Silver Co. Sees Big Results in Colombia

Source: Streetwise Reports   01/31/2023

This junior explorer says it has hit its highest equivalent silver assay to date at its flagship project in Colombia.

Outcrop Silver & Gold Corp. (OCG:TSX.V; OCGSF:OTCQX; MRG1:DB) announced Monday that it has hit its highest equivalent silver assay to date at its flagship Santa Ana project in Colombia.

Hole DH317 in the Las Abejas shoot in the El Dorado vein system intersected 3.05 meters of 3,975 grams equivalent per tonne silver (g/t Eq Ag), including 0.63 meters of 16,690 g/t Eq Ag.

Chen Lin, an asset manager and author of the What is Chen Buying? What is Chen Selling? newsletter, is bullish on silver as it will be vital in the green economy transition. He has called drill results from the company “spectacular” even before Monday’s numbers.

“They will have a resource estimate in early 2023 to confirm they have one of the highest-grade silver deposits in the world,” Chen wrote on Jan. 3.

The company said more than 60 kilometers of vein zones have been identified across Santa Ana.

Chen Lin, an asset manager and author of the What is Chen Buying? What is Chen Selling?, called drill results from the company “spectacular.”

Outcrop Chief Executive Officer Joseph Hebert said the Las Abejas shoot was discovered in 2021, and he was very happy with the assay results released Monday.

“We have drilled generally shallow in this area,” he told Streetwise Reports. “These results are related to identifying the depth we should hit this shoot.”

Research Capital Corp.’s Stuart McDougall has rated Outcrop a Speculative Buy with a target of CA$0.75 per share.

 Silver’s Expanding Demand

In his forecasts for 2023, Chen has been bullish on silver, just one of the elements that will be needed in large amounts as the economy attempts to switch gears from fossil fuels.

“I like silver, and I am preparing for a run of silver similar to two years ago,” Chen wrote on Jan. 13.

The Silver Institute has predicted that global silver demand will reach a new high of 1.21 billion ounces in 2022, up 16% from last year. Industrial demand is on course to grow to 539 million ounces (Moz).

“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 said.

Research Capital Corp.’s Stuart McDougall has rated Outcrop a Speculative Buy with a target of CA$0.75 per share.

The global silver market is forecasted to record a second consecutive deficit between supply and demand this year, the Institute said. At 194 Moz, it will be a multi-decade high and four times 2021’s level.

But investors also love the precious metal because of its versatility, wrote Vishal Toora on Equity.guru.

“Silver bulls love the metal because you get the best of both worlds,” Toora wrote. “You get an investment which follows the monetary metal but also has an industrial usage.”

The Catalyst: Resource Estimate Nearly Ready

Results from Santa Ana keep smashing the company’s records at the project, which Hebert said bodes well for the future. “It tells us we haven’t hit the best (hole) yet,” he said.

Santa Ana has been mined back to at least 1585 and was once the largest colonial silver mine in Colombia. It now covers 36,000 hectares. Spanish Royal Archives reports said the area had 14 mines producing an average of 4,000 g/t Ag over an average of 1.4 meters, with some mines finding as much as 17,000 g/t Ag.

While Outcrop is readying its maiden resource estimate for the first quarter, it continues to identify and drill new targets. Three rigs are drilling 1,700 to 1,900 meters per month, Hebert said.

“We should have another great year of drilling,” Herbert wrote.

The company said mineralization as Las Abejas remained open at depth, and surface work suggested more shoots would be discovered in the El Dorado vein system.

The drilling continued to support findings that “top of ore” within prospective veins is about 750 meters below absolute elevation, or 150 meters below the surface of Las Abejas.   

“Today, we know better at what depth (below top of ore) we should target veins,” Hebert said.

“Mineralization still generally is seen to come to surface, but the sweet spot of both width and grade is generally at a consistent depth from shoot to shoot.”

‘Great Year of Drilling’

The company also announced this month that two core holes drilled in the Megapozo vein connected areas of high-grade mineralization. It said the mineralization has a footprint of more than 350 meters by 380 meters and remains open to the northwest and southeast.

The Megapozo vein is an average true thickness of 0.80 meters at a weighted average grade of 1,068 g/t Eq Ag over 19 holes.

In Hebert’s annual letter to shareholders on Jan. 18, he said less than 10% of Santa Ana’s potential has been tested.

“We should have another great year of drilling, with three core rigs turning continually to drill high-grade mineralization of 13 shoots to depth and laterally and drilling our best new greenfield targets,” he wrote.

Ownership and Share Structure

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Mining financier Eric Sprott owns about 14% of Outcrop, management, and directors own about 12%, and the rest is held by high-net-worth investors and retail, the company said.

The company is followed by Research Capital Corp.’s Stuart McDougall wrote and Gwen Preston of The Maven Letter. Click “See More Live Data” in the data box above to read more. 

Outcrop has a market cap of CA$58.43 million with 194.7 million shares outstanding and 146 million of them free-floating. It trades in a 52-week range of CA$0.315 and CA$0.295.

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Disclosures: 

1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Outcrop Silver & Gold Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. 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.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Outcrop Silver & Gold Corp., a company mentioned in this article.

( Companies Mentioned: OCG:TSX.V; OCGSF:OTCQX; MRG1:DB,
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