SS1 hits high grade extensions to its existing resource

Our 2024 Pick Of The Year Sun Silver (ASX: SS1) put out what we think are pretty strong drill results.

SS1 hit an 88.39m intercept at a silver equivalent grade of 79.6g/t.

We liked the drill result for three key reasons:

1. SS1 extending its resource model - Today’s results show that SS1’s resource is open to the northwest, and it looks like it could get a lot bigger with more step-out drilling.

2. Drillhole ended in mineralisation - Down to the bottom of the hole, SS1 hit silver mineralisation, which could means there is potential to add a lot more resource at depth.

3. Grades were higher than the average of SS1’s current JORC resource - SS1 currently has a 423m ounce silver equivalent resource, where the average grade across the project is 67.25g/t. Today’s hit extends that resource to the northwest at a higher head grade (79/6g/t silver equivalent).

SS1 already has the biggest primary silver resource on the ASX at 432m ounce silver equivalent, so the market may not be placing much emphasis on the company’s drill results BUT…

We think today’s hits are important because higher grades at shallower depths outside of the current JORC resource would come straight into SS1’s future mine plans.

As with all mining projects, the highest grade material gets mined first, so drill hits like today’s could add to SS1’s project economics in the feasibility study stage.

SS1 is still in the middle of its 7,500m drill program, so we are hoping to see more results like today’s and further extensions to the northwest of the company’s current resource.

At the same time, we are looking forward to the antimony newsflow from SS1.

We covered all of that in our latest SS1 note here: SS1’s high grade antimony readings - does it run across the whole project?

How today’s news impacts our SS1 Investment Memo

Potential to increase an already large JORC resource

Only ~20% of SS1’s project has been explored to date. With its first round of drilling, SS1 will be looking for extensions to its current JORC resource and potential nearby targets.

Source: “Why did we Invest in SS1” - SS1 Investment Memo 18 May 2024

One of the key reasons we Invested in SS1 was because we thought its already giant JORC resource could get bigger.

When we first Invested only ~20% of SS1’s project had been explored.

We think that as the company drills out its project it could continue extending its resource well beyond where it is now.

We came across a video from Pierre Lassonde earlier this week where he talks about his first ever royalty investment in a project that Barrick Gold eventually ended up picking up in Nevada (next to SS1).

He talks about how the project started as a modest gold resource and eventually turned into a >50m ounce monster producing gold for decades.

It's a great listen to how important the upside of exploration can be for projects like SS1s. We highly recommend it for anyone who has a spare 40 minutes.

Check out the video here: The Founding of Franco Nevada | Pierre Lassonde & Jimmy Connor

What’s next for SS1:

• 🔄 More Assay results for the 7,500m drilling - SS1 is currently drilling out its project, assay results are expected any day now.
• 🔄 Antinomy potential - We want to see if antimony is widespread across SS1’s giant JORC resource.
• 🔄 Further update on silver paste tax credit - We want to see SS1 put out an update on the US$60M grant application the company is working on for its silver paste business.