Drilling Extends Silver Vein's Mineralization by 5 KM

Outcrop Silver & Gold Corp. (OCG:TSX.V; OCGSF:OTCQX; MRG1:DB) announced the results of initial core drilling at the Aguilar vein of its 30-kilometer-long flagship Santa Ana project in Colombia, confirming high-grade mineralization and extending the known mineralization by 5 kilometers.

Hole DH361 intercepted 0.78 meters of 776 grams per tonne silver equivalent (g/t Ag Eq), the company said. Follow-up drilling will test the extension along strike and update vectoring for targeting higher-grade shoots at Aguilar.

The year "2024 has been pivotal for Outcrop Silver, underscoring our commitment to unlocking the full potential of the Santa Ana district," said Outcrop President and Chief Executive Officer Ian Harris. "These initial results, set against a backdrop of improving silver prices, a significant global supply-demand deficit, and lack of silver discoveries, underscores the quality and uniqueness of the Santa Ana primary silver deposit, one of the world's highest-grade primary silver deposits."

Outcrop has a National Instrument 43-101 technical report for Santa Ana's maiden resource estimate (MRE) showing an initial indicated resource estimated at 1.2 million tonnes grading 614 g/t Ag eq, containing 24.1 million ounces (Moz) Ag eq. Initial inferred resources were estimated at 966,000 tonnes grading 435 g/t Ag eq, containing 13.5 Moz Ag eq.

Analyst Stuart McDougall of Research Capital Corp., who resumed covered with a Speculative Buy rating and a CA$0.50 per share target price in March, wrote at the time that the "Santa Ana property contains among what are considered the country's richest historic silver mines, if not in all of Latin America."

'Successful Start' to Exploration at Vein

Outcrop said the Aguilar vein was identified through its regional target generation program and is part of the Aguilar-Guadual zone, which can be traced for 1.8 kilometers.

"The Aguilar vein is represented as multiple parallel vein segments with different widths," the company said in a release. "Geological mapping suggests higher-grade mineralization occurs at flexures within the dominant northeast trend of the veins. These flexures are interpreted to represent structural intersections between northerly trending faults and northwest-trending lineaments that are currently being drill tested."

The initial drilling of the vein tests the continuity from outcrop channel samples with high-grade assays, such as 0.90 meters of 500 g/t Ag Eq.

The vein at depth has been confirmed through three drill holes to be a low-angle structure, generally dipping 55 degrees to the west and showing 5% to 10% total sulfide content. Hole DH361 intercepted 0.78 meters of quartz vein that assayed 3.79 g/t gold (Au) and 492 g/t Ag, the company said. Hole DH363 is pending assays and DH360 intercepted a narrow quartz vein with lower grades.

"This successful start to exploration at Aguilar not only underscores the high potential of the corridor but also shows that high-grade silver stretches far beyond our known resources," said VP of Exploration Guillermo Hernandez. "These results affirm the effectiveness of our strategic exploration and our systematic approach to target generation. They reveal the substantial untapped potential within this extensive vein system, confirming our confidence in Santa Ana's capacity for significant growth."

The Catalyst: White Metal Helping Drive Energy Transition

Silver, the most conductive element in nature, is important to the green energy transition because it's used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.

Silver spot prices rose to a new all-time high of US$32.43 per ounce on May 20 and have continued to hover around US$30 since. The price was US$29.61 on Tuesday.

According to the Silver Institute's World Silver Survey, global demand for silver "massively exceeded" supply last year, a deficit that is expected to extend into a fourth consecutive year in 2024.

Mordor Intelligence noted that the white metal is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.

"An increase in the demand for new technological products is expected to help the market expand in the future," Mordor analysts wrote. According to a U.S. Geological Survey report, "27% of the silver produced in the United States was being utilized in electrical and electronic applications."

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 7.79% of the company.

According to Reuters, Executive Chairman of the Board Ian Slater owns 7.05%, Director Joseph Hebert owns 0.65%, Director Kevin Nishi owns 0.03%, and CEO Harris owns 0.02%.

2176423 Ontario Ltd. owns 10.79% of the company as a strategic investor, stated Reuters. Institutional investors own 0.06%. The rest is retail.

The company has 287.8 million shares outstanding and 234.33 million free float traded shares, while the company has a market cap of CA$73.39 million and trades in a 52-week range between CA$0.12 and CA$0.31.