WCE - research report puts numbers around the Elizabeth Hill starter pit

Our silver exploration Investment West Coast Silver (ASX: WCE) has just had a research report released on it by Breakaway Research with a SPEC BUY recommendation.

The timing follows on directly from yesterday's Growth & Development Plan announcement where WCE laid out the workflow to take Elizabeth Hill from a maiden resource to a scoping study and a potential starter open pit.

The research report puts indicative numbers around exactly that thesis.

Here is a link to the full report:

Next Investors is not a research house and does 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.

So we are treating it as a directional sense-check on the high-grade thesis, not as a forecast.

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 show two conceptual pit scenarios:

• Full pit - mining all of the ~140kt of resource, recovering ~2.4Moz silver, at an indicative operating margin of ~A$70/oz Ag. This shows an indicative free cash flow of ~A$168M.
• Shallow starter pit - mining the top ~50m for ~84kt of (lower-grade) Indicated material, recovering ~0.318Moz Ag, at an indicative operating margin of ~A$55/oz silver. This would provide an indicative free cash flow of ~A$17.6M.

(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, so the actual margins at today's spot price could be even higher.)

1. 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.

Some of the other companies here have other metals making up a meaningful portion of their silver equivalent calculations, so when the silver price goes up, they don’t see as much benefit.

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, and at ~A$43M EV.

Yesterday we covered the update where WCE laid out its plans on the steps required to get this into production, with drilling, and updated JORC and scoping study expected early 2027.

All going to plan this would allow WCE to make the decision to go mining in early 2027.

(source)

We covered this in a QuickTake yesterday, where WCE laid out the forward planning.

To put it in pictures, here is the full pit outline at this stage with the historic mined area:

(source)

Here is the ongoing drilling looking to add to the resource, both with shallower nearer surface drilling to the north and deeper RC drilling to the south:

(source)

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

WCE presented at the RIU conference in Sydney yesterday morning

For anyone following the conference along from home WCE actually presented in the morning session on Wednesday- if you go back to the morning session you can actually replay the presentation on youtube here:

(we have timestamped the link, if it doesn’t stick it’s around 2h:24min into the stream)

What we want to see next from WCE

Yesterday, 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 most 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 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 before the Scoping Study before the end of the year, expected to get underway in Q4.