A High-Grade Silver Story That Keeps Getting Bigger

By Sean Brodrick

With silver below $60 an ounce, many investors are giving up on the precious metal. That’s a mistake. 

Silver is trading at its year-to-date low. So the time to find high-quality silver miners, developers and explorers at bargain-basement prices is now.

Here’s one for your consideration.

I recently sat down with Darrell Rader, CEO of Minaurum Silver (TSXV: MGG; OTCQX: MMRGF).

Minaurum is a junior explorer with a potentially much bigger story unfolding at its flagship Alamos Silver Project in Sonora, Mexico.

What caught my attention is the combination of grade and exploration upside.

Alamos already hosts an initial inferred resource of 55.2 million silver-equivalent ounces grading a robust 320 grams per tonne (g/t) silver equivalent. 

That includes 34.8 million ounces of actual silver, along with gold, copper, lead and zinc.

That 55-million-ounce figure may be the tip of the silver iceberg.

The existing resource covers portions of only three of the 26 known vein zones at Alamos — Promontorio, Travesia and Europa. 

Minaurum is now in the middle of a 50,000-meter resource-expansion drilling campaign designed to make the deposit substantially larger.

I’ll let Darrell give you the scoop, then add my notes below.

There’s Even More to Minaurum

Minaurum owns 100% of Alamos, a 37,928-hectare property covering an historic silver-mining district in southern Sonora.

And Minaurum isn't simply drilling low-grade mineralization in hopes of building a huge tonnage number. 

Alamos has repeatedly produced genuinely high-grade silver intercepts.

For example, drilling at the Quintera vein returned 5.95 meters grading 1,117 g/t silver equivalent, including 2.40 meters grading an eye-popping 2,557 g/t. 

Europa Sur returned 3.65 meters grading 888 g/t silver equivalent, including 2.65 meters at 1,053 g/t.

Then in August, Minaurum hit something important at Quintera: 26.3 meters grading 369 g/t silver equivalent. 

Nice!

The company's drilling is also showing that these mineralized systems don't simply stop at the boundaries of the existing resource. 

A 250-meter step-out at Europa, for example, hit 12.35 meters grading 408 g/t silver equivalent, including 3.2 meters grading a whopping 1,277 g/t.

That's why the next resource estimate could be such an important catalyst. 

4 More Reasons to Watch Minaurum

Since my conversation with Darrell, Minaurum has continued generating news. 

Here are some additional highlights worth keeping an eye on:

Minaurum just discovered an entirely new "blind" vein. 

On Oct. 22, the company announced the discovery of the Africa vein, which doesn't crop out at surface. 

Drilling hit 2.05 meters grading 669 g/t silver equivalent. 

The significance goes beyond one drill hole: If Alamos contains high-grade veins that leave no obvious surface expression, there could be more mineralized structures that haven't yet been discovered.

The old Promontorio mine could provide another avenue for exploration and eventual development. 

Minaurum has rehabilitated more than 600 meters of underground haulage and gained access to a 55-meter-deep internal shaft. 

Channel sampling returned grades as high as 4,142 g/t silver equivalent. Promontorio alone currently accounts for about 28.6 million silver-equivalent ounces of the project's resource.

This isn't a one-vein discovery. 

Quintera, Europa Sur, San Jose and Promontorio Sur have all produced significant high-grade results during the current program. 

That gives Minaurum multiple shots at adding ounces rather than depending on expansion of a single deposit.

Alamos is already production-permitted. 

That's an important distinction for an exploration-stage company. 

Minaurum has also begun adding people with Mexican underground mining and operational experience as it moves toward economic studies and evaluates possible future production centers and mining methods.

The Caveats

Minaurum is still an explorer, not a producer. 

Its current 55.2-million-ounce resource is entirely in the inferred category, the lowest-confidence resource classification, and there is no guarantee that exploration success ultimately translates into an economically viable mine.

There's also the normal junior-mining risk. 

Advancing Alamos through additional drilling, engineering, economic studies and ultimately construction will require time and capital.

The company has other gold, silver and copper projects in Mexico, along with $11 million in cash to help keep the drills turning. However, it will likely need to raise additional capital down the road. 

Even a great deposit can experience permitting, financing, metallurgy, construction and commodity-price setbacks along the way.

Still, Minaurum has something every exploration company wants: a high-grade deposit that appears to have plenty of room to grow.

And with 26 known vein zones, only portions of three included in the initial resource, an aggressive drilling campaign underway and now a newly discovered blind vein, Alamos may have quite a bit more silver left to reveal.

Indeed, management believes the resource could ultimately grow beyond 100 million ounces of silver equivalent. 

To be clear, this isn’t a recommendation to buy right now. 

But when silver takes off again, you’ll want to have Minaurum on your radar.

All the best,

Sean

P.S. I’m on my way to the New Orleans Investment Conference, where I’ll interview more great mining companies. I can’t wait to see what I find next.