In a May 4 research note, Red Cloud Securities analyst David A. Talbot discussed the just released initial resource estimates for Silver Viper Minerals Corp.'s (VIPR:TSX.V; VIPRF:OTCQB) La Virginia gold-silver (Au-Ag) project.
After incorporating the results into its model on Silver Viper, Red Cloud increased its target price on the company to CA$1.30 per share from CA$1. The current share price is about CA$0.44.
"While we consider the initial estimate a positive step, it is relatively small and low grade, and we believe it is not reflective of the property," Talbot commented. "We envision potential to increase grades given the high Au and Ag intercepts seen from recent drill results."
The five deposits at La Virginia are estimated to have a total resource of 48.9 million ounces (48.9 Moz) of silver equivalent (Ag eq) or 0.7 Moz gold equivalent (Au eq). Indicated resources stand at 154.3 thousand ounces (154.3 Koz) gold and 6.93 Moz silver. Inferred resources are 260.3 Koz gold and 12.9 Moz silver.
"The resource ranks 15th of 32 comparable Ag-Au deposits, while its 92 g/t [grams per ton] grade ranks it 23rd," Talbot wrote.
As for methodology, Talbot indicated that to calculate the resource estimate, Arseneau Consulting Services employed kriging for the Las Huatas, Con Virginia and El Rubi deposits, but used inverse distance squared for the other two. The firm capped grades at 1.5 meters (1.5m) at up to 15 g/t gold and 1,000 g/t silver. It used metals prices of US$1,650 per ounce for gold and US$22 per ounce for silver.
Talbot highlighted that the El Rubi deposit is "gaining critical mass," as shown in the resource estimate, now accounting for 95% of gold and 83% of silver mineralization. Currently, El Rubi spans 500 meters along strike and 300 meters vertically.
Silver Viper plans a phase three drill program at La Virginia to test prospective anomalies and expand the current resource. "The trend currently extends for 6.4km, but work suggests mineralization may extend for up to 1km S and 2km N along strike," Talbot noted.
Red Cloud has a Buy rating on Silver Viper. "We expect the stock to re-rate," the analyst concluded.
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Disclosures from Red Cloud Securities, Silver Viper Minerals Corp., Development Update, May 4, 2021
Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
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