AVM: We just increased our position (yep, after two weeks)

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 10,500,002 AVM Shares and the Company’s staff own 200,000 AVM Shares at the time of publishing this article. Some shares disclosed are subject to shareholder approval. The Company has been engaged by AVM to share our commentary on the progress of our Investment in AVM over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs.

Our recent silver Investment Advance Metals (ASX:AVM) just boosted its register with some heavy hitting institutional investors...

AVM raised $13M at 10c (at a premium to its last traded price before the capital raise) attracting the likes of:

• Jupiter Asset Management,
• Tribeca Investment Partners,
• Lowell Resources Fund,
• APAC Resources.

Jupiter and Tribeca alone took up half the placement ($6.5M of the total $13M raised).

And yes, we also added to our Position in the AVM capital raise.

We have had some good wins investing alongside Jupiter, Tribeca and Lowell before.

Jupiter and Lowell who were both on MTH (one of our biggest positions) which at its peak was up ~715%.

Tribeca on LKY which is one of our most recent big wins which at its peak was up 626%.

(look at us getting mentioned in the same sentence as the “big kids”)

AVM also said it is planning a North American listing.

(more on why we like this later).

The main reason we liked Friday’s cap raise is because AVM now has cash and a completely reset, institutional shareholder register which we think will change the way the market looks at the company going forward.

(oh and did we mention another reason is because we are bullish silver - just in case we hadn’t said this before in the past)

AVM has three silver assets in Mexico, which combined have an estimated ~100M silver ounces in foreign resources:

(Source)

(Source)

AVM has a high grade gold asset in Victoria too...

AVM also has a high grade gold asset in Victoria, Australia, which we think compares well to another Victorian gold explorer Falcon Metals which recently ran to a ~$170M market cap...

So far AVM has hit two drill results that aren’t that dissimilar to what triggered the big run in Falcon’s share price.

AVM hit 3.4m at 68.2g/t gold from 187m and a monster 1.3 metres hit at 305.8g/t gold from 169.6m depth.

And in the image below you can see the results that started the Falcon rally from ~12c to a high of $1.18 per share:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Both Jupiter Asset Management and Lowell Resources fund are in Falcon...

(Source)

(Source)

We wonder if Lowell and Jupiter came into AVM for the silver, another MTH?

Or are they trying to get their next Falcon Metals?

¿Por qué no los dos?

AVM is currently drilling the Victorian gold asset, and we think the next hole could be the most material (if it comes in) for AVM’s current valuation:

This is the first time AVM has had a decent chunk of cash to work on these projects after years of bringing them together.

We are looking forward to seeing what the company can get done with the new cash and insto backing...

Why we like the planned move to dual list in North America

As mentioned earlier, AVM also announced that it would look to list the company in North America.

(Source)

We think that silver stocks on the ASX (and especially the ones with assets in Mexico) are very much underappreciated when compared with North American peers.

We said in our note on Saturday that we think there is an edge for silver stocks on the ASX because the Australian market doesn't understand silver, so there is some good pricing of quality silver projects listed on the ASX. (read our Saturday note here)

We have taken a position, and now we want to see AVM get dual listed in North America to help it get a re-rate where Mexico silver assets are much better understood.

(We were on site at MTH’s Mexican silver assets earlier in the year with a bunch of Canadian analysts who were talking about dozens of Mexican silver peer comps)

On the ASX there are only two Mexican silver stocks and we are Invested in both (AVM and MTH).

We think the move to dual-list will be good for AVM and open up the stock to a whole new range of investors who know and understand silver stocks (and Mexico) really well.

In fact that dislocation was a key reason why we Invested in AVM:

(Source)

Combined, AVM’s three Mexican projects have 100M ounces of silver equivalent as foreign resource estimates:

(Source)

Post capital raise, at the last close price AVM’s enterprise value will sit at ~$46M.

Which means AVM trades at an EV/silver equivalent resource metric of ~A$0.46 per silver equivalent ounce.

AVM still trades at a discount to two other silver stocks in Mexico and Argentina:

1. Andean Silver in Argentina, trading at more than $2 per silver equivalent ounce of resource.
2. Mithril Silver and Gold in Mexico, trading at more than ~$2 per silver equivalent ounce of resource (one of the biggest positions in our portfolio, with more drill results any day now)

On top of that, all of those ASX stocks trade at discounts to their North American exchange listed peers...

One example is Vizsla silver which has one advanced stage asset in Mexico and trades at ~$4.50 EV/per silver equivalent ounce.

That is ~10x higher than where AVM trades today.

Noting of course that Vizsla’s project is a lot bigger and a lot more advanced relative to all three of AVM’s projects, which explains a lot of the valuation differential.

Past performance is not an indicator of future performance.

Now with a big institutional capital raise closed and AVM finally having a decent amount of cash in the bank to work up its projects, we think AVM can drill out and progress its projects to a level one day potentially comparable to Vizsla’s.

By then, we would expect the market to pay a much higher multiple for the ounces that sit in the ground across AVM’s projects.

Even partially comparable to Vizsla would be a significant re-rate for AVM.

Over time, we think the ASX market should get up to speed on the Mexican silver industry in general to the same level that the North Americans and Canadians are.

As mentioned earlier, the dislocation to North American peers was why we first Invested in AVM.

Here is the full list of reasons why we are Invested in AVM, from our AVM initiation note on the 19th of September 2025).

(with any new UPDATES in bold and italics)

9 reasons why we are Invested in AVM:

1. AVM has an estimated 100M ounces of silver equivalent resources. We think it can grow from here

Three projects, 100m+ ounces of silver equivalent in a foreign resource.

We think AVM can grow the resource well beyond this with some drilling.

1. AVM is undervalued relative to its silver peers on the ASX

AVM currently trades on an EV/silver equivalent JORC resource estimate of $0.14.

This compares to Latin American peers MTH trading at $2 and Andean Silver at $2.

We think that as AVM converts its resources to JORC status and with more exploration drilling it can close this valuation gap.

UPDATE: Post last week’s capital raise, at the last close price AVM’s enterprise value will sit at ~$46M.

Which means AVM trades at an EV/silver equivalent resource metric of ~A$0.46 per silver equivalent ounce.

1. We think silver could go on a ‘once in a generation’ run to new highs

Silver is now at 14 year highs, and we think it's about to go on a once in a generation run to new all time highs... taking all silver stocks with it.

1. Very few silver stocks on ASX

There are very few silver names on the ASX. If silver runs, there could be a lot of capital chasing silver exposure in only a handful of names. This scarcity could mean valuations run from where they are now.

1. Mexico is a top silver and gold producer (and this is in a mature mining area)

Mexico is the largest silver producer in the world, and the 7th largest gold producer.

AVM’s project sits along the “Sierra Madre Trend” which has produced as much as 6.2 billion ounces of silver - equal to roughly 10% of total global historical production.

1. Mexican silver projects are misunderstood on the ASX

We think Mexican silver stocks are misunderstood on the ASX, despite the country being the single biggest producer of silver in the world.

The market values projects in Mexico with a discount due to a perceived jurisdiction risk. We think that as the silver price runs, the market will start to appreciate the jurisdiction and potential of the projects.

1. AVM’s most recent acquisition adds scale to AVM’s portfolio

AVM just acquired a project from $2BN Endeavour Silver. The project has had 86,000M of drilling completed on it and a foreign resource estimate of 60.6M Oz silver equivalent, something that would cost tens of millions to do from a standing start.

We think this asset could become a company maker for AVM with some drilling and a higher silver price.

1. Exploration upside (three projects that haven’t been systematically drilled)

All of AVM’s projects have not been drilled in any major way for years. AVM will be the first company to have owned the assets in a high silver price environment in decades.

1. Victorian gold asset might justify AVM’s current valuation on its own

We think AVM’s Victorian gold assets, at today’s all time high gold price, justify AVM’s current market cap on its own.

Ultimately, we want to see AVM achieve our Big Bet which is as follows:

Our AVM Big Bet:

“We want to see AVM reach a $150M+ market cap by converting its existing foreign resources into 100M+ silver equivalent ounces at the JORC level AND by making new discoveries”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our AVM Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

Advance Metals
ASX:AVM

More on AVM’s four key projects and what we want to see next

AVM has four key projects:

1. Silver in Mexico - Guadalupe y Calvo (60.6M oz silver equivalent foreign resource estimate)
2. Silver in Mexico - Yoquivo (17.2M oz silver equivalent foreign resource estimate)
3. Silver in Mexico - Gavilanes (22.4M oz silver equivalent foreign resource estimate)
4. Gold in Victoria, Aus - Happy Valley project where AVM is CURRENTLY DRILLING.

Below we will go into more detail on each and list what we are looking forward to next on each project:

Project #1 Guadalupe y Calvo (60.6M oz silver equivalent foreign resource estimate)

This is AVM’s biggest and most advanced asset.

AVM acquired the asset from $2BN Endeavour Silver in July for a total consideration of $4M to be paid over 4 years. (Source)

The project has an existing foreign resource estimate of 60.6M ounces silver equivalent (816 Koz gold equivalent).

The project has mining history dating back to 1835 - with over 2Moz of gold and 31Moz of silver produced on the asset historically.

The project has also had 86,000m of drilling to define the 60.6M ounce silver equivalent foreign resource estimate the project has right now.

AVM’s strategy is to convert the current foreign resource into a JORC resource estimate.

And we think that the resource can get a lot bigger with some drilling:

What we want to see next:

Now that AVM has locked away a $13M capital raise the company is looking to start its first drill program on the asset. (Source)

Project #2 Yoquivo (17.2M Oz silver equivalent foreign resource estimate)

This project has thinner vein systems compared to GyC - but is a lot higher grade...

The project’s foreign resource estimate is 17.2M oz silver equivalent based on an average grade of 570g/t.

The foreign resource is based on ~70 diamond holes across three drill programs between 2020 and 2022, where previous drilling hit intercepts such as 0.4m at 21,447g/t silver and 0.3m at 7,480g/t silver...

AVM recently did some sampling on the project and in one part of the project sampled rock chips with grades as high as 1,594g/t silver equivalent.

The rock chips came from a part of the project that had never been drilled before.

In fact, before the results earlier this week - that part of the project hadn’t even been mapped before (despite the old underground workings that were found):

(Source)

So AVM found potential extensions to its project, in a part of the project that no one had really touched before...

And the rock chips (as well as the underground historic workings) are indicative of something being there that was worthy of the old timers mining the area out...

Here is where that newly mapped area sits relative to the known mineralised veins (in red) on the project:

(Source)

AVM is currently working on converting that to JORC status.

We think that an eventual JORC resource on this project could surprise to the upside, especially with the recent news from the assets over the last few weeks.

What we want to see next:

AVM has recently re-assayed ~3,500m of previously unsampled core with assays due in “late October” - which is only a few weeks away.

Here are the current drilled out veins and all of the areas that were left unsampled (in purple), we are hoping to see those red veins get bigger once the results come back in October:

(Source)

AVM is currently working on converting that to JORC status.

We think that an eventual JORC resource on this project could surprise to the upside, especially with the recent news from the assets over the last few weeks.

Project #3 Gavilanes (22.4M Oz silver equivalent foreign resource estimate)

This is AVM’s earliest stage project in Mexico.

The project has a foreign resource estimate of 22.4M oz of silver equivalent at an average 246g/t silver equivalent grade.

To date, drilling has only tested ~0.2km^2 of the project area while the ~15km^2 of KNOWN veins are undrilled.

The kicker for this project is its proximity to an existing mine owned by $7.3BN First Majestic Silver.

Right now, the project as it sits might not be big enough to become a standalone development asset BUT even if the resource stays where it is today, it could make for good feedstock to a much larger company's operations.

First Majestic’s San Dimas Tayoltita mine (134Moz of silver) sits ~23km northeast of this project.

This project is one of those that you just never know how big it might be, until AVM drills it out.

Project #4 (Gold exploration project in Victoria)

AVM is currently drilling this project following up recent hits as strong as:

• 3.4m at 68.2g/t gold from 187m and
• a monster 1.3 metres hit at 305.8g/t gold from 169.6m depth.

What we want to see next:

We really like the results AVM has put out so far... but the news we are most interested to see is the hole AVM is drilling right now.

AVM said that the deepest hole on the project was currently being drilled to test:

1. Down-plunge potential of the whole system AND
2. Intersect a zone ~60-80m below a previous hole that hit 7.55 metres at 5.7g/t Au, including 2.5 metres at 14.9g/t Au.

(Source)

Beyond the current drilling AVM also plans to start drilling “undrilled prospects along strike to the northwest and southeast immediately following the completion of the current hole”.

Both those areas have historic gold workings and rock chips at surface (some grading as high as 42.5g/t gold...

And they have never been drilled.

If hole 14 comes in, then the market could also start to price in some of the exploration upside on this project too:

(Source)

Advance Metals
ASX:AVM

What are the risks?

In the short term we think the key risk for AVM is “exploration risk”.

AVM is drilling its Victorian gold project right now and it’s possible that drilling doesn’t find economic mineralisation.

Poor drill results could mean AVM’s share price re-rates lower from current levels.

Exploration risk

There is no guarantee that AVM’s upcoming drill programs are successful. AVM may fail to find economic silver resources in which case we would expect the share price to re-rate lower.

Source: “What could go wrong” - AVM Investment Memo 19 September 2025.

Other risks

Investing in AVM carries other risks which may affect the value of the company.

There is also market liquidity risk. AVM is a small cap company, and its shares may be thinly traded.

This can lead to significant share price volatility or difficulties for investors seeking to buy or sell shares at their desired price.

Broader macroeconomic and commodity price factors could also impact the company’s prospects.

A fall in silver or gold prices, a global economic slowdown, or deteriorating investor sentiment toward the resources sector may negatively affect AVM’s valuation.

Political and jurisdictional risks must also be considered.

Although Mexico and Australia are established mining jurisdictions, changes in mining laws, royalty rates, or community sentiment could delay project development or increase operating costs.

Funding and dilution risk is another factor. As a pre-revenue company, AVM relies on external capital to progress its projects.

If market conditions turn unfavourable, the company may need to raise funds at a discount, resulting in shareholder dilution.

Finally, there is exploration and execution risk. Converting foreign resource estimates to JORC status, identifying new drill targets, and delivering positive drilling results are all critical steps.

There is no guarantee AVM will achieve these milestones on time, within budget, or with the success required to drive a material re-rating in its share price.

Investors should carefully consider these risks and seek professional advice tailored to their personal circumstances before investing.

Our AVM Investment Memo

Our Investment Memo provides a short, high-level summary of our reasons for Investing.

We use this memo to track the progress of all our Investments over time.

Click here to read our AVM Investment Memo where you will find:

• What does AVM do?
• The macro theme for AVM
• Our AVM Big Bet
• What we want to see AVM achieve
• Why we are Invested in AVM
• The key risks to our Investment Thesis
• Our Investment Plan