Silver Range Resources (TSXV:SNG) is a precious metals prospect generator working in the southwest United States and northern Canada. It has a portfolio of 42 properties – 14 are currently under option to others and four have been converted to royalty interests.
Silver Range is actively seeking other joint venture partners to explore the high-grade precious metals targets in its portfolio.
Here to give us the details on the company, its business model and the samples at the Shamrock property in Nevada is Mike Power, president and CEO of Silver Range.
The Market Herald: Welcome, Mike; to start off could you please tell us a bit about yourself and the company?
Power: I worked in mineral exploration for over 40 years. I’m a geologist and geophysicist by training for about 20 years. I worked primarily as a consultant. I set up my own company, some competitors approached us and we merged it and made a much bigger company, but all throughout I’ve been working as a prospector generating projects and vending them. And about 10 years ago I transitioned into doing this full time, first for a private company and then we ended in a package of projects into Silver Range Resources in 2016 and I took over as president and CEO.
TMH: And now a little bit about the company?
Power: Silver Range in 2010 and was formed on a specific project in the Yukon north of the Faro Mine. The company explored it. They found over 3 million ounces of silver. We had zinc and copper but the project ran into problems with respect to permitting and issues concerning First Nations relations between the governments, and so it kind of stalled.
In 2016, a friend of mine was running the company and I was looking to flap my wings a little bit. I went and talked to him and he said, “Well, why don’t we turn Silver Range into a prospect generator? It’s just languishing a bit.” That’s when we’ve ended in a bunch of projects into Silver Range and turned it into a full-blown prospect generator, and then the company’s continued ever since we started working in northern Canada. But our current is entirely in the southwest U.S. and likely we’ll be there for the time foreseeable future.
TMH: What do you think the biggest advantages are with your business model?
Power: I think if you are really trying to knock one out of the park in the mineral exploration business, you can’t beat the prospect generator model. The odds of a given drill program succeeding are worse than 300-to-1. So if you invest in a mining company based on a given drill program, finally unlocking some value, making a big discovery, your odds are worse than 300-to-1 but if you look at the odds of a given mineral prospect having a mine, at least in the southwest U.S. and northern Canada where we work quite well demonstrated they’re better than 80-to-1. So if you’re really trying to win in the game, the prospect generator model has some real advantages in terms of the odds but it has to be executed skillfully. It requires that the company get a large portfolio of properties to play those odds, get them drilled and tested.
It takes a while to do that. So you’ve got to basically make sure you preserve value for your shareholders by getting some money along the way for option partners and minimizing your G&A and you’ve got to keep your hand on the tail of the tiger with royalties, success fees, milestone payments, what have you, or spin outs at the end to really make some money but I do think that the prospect-generate model is your best path forward if you’re trying to invest in mineral exploration and end up owning a mine.
TMH: The company currently has 14 of 42 projects optioned to others, can you give us some highlights of these deals?
Power: Sure. The old Silver Range projects we have optioned to Broden Mining, which is a creation of Oxygen Capital. They’re trying to put the whole Faro Mine complex back in production. Now, at one time, that was the largest lead zinc mine in the free world and there’s five deposits left there. There’s more than a 20-year mine life. There’s really no risk in terms of the technical side in the material there. Basically what’s required is for the First Nations and the governments and Broden to agree on how and when to put the project back into production and we believe they’re very close. Now Silver Range has a 10% carried interest carried through until the property is conveyed from the federal government to Broden and that’s contingent. We understand that for the moment, basically on a signature from a neighbouring First Nation, allow the properties to be transferred.
When that happens, we will crystallize a lot of value on that project that could carry us for decades. That’s probably one of our biggest ones. We also have 17% of Silver 47, a great new company that’s been formed by Gary Thompson, the Brixton Group and Crescat (Capital) on one of our other legacy projects. We’ve got projects down here in Nevada, option two, Green Gold, a private company that’s seeking to list on the ASX, and they have our East Goldfield project, which immediately adjoins Centerra’s Goldfield project. So just a few miles from their new mill, and we’ve got a lot of potential in that project.
Also, we have stuff near Death Valley, we have optioned to them. We’ve got several more, another four or five projects that have been optional out to various partners any one of which could crystallize some value for us when they go public and drill.
TMH: On Aug. 16 you announced high-grade gold samples at the Shamrock Property in Nevada, can you break down the results?
Power: Shamrock is another one of our projects. We’re always out looking for new prospects in the southwest U.S. Shamrock is a very nice one. We found some very high grade gold up to 233 grams, silver up to 15 grams and copper up to 4%. So it was a trifecta, hence Shamrock. It’s in an area that was mined since the 1870s but the government wrote it up as a tungsten district. So it’s been largely overlooked, I think, by the industry. But it was a very significant producer of gold and silver. (It) was the ninth largest gold silver producer in 1946, for example. So we’ve staked it, sampled it, got some great results. It’s in our portfolio. It’s a carbonate replacement style deposit or CRD deposit. They’re very popular these days with certain technical groups, so we hope we’ll get it optioned soon, but that’s just part of our normal business model. We’re always looking for new projects.
TMH: I also like to ask the questions how people name their mines and why is this one called Shamrock?
Power: We’ve got high grade gold, silver, and copper. So it was Shamrock, it had an older name called Gilded Age from an old Mark Twain novel. Some people didn’t get that, so we said, let’s do Shamrock.
TMH: What’s next for Silver Range?
Power: We do believe that one of our various option projects, particularly Broden Mining, might come through in the near term and when that does, that will be a major game changer for Silver Range. All along, we’ve been seeking to build a self-sustaining company, so we’re looking to be self-financed so that we can maximize shareholder value because we believe it’s just a matter of time before one of our projects eventually turns into something very good.
So if the Broden deal goes through or perhaps Silver 47 or one of these others, then we will have a significant war chest available and then our requirement for further financings would be dramatically reduced or eliminated and that’ll be a happy day for us.
For more information on Silver Range Resources visit silverrangeresouces.com.
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