Manuka Resources (MKR) has quietly gone about its business being a successful small time gold miner since it joined the ASX. However its main resource is a deposit of silver totalling over 50M ounces, with 10M of that over 100g/t and profitable to mine even at $22 US oz. In just 2 months MKR will become Australia's largest primary silver producer. It will start by processing a stockpile of 500+K tonnes of material that is just waiting to be run through their mill.
Comparing MKR to its Australian small cap silver competitors is like comparing a pro football team to the amateur leagues. IVR, SVL and BML all have promising resources and all will see growth this year in my opinion. But they are years away from being on the silver. They will be building their plants in a time where inflation is out of control, the worst it has been in 40 years and it is currently getting worse by the month.
Boab Metals (BML), Silver Mines (SVL) and Investigator Resources (IVR) will be trying to build their mines when labour and supply issues are causing massive issues to even already established operations. So no matter what they estimate the costs to be to get started they will clearly blow out requiring more capital, more loans and more dilution. This knowledge will become more widespread over time likely affecting the stock prices of these companies.
Meanwhile MKR already has everything it needs right now to become Australia's largest primary silver producer in 2 months. It also has a stockpile waiting to be mined so there won't be weather events or other weird mining related things that stop it from being that. And it is currently severely undervalued (MST valued it at 97c in October 2021 and it is currently 34c as of this post).
When looking to invest in small cap ventures you want the reward to pay off for the risk it entails. If you look at Manuka Resource's competitors there is a hell of a lot of risk but also the potential for decent rewards if silver takes off in 2022. MKR on the other hand has very little risk as it has the plant, it has the silver stockpile, it has the people and it is simply waiting for last of its gold to be processed before it switches to the silver. It has a management that know how to be successful miners because they've literally just spent the last 20 months showing exactly that in the same location.
When the stories start to be written about the Australian silver landscape in 2022, that is after silver has exploded in price do you not think being the largest primary silver producer in the country will not get attention? How can such an undervalued company be Australia's largest primary silver producer? Well that will be the point the normies will see, the normies who follow stories and not fundamentals. This is why I think not only will MKR out perform every silver stock in Australia in 2022, it will destroy them as it has the best silver story in Australia.
MKR also have a LOT of licenses in the resource rich COBAR region, with a lot of virgin ground and ground that is promising but hasn't been drilled extensively yet. They have started a large drilling campaign in 2021 that is ongoing, so the expectation of a 25-75% increase in their silver resource in 2022 is reasonable in my opinion.
If silver even hits $50 US an ounce MKR will make half its current market cap (45M) in profit in 2022. So you can just imagine if silver reaches higher like many have predicted that you are looking at a once in a generation opportunity here. Of course do your own research and read the materials on the MKR website.
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