Silver Bull took the Sierra Mojada silver-zinc project back to the drawing board after a 2009-2010 merger between Metalline and Dome Ventures (since renamed Silver Bull). Under different management it had outlined 136 million ounces silver @ 149 g/t silver, inferred, in a 2010 resource estimate. But since then management has changed and it appears to be taking a more conservative approach in modelling open-pit resources. Now, after successive resources over the past couple years, Silver Bull is nearing the 100 million ounce silver mark again in an open-pit model that may get fairly strong recoveries from a cyanide leaching scenario.
In fact this is the first thing to watch for. This year Silver Bull hired its own metallurgist, which is not that common for a junior at this stage of development (without even an official scoping study out yet, for example) and under his direction Silver Bull is getting set to release more metallurgical results in the next month or so. A key development for Silver Bull would be to increase potential recoveries to the 70 to 80 percent range (or better of course) without having to resort to fine grinding. Brian Post, a Roth Capital Partner analyst, who has a C$0.90 target on Silver Bull, is looking for north of 70 percent as silver recovery. A recovery up there, would bode well for a planned economic study.
The second thing to watch for in early 2013 is an updated - and strenghtening - resource. The count now in the Shallow Silver zone is 6.7 million ounces silver @ 57 g/t; 65 million ounces silver @ 45 g/t; and 10.4 million ounces silver @ 40 g/t in measured, indicated and inferred resources respectively. Silver Bull had hoped for better grades in the last resource round, but in part didn't get them because its consultant working on the latest resource didn't accept as much of its historic data from a high grade silver zone as expected. That has spurred a more extensive twinning program of a portion of historic drilling to satisfy the consultant's appetite for quality control in the higher grade zone. With these pulled into the broader resources, among others that I spoke to, Roth Capital's Post bets that the next resource will push 100 million ounces and come in with a better grade.
Two final notes: there is a zinc component to Sierra Mojada that has yet to be pulled back into resources that are below the near surface silver resources. As Silver Bull would have it, the Silver Zone open pit could transition into those potential zinc resources down the road were Sierra Mojada ever to turn into a mine. Which makes a good segue for the second point, that Coeur d'Alenes Mines is Silver Bull's largest single shareholder having invested $10 million through two financings in 2011. So at least one silver producer is watching closely how Sierra Mojada shapes up as a silver deposit.
Watching closely at the $0.50 level. Convergence of SMA's looks interesting as accumulation by who knows who? looks to be happening. I've been surprised by the lack of M&A in this sector, but it may be coming soon. CDE's currency may accomplish alot at $30.00 +++.