A Case for GR Silver (TSXV:GRSL) Reaching CAD$3.00 by 2029

Stock Analysis: GR Silver Mining Ltd. (TSXV:GRSL)

This analysis provides a 5-year stock price forecast for GR Silver Mining Ltd. (TSXV:GRSL) based on the assumptions: silver reaching $100/oz, 7% annual M2 inflation, Plomosas mining complex starting operations by December 2026, and a combined resource from Plomosas and San Marcial exceeding 200 million ounces of silver equivalent (AgEq). This analysis integrates information from the company’s website (https://grsilvermining.com), my personal notes, and general industry knowledge up to March 2024, adjusted for the specified assumptions. All financial figures are in CAD unless stated otherwise.

Company Overview

GR Silver Mining Ltd. is a Canadian junior exploration and development company focused on silver, gold, lead, and zinc in the Rosario Mining District, Sinaloa, Mexico. Its key assets are:

• Plomosas Project: A past-producing lead-zinc-silver mine with 7.4 km of underground tunnels, a 60 km high-voltage power line, water permits, and a blasting permit. It historically produced 36 Moz AgEq over 14 years (~2.5 Moz/year). The current NI 43-101 resource estimate (2023) is 32 Moz AgEq Indicated (8.8 Moz silver) and 33 Moz AgEq Inferred (8.5 Moz silver), with recent bulk sampling indicating higher grades (>120 g/t silver, >200 g/t AgEq with lead and zinc).
• San Marcial Project: A high-grade silver project 5 km from Plomosas, with a 2023 NI 43-101 resource of 52 Moz AgEq Indicated (46 Moz silver) and 16 Moz AgEq Inferred (14 Moz silver). Only 20% of a large anomaly has been explored, with high-grade intercepts (>300 g/t silver).
• Recent Developments: The company raised CAD 13.8 million to fund 10,000–15,000 m of drilling at San Marcial, advance Plomosas toward production, and progress permitting. Plomosas is permitted for 600 tpd, with a 250 tpd pilot plant planned by December 2026, expandable in stages. San Marcial permitting (including tunneling) is expected by mid-2027.

Key Assumptions

1. Silver Price: Reaches $100/oz by 2025 and remains stable, adjusted for 7% M2 inflation impacting costs.
2. M2 Inflation: 7% annually, increasing operating and capital costs from 2025 to 2030.
3. Plomosas Operations: Initial production at 250 tpd by December 2026, scaling to 600 tpd by 2028. Higher-grade ore (>200 g/t AgEq) is assumed based on bulk sampling.
4. Resource Expansion: Combined Plomosas and San Marcial resource exceeds 200 Moz AgEq by 2027 via 10,000–15,000 m of drilling at San Marcial and ongoing Plomosas exploration.
5. San Marcial Development: Permitting completed by mid-2027, with production starting in 2029 at 250 tpd, leveraging Plomosas infrastructure to reduce capex.
6. Market Conditions: Stable demand for silver, lead, and zinc; no major disruptions in Mexico.

Financial and Operational Assumptions

• Current Resource: Plomosas (65 Moz AgEq) + San Marcial (68 Moz AgEq) = 133 Moz AgEq (2023 NI 43-101). Drilling expands this to >200 Moz AgEq by 2027.
• Production Profile:
  • Plomosas: 250 tpd (2026–2027, ~1.6 Moz AgEq/year at 200 g/t); 600 tpd (2028–2030, ~3.8 Moz AgEq/year).
  • San Marcial: 250 tpd (2029–2030, ~1.6 Moz AgEq/year).
• All-in Sustaining Costs (AISC): Estimated at $18/oz AgEq in 2026, rising 7% annually (e.g., $19.26/oz in 2027, $20.61/oz in 2028).
• Capital Expenditures:
  • Plomosas pilot plant (250 tpd): $15M (2025–2026).
  • Plomosas expansion (600 tpd): $10M (2027–2028).
  • San Marcial development: $20M (2027–2028), reduced by shared infrastructure.
• Commodity Prices: Silver at $100/oz; lead ($2.50/lb) and zinc ($1.50/lb) scale proportionally, contributing to AgEq value.
• Shares Outstanding: ~316M (based on CAD 73.63M market cap at $0.23/share).
• Valuation Metrics: Junior silver miners typically trade at 0.5–1.5x net asset value (NAV) pre-production, 1.0–2.5x during production.

5-Year Forecast and Stock Price Projections

The stock price forecast uses a discounted cash flow (DCF) approach for NAV, adjusted for exploration success, production milestones, and market sentiment. Assumptions include successful permitting, financing, and resource expansion. Risks (e.g., permitting delays, cost overruns) are factored into conservative multiples.2025: Exploration and Pre-Development

• Operations: 10,000–15,000 m drilling at San Marcial; bulk sampling at Plomosas to finalize plant design. Updated San Marcial MRE and combined PEA released by year-end.
• Resource: ~150 Moz AgEq (modest increase from 133 Moz via drilling).
• NAV: Estimated at $150M (0.75 oz x $100/oz x 150 Moz, discounted 50% for pre-production and risks).
• Stock Price: $0.60 (0.8x NAV, ~$190M market cap / 316M shares). Reflects exploration success and high silver prices, but limited by pre-production status and market volatility. Analyst estimates suggest a target of $0.60.
• Key Drivers: High-grade drill results (>300 g/t silver), $13.8M funding supports progress, positive market sentiment for silver.

2026: Plomosas Pilot Plant Construction

• Operations: Plomosas pilot plant (250 tpd) construction completed; initial production starts December 2026 (~0.1 Moz AgEq). San Marcial permitting advances.
• Resource: ~175 Moz AgEq (further drilling success).
• NAV: $200M (0.8 oz x $100/oz x 175 Moz, discounted 40% for nearing production).
• Stock Price: $0.95 (1.0x NAV, ~$300M market cap / 316M shares). Reflects de-risking from production start and strong silver prices.
• Key Drivers: Pilot plant success, high-grade bulk sampling results, and progress toward San Marcial permits.

2027: Plomosas Production and San Marcial Permitting

• Operations: Plomosas produces 1.6 Moz AgEq at 250 tpd. San Marcial permitting completed by mid-2027; drilling expands resource.
• Resource: >200 Moz AgEq achieved.
• NAV: $300M (0.9 oz x $100/oz x 200 Moz, discounted 30% as production stabilizes).
• Stock Price: $1.50 (1.2x NAV, ~$475M market cap / 316M shares). Reflects revenue generation and resource growth.
• Key Drivers: Cash flow from Plomosas, expanded resource, and San Marcial de-risking.

2028: Plomosas Expansion

• Operations: Plomosas scales to 600 tpd (~3.8 Moz AgEq/year). San Marcial development begins, leveraging Plomosas infrastructure.
• NAV: $450M (0.95 oz x $100/oz x 200 Moz, discounted 20% for scaled production).
• Stock Price: $2.20 (1.5x NAV, ~$695M market cap / 316M shares). Reflects higher production and market optimism for silver.
• Key Drivers: Significant cash flow, economies of scale, and San Marcial progress.

2029: San Marcial Production

• Operations: Plomosas at 3.8 Moz AgEq/year; San Marcial starts at 250 tpd (~1.6 Moz AgEq/year). Combined production ~5.4 Moz AgEq.
• NAV: $600M (0.98 oz x $100/oz x 200 Moz, discounted 10% for mature operations).
• Stock Price: $3.00 (1.6x NAV, ~$950M market cap / 316M shares). Reflects dual-project production and strong silver market.
• Key Drivers: High production, low capex at San Marcial, and sustained $100/oz silver price.

Summary Table

Year Key Milestones NAV (CAD) Stock Price (CAD) Market Cap (CAD)

2025 Exploration, PEA $150M $0.60 $190M

2026 Plomosas pilot plant $200M $0.95 $300M

2027 Plomosas 1.6 Moz, $300M $1.50 $475M

San Marcial permits

2028 Plomosas 3.8 Moz $450M $2.20 $695M

2029 San Marcial 1.6 Moz $600M $3.00 $950M

Risks

• Permitting Delays: San Marcial permits may take longer than 12–15 months, delaying production.
• Financing: Additional capital (~$45M total) may dilute shares if raised via equity.
• Commodity Price Volatility: A drop in silver, lead, or zinc prices could lower NAV.
• Operational Risks: Plant construction delays or lower-than-expected grades could impact cash flow.
• Market Sentiment: Junior miners are volatile; GRSL’s 18% weekly volatility suggests price swings.

Conclusion

GR Silver Mining is well-positioned to benefit from a $100/oz silver price, with Plomosas’ existing infrastructure and San Marcial’s high-grade potential driving resource growth to >200 Moz AgEq. The 5-year forecast projects significant stock price appreciation from $0.60 in 2025 to $3.00 in 2029, driven by production milestones and a favorable silver market. However, investors should monitor permitting progress, financing needs, and commodity price trends. The company’s 20+ years of experience in Mexico and bank interest in financing enhance its credibility as a near-term producer.

For further details, refer to the company’s website (https://grsilvermining.com) and NI 43-101 reports.

Disclaimer: A lot of recent info was gained from the Crux interview with the CEO. Mostly on the drilling and financing permitting and future plans. I'm looking hard at this company since the price/value delta is wide, it's just unloved right now. But nothing in this analysis is gospel so do your own due diligence.