Key Highlights

  • Kootenay Silver Inc.’s (“company”, “Kootenay”, “KTN”) shares are up 125% since we launched coverage in November 2018.
  • Stronger silver prices and excellent drill results from the recently optioned Columba silver project in Chihuahua enabled the company to raise $14 million in 2019 through various equity financings. Eric Sprott subscribed to $5 million.
  • In 2019, the company completed a 41 hole / 6,853 m drill program at Columba. We believe the program was very successful with multiple holes returning high grade silver intercepts on multiple veins, including 1,070 gpt over 0.90 meters, 982 gpt silver over 1.9 meters within 721 gpt silver over 4 meters, 650 gpt silver over 7.45 meters within 159 gpt silver over 39.9 meters.
  • Management is planning to commence a 7,000 m follow-up drill program at Columba this month.
  • Other key focus areas in 2020 will be another high-grade and previously undrilled Copalito silver-gold project in Sinaloa state. This project is approximately 35 km east of McEwen Mining’s (TSX: MUX) El Gallo mine complex. KTN is planning a maiden drill test at Copalito this quarter.
  • No immediate plans on the flagship asset; the La Cigarra project in Chihuahua state. La Cigarra’s 2015 open-pit defined silver equivalent measured and indicated resource ounces vary from 52.8 Moz to 65.3 Moz (Moz – million ounces), and inferred resource ounces vary from 11.1 Moz to 17.2 Moz as silver prices vary from US$17 per oz to US$29 per oz. Subsequent drilling has extended the known strike from 2.4 km to 4.8 km.
  • Suffered a setback in June 2019, when Pan American Silver (TSX: PAAS) relinquished its right to earn a 75% interest in the Promontorio and La Negra projects in Sonoro state. PAAS had spent US$3.6 million on drilling and exploration over the past three years. KTN is currently accessing its next steps in regard to advancing these assets.
  • We estimate that KTN’s shares are currently trading at an Enterprise Value (“EV”) of $0.34 per silver oz versus the comparables average of $0.81 per silver equivalent oz.

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