Operations Improving at Silver Project in Peru
Research Report

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Disclosures for Red Cloud Securities, Silver X Mining Corp., May 23, 2025:

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Silver X Mining Corp.'s (AGX:TSX.V; AGXPF:OTC) Q1/25 operating and financial results from its Nueva Recuperada mine in Peru were "slightly positive," reported Red Cloud Securities Mining Analyst Alina Islam in a May 23 research note.

369% Potential Return

Red Cloud reiterated its CA$0.75 target price on the Canadian miner, trading at the time of Islam's report at CA$0.16 per share, she noted. The target implies a return of 369%.

Silver X remains a Buy.

Turnaround Quarter

The highlight of Q1/25, noted Islam, was EBITDA of US$403,000 (US$403K), which was 241% higher than in Q4/24. This result was despite lower-than-expected production in Q1/25.

"This signals to us that operations at Nueva Recuperada are starting to turn around," Islam wrote.

EBITDA was improved due to reduced operating costs, noted the analyst. At US$4.5 million (US$4.5M), they were 38% lower than in Q4/24. Accounting changes were responsible in part. The company removed discretionary business development, investor relations and share-based compensation costs from general and administrative expense, which brought it down to US$434K from US$744K. Other contributors were lower mining and processing costs and, due to a larger resource base, lower depreciation expenses.

"We believe the declining processing and mining costs to be more significant than accounting changes," wrote Islam. "If these trends persist, the company should report positive operating income going forward and the all-in sustaining cost could fall below US$20 per oz (US$20/oz) Ag eq as early as Q1/27.

Lower-Than-Expected Production

Revenue was $6.01M, 22% lower QOQ. Realized silver price during the quarter was US$31.03/oz. Decreased revenue was due to less processed ore and a lower head grade, than in Q4/24. Total ore processed during Q1/25 was 40,200 tons, down 6.5% QOQ. Head grade in Q1/25 was 237 grams per ton of silver equivalent (Ag eq), 2.1% lower QOQ. This resulted in 8% lower production QOQ, of 240,200 ounces of Ag eq.

Silver X previously stated its intention to ramp up the plant to its 720 tons per day (720 tpd) nameplate capacity but has not yet accomplished this. The rate in Q1/25 was about 450 tpd, lower than last year's roughly 475 tpd.

"Ramp-up to full production and plans for further expansion could help rerate the stock," wrote Islam.

Net income in Q1/25 was (US$330K) versus Red Cloud's (US$840K). Islam highlighted that Q1/25 net income and EBITDA were the highest they have been in two-plus years.

Given gold recoveries reported in the last four quarters, Red Cloud lowered its gold recovery assumption in its model to 50% from 65%, Islam reported.

Mine Development Progress

The company completed more than 2,300 meters (2,300m) of mine development. This allows access to higher-grade zones and to targets of a planned 8,000m exploration program at the Tangana Mining Unit.

Because Silver X is still in the exploration-development stage, Islam pointed out, it will need to raise capital to fund continued operations.

What to Watch For

Islam noted upcoming events that could boost Silver X's stock. Catalysts expected this year include reaching a 720 tpd production rate at Tangana and completing a combined preliminary economic assessment of the Tangana and Plata Mining Units.

Next year, significant events include the start of mining at Plata and mill capacity expansion to 2,000 tpd.

"Looking ahead, we expect Q2/25 to be another turnaround quarter and, based on our prior discussions with management, believe operating and financial results should start improving by H2/25," Islam commented.

More Stock Details

At the time of her report, the analyst reported, Silver X had 222.5 million (222.5M) basic shares outstanding and 275.4M fully diluted shares outstanding. Its market cap was CA$34.5M. Its 52-week range was CA$0.12–0.38 per share.