Silver Explorer Pivots to New High-Grade Project in Mexico
Fabled Silver Gold Corp. has entered into a binding letter of intent to acquire the Mecatona Property in Chihuahua, Mexico.
Fabled Silver Gold Corp. (FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE) is preparing a National Instrument 43-101 technical report on the Mecatona Property in Chihuahua, Mexico, it has agreed to acquire from Kootenay Silver Inc.
The move to enter into a binding letter of intent with Kootenay came after Fabled Silver terminated its option agreement earlier this year for the Santa Maria project just 7 kilometers to the southeast.
"In early 2022, the company's Mexico team began a regional review and exploration program applying what was learned on the Santa Maria project in respect to structures, breccias, and hydrothermal and epithermal mineralization," Fabled Silver President and Chief Executive Officer Peter Hawley said. "This led the company to the Mecatona property."
Mecatona project. Source: Fabled Silver Gold Corp.The company decided to make the pivot after a review process found it couldn't make the required payments under the Santa Maria option agreement.
Under the agreement with Kootenay, Fabled Silver will issue the vendor 2 million common shares on closing of the proposed transaction to acquire 100% of the property. It will also pay Kootenay US$10,000 twice a year. When commercial production starts, Fabled Silver will pay the greater of US$15,000 or a 2% net smelter royalty (NSR), each to be paid on a quarterly basis.
The 43-101 report will be based on previous exploration campaigns made by Kootenay and more than 400 samples Fabled Silver has taken on the property, which Fabled Silver believes has the potential to host high-grade vein-type silver deposits, Hawley said.
The Catalyst: Green Economy Set to Trigger Silver Growth
Asset manager and author of the What is Chen Buying? What is Chen Selling? newsletter Chen Lin is bullish on silver this year, saying the precious metal will be vital in the green economy transition.
The global silver market will see a compound annual growth rate (CAGR) of 9.83% through 2030, according to Market Research Future.
Silver is great at coating electrical contacts. Almost all computers, phones, cars, and appliances contain the metal. It's also in high demand for use in solar panels. Because of this, the Silver Institute predicted global demand for silver would reach a new high of 1.21 billion ounces in 2022, up 16% from the preceding year.
"Physical investment (in silver) in 2022 (was) on track to jump by 18% to 329 Moz, which would also be a new record," the report said.
Industrial demand for the metal, including for vehicle electrification and other green technologies, is on course to grow to 539 Moz, it said.
"Developments such as ongoing vehicle electrification (despite sluggish vehicle sales), growing adoption of 5G technologies, and government commitments to green infrastructure will have industrial demand overcome macro-economic headwinds and weaker consumer electronics demand," the report's authors wrote.
High-Grade Samples Reveal Mecatona's Worth
The Mecatona project comprises 2,857 hectares in the Parral silver mining district south of the city of Parral in Chihuahua state. It has never been drilled.
It covers a silver-dominant epithermal mineral system in veins and breccias. Kootenay traced one mineralized structure for 1.7 kilometers, which remains open along strike. Another anomalous area outline featured a northeast-trending zone outlined by stockworks and quartz veinlets within an 80-meter-wide argillic alteration zone.
In 2018, Kootenay took 78 channel and grab samples on the property and reported silver values ranging from trace to 735 grams per tonne (g/t) and gold values ranging from trace to 6.94 g/t. The company also sampled up to 3.5% lead and 8% zinc, Fabled Silver said.
In 2019, the company discovered a previously unknown silver, copper, and gold zone hosted in pervasive skarn-altered lower Cretaceous turbidites of the Mezcalera group, Fabled Silver said.
In one 200-by-400-meter zone, silver, copper, gold, and anomalous cobalt mineralization is distributed uniformly. Fifty-one samples taken in that zone returned silver values averaging 110 g/t silver (Ag) to 486 g/t Ag.
Additionally, 12 of 51 samples graded more than 100 g/t Ag with 86% returning more than 20 g/t Ag. The average copper result was 1.7%, with 30 samples returning more than 1%, the company said.
Company Raises Cash
Fabled Silver last week announced a non-brokered private placement of up to CA$500,000 at CA$0.05 per unit to help the company pay for a Phase 1 exploration program at Mecatona and capital expenses.
Each Unit will consist of one common share in the capital of the company and one common share purchase warrant of the company. Each warrant shall be exercisable to acquire one common share at a price of CA$0.10 per share for a period of 24 months from the closing date of the offering.
Closing of the placement is expected to be concurrent with, and conditional upon, the closing of the Mecatona transaction, Fabled Silver said.
Phase 1 Exploration Starting
Hawley said the company had received permission from local landholders to work on the property.
"Phase 1 exploration will be airborne drone magnetics and select IP geophysics over high-priority areas in addition to detailed sampling and mapping, especially structural mapping," Hawley said. "Once this is completed, we will select our drill targets and apply for permits to drill."
Hawley said the company plans to start drilling by the end of the summer.
Streetwise Ownership Overview*
Fabled Silver Gold Corp. (FCO:TSX.V; FBSGF:OTCQB; 7NQ:FSE)
*Share Structure as of 5/30/2023Source: Fabled Silver Gold Corp."What happens below surface can only enhance the property-wide potential," Hawley said.
Ownership and Share Structure
Trading for Fabled Silver has been halted until the completion of the proposed transaction, the company said. It last traded at CA$0.07 on Feb. 21, the day the agreement was announced.
About 5% of the company is owned by management and insiders, including Director David Smalley with 2.63%, Hawley with 2.6%, and Director Luc Pelchat with 0.14%, according to Reuters.
The rest, about 95%, is retail, the company said.
Fabled Silver's market cap is about CA$3 million with about 43 million shares outstanding, about 41 million free-floating. It trades in a 52-week range of CA$0.475 and CA$0.07.
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Important Disclosures:
Fabled Silver Gold Corp. is a billboard sponsor of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000. In addition, Fabled Silver Gold Corp. is an affiliate of has a consulting relationship with Streetwise Reports and has paid a consulting fee between US$8,000 and US$20,000.As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fabled Silver Gold Corp.Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.For additional disclosures, please click here.