Silver Mines (ASX:SVL) on its high-grade Bowdens project


by Carolyn Herbert

Silver Mines Limited (ASX:SVL) Managing Director, Anthony McClure, discusses the company’s high grade silver projects and outlook for the remainder of FY17.

Silver Mines Limited (ASX:SVL) is a new company, it was put together midway through last year, so we’re 10 months into the process now. We acquired the Bowden silver project, recapitalised the company; new Board and we put it together pretty quickly. So in 10 months we’ve made a lot of progress, we’re still a small company. We’ve got a market capitalisation of about $50 million, but we feel we’ve got a fantastic growth story.

We’re solely New South Wales, the Bowden silver project is by far the main project. That’s located near Mudgee, so about 3.5 hours drive from Sydney. So location is great, we’re in a great jurisdiction in New South Wales. The project itself is Australia’s largest undeveloped silver project, so it’s got a lot of scale to it. In the global context, it’s one of the largest undeveloped silver projects, so we’re pretty excited about it. We’re in the process now of completing the feasibility, so that’ll be completed this year, along with the environmental impact statement. So we can start on the permitting process, but in terms of the project itself, it’s a substantial silver mine development. It also has some zinc and lead credits as well.

The unique nature of Bowden is first of all the scale of it. So it’s very substantial in size, it’s been de-risked by the huge amount of work that’s been done to date. More importantly is some of the exploration work that’s happening at the moment. So the project’s had about $60 million spent on it to date, not a lot of that has gone into exploration outside of the current area. We’ve commenced that late last year and the discoveries we’ve made in the meantime, have changed the outlook of the project potential very substantially. So at depth, we’re now seeing a lot of gold coming into the system. We’re also seeing bonanza scale zinc and lead coming into the system as well. So the exploration side of the story is particularly important.

The resource statement will be out mid this year, so there’s a historical statement that was completed in 2012. Mid-year we’ll have the resource statement completed. And following in the second half of this year, we’ll have the feasibility and the EIS, environmental impact statement complete.

We’ve just made a new discovery, so this initial discovery was in February/march and we’re still understanding what’s happening at depth. But in particular, what’s really important for us is we’re seeing gold at depth. That hasn’t been discovered before and indeed we’re seeing massive sulphide rich zones, at depth as well. So there’s potentially a life after the current development, there’s potentially a life underground in the future.

BlackRock, Inc. (NYSE:BLK) is our largest shareholder, so the world’s largest resources fund. We’ve also got the pool of the higher-level Australian resource funds, on board as well. Going forward in terms of financing, we’re comfortable at the moment. We’ve just completed a retail offering, so that’s good. But going forward in mine development and so forth, we’ve got a great supportive base for development.

The silver price is, well it’s just come off lows and that’s clear in the market at the moment. Our view is the outlook for silver is very, very positive. You’ve got the developments of solar technologies at the moment, so photovoltaic cells contain a huge amount of silver in them. That’s a big growth area and also we’re seeing silver technologies in medicine. So the technologies in medicine are coming to the forefront as well. So when you couple that with not a lot of new supply coming online, effectively we’re the largest development coming online, there’s not much else outside of that. So the supply demand dynamics are very positive for silver.

12 months time - we’ve got a great period in exploration. So we’ve commenced that work, we’re seeing results coming through from that as we speak. The ensuing months, we’ve got a very exciting program. Obviously as we move into the second half of this year we’ve got completion of the feasibility study, so we’ll have details out on that. The environmental impact statement will also complete at the same time. Importantly for us, over the next few years is to achieve production at a substantial scale. So we’re looking at a development program of roughly about five million ounces, which is a pretty substantial silver mine.


Carolyn Herbert

Finance News Network
Carolyn joined FNN in August 2015 as the Head of News and also presented the Market at Midday and the Market Wrap. With more than five years of broadcast journalism experience, Carolyn has worked as a finance anchor on the Sky News Business channel and as an anchor and reporter for ABC News. She is also a qualified corporate lawyer specialising in IPOs, takeovers and mergers and acquisitions.