High Grade Silver Resource And Refining Integration Will Support Long Term Upside Potential

Catalysts

About Sunshine Silver Mining & Refining

Sunshine Silver Mining & Refining is a U.S. based developer focused on high grade primary silver mining and related refining and critical minerals processing.

What are the underlying business or industry changes driving this perspective?

• The Sunshine Mine resource sits at very high grades with an envisioned 24 year mine life. This provides sizeable potential silver volumes that can scale as feasibility work, drilling and mine development mature and could be supportive for future revenue and operating leverage.
• Ongoing 50,000 meter infill drilling, near mine exploration in the Upper Country and district wide exploration across 9,561 hectares create scope for higher resource confidence and possible throughput increases toward 2,000 tons per day. This would directly influence future production levels, unit costs and earnings power.
• Existing infrastructure with an estimated replacement cost of about US$600m and major permits already in hand shortens the expected time to first production and may limit upfront capital intensity relative to a greenfield build. This can affect future free cash flow and returns on invested capital.
• The permitted Silver Copper Refinery with 10 million ounce annual silver capacity and the Sunshine Antimony Plant concept of up to 34.5 million pounds per year position the company to participate in growing demand for domestic critical mineral supply chains. This could diversify revenue streams and support margins once operating decisions are made.
• Silver has been added to the U.S. critical minerals list and the United States currently represents a small share of global mined silver production. This highlights a structural interest in secure local supply and provides a supportive backdrop for a large primary silver project like Sunshine that could influence future pricing power, realized revenue and cash generation.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Sunshine Silver Mining & Refining's revenue will grow by 609.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from -12608.7% today to 41.6% in 3 years time.
• Analysts expect earnings to reach $63.2 million (and earnings per share of $0.36) by about August 2029, up from -$53.6 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 68.7x on those 2029 earnings, up from -43.0x today. This future PE is greater than the current PE for the US Metals and Mining industry at 21.3x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.7%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Sunshine Silver Mining & Refining is still pre production with first output targeted for late 2028 and commercial production in 2029, so any delay in completing feasibility studies, construction or underground development could push out the production timeline and defer expected revenue and earnings.
• The current investment case leans heavily on leverage to the silver price and on silver being treated as a critical mineral in the United States. A weaker long term pricing environment or shifts in policy support for domestic mining could reduce project economics and pressure future net margins and cash based earnings.
• The company reported a net loss of US$16.7 million in Q2 2026 and higher cash use in operating and investing activities. It also signaled that additional capital will be required over time, which introduces funding and potential dilution or interest cost risk that could weigh on future earnings per share and returns on invested capital.
• The vertically integrated concept that includes a Silver Copper Refinery and Sunshine Antimony Plant still depends on separate feasibility work and third party tolling opportunities. Weaker than expected project outcomes or demand for toll processing could limit diversification benefits and keep overall revenue and net margins more dependent on a single mine.
• The plan assumes continued expansion of high grade resources through infill drilling and broader exploration across 9,561 hectares. Exploration results are inherently uncertain, and any shortfall relative to expectations for throughput or mine life could reduce long term production volumes, scale benefits and overall earnings power.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $19.2 for Sunshine Silver Mining & Refining based on their expectations of its future earnings growth, profit margins and other risk factors.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $23.0, and the most bearish reporting a price target of just $15.0.
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $151.7 million, earnings will come to $63.2 million, and it would be trading on a PE ratio of 68.7x, assuming you use a discount rate of 8.7%.
• Given the current share price of $16.06, the analyst price target of $19.2 is 16.4% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.