Latest / Kitco MINING / Blackrock Silver’s Plan to Build a High-Grade Nevada Silver Mine | Andrew Pollard

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Blackrock Silver’s Plan to Build a High-Grade Nevada Silver Mine | Andrew Pollard · Kitco MINING

0:07
SPEAKER_00: Hello and welcome to Kitco Mining with me, Paul Harris.
0:10
SPEAKER_00: Today it's Tuesday, June the 30th, and we are talking about silver.
0:13
SPEAKER_00: Joining me today is Andrew Pollard, president and CEO of BlackRock Silver, which trades on the TSXB under the ticker BRC.
0:20
SPEAKER_00: Andrew, welcome to Kitco.
0:23
SPEAKER_01: Always good to see you, my friend.
0:26
SPEAKER_00: Likewise, we've got a lot to talk about, and I want to start right at the top with silver, the metal, the silver price.
0:32
SPEAKER_00: I think it's been fair to say that silver's been living up to its volatile reputation so far this year.
0:38
SPEAKER_00: It's come off what 50 to 60% from its all-time high, which it achieved right at the start of the year.
0:44
SPEAKER_00: It's now about, let's say, 60 US dollars per ounce.
0:47
SPEAKER_00: I suppose the first question for many people, Andrew, is has silver completed its correction or is there potentially a bit more to come?
0:56
SPEAKER_01: Well, you know, silver's you know, probably the only commodity that either lives in one of two camps.
1:01
SPEAKER_01: It's either the most hated or it's the most loved.
1:04
SPEAKER_01: And sure, yeah, it is off 50% in the last three or four months, but it's also double where it was in January of last year, right?
1:12
SPEAKER_01: So, you know, the vol the volatility is what makes it exciting.
1:16
SPEAKER_01: Um, I don't think the thesis ever changed.
1:19
SPEAKER_01: You know, structural deficits, the industrial case expanding, uh the monetary metal aspect of it's um coming in full view as it's uh uh been trading right along with gold and and you know volatility to one side and the other.
1:33
SPEAKER_01: Um none of that's changed.
1:35
SPEAKER_01: It's just been the inflation surrounding the Iraq conflict that has sucked a bit of the life out of that.
1:42
SPEAKER_01: But you know, we're at quarter end now.
1:44
SPEAKER_01: Um you're seeing bids come in.
1:46
SPEAKER_01: Um and you know, the best thing about what I do is I don't really worry about the cost of silver because we've got one of the highest grade projects in the industry.
1:56
SPEAKER_01: And you know, it's in it's in markets like this uh where silver does lose 50%, where you know the high grade stories really actually stand out.
2:06
SPEAKER_01: It's the big bulk tonnage, you know, multi-billion ounce deposits that have the grade of salt water, which you know, silver drops below a certain threshold, those resources go to zero.
2:16
SPEAKER_01: Our resource, I mean, if you if you double the cutoff grade, um we we only lose about like 15% of our ounces, and the average grade ratches up by 20%.
2:27
SPEAKER_01: So, you know, high grade stories are all weather.
2:31
SPEAKER_01: They work in any pricing environment, and that's why we're just doing whatever we can to put our head down and ultimately get our project moving towards a production decision and construction decision.
2:42
SPEAKER_00: Okay, we're gonna dig into the Tonopar West project, which you have in the Walker Lane district of Navardo in just a moment, Andrew.
2:48
SPEAKER_00: But uh as I mentioned, silver's about 60 US dollars per ounce at the moment.
2:52
SPEAKER_00: Some of the commentators I've been reading think this is gonna be quite a strong, a very strong price floor for silver.
2:59
SPEAKER_00: What's your opinion there?
3:01
SPEAKER_01: Yeah, I I I mean I certainly think the worst is behind us.
3:04
SPEAKER_01: I mean, no one wants to buy at the bottom and no one wants to sell at the top, and you know, investors have been absolutely routed in the last few months.
3:12
SPEAKER_01: Just you know, it seems like there's there's that there's certain games being played, but at a certain point, there's a utility to it.
3:19
SPEAKER_01: Uh you know, more silver is being consumed um than is being produced.
3:24
SPEAKER_01: There's the structural deficits are in their fifth or sixth year now.
3:27
SPEAKER_01: There's not any major new mines coming online um to really dent that.
3:32
SPEAKER_01: Um so you know, at the end of the day, you you know, uh this isn't smoke and mirrors.
3:38
SPEAKER_01: This is something that's based off actual fundamentals.
3:40
SPEAKER_01: And um I I think at a certain point uh you'll see that that significant V-shaped recovery.
3:47
SPEAKER_01: And uh I mean we're filming this on the last day of the quarter, so so June 30th.
3:52
SPEAKER_01: Um and you're seeing that happen today.
3:54
SPEAKER_01: Overnight, silver got sold down to low 57, and now it's back over 60, and it's looking pretty strong here.
4:01
SPEAKER_01: So, you know, we're at the end of the month, end of the quarter.
4:04
SPEAKER_01: Uh you've seen oil prices uh come down significantly, which was what was causing the inflation, which was causing um Fed rate hikes expectations to move up as opposed to move down.
4:17
SPEAKER_01: Um, well, you know, all of the all of the noise is seems to be abating and working itself out.
4:23
SPEAKER_01: So, no, I think we've got some good um good good potential to really, really run here.
4:29
SPEAKER_01: Whether or not it'll hit 120 this year again, that's you know beyond my pay grade.
4:33
SPEAKER_01: But certainly, you know, I'd be shocked if we don't see a significant retracement uh over the coming months.
4:40
SPEAKER_00: And I think it's been it'll be fair to say that the the market for silver stocks has also been hot.
4:46
SPEAKER_00: We'll talk about that a little bit later on, but first uh I want to talk more about Tonapah West.
4:51
SPEAKER_00: Um, you've got one of the biggest and highest grade silver deposits in the US, if not in uh in the Americas, uh at Tonopa West, as I say in the Walker Lane district of Nevada.
5:00
SPEAKER_00: You're taking steps towards production.
5:02
SPEAKER_00: In March, you released a PEA, a preliminary economic assessment, to produce an average of 7.1 million ounces a year of silver equivalent at an all-in-sustaining cost of 70.44 US dollars per ounce for more than 11 years, an additional capital cost, initial capital cost there of just 190 million dollars.
5:22
SPEAKER_00: Andrew, this would be a sizable mine in terms of its production, yet uh a relatively modest 1,800 tonne per day operation.
5:30
SPEAKER_00: And that of course is due to the high grade which you mentioned.
5:32
SPEAKER_00: Uh 454 grams per ton of the grade there.
5:35
SPEAKER_00: What is your plan to sort of bring Tonopar West into production?
5:39
SPEAKER_00: You've been talking about an underground or starting an underground development next year, 2020 to seven.
5:45
SPEAKER_00: What would that be for?
5:46
SPEAKER_00: And how would that advance the project?
5:48
SPEAKER_01: Yeah, well, listen, it was it was six years ago this month that we first had drill rigs coming up to our site.
5:53
SPEAKER_01: You know, we're the first group to ever drill this in modern times.
5:57
SPEAKER_01: The old timers just went straight to mining it, and you know, we consolidated what we saw as the extension of one of the most famous precious metals camps in America, certainly one of the most famous silver camps.
6:09
SPEAKER_01: Um, and we're picking up right from where the old timers left off.
6:12
SPEAKER_01: So in the six years we've had the project, we're not getting this thing permitted.
6:16
SPEAKER_01: Uh, we're at the very, very tail end of our environmental data collection.
6:20
SPEAKER_01: And one of the nice things about this project is um obviously there's no better place to be right now in terms of building something brand new than in America and specifically Nevada, but unequivocally, there's no better setup you can have in the mining business than being on private land, patented claims, which our project sits entirely on, meaning we circumvent the whole NEPA process.
6:41
SPEAKER_01: We're only getting our permits from the county and the state of Nevada, which means we're moving faster than the fastest 41 down there.
6:50
SPEAKER_01: Um and yeah, six years after our discovery hole, uh, we've already got the first of three key permits.
6:56
SPEAKER_01: Everything that we're doing this year is gonna put us in a position to break ground on a uh a commercial grade exploration decline in um Q3 of 2027, which will allow us to uh get underground, get into the guts of the system, and start start stacking high grade ore in 2028.
7:15
SPEAKER_01: Um, you know, this isn't gonna be your average test mine where we're just gonna do a 10,000 ton bulk sample.
7:22
SPEAKER_01: You know, we're gonna be pulling out at minimum 50,000 tons of you know high grade ore.
7:28
SPEAKER_01: You know, that the first test mine area is gonna be averaging north of 400 grams per ton silver equivalent or so, and that's gonna give us a lot of optionality to potentially start making some money towards the back end of 28 and 29, all while we're getting just the most white glove level data, because we'll be actually mining, we'll be testing our underground mining methods, we'll be looking at stability, we'll be looking most importantly at reconciliation against the model, uh, all which will feed into a fantastic feasibility study in 29.
8:01
SPEAKER_01: And ultimately, at that point, as we've got some money coming in the door from you know, whether it's off-takes or toll milling style scenarios, um, you know, the only decision we'll be left to really decide on, to push the green light on, is to build the mill and surface infrastructure.
8:19
SPEAKER_01: And um uh from there, yeah, you know, we'll be on the fast track to hitting that um that production profile that you so eloquently stated in your opening.
8:30
SPEAKER_00: I've got a lot to follow up on on uh what you've just said there, Andrew.
8:32
SPEAKER_00: Let me start at the sort of top there.
8:35
SPEAKER_00: Um you mentioned that um there's been a you're in a historical mining district, and of course, Nevada is the silver state.
8:42
SPEAKER_00: Uh it was its fortune was made on silver, more recently gold, of course.
8:47
SPEAKER_00: I did a site visit to the project a few years ago, and around the project site there was a lot of uh historical mining artifacts, um, very, very visible.
8:56
SPEAKER_00: So I guess an obvious question is why hasn't Tonopah West been exploited before if there's been so much activity in the past?
9:04
SPEAKER_01: You know, it sounded too good to be true, and I'll tell you what, that's what I was told when we were first trying to raise money when we got um this uh land package together in 2020.
9:14
SPEAKER_01: Really, the missing link for the entire district was um the holdings of a former company called the Tonopah Extension Mining Company that went bankrupt in 1930, not due to um not due to uh any issues with the actual project.
9:30
SPEAKER_01: It was due to some technical issues uh in 1924, primarily the reliability of electricity, um, which affected their ability to pump out water.
9:39
SPEAKER_01: Um and they ended up taking out a lot of debt to get diesel generators and heavy-duty water pumps uh built and shipped over, which took about five years.
9:49
SPEAKER_01: Uh and when they were installed in 1929, it was the Great Depression, metals prices tanked.
9:55
SPEAKER_01: Uh, their note was payable upon installation, and effectively the guy who owned the note um forced the company into chapter 11.
10:03
SPEAKER_01: That that company was uh put into uh the the holdings of that company were bought out of chapter 11 in 1930 and held by one family ever since we got our hands on it uh in 2020.
10:16
SPEAKER_01: Um we you know we're picking up from the last two historic uh uh mines in the district.
10:22
SPEAKER_01: And where they where this company stopped mining in 1924, the vein was said to be 24 meters thick.
10:29
SPEAKER_01: So we figured six years ago that would be a pretty good place to start.
10:33
SPEAKER_01: Um, you know, it sounded too good to be true.
10:35
SPEAKER_01: I said, listen, if the historic records are correct, we're gonna hit something that's gonna be 20, 25 meters thick.
10:42
SPEAKER_01: Our first drill hole hit 30 meters of a kilogram per ton.
10:46
SPEAKER_01: Um, and uh uh we hit multiple veins that the old timers didn't know were even there.
10:50
SPEAKER_01: One was up to 3.6 uh kilo silver equivalent.
10:54
SPEAKER_01: Now, six years later, let's say 95% of our mineralization is hosted on this land package, this land package that was tied up and held sitting in purgatory, just waiting for someone to uh uh bring the drills back.
11:07
SPEAKER_01: So, you know, you mentioned that Nevada's known as the silver state.
11:10
SPEAKER_01: It's known as the silver state because of the Tonopah Silver District.
11:14
SPEAKER_01: This is the second largest historic uh silver producer, but only behind the Comstock load.
11:19
SPEAKER_01: But whereas the Comstock petered out uh naturally, ours stopped mining simply because um of that one issue, of that one company that uh ran into some financial troubles.
11:31
SPEAKER_01: You know, in 30 years of production, our district produced 400 million silver equivalent ounces over a strike length of four, about four and a half kilometers.
11:40
SPEAKER_01: Now we're picking up on those exact same vein steps right from where they left off in 1930.
11:45
SPEAKER_01: We've now drilled out about five and a half kilometers of cohesive intact mineralization, starting right from where they left off.
11:53
SPEAKER_01: And just this year, I mean, we're doing step outs uh with assays pending right now of a further 800 meters beyond on multiple vein sets there.
12:01
SPEAKER_01: So we've we've effectively drilled out another Tonopa Silver District um in the span of six years, and and it's got no signs of stopping.
12:11
SPEAKER_00: Okay.
12:11
SPEAKER_00: Now you also mentioned you're on private land, so that makes uh for a much simpler permitting environment.
12:17
SPEAKER_00: You mentioned you got one permit out of three.
12:21
SPEAKER_00: What have you got and what you still have to get?
12:24
SPEAKER_01: Yeah, well, the the the longest lead permit, so so the the permit that we got in hand is our air quality permit.
12:30
SPEAKER_01: Um the main one that we're seeking, or not the main one, but the longest lead one that environes it involves the most amount of data collection.
12:37
SPEAKER_01: It's called the water pollution control permit.
12:40
SPEAKER_01: Um, so we've been working on that, you know.
12:43
SPEAKER_01: Uh it that that handles everything with respect to water.
12:47
SPEAKER_01: Not only you want to get a water balance, you know, where the water table is, how you're gonna handle it.
12:54
SPEAKER_01: Um so we've been doing pisometer and hydrology focused uh uh uh programs since the beginning of last year.
13:00
SPEAKER_01: We're now at the humidity cell uh uh uh uh phase of our testing, which is how the waste rock, how what we're pulling out of the ground is gonna react with water in the sense uh uh um to what extent it generates acid.
13:13
SPEAKER_01: Um, this is a very well understood um district, and and um you know we've got mind dumps all over the project, so we already have a very good understanding of um uh the extent to which it would be acid generating.
13:25
SPEAKER_01: And I guess as it relates to this water pollution control permit, um it's looking like we're what we'll need between 36 and 40 weeks' worth of data based off what we're seeing.
13:36
SPEAKER_01: Um and we're in week, I think, 27 or 28 of that.
13:40
SPEAKER_01: So the lights at the end of the tunnel where we've almost got all of the data we need to write our report and make our submission to the regulators.
13:48
SPEAKER_01: And from there, what's nice about being on private land is you've got prescribed timelines where they have to get back to you.
13:54
SPEAKER_01: So we make, you know, effectively if we've got everything we need uh in hand by mid to late September, um, we should have a response back by the end of the year on that.
14:03
SPEAKER_01: And then last but not least, um really it's just uh converting our exploration permit into an exploitation permit, um, which um uh is really uh the the state approving our engineering designs.
14:16
SPEAKER_01: And that's what we're working on right now behind the scenes is getting our engineering plans finalized, get those um put forward.
14:23
SPEAKER_01: You know, our initial decline that we're gonna be doing is gonna run about 800 meters in length.
14:28
SPEAKER_01: It's gonna be about uh four and a half meters by four and a half meters, and it's gonna take us effectively 200 meters um from surface on a vertical extent.
14:38
SPEAKER_01: Um so you know, these permits are gonna allow us um to obviously break ground, uh, do that 800 meters of uh exploration decline, and it's gonna allow us to bring, you know, at minimum 50,000 tons of ore up to surface.
14:53
SPEAKER_01: Uh, all in the while, you know, we're de-risking it, we're getting a good sense of reconciliation.
14:59
SPEAKER_01: That you know, by getting underground, that's what's going to allow us to really tighten up the drill spacings and start drilling it out on 10-meter centers and start you know proving our reserves, um, de-risking it as we go.
15:12
SPEAKER_01: Um, and as I said, ultimately finding a way to monetize that initial uh bulk sample and test mining uh or stockpile that we're we're generating, all while we um you know get ready to make that final investment decision uh to build that that mill and surface infrastructure.
15:30
SPEAKER_00: Okay, so Andrew, the 800-meter decline, what will the cost of that be?
15:35
SPEAKER_00: And do you have the cash on hand to execute on that?
15:38
SPEAKER_01: Yeah, I'm glad you asked.
15:39
SPEAKER_01: So so yeah, you know what's nice about what we're doing is you know the total capex for the project's$190 million.
15:46
SPEAKER_01: What's nice about this is we don't have to we're we're we're not spending$190 million to get started.
15:51
SPEAKER_01: We're de-risking this and chunking down aspects of that capex as we go that'll ultimately provide some revenue for us to help further chunk down the rest of the capex once we uh decide to uh go full steam ahead after that initial test mining.
16:06
SPEAKER_01: Um so the the the decline itself, it's gonna be, you know, we're we're targeting somewhere between 20 and 25 million dollars US.
16:14
SPEAKER_01: Now, where where it gets interesting is, I mean, I've seen a lot of people talk about how great it is and wonderful it is that silver is just being added to the critical minerals list uh in the US.
16:25
SPEAKER_01: And most of the people talking about that don't have companies developing projects in the US.
16:30
SPEAKER_01: Uh, we're the only company that I'm aware of that's going to be permitted and be breaking ground on a new project during this administration.
16:38
SPEAKER_01: Um so what we're doing right now is we're pursuing a number of different avenues within the federal government uh that may help uh provide non-dilutive financing for this next chunk.
16:49
SPEAKER_01: And once again, this next chunk is bite-sized for us and it's gonna open the door to uh potentially significant revenue for us in you know late 28 and 29.
16:58
SPEAKER_01: Um, at the end of the day, America doesn't produce all that much silver.
17:03
SPEAKER_01: They only produce 32 million ounces.
17:05
SPEAKER_01: So our contribution uh is gonna jog domestic production by you know 10% at minimum each and every year, and it's gonna generate a heck of a lot of money.
17:15
SPEAKER_01: You know, at$31 silver, which was what our PEA was based off of, uh, through Life of Mine, it's gonna generate over$112 million in income taxes.
17:25
SPEAKER_01: So um this is gonna be a big deal for Nevada, it's gonna be a big deal for domestic production, um, and it's gonna be a big deal for us and our shareholders.
17:35
SPEAKER_00: Okay, so the exploration decline will cost 20 to 25 million.
17:40
SPEAKER_00: You're potentially hoping to get some US government grants to contribute towards that.
17:46
SPEAKER_00: Um, whether or not that materializes, how much cash do you have on hand at the moment with which to finance that development, or will you need to go to the market or do something else?
17:57
SPEAKER_01: Well, you know, it this has been a very easy figure for me to remember because it's been the same amount of money we've had for about the last six months.
18:04
SPEAKER_01: Um we're sitting at$25 million.
18:07
SPEAKER_01: We just put our financials out um for quarter ending April 30th, where we had uh$25 million or so in the Treasury.
18:15
SPEAKER_01: Um that's nearly exactly the same as where we were at the end of January, uh$25 million.
18:22
SPEAKER_01: And subsequent to quarter end, we had another$3.5 million or so come in.
18:26
SPEAKER_01: We've been effectively treading water for the last six months just due to a torrent of warrant money that's come in the door, um, just given how uh well our stocks performed um over the last uh year or so.
18:38
SPEAKER_01: Um so uh we've you know we've had drills at site, three drills turning at site since the beginning of March, I think it was, and our treasury has been exactly the same.
18:50
SPEAKER_01: Um and you know, and looking at uh what's coming in the door over the next, say, six months, we've got another tranche of warrants that expires in January of next year, strike price of 50 cents, um, and that amounts to about another six or seven million dollars.
19:06
SPEAKER_01: So, you know, our entire exploration program thus far has been completely paid for.
19:11
SPEAKER_01: Uh, we're expecting more money in.
19:13
SPEAKER_01: And the nice thing is there's no overhang on our stock now.
19:16
SPEAKER_01: Um, you know, all that we had a influ uh a huge influx of money in in May, another huge influx of money in in um January simply because we had uh multiple tranches of of warrants expiring then, and now that sort of um anchors come off our stock.
19:32
SPEAKER_01: Um granted our volume's still very, very good, so we've been chewing through it.
19:36
SPEAKER_01: But um, yeah, we're in a really, really good position.
19:38
SPEAKER_01: And you know, most importantly, you know, just say we have to finance this um this uh decline ourselves.
19:45
SPEAKER_01: Well, listen, we're a$350 or$400 million stock right now.
19:49
SPEAKER_01: At the end of February, we're$800 million.
19:52
SPEAKER_01: Um, you know, if the worst is behind us, uh and you know, this next this next stage for us, um, that's gonna be after we have all our permits in hand, which analysts tell me is gonna probably be the biggest re-rate we've ever had on our multiple, because we'll go from, you know, we're leapfrogging just about any everyone in terms of discovery hole resource, PEA, another resource, getting our permits in place, breaking ground.
20:16
SPEAKER_01: I mean, this is all gonna happen within the span of seven years.
20:19
SPEAKER_01: So our multiple is poised to significantly re-rate once the light is at the end of the tunnel and the markets assured that we've, you know, the the biggest risk in mining isn't really project-related, it's time-related.
20:33
SPEAKER_01: Um, by taking out the biggest uh the biggest potential risk that projects face, which is getting our permits in a timely fashion, that's when I think people start um uh while we start trading, not based off our PNAV multiple on our PEA economics, but off our PNAV multiple based on our our project at current metals prices.
20:53
SPEAKER_01: So, you know, we've got a lot of different catalysts coming down the pipe um by the end of this year.
20:58
SPEAKER_01: And as I said, uh we've got a lot, uh we've got those step-outs in the lab right now, which have the potential to blow the doors off the upside uh from a market perspective in terms of just how many ounces are there.
21:10
SPEAKER_01: So any which way you cut the cookie, it's uh looking good for us.
21:15
SPEAKER_00: Okay, well, let's look at potential downside.
21:17
SPEAKER_00: Tonopar West has many advantages.
21:19
SPEAKER_00: It's got great, it's got scare.
21:21
SPEAKER_00: As you mentioned, you're on private land, you're in an area with an abundant infrastructure, Nevada, of course, everything seems doable.
21:27
SPEAKER_00: What, if anything, could be a snag for the project?
21:31
SPEAKER_01: Well, I mean, at the end of the day, it's always it it always comes down to execution.
21:37
SPEAKER_01: Um, and you know, anytime a company goes from exploration to developer, obviously that's a big turning point.
21:44
SPEAKER_01: Um, you know, we're going full steam ahead right now.
21:47
SPEAKER_01: In fact, we're a little ahead of schedule in terms of where we thought we would be uh in within this permitting process.
21:53
SPEAKER_01: Um but you know, this is the year where the company changes.
21:56
SPEAKER_01: This is our where we're we're we're we're we're going from You know, teen to adult very quickly, and we're building out the infrastructure internally.
22:04
SPEAKER_01: We've built out our board with real operators.
22:07
SPEAKER_01: We've got um uh people from MagSilver, two new directors from MagSilver.
22:12
SPEAKER_01: We've got one of Eric Fear's partners from Silvercrest on our board.
22:16
SPEAKER_01: Um uh but really what we're doing is we're building out the internal functions now.
22:21
SPEAKER_01: We've got an executive search underway um to bring on you know a world-class mind builder, someone that the market uh can have confidence in that's done it before, that's taken projects from conception to reality, especially narrow vein high-grade projects like this.
22:38
SPEAKER_01: Um we're we're we're we're just sort of in that phase where we're we're you know less geologists, more engineers.
22:44
SPEAKER_01: Um, and that's gonna be a big uh a big step forward for us too.
22:47
SPEAKER_01: So expect some news on that front over the coming months.
22:50
SPEAKER_01: But this is the project where you know people want to get behind it.
22:54
SPEAKER_01: Um we've had uh a lot of interest from some pretty big names uh uh within the Mind Builder uh ecosystem simply because it's got a lot of wiggle room.
23:03
SPEAKER_01: This isn't a project that's gonna blow up on your face.
23:06
SPEAKER_01: It's got grade the metallurgy here is phenomenal and super well understood.
23:10
SPEAKER_01: It's not in Timbuktu.
23:12
SPEAKER_01: You know, the only security you need in Tonopa is at the casino next door to our project.
23:17
SPEAKER_01: Um and it's you know, three hours from Vegas and four from Reno.
23:21
SPEAKER_01: So this is uh this is something that um I think we're gonna get the right people behind it.
23:26
SPEAKER_01: Uh we're gonna have some help from the government, I'm quite certain.
23:30
SPEAKER_01: Um and uh, you know, once the permits come in, this is gonna be on the fast track to once again taking it from this conception that we've got right now into just a high margin, low-cost producer.
23:43
SPEAKER_00: Now, I imagine it's not just the major engineering houses that you're getting interest from, Andrew.
23:48
SPEAKER_00: There's been incredible appetite for silver in recent years and silver stocks with three major transactions, including Gatos, Los Chispas, and part of the Wannacipio project uh mine in Mexico.
23:59
SPEAKER_00: And in the past few weeks, Thomas Kaplan and the Electrum Group has IPO'd two new silver developers on the New York Stock Exchange with assets in Idaho and in Guanajuato in Mexico.
24:11
SPEAKER_00: And there have been numerous smaller transactions.
24:13
SPEAKER_00: So I guess, Andrew, the question is will it be BlackRock Silver that builds Tonopar West?
24:19
SPEAKER_01: Oh yeah, well listen, uh the quickest way for us to add value is to advance this as quickly and um safely towards uh towards ultimately that construction decision and realizing its potential.
24:32
SPEAKER_01: Um, I think you know, certainly getting these permits in hand is gonna put a huge, huge target on our back, but it's also gonna lead to a significant re-rate.
24:41
SPEAKER_01: So we're just trying to put our head down and get there as quickly as possible because um, this is something that I think every silver company in the world is gonna want to have, given the grade and the upside potential, and just you know, it's gonna work in any pricing environment, but it's also attractive to a lot of gold companies, too.
24:59
SPEAKER_01: Um, we're right next door to uh a project that Sentera is gonna be breaking ground on um by the end of this year called Gem Fields, which is effectively one town over from us along the highway.
25:12
SPEAKER_01: Um there's a bunch of shovel ready projects that directly abut our project that are just waiting for someone to come in.
25:19
SPEAKER_01: Um two towns over, Anglo Gold has consolidated, I think, 25 million ounces uh at their Arthur and Merlin projects.
25:27
SPEAKER_01: Um so they're and and we're we're we're just you know 40 miles south of Kinross's Round Mountain.
25:32
SPEAKER_01: So, you know, silver uh in a safe jurisdiction that's uh uh is getting permitted, um, that's going to be very appealing for companies operating in some sketchier parts of the world right now, as you can imagine.
25:46
SPEAKER_01: But really, we're acting as if the way to, you know, if we were to put a for sale sign uh on us, you know, you've got no control over your destiny.
25:54
SPEAKER_01: If we can listen, it's$67 silver, this project commands a$1.55 billion after tax NPV against a capex of$190 million.
26:06
SPEAKER_01: Um I don't know where silver's gonna be in 28 or 29 or 30, but I've got a sense it's gonna be higher than that.
26:13
SPEAKER_01: So why wouldn't we want to go the distance and add as much value as we can?
26:17
SPEAKER_01: And you know, you mentioned Gattos and First Majestic and Meg.
26:21
SPEAKER_01: All of those guys had to go the distance and de-risk it.
26:24
SPEAKER_01: So, you know, granted it was a different market and the big boys were more interested in buying production versus taking on risk.
26:34
SPEAKER_01: Um, you know, maybe the market will change, and maybe you'll see the the big silver and gold producers start coming down into the developer sphere.
26:42
SPEAKER_01: If that happens, I mean every single analyst that covers us says that we're one of the top takeout targets in the industry right now.
26:48
SPEAKER_01: My goal is just to add as much value as we can so we can we can start trading off of that you know$1.55 billion NPV at 67 and not so much based off of that$437 million NPV that are PEA outlines that's based off of that$31 silver.
27:07
SPEAKER_00: Okay, now through our conversation today, Andrew, you've mentioned a couple of times the 17,000 meter drilling program you've got underway, which includes some significant step-outs.
27:17
SPEAKER_00: When I visited the the project a few years ago, there were two other three, two or three other explorers near you and around you.
27:24
SPEAKER_00: Um, do you see opportunity to further consolidate the district and potentially build your ounces through Juni acquisition uh in addition to further exploration?
27:34
SPEAKER_01: Tonopah's ripe.
27:36
SPEAKER_01: Uh to to it could be consolidated in maybe two turns of the screw to turn it into a tier one mining camp overnight quickly and cheaply.
27:45
SPEAKER_01: Um what we've got at Tonopa West specifically, uh we're gonna be building you know an 1800-ton per day mill.
27:52
SPEAKER_01: In fact, we're gonna be overbuilding it in the sense that it'll be expandable to 2,000 tons, and it's gonna have uh you know, two-stage crushing circuit, a ball mill to do some ultra-fine grinding, and then we're gonna have thickener tanks in our own Merrill Crow facility.
28:06
SPEAKER_01: Um directly or budding, our project to the south is uh the Three Hills Deposit and Hasbrook, which are owned by Westfall Mining.
28:15
SPEAKER_01: Those are shovel-ready bulk tonnage heap leach gold operations, so they're not quite the same as ours.
28:21
SPEAKER_01: They're on a completely different system.
28:23
SPEAKER_01: But you know, together that's about a million ounces, which is good to go.
28:27
SPEAKER_01: Um, as I said, Center is building their Gem Field project, which is also, I think, around 800,000 ounces, but that's going to be coming online in 27.
28:36
SPEAKER_01: Um, and that's moving very quickly.
28:39
SPEAKER_01: Uh there's a whole bunch of, you know, there's a million-ounce deposit about 12 million uh sorry, 12 kilometers uh west of us.
28:46
SPEAKER_01: Uh there's a number of smaller projects um that are you know five, six, seven hundred thousand ounces, which are trading at very low valuations.
28:55
SPEAKER_01: And and yeah, directly east of us is another company with the historic side of the district, which has uh also got about 40, 45 million ounces of silver equivalent that they've drilled out and are chasing some pretty big step-outs.
29:07
SPEAKER_01: I guess what I'm getting at is that there's serious potential for BlackRock and Tonopo West to be the hub uh with multiple spokes all around this district.
29:17
SPEAKER_01: And as I said, you turn a couple screws, this becomes a three, four million ounce mining camp uh overnight um with with uh uh projects that can come online very rapidly.
29:28
SPEAKER_01: So yeah, there's potential.
29:30
SPEAKER_00: Okay, thank you, Andrew.
29:32
SPEAKER_00: We've covered a lot of ground in our conversation, Andrew.
29:34
SPEAKER_00: So maybe to finalize with a recap of what will be some of the key catalysts for the company for the remainder of this year and going into 2027 that our viewers should watch out for.
29:45
SPEAKER_01: Well, the biggest catalyst, I think, is the one that that that lets me sleep the soundest at night, and that's getting all the permits we need to break ground, start working our way into the guts of the system, and really start de-risking the project and ultimately leading to revenue potential very, very quickly.
30:03
SPEAKER_01: Um, and that's that's not a question of if, it's a question of when.
30:07
SPEAKER_01: And the when is a very defined time period.
30:10
SPEAKER_01: Um, as I said, we're at the tail end of all of the background uh data collection work that we need to do to make our submission, write a report, and hand it over to the regulators.
30:20
SPEAKER_01: Um, you know, the the questions we get from the town uh, you know, aren't so much you know questions about you know what's this gonna mean, it's how quickly can you make this happen.
30:31
SPEAKER_01: Um, so we're we're in very, very good shape.
30:34
SPEAKER_01: We've got a timeline on there in our slide deck, and I think right now we're actually ahead of where we want to be within the permitting process in terms of what we need to do to get there.
30:43
SPEAKER_01: So getting those permits in hand is gonna be a huge re-rate for us.
30:47
SPEAKER_01: So that's that's the thing that's you know moving forward, and you know, if the trains left the station and there's a definitive destination and it's gonna happen.
30:57
SPEAKER_01: Um now the real upside, the real icing on the cake for investors, which um uh is you know gives us some optionalities, we're stepping out 800 meters to the northwest along multiple vein sets.
31:11
SPEAKER_01: Um, you know, anyone looking at our model right now, you know, can take our existing resource, you know, 123 million ounces of silver equivalent, and you could probably daylight certainly well north of 150 to 200 million ounces when you just infill in some of the gaps between the various zones we've got and look at the uh potential at depth.
31:30
SPEAKER_01: Um this this this thing's gonna have deep roots, and we've nowhere near exhausted that potential at depth.
31:36
SPEAKER_01: If we hit on these step outs, you know, that upside potential goes from that 200 million to potentially 300 million, and there's no reason why it wouldn't keep me going based off of our model.
31:47
SPEAKER_01: So, you know, we just finished off drill hole 190, which is the first of uh one of those 800 meter step outs along what we think is going to be our Merton vein.
31:56
SPEAKER_01: That's the deepest drill hole we've ever done.
31:58
SPEAKER_01: It's the deepest drill hole ever done in the district or the area around us.
32:02
SPEAKER_01: We were down over 1,350 meters, which is deeper than any shaft goes.
32:07
SPEAKER_01: And I don't think we would have drilled that deep had it not looked a little interesting for us.
32:11
SPEAKER_01: Um if we hit on that one, um, that one has the potential to really, really light a fuse and you know, really, really take this from you know something that's probably you know silver crest size, you know, Lost Cheese Pis only ever got to about 120 million ounces or so, and all of a sudden it moves up into that upper echelon of rare breeds of you know multiple multi-hundred million ounce ultra-high grade deposits with clean metallurgy.
32:38
SPEAKER_01: So, yeah, you know, these step out programs, this was designed to keep investors interested so we can sort of um keep people's attention during our truncated version of the LaSon curve.
32:51
SPEAKER_01: And um, not many people attempt 800 meter step outs on epithermal systems.
32:56
SPEAKER_01: Uh, we're doing it.
32:58
SPEAKER_01: And um, yeah, it's looking promising.
33:00
SPEAKER_01: So that whole, I mean, that took us well probably two two over two months to drill.
33:05
SPEAKER_01: That's in the lab now.
33:06
SPEAKER_01: We're hoping to have that uh out for potentially a beaver creek surprise for everyone.
33:11
SPEAKER_01: So stay tuned on that.
33:14
SPEAKER_00: Beaver Creek, of course, is in mid-September.
33:17
SPEAKER_00: Um, congratulations on what you've achieved so far.
33:19
SPEAKER_00: Uh, once again, BlackRock Silver trades on the TSX V under the ticket BRC.
33:25
SPEAKER_00: Andrew Pollard, thank you very much for joining me today.
33:28
SPEAKER_01: Thank you very much.
33:29
SPEAKER_01: Great to be here.
33:31
SPEAKER_00: And of course, if you like what you see, don't forget to hit that subscribe button.
33:34
SPEAKER_00: I'm Paul Harris, and this is Kitco Mining.