Following the release of positive test results from the silver mineralization zone at the company’s flagship project in Mexico, analyst Philip Ker reiterated his buy recommendation, maintaining his 12-month target of $0.95, a premium of 137% to the $0.40 price the day the report was issued.
The flagship “Sierra Mojada” project is located 150 kilometers north of the city of Torreon in Coahuila, Mexico, and is highly prospective for silver and zinc.
Results reported pertain to test work on the silver mineralization from the three areas of the silver deposit: “Shallow Silver Zone, “Centenario Zone”, and “Fonteriza Zone” and does not include work on the “High grade” zinc zone which is still ongoing and sits underneath and adjacent to the silver mineralization.
Overall silver recoveries averaged 73.2% with peak values achieving approximately 89% from various sample grades and cyanide concentrations. Furthermore, zinc recoveries of 40 to 50% were achieved from a SART process test from samples where the silver had already been precipitated out of the solution and is believed this process would significantly aid in reducing costs as more than 98% of the cyanide was recycled.
Tim Barry, President and CEO stated, “Work going forward on the metallurgy will now focus on optimizing and improving the silver and low grade zinc recoveries at various steps along the process, and examining the potential to extract more value from lead and zinc. By unlocking the metallurgy we have taken another major step forward in development of one of the largest undeveloped silver resources in Mexico.”
Analyst Philip Ker stated, “We continue to be optimistic of Silver Bull to further de-risk Sierra Mojada and believe the positive metallurgy demonstrated today will be a principal component to investigate project economics in an upcoming Preliminary Economic Assessment that is anticipated later in the 3rd quarter of 2013. We continue to value shares of Silver Bull on an in-situ basis only at this time and have only attributed value to half of the in-situ zinc within the deposit.”
Silver Bull also has 2 mineral licenses in Gabon, Central Africa, which are prospective for gold, manganese, and iron ore.
The company currently trades at $0.39, and with 159.1 million shares outstanding, the company is capitalized at $62 million.
For more information about PI Financial or to obtain a copy of their research report, contact your nearest PI Financial office. Their branches are listed on their website at www.pifinancialcorp.com.