AbraSilver Resource Corp. (TSXV: ABRA) has announced plans to raise approximately C$49 million ($34 million) to fund the development of its fully owned Diablillos project in Argentina. The company projects that once operational, Diablillos will rank among the world’s leading primary silver mines.
The funding initiative consists of two components:
A bought deal public offering of 8.55 million common shares, priced at C$2.55 each, generating approximately C$21.8 million.
A private placement of over 10.43 million shares at the same issue price, raising an additional C$26.6 million.
AbraSilver’s stock was trading at C$2.72 on Friday morning, reflecting a 1.1% intraday loss and a total market capitalization of C$345.8 million ($240.5 million). Over the past 52 weeks, the stock has fluctuated between C$1.32 and C$3.58.
Among the private placement subscribers are Central Puerto SA, Argentina’s leading electricity provider, and Kinross Gold (TSX: K). Both companies exercised their anti-dilution rights as shareholders, having initially invested a combined C$20 million in April 2024, securing a 4% equity interest each in AbraSilver.
“We are truly delighted to announce this C$48.4 million financing, providing us with immense financial flexibility to accelerate the development of our Diablillos project and continue unlocking its full potential,” stated John Miniotis, CEO of AbraSilver, in a press release.
The value of the Diablillos project increased significantly following an updated prefeasibility study (PFS) released in late 2023. The new PFS estimates an after-tax net present value (NPV) at a 5% discount rate of $747 million, up from the $494 million reported in March 2024.
The NPV improvement is attributed to optimized mine sequencing, particularly accelerated extraction from the shallow gold zone, which is expected to yield higher gold grades and increased production during the first five years.
However, the PFS also revealed a 45% rise in capital costs, now estimated at $544 million. The company attributed this increase to general cost inflation, fluctuating exchange rates on imported materials, updated labor costs, and additional waste stripping expenses due to mining sequence adjustments.
A definitive feasibility study is scheduled for the first half of 2026 to solidify the mine’s development plan.
The technical report envisions that the open-pit mine will yield 7.6 million ounces of silver and 72,000 ounces of gold annually, equating to 13.4 million silver-equivalent ounces. The estimated all-in sustaining costs stand at $12.67 per silver-equivalent ounce. AbraSilver asserts that this production profile places Diablillos among the world’s top 10 primary silver mines.
Within the expansive 79 km² property, several near-surface deposits contribute to its robust reserves. Proven and probable reserves total 42.3 million tonnes grading 91 g/t silver and 0.81 g/t gold, translating to 123.48 million ounces of contained silver and 1.11 million ounces of gold, or 210 million ounces of silver equivalent.
Diablillos is located in Argentina’s Puna region, an extension of the Altiplano that spans southern Peru, Bolivia, and northern Chile. With significant financial backing and a promising resource profile, AbraSilver is well-positioned to advance its project towards production, further strengthening its foothold in the global silver mining sector.
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