Silver Storm moves to finance Mexico mine restart
Silver Storm Mining Ltd. [SVRS-TSXV, SVRSF-OTCQB, SVR-FSE], a company previously known as Golden Tag Resources, said it plans to complete a non-brokered private placement offering that is expected to generate gross proceeds of $2 million.
The company said it intends to use to net proceeds to advance drilling at La Parrilla silver mine complex in Durango, Mexico, to perform technical studies for a potential restart in 2025, and fund ongoing operations.
The offering is expected to consist of 18.2 million units priced at 11 cents per unit. Subject to approval the company said it reserves the right to increase the size of the offering.
Under the terms of the offering, each unit consists of one common share of the company, and one half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share at an exercise price of 16 cents per unit until 24 months from the issue date.
Silver Storm recently completed the acquisition of a 100% interest in the La Parrilla Silver Mine Complex, a prolific operation which consists of a 2,000 tonne-per-day mill as well as five underground mines and an open pit that collectively produced 34.2 million silver equivalent ounces between 2005 and 2019.
When placed on care and maintenance in September, 2019, La Parrilla was a fully-permitted mine complex.
Silver Storm acquired the asset from First Majestic Silver Corp. [FR-TSX, AG-NYSE, FMV-Frankfurt], a company that currently ranks as Silver Storm’s largest shareholder. Silver Storm’s other key shareholders include financier Eric Sprott, who currently owns a 10.5% stake in the company on a non-diluted basis.
The property was acquired by First Majestic in 2004 and became its first silver mine in 2005.
The company has previously said its short-term objective is to commence exploration within and near-mine workings in order to expand the resource base, to support our ultimate goal and vision of placing the asset back into production, “This is a transformative acquisition for Golden Tag and we strongly believe in the upside resource growth potential of this long-life prolific asset,’’ the company has said.
Part of the net proceeds of the offering will be used to follow-up on the previously announced drill results on the C460 Zone. In this zone, Silver Storm intersected high grade mineralization including 1,810 g/t silver equivalent (AgEq) over 14.62 metres from hole Q-23-020, and 911 g/t AgEq over 13.05 metres from Hole Q-23-022A.
Silver Storm also holds a 100% interest in the San Diego Project, which is among the largest undeveloped silver assets in Mexico.
On Thursday, the shares eased 4.2% or $0.005 to 11.5 cents. The shares are currently trading in a 52-week range of 22.5 cents and $0.085.