Kristie Batten: The cheapest silver explorer on the ASX

With a market cap of just $6m, Silver hunter Sierra Nevada Gold may be the next cab off the rank in the ASX silver revival.

Sierra Nevada Gold is sitting in the heart of US silver country. Pic: Supplied/Stockhead

One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

Even after a recent dip, silver remains the best-performing commodity so far in 2024.

Silver is up by around 30% this year and touched a 12-year high of almost US$35 an ounce last month.

ASX silver stocks have rallied to the point where most now have meaningful market capitalisations of more than $40 million, even after their post-election weakness.

However, one stock to miss the memo is Sierra Nevada Gold, which had a market cap of just $6 million on Friday.

While the company holds several gold projects, including the high-grade Warrior project, its main focus is currently the Blackhawk epithermal project in Nevada.

“We previously looked at the Blackhawk epithermal project as a gold equivalent project, because it has significant gold, more significant silver and lead-zinc as well,” Sierra Nevada Gold (ASX:SNX) executive chairman Peter Moore told Stockhead.

“We did a review to assess its potential for silver, and obviously with the grades and the values that are there for silver, we've pivoted to focus on that because of the market interest in silver.”

Blackhawk was mined up until the 1920s across at least eight areas, but has had little work since.

The epithermal vein system covers around 5km2 and contains up to 22.5 line kilometres of mostly untested veins.

The project is in the right neighbourhood, sitting just 25km along trend from the large Candelaria deposit, which has an endowment of 230Moz of silver.

Drilling underway

In late October, Sierra Nevada kicked off a 1500m reverse circulation program at Blackhawk’s Endowment mine.

The program will follow up a previous hole at Endowment, which returned 12m at 219g/t silver from 250m, including 5m at 479g/t silver and 0.5m at 1270g/t silver plus 21.5% lead and zinc, as well as targeting near-mine extensions.

Moore is hoping to receive the first set of assay results in mid-December.

“The rest of them will come in the new year, so we'll have progressive assay returns from the drilling, plus we've done a lot of geological mapping and work on a number of the prospects around the Blackhawk project,” he said.

Rock chip sampling at the Two Shovels mine dumps, on the western periphery of the project, returned up to 5180g/t silver, as well as 2.82% copper.

Work in the 1980s by a previous explorer identified structurally controlled, high-grade silver, areas of disseminated copper oxide and coincident induced polarisation anomalies but there has been no follow-up drilling.

Sierra Nevada also recently staked the Crystal Peak and G Mine areas near Blackhawk, which are also prospective for high-grade silver-gold-copper-antimony.

Sierra Nevada raised $2 million last month, supported by Canaccord Genuity and Foster Stockbroking, to fund the work.

“We'll be straight into it next year as well,” Moore said.

“We’re funded into next year, so we'll be continuing the program. The field season starts up again in April, so we'll be ready to hit the ground running when it opens.”

The Sun Silver analogy

Sierra Nevada is hoping to replicate the success of another Nevada silver explorer, Sun Silver (ASX:SS1).

Sun’s more advanced Maverick Springs project in Nevada has a resource of 423Moz at 67.25g/t silver equivalent or 253Moz at 40.25g/t silver, making it the largest pre-production primary silver project on the ASX.

While SS1’s share price has dipped in the past three weeks, it is still the most successful mining IPO of the year with a market cap of around $80 million.

“Certainly, their success has helped us,” Moore said.

“There's significant interest in silver on the back of that, so we're happy to see them in Nevada and raising the profile of the sort of development opportunities there are.

“Not that well recognised in Australia, but we've been in Nevada over 10 years, and there are significant opportunities – geographically well-located, and also geopolitically really secure.

“Unlike Africa and South American countries, you can work there and you can keep what you find, so it's a really good jurisdiction for small miners. We think it's got fantastic potential.”

At Stockhead, we tell it like is is. While Sierra Nevada Gold and Sun Silver are Stockhead advertisers, they did not sponsor this article.

Originally published as Kristie Batten: The cheapest silver explorer on the ASX