Mining Co. Discovers High-Grade Silver Potential in Peru
Research Report

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Disclosures for Red Cloud Securities, Silver X Mining Corp., September 5, 2025

Alina Islam | Mining Analyst Daniel Kozielewicz | Research Associate Shikhar Sarpal | Research Associate Surya Sankarasubramanian | Research Associate Red Cloud Securities Inc. 120 Adelaide St. W, Suite 1400 Toronto, ON M5H 1T1 [email protected] www.redcloudresearch.com Disclosure Statement Updated September 5, 2025 Disclosure Requirement Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Canadian Investment Regulatory Organization (CIRO). Red Cloud Securities registration as an Investment Dealer is specific to the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, and Saskatchewan. We are registered and authorized to conduct business solely within these jurisdictions. We do not operate in or hold registration in any other regions, territories, or countries outside of these provinces. 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On September 5, 2025, Red Cloud Securities analyst Alina Islam maintained a Buy rating on Silver X Mining Corp. (AGX:TSX.V; AGXPF:OTC), while raising the target price to CA$0.85 from CA$0.65, representing 113% upside from the current share price at the time of the report of CA$0.40.

The target increase reflects the incorporation of expanded operations following the release of an updated Preliminary Economic Assessment that demonstrates significant value creation potential.

Updated Preliminary Economic Assessment Results

Silver X Mining Corp. released an updated Preliminary Economic Assessment for its Nueva Recuperada mine in Peru, outlining a 14-year operation that includes both the Tangana and Plata mining units. The study contemplates a processing capacity of 3,000 tonnes per day with annual production exceeding 6 million ounces of silver equivalent.

Using long-term commodity prices of US$33.2 per ounce silver, US$2,928 per ounce gold, US$0.90 per pound copper, and US$1.34 per pound zinc, the assessment demonstrates an after-tax net present value at 5% discount rate of US$440 million and internal rate of return of 69%. The payback period is estimated at three years with initial capital for the expansion at US$82 million.

Islam characterized this as "a positive update since the mine plan incorporates the operation of two mill facilities at Nueva Recuperada, both with a capacity of 1,500tpd." The expansion involves increasing the current Recuperada mill from 720 tonnes per day to 1,500 tonnes per day and constructing a new mill called Tangana located 15 kilometers south of existing facilities.

Operational Scaling and Production Profile

The Preliminary Economic Assessment envisions transforming Silver X into a mid-tier silver producer through significant capacity expansion. Production would increase from the current approximately 1 million silver equivalent ounces per annum to 6.2 million silver equivalent ounces. Cash costs are projected at US$11.8 per ounce with all-in sustaining costs of US$15.8 per ounce.

The analyst noted that the inclusion of the higher-grade Plata mining unit in the future mine plan should help reduce costs over the long term. This is particularly relevant given that "Silver X has been struggling with its operations . . . and has been maintaining the Recuperada plant at about ~50% of capacity, due to challenges with mining and mine development."

Permitting and Financing Progress

Silver X is advancing regulatory approvals for the expansion, with the Environmental and Social Impact Assessment for the Tangana plant currently in final stages and approval expected before the end of 2025. Concurrently, the company is expected to approach capital markets to fund current operations at Tangana and development of the Plata unit.

The company maintains CA$0.3 million in cash and cash equivalents against CA$3.5 million in total debt, with 222.5 million basic shares outstanding, resulting in a market capitalization of CA$89.0 million and an enterprise value of CA$92.2 million.

Updated Mineral Resource Estimate

The updated Mineral Resource Estimate shows measured, indicated, and inferred resources totaling approximately 19 million tonnes at 277 grams per tonne silver equivalent for 169.9 million ounces of silver equivalent.

Compared to the 2024 Mineral Resource Estimate, total tonnage decreased by 11%, silver equivalent grade increased by 2%, and contained silver equivalent metal decreased by 9%.

Financial Model Revisions and Valuation

Islam has incorporated the expansion of the Recuperada plant from 720 tonnes per day to 1,500 tonnes per day and construction of the new 1,500 tonnes per day Tangana plant into her financial model. The analyst assumes production at full capacity begins in the first quarter of 2029.

The updated discounted cash flow analysis using a 7% discount rate yields a net asset value per share of CA$0.96, increased from the previous CA$0.75. The analyst's target price reflects the expanded operations potential while maintaining confidence that "successful execution of the ramp-up and expansion could help re-rate the stock."

Strategic Outlook and Catalysts

Near-term catalysts include ongoing production ramp-up to 720 tonnes per day capacity, permit approval for the Tangana plant expected in 2025/2026, and expansion of mill capacity to 3,000 tonnes per day targeted for 2029. The company's ability to execute the current operational ramp-up while advancing the larger expansion plan will be critical for achieving the projected economics.

Despite current operational challenges, the Preliminary Economic Assessment demonstrates the significant value creation potential of Silver X's Nueva Recuperada asset through systematic expansion and development of multiple mining units within the property.