August 20, 2020 (MicroSmallCap via Comtex) — Silver is finally catching up to gold and creating serious buzz around the silver market. Although silver prices have retreated from a high of $29.85, the white metal is still up over 140% since the beginning of 2020 and is expected to remain elevated throughout the rest of the year and beyond. The silver bull run has garnered serious investor interest and created an exciting opportunity for mining stocks like Fortuna Silver Mines (NYSE:FSM) (TSX:FVI), Endeavour Silver (NYSE:EXK) (TSX:EDR), Kootenay Silver Inc. (TSXV:KTN), Coeur Mining Inc (NYSE:CDE), and First Energy Metals Ltd. (CSE:FE) (OTC:ASKDF).
Of the promising silver stocks out there, First Energy Metals Ltd. (CSE:FE) (OTC:ASKDF) is the most recent addition to the space. The company, which has focused primarily on gold projects in Ontario, announced the acquisition of the Bald Eagle Silver Property in the prolific mining region of Port Alberni, British Columbia. The purchase couldn’t have been at a better time, as elevated silver prices have made silver projects a very attractive investment.
New Silver Projects Necessary to Meet Growing Demand
It isn’t surprising to see silver prices reaching 7-year highs when you consider the growing demand for silver along with the supply restraints. New applications like solar photovoltaic panels, 5G infrastructure, and electric vehicles (EVs) have made silver an indispensable metal, yet supply continues to decline. In 2019, global silver mine production fell for the fourth consecutive year by 1.3% to 836.5 million ounces (Moz) and COVID-related mining closures have only added to the problem.
Prior to the pandemic, silver mining production was already experiencing setbacks due to declining grades at several large primary silver mines and disruption-related losses at some major silver producers, creating an urgency for new projects to move toward production. First Energy Metals’ (CSE:FE) (OTC:ASKDF) newly acquired Bald Eagle Silver property could have what it takes to go the distance if historical data is any indication.
First Energy’s Bald Eagle Silver property consists of three mining claims covering approximately 1,013.58 hectares area (over 2,500 acres) in the Alberni Mining Division. The Port Alberni-Tofino paved highway runs 800m east of the property and immediately east of the Canoe Creek bridge on the highway is a logging road, giving direct access to the southern and western portions of the property. The property is also in an ideal location to ship minerals by ocean freight to any destination in the world.
There are four mineral occurrences on First Energy Metals’ (CSE:FE) (OTC:ASKDF) Bald Eagle Property, as documented in the MTO database of BC Ministry of Mines records. The Kristen Occurrence, which was discovered by Golden Spinnaker in 1987 after conducting trenching, VLF-EM surveys, and diamond drilling. In 1993, chip sampling of the Kristen I vein assayed values up to 4.4 g/t gold and 126.5 g/t silver. In 1995, sampling of the vein assayed up to 9.8 g/t gold and 31.5 g/t silver.
There is also the Bald Eagle Occurrence, which assayed 8.3 g/t gold and 35.2 g/t silver in a 0.10 meter chip sample taken by Golden Spinnaker in 1995, and the Frog Creek Occurrence, which returned values of 2.6 g/t gold and 2.7 g/t silver in a 0.20 meter chip sample.
Silver Producers Restart Operations Following Temporary Closures
When the COVID-19 pandemic swept the globe, several mining jurisdictions decided to temporarily suspend activities to curb the spread of the deadly virus. After being closed for roughly two months, mining operations in Mexico and Peru have started to reopen. On May 13, the Mexican Government officially confirmed that mining is now deemed essential and allowed mining operations in areas with little to no cases to reopen as of May 18.
That same day, Coeur Mining, Inc. (NYSE:CDE) restarted active mining, processing, and exploration activities at its Palmarejo gold-silver complex in Mexico and not a moment too soon. Despite Coeur’s three US-based mines remaining in operation, the production loss at Palmarejo did have a significant impact on the company’s second quarter results. In Q2 2020, the Palmarejo mine produced 269 million tons compared to 479 million tons in Q1 2020, a 43% drop quarter over quarter.
Endeavour Silver Corp. (NYSE:EXK) (TSX:EDR) also resumed its mining operations at its three high-grade, underground silver-gold mines in Mexico in May and is ramping up activities to achieve normal operations. Although the mining closures in Mexico set the company back $2.2 million in care and maintenance costs, Endeavour ended the quarter with a cash position of $30.5 million and working capital of $44.6 million.
Endeavour Silver Corp. (NYSE:EXK) (TSX:EDR) is also continuing to advance its Terronera Mine project toward development and just filed a NI 43-101 Technical Report for the property. According to the report, the property has Probable Mineral Reserves of 5.35 million tons grading 205 g/t silver and 2.08 g/t gold for 35.2 million ounces silver and 358,000 oz gold.
Kootenay Silver Inc. (TSXV: KTN) has also resumed exploration activities at its Copalito silver-gold property and its Columba high-grade silver project in Mexico following temporary closures. Since resuming work, the company has reported high-grade silver intercepts at both properties including 601 g/t over 1.23 meters within 279 g/t over 4.08 meters and 753 g/t over 0.95 meters at Columba and 1,297 g/t silver & 0.285 g/t gold over 3.2 meters at Copalito.
With the silver supply squeeze expected to get worse, it is encouraging to see promising silver projects moving forward. It’s likely that continued interest in the silver space will continue to offer these junior miners the backing needed to bring their projects to fruition. Investors who are interested in the silver market should keep an eye on next steps at First Energy Metals’ (CSE:FE) (OTC:ASKDF) newly acquired Bald Eagle silver property in BC.
For more information on First Energy Metals’ (CSE:FE) (OTC:ASKDF), click here.
Featured image: DepositPhotos © ras-slava
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