Disclosure: Southern Silver Exploration Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Price and Volume (1-year)
(QP: Robert Macdonald, MSc., P.Geo., VP Exploration for Southern Silver)
* Southern Silver has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Portfolio Summary
Advancing four polymetallic projects: two in Durango, Mexico, and two in New Mexico, U.S
Mexico is the world’s largest silver producer
SSV is focused on its flagship CLM project in Mexico
Source: Company / FRC
Cerro Las Minitas (100% interest / no royalties)
This advanced-stage project is 70 km northeast of the city of Durango, Mexico.
Location Map
Source: Company
Located in a well-established mining district near several majors
Well-developed infrastructure: highway, railway, and grid power access
US$28M invested in acquisition and exploration since 2011
The project hosts a classic silver-lead-zinc CRD/skarn system, typically characterized by moderate to high tonnage, and medium grades, comparable to major polymetallic deposits in Mexico.
(QP: Robert Macdonald, MSc., P.Geo., VP Exploration for Southern Silver)
Source: Company
CLM hosts a large polymetallic resource, with relatively high-grade silver, and low-grade zinc, gold, copper, and lead
At spot prices, silver represents 58% of the resource, followed by zinc and lead (33%), copper (6%), and gold (3%)
Seven Deposits
Resources are spread across seven deposits (Blind, El Sol, Las Victorias, North Felsite, Bocona, Skarn Front, and South Skarn)
2024 drilling, following the latest resource estimate, returned thick sulphide intercepts beneath the main zone of the South Skarn deposit
Source: Company
We believe there is significant resource expansion potential, as mineralization remains open laterally, and at depth
Puro Corazon Claim
In September 2025, SSV acquired the nine-hectare Puro Corazón claim near CLM, identifying high-grade near-surface targets
Puro Corazon Drill Targets
Source: Company
The company has since commenced a 12,000 m drill program primarily targeting this claim
Management plans to incorporate results from the 2024 and current drill programs into an updated resource estimate in Q1-2026, followed by a Preliminary Economic Assessment (PEA) expected in Q3-2026.
The 2024 PEA, outlining a 17-year underground operation, showed strong project economics
2024 PEA Highlights
AT-NPV5% of US$931M, and an AT-IRR of 31% using US$32/oz silver (spot: US$54/oz)
Anticipated life-of-mine sales of 194 Moz AgEq over 17 years (11 Moz/year), at US$13/oz AISC (all-in-sustaining costs)
Production Profile
(QP: Robert Macdonald, MSc., P.Geo., VP Exploration for Southern Silver)
Source: Company
A key advantage of the project is the potential for higher production in the initial years
Given the project’s resource expansion potential, we anticipate significantly stronger economics in the next PEA
Nazas (Option to earn 100% interest)
This pre-resource stage project covers 2,189 hectares and is accessible by road from Durango, approximately 150 km to the north.
Location Map
Just 12 km east of Endeavour Silver’s (TSXV: EDR) Pitarrilla project, sharing comparable geology and mineralization
Pitarrilla hosts 845 Moz AgEq, ranking among the world’s largest undeveloped silver resources
Exploration Targets
(QP: Robert Macdonald, MSc., P.Geo., VP Exploration for Southern Silver)
Source: Company
Seven targets identified along a >7 km strike length
Historic drilling (18 holes) returned multiple anomalous gold and silver intercepts, including 15 m of 0.75 g/t Au, 31 m of 0.57 g/t, and 40 m of 0.33 g/t
SSV plans to drill-test four targets
Management Directors
Source: Sedi / FRC
Management and the board own 1.54%, while Electrum Global Holdings, a New York-based investment manager, holds 20.46%
Six out of seven directors are independent
Financials
Strong balance sheet
Source: Company
Can raise up to $11M from in-the-money options/warrants
Comparable Valuation
Source: S&P Capital IQ / FRC / Various
SSV is trading at $0.64/AgEq oz vs the sector average of $1.62/oz, a 60% discount
Applying the sector average, we arrived at a comparables valuation of $0.90/share
DCF Valuation
Our DCF valuation is $0.85/share
While most of our production inputs are in line with the PEA, we are using 10% higher CAPEX and OPEX to account for sector-wide cost increases since the PEA
For conservatism, our models are based solely on the flagship CLM Project, with no value assigned to SSV’s other projects
Source: FRC
Our valuation is highly sensitive to metal prices
We are resuming coverage with a BUY rating, with a fair value estimate of $0.87/share (the average of our DCF and comparables valuations). We believe SSV is a compelling acquisition target, driven by its large resource, robust economics, strong cash position, and a favorable silver market, while trading at a significant discount to peers.
Risks
We believe the company is exposed to the following key risks:
Maintaining our risk rating of 5 (Highly Speculative)
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