Strong drill results bode well for AbraSilver’s mid-year Diablillos update

AbraSilver Resource's Diablillos project in Salta, northwest Argentina shows resource upside.

AbraSilver Resource (TSX: ABRA; OTCQX: ABBRF) released assays Tuesday from the Diablillos project in Salta, northwest Argentina, showing mineralization extends beyond the pit boundary.

At the JAC Extension zone, hole DDH-25-002 returned 65 metres grading 161.6 grams silver per tonne from 82 metres depth, including 12 metres at 404.6 grams silver. Hole DDH-25-001 cut 56 metres at 107.4 grams silver from 66 metres, including 6 metres at 180.6 grams silver.

AbraSilver plans to add stage four assays into a resource update due mid-year. “Results … will enhance scale and quality of the Diablillos project,” president and CEO John Miniotis said in a release.

Diablillos is located in the high-elevation Puna region. It has features similar to high-sulphidation epithermal deposits like Veladero and Filo del Sol. Argentina’s Puna belt hosts several silver-gold projects, such as Fortuna Mining’s Lindero mine, the subject of a recent site visit. SSR Mining (TSX: SSRM; ASX: SSR) is focused on Chinchillas, while Pan American Silver (TSX, NYSE: PAAS) is active at Veladero. Both drive exploration and development. The government’s so-called ‘RIGI’ program offers tax breaks for qualifying projects.

The company’s Toronto-quoted shares closed up 1.7% or 5¢ on Tuesday at C$3.03, giving it a market capitalization of C$462.2 million.

Mineral upside

Other noteworthy intercepts reported Tuesday include hole DDH-25-005 that cut 63 metres at 138.6 grams silver from 74 metres and DDH-25-006 that returned 88 metres at 88.9 grams silver from 52 metres depth.

Drilling has now advanced to targets including JAC South, Sombra, Oculto East, Oculto West, Laderas, and a porphyry-epithermal complex located 4 km northeast of Oculto.

 “Assays confirm silver grades at depth and over widths,” Chief geologist Dave O’Connor said, adding that targets are to be also tested across the property in a fifth stage of drilling.

Diablillos holds proven and probable reserves of 42.3 million tonnes at 91 grams silver and 0.8 gram gold, containing 123 million oz. silver and 1.1 million oz. gold based on a March 7, 2024 estimate.

A December pre-feasibility study revealed a net present value of US$747 million (C$1 billion) at a 5% discount. It showed an internal rate of return of 28% with a two-year payback. The average production in the first five years is 13.4 million silver-equivalent oz. at an all-in sustaining cost of US$12.67 per ounce.

The company held C$65 million cash at March and is funded to a construction decision by end of 2026.