Silver Resource Comparison Thread

Posted this in another thread but thought it needed its own thread. I hope I have not made it too complicated to follow.

The one take from the below post is that the silver projects with a higher percentage of silver as a percent of its project resource will begin to outperform those other projects where silver makes up a smaller percentage of its entire silver equivalent resources as the silver price begins to outperform the other metals.

Using the future prices listed below and comparing to today's prices, MMAs entire Maronan silver equivalent ounces drop by over 100Mozs because the other metals value have not been able to keep up with the price increase in silver on a percentage basis. The only way the silver equivalent ounces do not reduce is if the project is 100% silver. That is why IVR with its large 87.6% of silver in its resource has the greatest upside in percentage terms when silver begins to outperform the other metals.

When I say percentage terms, I am referring to project revenue percent and assuming that the company is in production. In IVRs case, if it was profitable at todays silver price of US$27.46, and if the silver price jumped to US$50, then the revenue increase would be 72.2%. It would be higher if they were 100% silver, but they are in fact 87.6% silver resource. The 72.2% increase in revenue is an increase of todays revenue mining the same silver grades, silver recovery etc in the companies reserves. IVR have not completed their DFS but if we assume for ease that their entire project revenue was A$100M at silver price of $27.46 and lead price of $2212 then at US$50 Ag & US$2,450/t Pb that revenue would increase to A$172.2M.

The Cu/Au resource at Maronan lowers the Pb/Ag resource grades for the project by over 20%. MMA have stated that they may mine the Cu/Au resource at a later date, probably after project payback. I separated the starter zone and the Pb/Ag only resource (which includes the starter zone) into their own sections to show the higher silver percentages of the resource. I believe that 50% to 60% mix of PMs in a project is the right mix. If you drop below this figure then larger higher-grade resources of Cu, Zn and Pb increases project attractiveness. At todays spot prices 1% Cu is equivalent to 4.6%Pb or 3.51% Zn.

SVL meets the above criteria but has a market cap of more than 5x greater than MMA and 11x greater than ARD. MMA & ARD are the stand outs as undervalued for this reason. MMA has the largest valued resource of these companies. MMAs resource valuation is 3x greater than ARD so the most undervalued is MMA followed by ARD and then BML. The most profitable of all of the companies on the list is ADT with its massive high-grade deposit. ADT's revenue may only increase 38.2% in the below table, but ADTs resource grades are 5.5x larger than IVR's at todays spot prices. ADT's market cap is 15x larger than IVRs and EV larger again because of project debt.

BML has the lowest percent of its project as PM's and thus the least upside as the silver price increases of all of the stocks because of this. If lead was to start outperforming, then that would be added value to MMA, SVL, ADT & BML.