S32, EQE & AZS – Three ASX silver stocks to keep on watchlist

Highlights

• Spot silver prices edged up 4.49% in the past month despite the rise in US bond yields.
• Silver has been in the spotlight given it is a key component for producing solar photovoltaic cells, driving the developments in renewable energy production.

Spot silver prices (XAG/USD) have surpassed the US$23 mark, witnessing over 4% growth on the month. The upbeat movement comes despite the rise in US bond yields.

The 10-year US Treasury yield recently edged up 1.96% while yield on the 30-year Treasury bond also jumped nearly 4 basis points to 2.256%. Usually, increase in bond yield is inversely proportional to silver prices as the opportunity cost for holding non-yielding precious metals increases.

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Silver has a range of applications and is used in making coins, jewellery, medical appliances, and electronics. Moreover, the precious metal has been in the spotlight given it is a key component for producing solar photovoltaic cells, driving the developments in renewable energy production.

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With this backdrop, let us discuss three ASX-listed companies that are engaged in silver exploration and production.

South32 Limited (ASX:S32)

South32 owns Australia-based Cannington mine, which has grown to become one of the world’s largest and lowest-cost silver producers.

Notably, Cannington boasts:

• A surface processing facility and an underground hard rock mine
• A facility for concentrate handling and ship loading at the Townsville Port
• A road-to-rail transfer facility

Silver, lead, and zinc are extracted from the ore to produce high-grade, marketable lead and zinc concentrates that have a high silver content.

The Company has also revised the Cannington mine production guidance for FY22, expected to be higher by 5% with the operation on-track to transition to 100% truck haulage in the quarter ending 30 June 2022.

S32 shares were trading at AU$4.410 midday on 10 February 2022.

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Equus Mining Limited (ASX:EQE)

Equus Mining is a gold and silver producing company focused on Cerro Bayo, a historical high-grade gold-silver producing mining district in southern Chile.

In December last year, the Company wholly acquired the Cerro Bayo Project from Mandalay Resources, including the ownership of the mine, infrastructure, operational processing infrastructure and 295 square-kilometre mining claim package.

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An Inferred Mineral Resource estimate of 302,000oz AuEq @ 2.5 g/t AuEq has been confirmed at the Taitao Deposit within the Cerro Bayo District.

The Company is currently focussed on:

• Advancing brownfield and greenfields exploration drilling programs on high-priority targets near the Cerro Bayo processing plant
• Resource evaluation and optimisation studies of the Taitao Inferred Resource and peripheral to centres of historic production
• Production from the low-grade stockpiles of the Cerro Bayo Project

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EQE shares were trading at AU$0.165 midday on 10 February 2022.

Azure Minerals Limited (ASX:AZS)

Azure Minerals holds significant project portfolio in Australia and Mexico, with the Company’s Mexican projects providing exposure to silver.

• Azure has discovered and defined two epithermal silver and gold deposits at the Alacrán Project, which hosts resources of 32Moz silver and 150,000oz gold.
• Oposura Project boasts JORC Mineral Resources of 3.1Mt @ 5.0% Zn, 2.7%Pb & 18g/t Ag.
• The Promontorio Project hosts two deposits with Mineral Resources totalling 2.9M tonnes containing 39,600 tonnes of copper at 1.4% Cu, 151,000 ounces of gold at 1.5g/t Au, and 3.26Moz of silver at 35g/t Ag.
• The San Agustin project covers 201 hectares and is located in the heart of the Mexican Silver Belt.

The Company has kicked-off a strategic review of its 100%-owned Mexican precious metals and base metals projects, including the Oposura zinc-lead-silver project and the Alacrán silver-gold-copper project.  

AZS shares were trading at AU$0.440 midday on 10 February 2022.