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Silver Co. Returns High-Grade Results, Extends Shoot

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Source: Streetwise Reports   02/28/2023

Assays from 18 core drill holes at Outcrop Silver & Gold Corp.’s flagship Santa Ana project in Columbia return high-grade results and extend the Los Naranjos shoot to 300 meters depth.

Assays from 18 core drill holes at Outcrop Silver & Gold Corp.’s (OCG:TSX.V; OCGSF:OTCQX; MRG1:DB) flagship Santa Ana project in Columbia have returned high-grade results and extended the Los Naranjos shoot to 300 meters depth.

The holes had an average estimated true width of 0.75 meters and a weighted average grade of 926 grams silver equivalent per tonne (g/t Ag Eq), the company said.

In addition, Los Naranjos is open to the north and south at depth and delineation and exploration drilling continues at the project with three rigs.

“Outcrop Silver released what we view as more positive results from its Santa Ana gold-silver project in Colombia,” Research Capital Corp. analyst Stuart McDougall wrote in a Feb. 14 note. “This latest update comes from Los Naranjos, one of several high-grade shoots being delineated in preparation for a maiden resource estimate scheduled for completion in Q1/23.”

McDougall reiterated his Speculative Buy rating with a target of CA$0.75 per share.

McDougall reiterated his Speculative Buy rating with a target of CA$0.75 per share.

He said the rating was based on an expected resource of 50 million ounces (Moz) Ag.

“If achieved, we think this bodes well for a re-rating of the stock, given the market’s expectation for one-quarter of our expectation, based on a select group of comparable explorers,” McDougall wrote.

Chen Lin, an asset manager and author of the What is Chen Buying? What is Chen Selling? newsletter said silver will be vital in the green economy transition. He has called drill results from the company “spectacular.”

“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 Catalyst: Expanding Mineralization

The results will likely add to the scope of Santa Ana, which covers a significant part of the Mariquita District, where mining records date to at least 1585. The district was once the highest-grade primary silver district in Colombia, the company said

The results are likely to add to the scope of Santa Ana, which has been mined back to at least 1585 and was once the largest colonial silver mine in Colombia, the company said.

“The production level maps for the Frias Mine, and now Outcrop Silver drill results from Las Maras and Los Naranjos, all show plus-300-meter depths to mineralization,” Outcrop Chief Executive Officer Joseph Hebert said. “We will likely significantly expand the vertical extent of mineralization at Santa Ana.”

Highlights of the new Las Naranjos results include Hole DH312, which returned 1.53 meters (true width) of 516 g/t Eq Ag; Hole DH279, which returned 1.89 meters (true width) of 468 g/t Eq Ag; and Hole DH296, which returned 0.65 meters of 3,312 g/t Eq Ag.

The company has continually broken its own assay records at the project over the last year, culminating in Hole DH317 in the Las Abejas shoot in the El Dorado vein system, which intersected 3.05 meters of 3,975 g/t Eq Ag, including 0.63 meters of 16,690 g/t Eq Ag.

Santa Ana covers 27,000 hectares. Spanish Royal Archives reports said the area historically 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 at the project. Three rigs are drilling 1,700 to 1,900 meters per month, Hebert said.

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.

An Element in Demand

Silver is one of the elements that will be in demand in large amounts as the economy switches gears from fossil fuels to green sources.

Almost all computers, phones, cars, and appliances contain silver, which is excellent at coating electrical contacts, the report said. It’s also an important element in solar technology.

“I like silver, and I am preparing for a run of silver similar to two years ago,” wrote Chen Lin, who has been bullish on the precious metal in his forecasts for 2023.

“I like silver, and I am preparing for a run of silver similar to two years ago,” wrote Chen, who has been bullish on the precious metal in his forecasts for 2023.

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.

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.

Ownership and Share Structure

[OWNERSHIP_CHART-9884]

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.

Major inside shareholders include Executive Chairman of the Board Ian Slater with about 10% or 20 million shares, and the CEO Hebert with 0.96% or 1.9 million shares, according to Reuters.

Outcrop has a market cap of CA$54.53 million with 195.6 million shares outstanding and 146 million free-floating. It trades in a 52-week range of CA$0.43 and CA$0.10.

[SMNLINSERT]

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.

Disclosures for Stuart McDougall/Research Capital Corp:

Analyst Certification: I, Stuart McDougall, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report. Research Capital Corporation publishes research and investment recommendations for the use of its clients. Information regarding our categories of recommendations, quarterly summaries of the percentage of our recommendations which fall into each category and our policies regarding the release of our research reports is available at www.researchcapital.com or may be requested by contacting the analyst. Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

Relevant Disclosures Applicable to Companies Under Coverage: Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our website at www.researchcapital.ca.

General Disclosures: The opinions, estimates and projections contained in all Research Reports published by Research Capital Corporation (“RCC”) are those of RCC as of the date of publication and are subject to change without notice. RCC makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; RCC makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained therein and accepts no liability whatsoever for any loss arising from any use of or reliance on its Research Reports or its contents. Information may be available to RCC that is not contained therein. Research Reports disseminated by RCC are not a solicitation to buy or sell. All securities not available in all jurisdictions.

Company Specific Disclosures: Within the past 12 months, Research Capital has provided investment banking services to the issuer.

Distribution Policy: Through www.researchcapital.com, our institutional and corporate clients can access our research as soon as it becomes available, 24-7. New reports are continually uploaded to the site as they become available throughout the day. Clients may also receive our research via Reuters, Bloomberg, FactSet, and Capital IQ. All of our research is made widely available at the same time to all Research Capital client groups entitled to our research. In addition, research reports are sent directly to our clients based on their delivery preference (mail, fax, e-mail).

Fair Dissemination of Research Reports and Ratings: To the extent reasonably practicable, Research Reports will be disseminated contemporaneously to all of Research Capital Corporation (“RCC”) customers who are entitled to receive the firm’s research. Until such time, Research Analysts will not discuss the contents of their reports with Sales and Trading or Investment Banking employees. RCC equity research is posted to our proprietary website to ensure eligible clients receive coverage initiations and changes in rating, targets and opinions in a timely manner. Additional distribution may be done by the sales personnel via email, fax or regular mail. Please contact your investment advisor for more information regarding RCC research.

Percentage Distribution of Research Ratings: As required by the Investment Industry Regulatory Organization of Canada, Research Capital provides a summary of the percentage of its recommendations that fall into each category of our ratings. Please click this link Our Research – Research Capital Corporation to see our distribution of ratings.

Potential Conflicts of Interest: All Research Capital Corporation (“RCC”) Analysts are compensated based in part on the overall revenues of RCC, a portion of which are generated by investment banking activities. RCC may have had, or seek to have, an investment banking relationship with companies mentioned in this report. RCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned in our Research Reports as principal or agent. RCC makes every effort possible to avoid conflicts of interest, however readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.

Information about Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations which are in each of our rating categories is available on our website at www.researchcapital.com.

The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in providing it does Research Capital Corporation assume any responsibility or liability. Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part without the express permission of Research Capital Corporation. US Institutional Clients – Research Capital USA Inc., a wholly owned subsidiary of Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or institutions receiving this report should effect transactions in securities discussed in the report through Research Capital USA Inc., a Broker – Dealer registered with the Financial Industry Regulatory Authority (FINRA). Member – Canadian Investor Protection Fund.

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


Source: https://www.streetwisereports.com/article/2023/02/28/silver-co-returns-high-grade-results-extends-shoot.html


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