Investigator Resources’ (ASX:IVR) continuing efforts to add value at its Paris silver project South Australia are poised to benefit from industry and investor interest in new macro momentum for the metal.
Although Paris is a multi-metal resource with substantial versatility, its 20-million-ounce silver resource attracts most of the attention and may be the key to medium-term investment opportunities as the silver market continues to exhibit a number of positive trends.
Investigator has maintained a steady exploration campaign at the site in recent months despite the general malaise impacting investment appetite in the broader junior exploration scene.
This momentum has partly been thanks to the flow-on discovery potential of near-Paris tenements and general resilience in silver market sentiment.
The latest progress at Paris has included the demonstration of nickel and chromium potential at the nearby Diomedes prospect, where magnetic anomalies of about 1 kilometre long are among the most enticing targets.
The widespread intersections in the Diomedes area are considered lead-ins to shallow nickel sulphide targets adjacent to – and underneath – the nickel mineralisation revealed by scout drilling.
Also earlier this year, exploration work indicated that there could be 20 kilometres of prospective extensions to the Paris geological setting along the southern side of the Uno Fault.
This offers an opportunity for new discoveries to be made at an unexplored area near Paris in geological structures that are considered to localise silver-dominant epithermal mineralisation in offsets to the Uno Fault.
This work expanded on Investigator’s ambitious development of Paris-style lead systems in the region last year despite an industry-wide exploration spending draught. These systems delivered intersections grading up to 91.9 grams per tonne silver.
A case for silver
Although Comex silver is currently trading at circa US$14.50 an ounce – compared to a mid-May peak of nearly US$18 an ounce – a favourable exchange rate for the Australian dollar is reflecting some opportunities for the few local operators in this sector.
While a plethora of North American silver explorers contends with this relatively depressed US-dollar price range, ASX plays such as Investigator are benefiting from a AUD/USD ratio of 0.698, which supports a current Australian silver price of A$20.90 an ounce.
This context puts Investigator in a stronger position to exploit improving sentiment for silver as investors absorb its emerging status as a metal evenly split between the sectors of safe haven wealth storage and high-tech innovation.
As new technological applications become increasingly marketable, silver is realising unmatched versatility as both a gold-style safe haven investment and a strategic niche material in the same vein as rare earths, graphite or lithium.
Examples of new uses of silver in high-tech applications have included progress by miniature battery producers in using silver for extra-lightweight power supplies and even a U.S. clothing manufacturer which is exploiting the metal’s less celebrated moisture wicking and antimicrobial properties in cotton-based fabrics.
The Silver Institute has called for industrial silver use to rise 27% by 2018.
Funding support
This supportive macro environment has been punctuated for Investigator recently with the award of a $968,670 tax refund under the Australian government’s Research and Development Tax Incentive program.
The award was in relation to experimental work conducted as part of the company’s studies of the nature of the geology and mineral systems revealed by Paris.
These funds, along with a $100,000 collaborative drilling grant from the South Australian government, will be re-invested to build on the Paris silver resource and test flow-on silver, copper and gold opportunities within Investigator’s surrounding tenements on Eyre Peninsula.
The money built on Investigator’s $2.58 million cash balance marked at the end of June.
Analysis
A favourable Australian dollar exchange rate and warming investor sentiment for silver bode well for Investigator, as ongoing exploration work aims to extend the company’s already impressive holdings in the Paris mineralised area.
Investigator has a first-mover advantage in this new province, which stands to benefit not only from increasing marketability for silver but also the demonstrated potential of other industrial metals such as nickel and chromium.
The company is well funded for continued exploration, with $2.58 million in cash declared at the end of the June quarter subsequently being reinforced by almost $1 million in government incentives.
Paris has a similar geological setting to the world-class Imiter silver mine in Morocco, which boasts a massive resource of 290 million ounces of silver and underground production of 7.7 million ounces a year grading circa 440 g/t silver.
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