- Mining magnate Eric Sprott allowed 2 million Silver Storm Mining share purchase warrants to expire unexercised, despite the stock’s attractive operations
- The expiry lowered Sprott’s investment from 10.9 to 9.5 per cent of outstanding common shares since the last early warning report
- Silver Storm Mining, formerly Golden Tag Resources, is developing advanced-stage silver projects in Mexico
- Silver Storm stock is down by 52.38 per cent year-over-year, but has gained 100 per cent since 2019
Mining magnate Eric Sprott allowed 2 million Silver Storm Mining (TSXV:SVRS) share purchase warrants to expire unexercised, despite the stock’s attractive operations.
The expiry decreased Sprott’s investment – held by 2176423 Ontario Ltd., a corporation he beneficially owns – from 10.9 to 9.5 per cent of outstanding common shares on a partially diluted basis since the last early warning report. He continues to own 41,604,282 Silver Storm shares, as he did prior to the warrant expiry.
Given Sprott’s large, insider-sized holding, it’s reasonable to suppose that his reluctance to use the warrants is more a matter of diversification than distaste at the state of Silver Storm’s operations. Taking a look at the company’s deck, it quickly becomes clear that its stock’s more than 80 per cent drop since 2021 runs counter to considerable progress during the period.
Silver Storm is on track to restart mining at its La Parilla silver complex in Mexico in mid-2025 on vastly underexplored land that produced 34 million ounces of silver equivalent (AgEq) from 2006 to 2019. An August 2023 mineral resource estimate (MRE) detailed 5.19 million ounces AgEq indicated and 10.33 million ounces AgEq inferred.
The company is also exploring its San Diego project, one of the largest undeveloped silver projects in Mexico, where a 2013 MRE calculated 55.5 million ounces AgEq indicated and 155.3 million ounces AgEq inferred, with ample potential for expansion across four key zones.
While these two projects offer a compelling case for a stock re-rating – especially given silver’s steep deficit – Silver Storm’s dependence on capital raises to pursue further development, plus its unavoidable vulnerability to movements in the silver price, will almost certainly make it a volatile ride to own the company’s stock. So, while Sprott’s investment is a green flag in favour of a potential allocation, given his established track record in junior mining, it should never replace the insights and conclusions of your personal due diligence process.
Silver Storm Mining, formerly Golden Tag Resources, is developing advanced-stage silver projects in Mexico.
Silver Storm Mining (TSXV:SVRS) last traded at C$0.10 per share. The stock is down by 52.38 per cent year-over-year, but has gained 100 per cent since 2019.
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