Silver resource an avenue for financing a mine.

We are all aware of the recent surge in the price of gold & silver. Silver is now selling for September delivery at $US 20.32 oz. That equates to $AUD 28.95 oz.

Currently Peel has uncovered 6.6M oz @ Mallee Bull & 9.1M oz @ Wagga Tank / Southern Nights. That gives a total current silver resource of 15.7M oz.

Given that Peel is going to need a substantial amount of cash to develop ( i'm still doubtful that is their game plan ) either or both of these deposits then i'm wondering if the precious metal component ( predominantly silver ) may provide an avenue to secure the funds required.

Peel needs to speed up the development process. An avenue open to them may be to secure financing from a mine financing company via an upfront payment. Based upon that company taking a certain level of that precious metals production. There are several companies that specialise in this type of financing. The Canadians feature prominently in this sphere.

The current in ground silver resource even at say $US 18 oz would mean an implied value of $AUD 402.5M. Now that figure is nowhere near the reality of what it would be worth if it were monetised. Production costs & recovery rates have to be taken into account. Precious metals recoveries in base metals plants can be low at times. However Peel has expressed confidence that they will be able to achieve quite high recoveries of these. I couldn't find any info on percentages. Yet !

If they were willing to give up a chunk of their precious metals credits & if the mine would stake up without those credits this may provide them with an avenue to move towards production sooner rather than later.

Food for thought !