IVR Drilling underway at Paris - derisking production, expanding the pit, and hunting the 15km corridor

Our development stage silver Investment Investigator Silver (ASX: IVR) has given the market an update on the drilling program now underway at its 100%-owned Paris Silver Project in South Australia.

Drilling kicked off in early March- funded by the $55M institutional capital raise IVR completed alongside its Definitive Feasibility Study (DFS).

This gives IVR the runway to do all it needs to make sure the project progresses to be in an optimal position for future items such as financing and approvals ahead of construction.

The drill program got underway last month with IVR confirming that the program is on schedule and assay results will be released progressively as they come in.

IVR's DFS dropped back in March, so as expected more drilling here is being done to tighten up the geological model.

So we wouldn’t expect the results from this part of the drilling to throw up any big surprises.

When the DFS landed with its $1.15BN pre-tax NPV, 93% IRR and 11-month CAPEX payback, we wrote that the next big things to watch for were:

• Permitting,
• Financing of the ~$A260M CAPEX, likely via a combination of debt and equity,
• High density drilling to derisk production startup,
• Execution readiness pre Final Investment Decision, and;
• Ongoing project optimisation.

You can read more on our DFS coverage here: IVR’s Paris silver project in South Australia shows $1.15BN pre-tax NPV, 93% IRR, 11 month payback... and the silver price is rising

Today's update progresses the third item directly.

What the drilling program is designed to do

IVR has split the drilling into three distinct areas - each one designed to solve a different problem:

1. Grade control / infill drilling - straight at the financiers

The first priority is tightening up the drilling data density in the first few years of the mine plan of which we saw in the prior DFS earlier in the year.

Currently, the resource model at Paris is based on drilling at ~25 metre spacing, so IVR is infilling that down to grade control drilling density.

(source)

This is crucial because the first couple of years of production are where the debt gets repaid, it’s the period financiers care most about.

It’s also the period when a producing company is at its most vulnerable, if things don’t go to plan they can’t exactly just reach into the cash reserves from prior profits to make things better.

Tighter data in those early years gives potential lenders greater confidence in their due diligence process, which would ultimately lead to better financing terms.

This is what MD Lachlan Wallace flagged when he took over - his stated goal was to design a mine plan that could be taken directly to financiers with due diligence answers baked in from day one.

Here is a quote form a webinar not long after he took over last year:

“So the mission here is not really just to publish a DFS on its own, but it's to produce a plan that I can take directly to financiers. So the mine plan has already been stress tested against their benchmarks and stands up as a financeable plan from day one”

(source - listen to that quote here)

2. Resource conversion and pit expansion - back into the 13M inferred ounces

The second aim of the drilling is from drilling adjacent to the current DFS pit into areas where mineralisation is already defined but still sits in the Inferred category.

These zones were deliberately excluded from the DFS mine plan to keep the study's geological confidence high.

Here, future pit optimisation works flagged the expansion potential to the north, south and east.

(source)

Back in December, we covered when IVR "found" an additional ~13M ounces of silver by optimising its pit designs, a big part of this was the higher silver price making it worth processing lower grades.

That silver didn't make it into the DFS, so there is an obvious pathway to add these ounces into the plan.

Converting Inferred material to higher confidence categories in these zones could:

• Add years to the mine life without significant additional capital costs,
• Increase mineable inventory, and
• Feed into a future DFS upgrade.

At today's silver prices, 13M ounces of extra silver is worth serious money, at the current price of A$109/oz that is A$1.4BN of silver potentially sitting in the ground.

Obviously there will be costs to get this out of the ground and process, plus the DFS hasn’t been run on this part of the resource, at this stage it’s just a big number that gives IVR added opportunity.

Every bit of that inferred material that gets upgraded and pulled into the mine plan should provide increases to project value.

3. Paris Silver Corridor - 15km long district opportunity

The third part of today’s update on drilling is the regional drilling across the Paris Silver Corridor.

This is the 15km corridor of silver occurrences along strike from the Paris deposit - including previously drilled prospects like

• Athena (5m at 493g/t Ag from 71m) and,
• Apollo (8m at 1,262g/t Ag from 149m)

These have barely been tested properly for silver.

The goal here is to define additional mineralisation that could act as satellite feed into the Paris central processing facility in the future.

Should any higher grades be found out here, it could open up further opportunities to increase cashflow in those critical earlier years of the project when debt may be involved.

Even relatively modest regional discovery/ies could extend the 11-year mine life.

We covered the recent DFS here: IVR’s Paris silver project in South Australia shows $1.15BN pre-tax NPV, 93% IRR, 11 month payback... and the silver price is rising

What do we want to see IVR do next?

Permitting 🔄

Now that the DFS has been published, we will be watching IVR go through all of the permitting workstreams on its project.

We especially want to see the project get a mining licence and an environmental permit granted for the project as soon as possible.

• 🔄 Environmental permits
• 🔄 Project infrastructure permits
• 🔄 Mining licence granted

Project financing 🔄

The DFS set the CAPEX at A$260M. We want to see IVR make progress on debt/equity financing while the silver price is supportive.

Now that the DFS has been published, the next major catalyst for IVR will be project financing.

While permitting is progressing, we want to see IVR make progress on debt/equity financing commitments for the project CAPEX of A$260M.

• 🔄 Lender engagement and technical due diligence
• 🔲 Financing commitments

Grade control drilling 🔄

We want to see IVR complete infill drilling at its resource and upgrade the resource in terms of classification.

Drilling on regional targets 🔄

We also want to see IVR drill out the 15km corridor of targets that sit around its 57M ounce JORC resource estimate.

The ultimate success from these drill programs would be a discovery similar to IVR’s existing resource.

IVR is continuing to work on this as part of this drill program

Here are the milestones we are tracking:

• ✅ Geophysics/Geochemistry work
• ✅ Identify drill targets
• 🔲 Drilling starts
• 🔲 Drilling results