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  • Writer's pictureSmallCapInvestor

Zacatecas Silver Releases Updated Resource Estimate - 1.23m AuOz

As predicted in my article from last week, Zacatecas Silver (TSXV:ZAC) has just come out with an updated resource estimate for the Esperanza project showing 1.2M oz of high-grade oxide gold.

More specifically, 956k ounces in the measured and indicated category and 276k oz inferred -- so 1.23M oz total with more than 75% of the resource being measured and indicated. This should give investors a comfortable value cushion, while also maintaining a huge amount of exploration potential.

At the current market, this implies an EV/oz multiple of ~$50/oz -- So, still pretty cheap.

The market seems to have taken the news positively, as the stock is up around 8% on big volume (1M shares traded already today).

The resource estimate is the first step in the de-risking process for ZAC. Investors should feel alot more comfortable now that the company has an established resource under its belt.

Moving forward, this updated resource estimate will pave the way for a PFS which I would expect to see in the first half of 2022.

In the news release, Dr. Chris Wilson, Chief Operating Officer and a Director of Zacatecas commented:

"With this initial high grade Mineral Resource Estimate complete, we can focus on the completion of this PFS which will evaluate economics targeting a low capex, low cost and high margin operation that can generate substantial stakeholder benefit including economic, employment, environmental and revenue opportunities for the surrounding communities."

Remember, this is no longer a silver exploration story which tends to carry a significant amount of risk. Rather it is now a relatively de-risked gold development play with a ton of exploration potential.

As such, I am also envisioning a potential name change here -- probably something with "Gold" in the name.



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