The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

  • Sun Silver (ASX:SS1) is seeking gold, silver, copper and pathfinder elements in Nevada.
  • Its flagship project Maverick Springs is located along the Carlin Trend, which hosts high-profile mines such as Couer Mining’s Rochester (silver-gold) and Kinross Gold’s Bald Mountain.
  • Maverick Springs holds a globally significant resource of 292 million ounces of silver equivalent, at 43.5 grams per tonne, a strong grade for the region.
  • Sun Silver is anticipating a strong economic profile for the project, given the low cost of mining and processing the (soft) carbonate host rock found on the Carlin Trend.
  • As a cost comparison, Bellevue’s Gold Ltd (ASX:BGL)’s flagship and namesake project in Australia grades at 11.2 grams per tonne, with a targeted AISC (all-in sustaining cost) of $1,014 per ounce in their 2021 feasibility study, and closer to $1,800 per ounce according to their latest half yearly report, a near $1,800 difference per ounce to Couer.

Sun Silver Ltd (ASX:SS1) – which launched as a new IPO last month – is gearing up for a suite of exploration activities at flagship project Maverick Springs in Nevada to target both silver and gold within the prime territory of the Carlin Trend. It already has a globally significant resource of 292 million ounces of silver equivalent, containing 176 million ounces of pure silver.

This region is home to several noted mines, mainly of the open-pit type, such as Kinross Gold’s Bald Mountain mine – which produced 157,749 ounces of gold equivalent last year – and Couer Mining’s Rochester silver-gold mine, which is progressing through ramp up this year, and as a result, is set to become the largest single source of U.S.-produced and refined silver.

Notably, Maverick Springs is located near Bald Mountain, and Sun Silver executive director Gerard O’Donovan believes the reputation other regional players have for low-cost production and processing of gold and silver will boost expectations for his company’s new play.

“It’s a common phrase that’s utilised, that grade is king,” he said. “But the geological setting of the resource is one of the most important things.”

“What’s prolific about the Carlin Trend is the carbonate host rock: it’s soft, amenable to low-cost mining, and low-cost production, and we’ll be investigating similar processing techniques for the Maverick Springs asset.”

Mr O’Donovan pointed out that the silver grades being identified at Maverick Springs were actually quite strong for the area compared to some well-known projects along the Carlin Trend, and given the latter’s positive economic profile, there was reason to believe that Sun Silver could pursue similar low-cost mining production.

“Look at some of our neighbours, such as Couer Mining’s Rochester deposit: that is their flagship silver asset, which they’re currently expanding,” he said.

“Its head grade is 12 grams per tonne (g/t), ours is 43.5 grams per tonne.

“And their All-In-Sustaining Cost (AISC) currently is $24 dollars an ounce, post-expansion they’ll reduce that to $14 per ounce.”

The closer neighbour of Bald Mountain also provided a good guide to earnings from gold mining, he added.

“Kinross’ Bald Mountain gold mine is located about 25 km away from Maverick Springs as the crow flies and operates at half a gram per tonne head grade (0.5g/t Au),” Mr O’Donovan said.

“And their Cost Of Goods Sold (COGS) is $1241 per ounce of gold. This is low-cost mining and a heap leach operation, which is very common for the area, with an AISC of approximately $900. Sun Silver Maverick Spring gold equivalent resource is 4.5Moz of Gold at 1 g/t.  Double the grade of Bald Mountain Kinross and effectively the same geological material.

“You show me a gold deposit in a hard rock setting in the Goldfields or Pilbara that’s operating with those numbers.”

Such a comparative project might be Bellevue Gold Ltd (ASX:BGL)’s flagship and namesake project, with a 1.7-million-ounce (indicated) resource grading at 11.2c grams per tonne, and with a targeted AISC (all-in sustaining cost of $1,014 per ounce in their 2021 feasibility study, and closer to $1800 per ounce according to their latest half yearly report, a near $1,800 difference per ounce to Couer.

“To better understand this, consider the difference like this: You could have heaps of small silver nuggets in a sandpit and use a sieve, or large silver nuggets embedded deep in a block of concrete,” Mr O’Donovan said.

“It’s pretty easy to work out which would be easier and cheaper to recover.”

Tracking back to Maverick Springs, Mr O’Donovan said that Sun Silver’s asset was impressive not only in terms of resource – which is set at 125 million tonnes at 43.5 grams per tonne of silver – but also what it was predicted to produce.

“We have a globally significant asset,” he said.

“292 million ounces of silver equivalent, and 176 million ounces of pure silver and the grade is 43.5 grams per tonne.

“This is an extremely good grade for the Carlin Trend. As I mentioned, Carlin hosts soft rock, amenable to low-cost mining and processing.”

With this in mind, Sun Silver is getting set to kick off exploration at Maverick Springs, with its geotechnical team undertaking an assessment of historical samples from the project’s acreage.

Mr O’Donovan said the company would be expansive in terms of what it was looking for and the techniques used to identify and delineate mineralisation there.

“With this extensive dataset that was only previously assayed for only silver and gold, we’ll be looking to identify other mineralisation such as copper,” he said.

“We’ll also be looking to identify pathfinder elements which will inform our upcoming drill program, looking at the structural characteristics of the orebody, and we’ll also be looking at twinning a select number of holes which will expedite our resource classification upgrade.

“Finally, we’ll be looking at the limits of oxidisation within the resource with a view to defining that.”

The samples being relogged comprise mainly core from reverse circulation (RC) and diamond drilling which were previously in storage, and reflect some of the 60,000 metres (for approximately 200 holes) of drilling which have been drilled at the project to date.

Sun Silver will soon commence drilling to test mineralisation extension as well as upgrade it’s resource status from inferred to indicated.

SS1 by the numbers
More From The Market Online
The Market Online Video

ASX Market Close: Consumer Discretionary rises ahead of interest rates decision | June 14, 2024

The ASX200 is down a third of a per cent to close the week. All sectors…
The Market Online Video

ASX Market Update: ASX slips 0.3%, Discretionary is the only sector to rise | 14 June, 2024

The ASX200 is trading down around 0.3%. The discretionary sector has made gains of 0.3%, all…

Week 24 Wrap: US contagion sentiment not so contagious; iron ore remains pressured

It was, overall, a lacklustre week for the ASX. We only saw one green day on…

Whitebark launches $1.5M capital raise to progress QLD geothermal assets

Whitebark Energy Ltd has launched a capital raise totalling A$1.5M to fund development of its geothermal…