Australia Silver Play for 1,200%

🪙 Andean Silver – Valuation & Outlook

🔑 Key Project – Cerro Bayo (Chile)

• Resource: ~90M oz AgEq at ~300 gpt, mostly underground with a 16M oz open pit.
• History: Produced 45M oz silver and 650K oz gold before being put on care & maintenance in 2022.
• Infrastructure: Fully permitted 1,650 tpd mill in excellent condition, with water, power, and mining town nearby.
• Past production areas: LVMC complex (66M oz @ 330 gpt AgEq), Cerro Bayo complex (350M oz AgEq historically mined).
• Exploration potential: Underexplored; expectation of at least 125M oz AgEq long-term.
• Timeline: Drilling completed in 2024, scoping study planned 2025. Restart could be feasible 2026–2027.
• Production profile: Restart 3M oz AgEq/year with potential to grow toward 5M oz/year.
• Ownership: Management/board owns ~30%, strong insider alignment.

💰 Valuation Scenarios (AISC assumed $20/oz, industry average)

At $100 silver:

• Free cash flow per ounce = $80.
• Production base case = 3M oz × $80 = $240M annual FCF. • At 10× FCF = $2.40B. • At 15× FCF = $3.60B. • At 20× FCF = $4.80B.
• Production upside case = 5M oz × $80 = $400M annual FCF. • At 10× FCF = $4.00B. • At 15× FCF = $6.00B. • At 20× FCF = $8.00B.

At $150 silver:

• Free cash flow per ounce = $130.
• Production base case = 3M oz × $130 = $390M annual FCF. • At 10× FCF = $3.90B. • At 15× FCF = $5.85B. • At 20× FCF = $7.80B.
• Production upside case = 5M oz × $130 = $650M annual FCF. • At 10× FCF = $6.50B. • At 15× FCF = $9.75B. • At 20× FCF = $13.00B.

(Per-share values depend on final share count post-financing; current valuation is still very cheap relative to restart potential.)

⚠️ Risks

• Timeline risk: Restart requires a scoping study (2025), financing, and refurbishing → earliest production ~2026–2027.
• Jurisdiction: Chile has become less mining-friendly, though Cerro Bayo being permitted and recently in production reduces risk.
• Financing: Even with low restart capex, some equity/debt financing is likely; dilution possible.
• Operational ramp-up: Restarting underground mines can bring cost surprises or lower recoveries.
• Commodity risk: Valuation is highly leveraged to silver price staying above $50–100.
• Exploration dependence: Assumption of 125M+ oz requires continued drilling success.

⚡ Catalysts

• 2025 scoping study: Key milestone to outline restart economics.
• 2026–2027 restart decision: Moving from developer to producer.
• Exploration success: Expanding Cerro Bayo resource beyond 90M oz AgEq.
• Ramp-up to 5M oz/year production: Would double FCF potential.
• Rising silver prices: Each $10 increase adds significant cash flow.
• Strategic M&A potential: Cerro Bayo’s grade, scale, and existing mill make it highly attractive to mid-tier or major producers.
• Insider alignment: 30% insider ownership drives confidence in execution.

🎯 Conclusion

Andean Silver’s Cerro Bayo is one of the lowest-risk restart projects in the silver sector: fully permitted, high-grade, with existing infrastructure and a production history.

At $100 silver, valuations could range $2.4B–$8.0B depending on scale. At $150 silver, the range expands to $3.9B–$13.0B. With insiders holding 30% and Frank Giustra-style positioning, Andean Silver could deliver 10×–20× upside in a secular silver bull market.