WCE: Highest grade silver project on the ASX.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 3,908,000 WCE Shares at the time of publishing this article. The Company has been engaged by WCE to share our commentary on the progress of our Investment in WCE 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. Any forward-looking statements are uncertain and not a guaranteed outcome.

In the last 48 hours - silver is firmly back up and about.

Up over 10% the last two trading sessions.

(touching as high as 13% up - big moves for just two trading days)

Is this the start of the next run up to new all time highs?

Or another false start - we’ll see over the coming weeks...

The silver price will do whatever it does - we can't control that.

When it finally picks the direction it wants to head in - ASX silver stocks should follow...

(Our theory is it will go much higher from here - of course we could be wrong but we have positioned our Portfolio assuming we are right).

Our silver Investment West Coast Silver (ASX:WCE) now holds the title of the “highest grade silver project” on the ASX.

Back in April WCE announced its maiden JORC resource estimate - 2.8M ounces of silver at ~617g/t.

That's 617g/t of PURE silver - not a silver “equivalent”...

(source)

(WCE is also drilling right now on some district targets to see if they can find a similar silver deposit nearby... two is better than one right?)

All of WCE’s ultra-high grade silver sits inside one optimised open-pit shell.

(source)

Meaning they can just start digging it out from surface.

The last time this project was mined back in the early 2000s it was done using underground mining methods.

So changing the nature of the deposit from underground to open-pit is a big win for WCE.

WCE could have the highest grade deposit on the ASX that could be mined using well understood, low cost open-pit mining methods.

High grades = More silver comes out of each tonne of material mined.

Open-pit = cheaper and faster to run (literally just digging and blasting rock).

AND right now, WCE is running both a diamond and RC drill program looking to push the boundaries of the pit to the north and at depth:

(source)

Drill results are expected over the next few months AND the main things we are looking out for over the next few months are:

1. The RC drill campaign on the targets to the north of the Elizabeth Hill Mine (happening now).
2. The diamond drilling is going for at depth extensions to the Elizabeth Hill mine (started Mid April).
3. Geophysics across the broader project area

(source)

IF the drilling comes in, the project could go from super high-grade medium-sized mine, to something a lot bigger.

We should get an idea of the potential economics of the pit when WCE gets its scoping study started later this year (expected to begin Q4 2026).

And if the silver price delivers the run we are hoping for, attention and capital should flow to WCE.

Here is everything we know about WCE’s project right now:

• WCE’s project sits on a granted Mining Lease (reducing permitting timelines)
• There is historic mine infrastructure on site (the project was last mined in 2000)
• The project is ~30km away from the Radio Hill processing plant (WCE has an MoU in place with the owners of that plant).
• We know that the project was previously mined using a very simple processing flowsheet (conventional gravity circuits only).
• Access to mine support services, infrastructure, port, rail, power and skilled labour in the major coastal iron ore mining hub city of Karratha, Western Australia (~45km by road).

And the announcement WCE put out earlier in the week made it clear that WCE’s intention is to get the project back online with a high margin starter pit that is one single ~130m deep open pit. (source)

A low tonnage, high grade mine where WCE has already proven up to 90% silver recovery rates (so should be able to process with a relatively simple flowsheet).

WCE also made it clear that one of the processing options it's considering for the mine would be from the Radio Hill processing plant ~30km away (WCE already has an MoU in place with the owners of that plant).

Here are some photos of that plant:

(source)

And here is where it sits relative to WCE’s project:

(source)

We were in Sydney earlier in the week for the RIU conference where WCE presented on Wednesday.

WCE’s technical director, Serge Smolonogov put a lot more detail around the development plan in the presentation.

Here is the full replay for anyone who missed it:

(WCE's RIU Presentation)

Research report out on WCE this week too

We also came across the following research report from Breakaway Research on WCE.

We mentioned earlier, WCE has a scoping study in the works to put numbers around its current resource (the study is due later this year).

Breakaway’s research report gave us an early indication of what those numbers might look like...

Here is a link to the full report:

We are not a research house and do not provide price targets. The research report mentioned in this article was produced by a third party. We are sharing it for informational purposes only. We have not independently verified the data or the assumptions used in that report.

Here were our key takeaways from the report:

1. Indicative operating margins of A$55/oz to A$70/oz at the silver price assumptions used in the WCE pit optimisation.

Breakaway’s numbers showed that mining the full open pit - mining all of the ~140kt of resource, recovering ~2.4Moz silver, at an indicative operating margin of ~A$70/oz Ag.

That scenario shows indicative free cash flow of ~A$168M.

(source)

(The report is based on a silver price of A$85.71/oz (US$60/oz) so with silver currently trading at ~US$77/oz, the actual margins at today's spot price could be even higher.

2. WCE has the highest grade silver resource on the ASX and one of the lowest EVs.

The report includes a peer comparison across ASX-listed silver developers (sorted by silver-equivalent grade):

(source)

WCE's grade is more than 2x the next highest on the ASX list, and roughly 5-14x the grade of most other listed silver developers.

WCE's resource is also a "pure silver" play, this means that 100% of the silver equivalent figure comes from silver, there are no other metals in the mix to complicate things.

The result of all of this is that it shows WCE’s Elizabeth Hill Project as the highest grade, pure silver, near-term development potential.

(WCE has a scoping study starting later this year)

(source)

3. "Small Mining Operations" policy benefits

Breakaway has also flagged that the project could potentially be permitted under Western Australia's "Small Mining Operations" policy.

That policy is meaningful because it:

• Significantly cuts down permitting time and cost
• Allows operations to be undertaken with only limited up-front capital (via ore sales / toll treatment / contractor mining)
• Permits profit-sharing arrangements that further reduce capital exposure

WA Government Small Mining Operations Policy:

(source - WA Government Small Mining Operations Policy)

Ultimately, we are Invested in WCE to see it drill out and bring back online its silver project - repeating the types of mining runs done in the past (high grade, low tonnage) BUT this time into a silver market where prices are high.

Our WCE Big Bet:

“WCE re-rates to a market cap of $300M by bringing the Elizabeth Hill mine back online OR making a new discovery that is as big (if not bigger) than Elizabeth Hill into a strong macro silver theme.”

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 WCE Investment Memo.

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

What’s next for WCE?

On Wednesday, WCE released an updated presentation here.

It’s always good to see a Gantt chart showing what’s ahead in these presentations - a one pager on what to expect next:

(source)

The three things we are looking out for are:

1. The RC drill campaign on the targets to the north of the Elizabeth Hill Mine (happening now).
2. The diamond drilling is going for at depth extensions to the Elizabeth Hill mine (started Mid April).
3. Geophysics across the broader project area

And then all of that data rolling into what we expect to be an updated JORC resource being fed into a Scoping Study, expected to get underway in Q4.

What could go wrong?

In the short term the key risk is around “exploration risk” and “commodity price risk”.

WCE is currently drilling surrounding the historical mine.

There is a risk WCE does not find enough economically viable mineralisation and the company’s share price re-rates lower.

Exploration risk

There is no guarantee that WCE’s upcoming drill programs are successful. WCE may fail to find economic deposits of silver.

Source: What could go wrong? - WCE Investment Memo 8 August 2025.

Right now, the silver price has pulled back significantly from its all time highs earlier in the year.

WCE’s primary commodity exposure is silver, so any further falls in the silver price could mean WCE’s share price moves lower.

Commodity price risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract. Should silver prices fall, this could hurt the WCE share price.

Source: What could go wrong? - WCE Investment Memo 8 August 2025.

Other risks

Like any early-stage exploration and development company, WCE carries significant risk, here we aim to identify a few more risks.

While WCE has a Memorandum of Understanding (MoU) with the owners of the nearby Radio Hill plant, this is not yet a binding agreement. If the company cannot secure a final contract for processing, it may be forced to build its own infrastructure, which would drastically increase the capital required to start mining.

The "nuggety" and high-grade nature of the Elizabeth Hill deposit means that silver mineralisation can be highly irregular. There is a risk that upcoming drill results fail to show enough continuity to support the large-scale, open-pit mining model the company is currently planning.

WCE may be eligible for the Western Australian "Small Mining Operations" policy to fast-track its permitting and reduce costs. If the project eventually exceeds the specific limits of this policy, WCE could face a much longer and more expensive traditional regulatory approvals process.

With an intensive drilling campaign underway and a scoping study due to start in Q4, the company's cash burn is expected to remain high. WCE will likely need to raise additional capital in the near future to fund these activities, which would result in the dilution of current shareholders.

Finally, even with high-grade ore, the project's economics are sensitive to the rising costs of labour and equipment in the Pilbara region. Any significant inflationary pressure on mining services could squeeze the high margins that the company is currently projecting in its internal models.

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

Our WCE Investment Memo

In our WCE Investment Memo, you can find the following:

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