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Silver Bull Resources, Inc. is an exploration stage enterprise engaged in the business of mining and is listed on the NYSE Amex with the symbol SVBL and on the TSX as SVB.
Silver and tin: 2 new critical electric metals, says Byron Capital
Silver and tin are two new critical electric metals that are garnering attention, according to Dr. Jon Hykawy, head of global research, clean technologies at Byron Capital Markets, who kicked off a talk on battery materials at the third annual electric metals conference in Toronto on Thursday.
These two metals are expected to see a sharp boost in demand, leading to a predicted shortage in materials for electronics like iPads and Kindles starting in 2017, and an anticipated increase in prices.
Demand for both silver and tin is driven by the fact that both metals are key components in solder alloys that meet the Restriction of Hazardous Substances (RoHS) directive implemented in the EU in 2006.
The directive, which took effect in July of 2006, recognizes that a large proportion of electronic waste will never be recycled, and therefore the materials within devices will dissipate into the environment. For example, when lead is used in substances such as the solder that connects components to a circuit board in an electronic device, there is no way the lead can be collected.
As a result, the EU said that substances like solder, at least within devices intended for sale in the region, must not contain any of the hazardous materials the directive is concerned with, including lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and diphenyl ether.
Because of this new law, the search for a new standard solder in the electronics industry began, resulting in a mixture of tin and silver - putting pressure on supplies for both of these metals.
Byron Capital says that from the period of 2004 to 2011, prices for both tin and silver have been appreciating markedly. The firm noted in a recent report that many electronic manufacturers have decided to use lead-free solders on all versions of their products - whether shipping to regions in which RoHS regulations pertain, or not - as it is logistically simpler.
Hykawy says that a shortfall in tin supply is of particular concern, as mining production levels suggest growth rates of tin output are "anemic".
Tin, which is an LME-traded metal, had the lowest warehouse availability of any LME-traded metal at only 10,000 tonnes as of February 22.
Byron predicts that non-investment demand for tin will jump from around 362,000 tonnes last year to more than 544,000 tonnes by 2020. Silver demand, meanwhile, is expected to go up from 844 million ounces in 2011 to over 1 billion ounces by 2020 as demand for silver in the construction of solar modules is also accelerating quickly.
Prices for tin, according to Byron, are projected to more than double to $59,047 per tonne in 2018, while prices for silver are expected to rise to $68.88 per ounce in 2018 - when silver is anticipated to reach critical supply levels - from $35.11 in 2011.
"Global growth is driven by people, energy and materials, and of these materials, more tin and silver is needed or we will have a potentially dangerous supply situation on our hands," says Hykawy.
After an enlightening talk on critical materials used in hybrid, electric and fuel cell vehicles from General Motors' Dr. Yucong Wang, South American Silver's (TSE:SAC) investor relations manager, Robert Gill, spoke on the company's silver and indium assets in Bolivia on Thursday.
Indium's current primary application is to form transparent electrodes from indium tin oxide in liquid crystal displays and touchscreens, and this use largely determines its global mining production.
It is also used for making particularly low melting point alloys, and is a component in some lead-free solders.
South American's Malku Khota project in Bolivia, which is listed by Byton as one of the major new silver projects coming on stream, is one of the world’s largest undeveloped silver and indium resources with an NI 43-101-qualified indicated resource of 230.3 million ounces of silver and 1,481 tonnes of indium, plus an inferred resource of 140 million ounces silver and 935 tonnes indium.
An updated preliminary economic assessment, released last year, showed a net present value of $704 million at a five percent discount rate for a 40,000 tonne per day bulk mineable heap leach operation. Projected silver production is 13.2 million ounces per year, with 80 tonnes of indium per year.
Gill says that the company, with $26.6 million in cash, is due to release a pre-feasibility level update in the second quarter of this year, with feasibility work to start in the second half of 2012.
Other noteworthy companies in the silver sector include Southern Silver (CVE:SSV), SilverCrest Mines (CVE:SVL)(OTCQX:STVZF), Silver Bull Resources (TSE:SVB)(AMEX:SVBL), Great Panther Silver (TSE:GPR)(AMEX:GPL), Orko Silver (CVE:OK), and Arian Silver (CVE:AGQ)(AIM:AGQ).
Southern Silver Exploration is a Canadian precious and base metals explorer with mining ventures in Mexico, New Mexico and Arizona.
At its Cerro Las Minitas project in Mexico, Southern Silver has scheduled 20,000 metres of core drilling in 2012, with the aim of completing an NI 43-101 compliant resource on its first set of targets by the fourth quarter. This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.
Assay results from hole 12CLM-030 returned a 1.1 metre interval averaging 250 grams per tonne (g/t) silver, 10.7% lead and 16.95 zinc (1,007 g/t silver equivalent) at a vertical depth of approximately 270 metres.
SilverCrest Mines
Precious metals producer SilverCrest Mines, meanwhile, is focused on production from its Santa Elena Mine in Sonora, Mexico, which started commercial production in July of last year.
The company recently announced that silver production in the first quarter from its Santa Elena Mine more than doubled while gold production almost tripled year-over-year.
For the first quarter, silver production jumped 108 percent to 134,528 ounces, from 64,712 ounces a year ago, when the mine, which is now in commercial production, was still in the commissioning phase. Silver equivalent ounces sold soared 339 percent to 641,532 ounces from 146,219 in the first quarter one year ago.
The mine is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent.
SilverCrest anticipates that the mine should recover around 4,805,000 ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase.
Silver Bull Resources is a silver and zinc-focused explorer, whose flagship project is Sierra Mojada in Mexico. The property is located 150 kilometres north of the city of Torreon in Coahuila, Mexico and is highly prospective for silver and zinc. The explorer said that the third in a series of NI 43-101 resource updates is anticipated in the second quarter of 2012.
Given the drilling results to date for Silver Bull, it is anticipated that the next report for the property will show a substantial increase in the silver resource at Sierra Mojada, as well as including a resource for the significant zinc mineralization seen on the project.
Recent drill results from the site include 8.45 metres of massive sulphide grading 16.98% zinc, 5.45% lead, and 57.29 grams per tonne (g/t) silver in a previously untested zone 500 metres to the north of the Shallow Silver Zone.
Overall, Silver Bull has acquired or has options to acquire mineral concessions totaling 15,833 hectares in the Sierra Mojada Mining District. The company has been working on the Sierra Mojada property since 1997 and has completed over 80,000 metres of drilling.
The Vancouver-headquartered miner also owns three mineral exploration licences in Gabon, Africa, two of which are currently under joint venture with AngloGold Ashanti (NYSE:AU).
Vancouver-headquartered Great Panther Silver is a silver miner focused on its two wholly-owned operating mines in Mexico - Guanajuato and Topia.
Since commencing operations at these two mines in 2006, Great Panther has achieved continuous growth in metal production in excess of 20 percent per year until 2010, when the company saw record production of 2.3 million silver equivalent ounces.
In 2012, Great Panther expects to deliver production of 2.5 to 2.75 million silver equivalent ounces, an increase of 14 to 25 percent from 2011.
Another company with robust assets in the silver sector includes Orko Silver, which earlier this month regained 100 percent ownership in its La Preciosa property in Mexico.
In early April, Pan American Silver (TSE:PAA)(NASDAQ:PAAS) relinquished its right to earn a 55 percent interest in the La Preciosa project, one of the world's largest primary silver deposits, after it decided not to deliver feasibility study before an April 13, 2012 deadline.
Orko Silver's chief executive Gary Cope confirmed that four unnamed mining companies had "expressed an interest" in the project, with Orko signing standstill agreements with two of these parties.
La Preciosa is located in Durango State, which envelops the heart of Mexico’s prolific Sierra Madre Mining Belt, and includes large silver deposits such as Fresnillo and Pitarrilla.
An August 2011 preliminary economic assessment (PEA) gave an estimated mineral resource containing 113 million ounces of silver classified as indicated and a further 46 million ounces of silver classified as inferred. In addition, the deposit contains over 222,000 ounces of indicated gold and 83,000 ounces of gold in the inferred category.
The PEA showed an after-tax net present value of $315 million at a five percent discount rate, and a 24.3 percent internal rate of return. The results assumed prices of $25 per ounce of silver and $1,250 per ounce of gold.
Mexico-focused Arian Silver, meanwhile, is an emerging producer, that in March unveiled an updated NI 43-101 mineral resource estimate for its 100 percent-owned San José property in Zacatecas State.
Resource tonnage was up 29 percent along the San José Vein (SJV) from a July 2011 estimate, while contained ounces of silver were up 32 percent.
The company said that in the indicated category, the resource contained 8 million tonnes at an average grade of 119 grams per tonne (g/t) silver, 0.38% lead and 0.85% zinc. Contained metal comprised 30.61 million ounces of silver, 67.02 million pounds of lead and 149.91 million pounds of zinc.
In the inferred category, the resource contained 24.5 million tonnes at an average grade of 110 g/t silver, 0.38% lead and 0.76% zinc. Contained metal comprised 86.65 million ounces of silver, 205.25 million pounds of lead and 410.50 million pounds of zinc.
Mineralization remains open along the western and eastern strikes of the main vein, and to depth, with further drilling planned.
Silver Standard
On the tin side, Byron Capital listed Silver Standard Resources' (TSE:SSO) (NASDAQ:SSRI) Pirquitas Mine in northern Argentina as one of the new tin projects globally. The mine is the company's first major mining operation, and commercial production started in December 2009. At full production, it is estimated the mine will produce an average of around eight to ten million ounces of silver and ten to twelve million pounds of zinc annually, ranking Pirquitas among the largest primary silver mines in the world, the company says.
The silver and zinc concentrates produced from the plant are shipped to various smelters around the world.
Other new projects for tin listed are Eurotin's (CVE:TIN) Oropesa project in Spain, Kasbah Resources’ (ASX:KAS) Achmmach property in Morocco, anticipated to come on stream in 2017, and Consolidated Tin Mines' (ASX:CSD) Mount Garnet asset in Australia.
