Silver X Mining Corp (TSX-V:AGX, OTC:WRPSF) is a different kind of resource company – one that defies conventional categorization with production, social capital and discovery potential in the Americas.
At the heart of Silver X's success lies its expansive land package, spanning over 20,000 hectares in the Nueva Recuperada silver district in central Peru.
It’s a familiar region for Silver X CEO Jose Garcia, who came across Nueva Recuperada in 2017.
As Garcia tells it, he became interested in the geological opportunity that he saw in the district, which had been home to operating mines for more than 50 years. “Everything that it takes to build a mining company with local skills (was there),” Garcia said. “But there was a lack of vision, a lack of exploration.”
A different approach
Silver X deems itself as a high growth-oriented company. For Nueva Recuperada to flourish, the team needed to think differently.
The project is a treasure trove of potential, hosting three mining units: Tangana, Plata, and Red Silver that contain a web of veins with impressive silver values. To enhance operational efficiency, Silver X has divided the vein systems into two units: the Tangana Mining Unit in the north and the Plata Advanced Project in the south.
The company’s approach involves assimilating historic data, field checking various vein sectors, and identifying 541 veins and splits on the property. Significant discoveries in sectors like San Antonio, Tangana, Cauca, Pucapunta, Maria Luz, and Positivas highlight the economic potential awaiting exploration.
This approach paid off in January 2023 when the Tangana Mining Unit achieved commercial production of silver, gold, lead, and zinc. Commercial production is set to ramp up to 720 tons per day (tpd) nameplate capacity.
Now, a year into production, the company is a rapidly expanding silver developer and producer carving its path in the Americas.
The company has faced a few hurdles along the way. A temporary operational pause to implement upgrades led to a dip in revenues and production metrics during the third quarter of 2023. The operational reset included equipment upgrades, workforce training, and safety measures. And it worked: the company successfully processed 230,444 ounces of silver equivalent within 45 days post-resumption.
“We felt the necessity of (pausing) operations because we were underperforming in 1Q and 2Q. There were declining grades and less operational performance, per se,” Garcia explained.
“We revisited our main plan, making sure that we targeted areas with better grades and higher certainty. We also established a new contract with our contractor, making an alliance to make sure that we all work with good incentives, so the production keeps up.”
More importantly, for Garcia, the firm negotiated with the local community and announced a 12-year extension of its social agreement.
“That’s very commendable given the current situation in Peru,” Garcia said.
Peru's resource potential
Despite being the world's third-largest silver producer, Peru's recent mining operations face challenges stemming from a complex political risk landscape. Factors such as political instability, violent protests, organized crime, and illegal mining activities contribute to the uncertainties in the sector. As the country’s deputy mining minister Augusto Cauti told Forbes recently, navigating bureaucratic hurdles remains a substantial challenge for initiating new investments in mining activities in Peru, encompassing both exploration and exploitation endeavors. The nation is striving to strike a harmonious equilibrium between human and social development and the imperatives of economic and environmental sustainability.
“Peru is a country that over the last couple of decades got more bureaucratized, which is a pity. One of the biggest opportunities for the country is to ease the permitting to make sure that the great pipeline of projects that the country has come into place.”
Opening a development project in Peru is “not as complicated as other people would believe,” Garcia said. “I would challenge those investors who say that opening minds in Mexico the US or Canada would be any faster than in Peru.”
García is confident that the team has done the work to transform Nueva Recuperada into a prominent silver district.
“Peru is one of the best mining jurisdictions worldwide, and we'll keep on going.”
The CEO hinted at a growth trajectory beyond the current district, indicating a consolidation strategy involving mergers and acquisitions to solidify Silver X's position as a mid-tier silver producer. Silver X's robust exploration, development, and production pipeline position it for potential production of six million silver equivalent ounces by 2026, and that is just organically. M&A transactions are always an option – as Garcia acknowledges, the silver market is quite small. “I think that we should aim for a consolidation strategy over the next few years,” Garcia told Proactive. “That means acquiring, merging, creating a mid-tier producer that we will be part of.”
A new mid tier mining company
As a co-founder of Silver X, Garcia is driven by his desire to see the Nueva Recuperada silver district to its fullest potential. In the interest of Silver X shareholders, that means a modest, responsible development plan. “There’s so much to be done with little access to capital. As a modest company, we have to be extremely conscious on budget and extremely agile. We’re ambitious but have to play with austerity, and that’s a lot of fun for me.”
Silver X is well on its way to accomplishing its goal of becoming a mid tier mining company.
“We've got the team or the management,” Garcia said, referencing his CFO Jason Tong and co-founder Sebastian Wahl, who serves as vice president corporate development.
“We've got the vision,” Garcia said. “We've got the expertise, and we just need to be bringing opportunities in the pipeline.”