SILVER STORM MINING - the only way is up...

originally published Friday, December 01, 2023

All Gold & Silver Stocks

I was not minded to write up a silver stock at this time but then last night I received the following intelligence from The Toronto Sleuth

” Have a look at Silver Storm which will be a producer of about 3 million ounces of Silver in the next 1-2 years.

They are currently undertaking a drilling program that has already yielded excellent results and there will be plenty more on that front in the near future. They have 2 excellent assets, both in Mexico. They already have all the plant/equipment in place due to its recent deal with First Majestic (which now owns about 40% of Silver Storm!).

All they are waiting for is a sustainable Silver move above $25 to get production going again which will generate significant free cash flow.

Once that is achieved, the markets will re-rate the stock into a production story and apply a much higher multiple.

Not sure about you but I see Silver closer to $35 to $40 in 2024 than $20.

I conservatively have a 40 cents target on this stock in next 6 to 12 month, IF Silver performs as expected.

Also, in addition to FR owning 40% of the company, Eric Sprott I believe owns around 20%.

Although the float is a little larger then I would ideally like it to be, the majority (almost 60%) is owned by only 2 shareholders."

OK – sounds good, so how about the charts?

On the 5-year chart we can see that after a humongous runup in 2020 it went into a savage bearmarket in 2021 that by the time it had hit bottom in August to October of this year had erased almost all of the gains made in 2020. Thus this bearmarket went on for 2 years and 8 months!

It has been a very eventful year or so for the company which has acquired from First Majestic Silver the extensive and impressive La Parrilla Silver Mine complex in Mexico, and it was due to the negotiations etc. centered on this that the company’s stock was halted for a lengthy period of time from late last year into April of this year. In furtherance of the acquisition and development of this project the company has issued a huge wad of 143.6 million shares of common stock to raise US$20 million which brings the quantity of fully diluted shares in issue to an initially frightening 434.4 million but against this must be set that the number of shares are factored into the now low stock price, First Majestic owns 40% of the stock with legendary investor Eric Sprott owning a further 20%, and he’s not known for “putting his foot in it” and lastly the company has acquired a very substantial asset that should end up generating huge profits if silver takes off higher to the extent that we expect it to.

Returning to consideration of the 5-year chart we see that the Accumulation line held up well as the bearmarket unfolded, downside momentum eased as the stock approached the important support that it is now at and so the bearmarket looks to have run its course, especially as we appear to be on the verge of a major sector bullmarket.

On the year-to-date chart we can see this year’s action in much more detail. On this chart we can see that after it finally hit bottom in mid-August it went on to form a Double Bottom base pattern with the 2nd low occurring late in September and early in October after which it has tentatively tried to advance, tentative so far because it is hanging around waiting for the falling 200-day moving average to drop down and close on the price, and the closer it gets to it the higher the chances of an upside breakout. With quite strong support at the level of the Double Bottom there isn’t thought to be much downside risk for this low-priced stock here, while the upside, especially if silver gets its act together soon, is big.

Silver Storm is believed to be late in the basing process and at the current very low price it is considered to be most attractive and not unduly speculative because of the magnitude and productive capacity of its main project and because the company has serious backing.

Last but not least it should be mentioned that the company changed its name just last month from Golden Tag Resources to the current Silver Storm Mining.

Silver Storm Mining website

Silver Storm Mining Ltd., SVRS.V, SVRSF on OTC, closed at C$0.11, $0.086 on 30th November 23.

Posted at 9.15 am EST on 1st December 23.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.