Dark Horse’s Las Opeñas Project Under Spotlight with Shining Silver Prices

Summary

• Silver prices outshined gold by surging almost 125% from the March lows, on the back of growing investments. Industrial demand set to grow with anticipation of infrastructure development across geographies.
• Dark Horse Resources’ Las Opeñas Project exhibits silver mineralisation of high grade, with resource definition under focus.
• Dark Horse has earned a 25% equity in the Argentinian project, with project ownership expected to increase to 51% post meeting second year terms of the agreement.

Silver has regained momentum with investments pouring, as the white metal prices have continued growth trajectory even after doubling since the March lows. The versatile metal, attributing to its dual nature as an industrial and a precious metal, acted as a safe haven amid the coronavirus crisis, recovering from the lows of US$11.98 an ounce to US$26.74 an ounce on 25 August 2020.

Good Read: Silver Catches up With Gold and How!

While both silver and gold have been on an unabated bull run, silver at present offers attractive return on ~50% year to date and ~125% from the lows in March against gold, which surged by ~27% year to date and ~32% from the lowest values of 2020 in March.

Why the Turnaround in 1H 2020? Trigger Points in Favour of Plata

Safe Haven Investment – Strong growth was observed during the first half of the year, on the back of burgeoning demand in silver-backed exchange-traded products (ETPs) and solid silver coin and bar investments.

During 1H ended 30 June 2020, retail and institutional investors poured immense investment into silver ETPs, pushing silver holdings for ETPs at all-time high of 925 million ounces, according to a report by the Silver Institute. The ETP inflows during 1H 2020 stood at 196 Moz, surpassing the highest annual inflows of 149 million ounce during 2009.

Industrial and Jewellery Demand – Although the pandemic severely impacted silver fabrication demand during the initial period of 2020, signs of recovery have been observed in industrial demand from May onwards, following the easing of extensive quarantine measures. With the global stimulus packages focused on infrastructure development, a major boost in industrial demand is anticipated in the short and longer term. Silver demand for jewellery is anticipated to hold strong ground with the prices of other precious metals, especially gold splurging to record ranges.

Mine Supply – With global silver mining countries suspending operations on a temporary basis due to the coronavirus outbreak, silver supply chain had been severely impacted. As per the Silver Institute, a decline of ~7% is anticipated to restrict silver supply to ~950 million ounces in 2020.

Silver – A Long-Term Play

Investments into silver are anticipated to continue over the remaining period of 2020 and thereafter. Growth in the silver market can be attributed to the safe-haven nature of the metal. Moreover, unprecedented liquidity injections by central banks and extremely low interest rates reduced the cost for making investments in precious metals.

While gold trades around the record levels of USD 1,933.55 an ounce, silver prices have a long way to match the previous highs. Furthermore, with boost to infrastructure, investment and jewellery, the demand scenario remains optimistic for silver in the long term.

Dark Horse: Best of the Plata and Aurum Worlds

Dark Horse Resources Limited (ASX:DHR), an experienced silver and gold explorer, holds high-grade projects in Argentina and is boosting its project portfolio with new acquisitions in tier 1 mining jurisdictions.

Good Read: Dark Horse Exploring for Large Gold Deposits in Key Mining Jurisdictions, Expanding Horizons in 2020

Its project portfolio includes the Las Opeñas gold and silver project, which is located in the prolific San Juan province on the border of the Indio Belt of Argentina in the neighbourhood of Barrick’s Pascua Lama and Veladero projects. The gold and silver project at altitude greater than 2,800 metres, stretches over an area of 1,462 hectares in absence of glaciers and in the presence of substantial infrastructure.

The RC drilling campaign from 2019 confirmed high-grade gold and silver mineralisation near surface.

• 4m with 2.2 g/t Gold, 288 g/t Silver; Including 1.2m with 10.5 g/t Gold, 1,692 g/t Silver
• 5m with 1.9 g/t Gold, 262 g/t Silver
• 0m with 2.9 g/t Gold, 103 g/t Silver; Including 1.6m with 10.6 g/t Gold, 226 g/t Silver

A drilling program at the Presagio deposit is anticipated to estimate the JORC code complaint mineral resources. The project has already exhibited multiple silver targets of high grade, including the “LINA” target discovery.

Recently, Dark Horse announced a payment of US$23,650 to the vendor of the Las Opeñas Project in Argentina, following which in compliance to the exploration agreement, the company earned the rights to a 25% equity in the project. After meeting second year terms of the agreement, its ownership is expected to increase to 51% in the project.

Stock Performance - DHR stock traded at AU$0.002 a share on 26 August 2020 with a market capitalisation of AU$8.07 million. The last three-month return of the stock was noted at 25%.

Good Read: Dark Horse’s Remarkable June Quarter, Gold and Tungsten Projects’ Acquisition in Spotlight