Drilling Expands Silver-Gold Footprint in Argentina, Unlocking Significant Growth Potential

Source: Streetwise Reports 02/20/2025

AbraSilver Resource Corp. (ABRA:TSX.V; ABBRF:OTCQX) latest drilling at Oculto East and Sombra has uncovered significant silver and gold mineralization, expanding the project’s resource potential. With the Phase IV program nearing completion, what’s next for this high-grade discovery?

AbraSilver Resource Corp. (ABRA:TSX.V; ABBRF:OTCQX) has announced promising new assay results from its ongoing Phase IV drill program at the Diablillos project in Argentina. The latest drilling at the Oculto East and Sombra targets has confirmed significant high-grade gold and silver mineralization, expanding the project’s mineralized footprint and highlighting further resource potential.

At the Oculto East target, located approximately 600 meters east of the Oculto deposit, drill hole DDH 24-058 returned 24.5 meters grading 107 grams per tonne (g/t) silver, including a high-grade interval of 3.0 meters at 465 g/t silver. Further south, hole DDH 24-064 intercepted 22.0 meters grading 2.78 g/t gold, with a higher-grade section of 9.0 meters at 5.35 g/t gold in oxides. These results suggest that Oculto East has strong expansion potential beyond the current open pit design.

Drilling at the Sombra target, positioned east of the JAC Zone, also returned encouraging results. Hole DDH 24-062 encountered 23.0 meters grading 55 g/t silver at a shallow depth of 40 meters. The company plans additional drilling at Sombra to delineate the extent of this new zone.

John Miniotis, President and CEO of AbraSilver, stated in the announcement, “The confirmation of high-grade mineralization at Oculto East is a positive development in our exploration strategy. The target remains open along strike and at depth, offering substantial expansion potential beyond the Oculto open pit as defined in the Pre-Feasibility Study. With ongoing drilling and a fully-funded exploration program, we’re extremely excited to continue unlocking additional value for our shareholders.”

The Phase IV drill program is nearing completion, with final results expected to be incorporated into the Definitive Feasibility Study scheduled for completion in the first quarter of 2026. Looking ahead, the company is planning a Phase V drill program to further expand known mineralization and test high-priority step-out targets, including Oculto East and Cerro Viejo.

Silver Market Trends: Industrial Demand, Technical Patterns, and Supply Challenges Shape 2025 Outlook

According to FX Empire on January 22, silver prices edged higher but did not match gold’s rally, as broader market interest remained subdued. Analysts noted that key technical levels, including US$30.04 and US$30.40, provided support for the metal’s upward trend. However, uncertainty surrounding industrial demand in China and potential shifts in U.S. renewable energy policy created challenges for silver’s outlook. Ole Hansen of Saxo Bank highlighted that “uncertainty around tariffs and inflationary impacts tied to [U.S. policy] have become central to market sentiment for precious metals.”

“The eastern extension of Oculto is looking like a potentially high-grade target that could significantly extend the known mineralized footprint,” wrote Peter Krauth of The Silver Stock Investor.

On January 23, Kitco reported that silver was expected to lead the metals sector with a 14% gain in 2025, driven by increasing industrial demand. StoneX analysts Rhona O’Connell and Natalie Scott-Gray stated that “silver, the precious-industrial hybrid, is expected to collect the laurels in 2025 as the market’s tightening fundamentals and strong future prospects . . . continue to capture the imagination.”

They added that silver’s growing role in the solar sector could sustain long-term demand, with estimates projecting a 16% annual growth rate in photovoltaic applications through 2027.

Zero Hedge, on January 27, highlighted the technical patterns forming in silver’s price movements. Analyst AJ Monte identified a “textbook Cup & Handle formation” in silver’s long-term charts, suggesting that a breakout above US$50 per ounce could lead to substantial price appreciation. He cautioned that supply constraints in the COMEX market could trigger a short squeeze, further amplifying silver’s volatility.

Stockhead, on February 7, reported that ASX silver stocks rebounded following price increases, with silver trading at US$32.25 per ounce. Columnist Barry FitzGerald noted that “silver stocks are still sporting 25-50% losses on their October 2024 levels when silver was near US$35 per ounce,” but indicated that investor sentiment had begun to recover. He also pointed to potential trade policy risks, explaining that “Mexico is the world’s biggest producer and supplies about 80% of U.S. demand,” with ongoing tariff discussions creating uncertainty in the supply chain.

Strong Expansion Potential for Diablillos Project

According to Peter Krauth of The Silver Stock Advisor on February 18, AbraSilver’s ongoing drilling at the Oculto East and Sombra targets within the Diablillos project has demonstrated strong expansion potential. The report highlighted the discovery of high-grade silver and gold mineralization at Oculto East, with intercepts such as 24.5 meters at 107 grams per tonne (g/t) silver, including a high-grade interval of 3.0 meters at 465 g/t silver. It noted that the results suggest “significant gold and silver mineralization,” reinforcing expectations that the deposit could extend beyond its current defined boundaries.

The publication also pointed to AbraSilver’s continued drilling success and the scale of the Diablillos project, stating that “the eastern extension of Oculto is looking like a potentially high-grade target that could significantly extend the known mineralized footprint.” With the Phase IV drill program nearing completion and results to be incorporated into the upcoming Definitive Feasibility Study, experts expressed optimism about the project’s long-term growth potential. The report further emphasized that shares of AbraSilver had climbed approximately 70% since their inclusion in the publication’s portfolio, reflecting growing investor confidence in the company’s exploration progress.

AbraSilver Advances Diablillos with Strong Growth Metrics and Strategic Backing

As outlined in its February 2025 Investor Presentation, AbraSilver’s Diablillos project continues to demonstrate strong growth potential, reinforced by an updated pre-feasibility study that estimates a net present value (NPV) of approximately US$555 million (converted from CA$747 million) at a 5% discount rate and an internal rate of return (IRR) of 28%. The mine plan projects an average annual production of 13.4 million silver-equivalent ounces at an all-in-sustaining cost of approximately US$9.41 per ounce (converted from CA$12.67 per ounce).

The company’s exploration focus remains on high-grade targets, particularly following the identification of the JAC target, which contributed to a 20% increase in measured and indicated resources compared to prior estimates. Additionally, AbraSilver has launched a 20,000-meter drilling program aimed at expanding high-grade zones surrounding the Oculto deposit. [OWNERSHIP_CHART-9164]

With newly secured financing, the company is positioned to advance key milestones, including further resource expansion, feasibility study completion, and the initiation of permitting processes required for a construction decision by late 2026. AbraSilver could also benefit from Argentina’s mining incentive program (RIGI), which offers tax savings and reduced capital costs for qualifying projects.

The strategic investments from Kinross Gold and Central Puerto provide further validation of the project’s potential. These partnerships ensure financial stability as AbraSilver advances Diablillos toward production, reinforcing its position as a developing high-grade silver and gold asset in Argentina.

Ownership and Share Structure

According to the AbraSilver, the top three shareholders are: Central Puerto with 9.9%, Eric Sprott with 8% and Kinross Gold with 4%.   

Additionally, the top three insiders are CEO Miniotis with 1%, Director Hernan Zaballa with 0.83%, and Chairman and Director Robert Bruggeman with 0.86%.

The company has 152 million outstanding shares. Its market cap is CA$492 million. Its 52-week high and low are CA$3.58 and CA$1.30 per share, respectively.  

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Important Disclosures:

1. AbraSilver Resource Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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( Companies Mentioned: ABRA:TSX.V; ABBRF:OTCQX, )

Source: https://www.streetwisereports.com/article/2025/02/20/drilling-expands-silver-gold-footprint-in-argentina-unlocking-significant-growth-potential.html