The information here outlines the strategic initiatives and growth potential of the Texas Silver Mine, positioning it as a compelling investment opportunity in the upcoming IPO.
Part of the geological team’s research involves a thorough review of existing data, historical drilling results, and other relevant information. During this process, they identified an Induced Polarisation study that highlights three priority locations for potential new resource discoveries. These large anomalies present significant opportunities for future exploration and potential resource expansion.
To act on these findings, we have engaged Seismic Drilling to commence a three-month drilling program starting in early September. The program will allocate 50% of its efforts toward upgrading existing resources by validating earlier drilling results, which the geological team believes will yield higher net resources. The remaining 50% will focus on exploring the three identified high-priority discovery sites.
Additionally, we have engaged H&S Consultants, independent experts, to verify the geological team’s findings and provide a JORC-compliant report. On August 7th, H&S Consultants completed the first phase of their process, confirming that an additional four million ounces can be added to the current resources. This report will be included in the information pack, alongside a comprehensive listing of the plant equipment, bonds, and other assets associated with the Texas project to provide a complete overview of the opportunity.
The geological team has advised that during their phase two review, they have identified the potential to add a further five million ounces (silver equivalent) to the resources. We have tasked H&S Consultants to validate these findings. If confirmed, the resources, following the phase one and two audits, will rise from 19.5 million to 28.5 million ounces, significantly exceeding previous projections.
The geological team will then proceed with the final phase of their historical exploration work to assess additional potential increases to the resources, further enhancing the project’s value and opportunity.
Twin Hills is a sediment-hosted, low-grade silver-(gold) deposit with minor zinc, lead, and copper content. Approximately 25% of the known sulphide deposit was extracted during the previous open pit and heap leach operations at Twin Hills, leaving easily accessible outcropping silver-gold sulphide mineralisation in the pit floor, facilitating a straightforward restart of mining operations.
Mt Gunyan, located 3 km northeast of the Twin Hills pit, is an undeveloped silver-gold-zinc-lead deposit that outcrops as a prominent hill. The deposit is mostly oxidised, with silver mineralisation starting at the surface and continuing to depths of up to 150 metres, remaining open below this depth.
Silver Spur is a structurally controlled silver-base metal deposit situated 2km southeast of Twin Hills. Underground mining between 1892 and 1925 yielded approximately 2.19Moz of silver at an average grade of 800g/t, along with significant quantities of zinc, lead, copper, and by-product gold.
Modelling indicates that Twin Hills remains open at depth in several areas, where step-out drilling could quickly expand the mineralisation, particularly to the north where higher-grade mineralisation remains open at shallow depths and has not been tested below approximately 60 metres from the surface. Additionally, higher-grade silver mineralisation under the core of the deposit, where interpreted ‘feeder structures’ exist, presents an attractive target for further exploration.
At Silver Spur, mineralisation remains under-drilled. The block model suggests that high-grade silver-zinc Stokes mineralisation is open to the north, making it a priority target for expanding the resource. Furthermore, underground rock chip sampling from 1971, although not used in the resource calculations, indicates that higher-grade zinc and silver mineralisation extends beyond the current block model limits, representing another promising drill target. Near-surface oxide mineralisation outlined by previous drilling at Silver Spur North is also a prime area for further exploration.
Silver Star Resources will undertake geological re-evaluation and drill hole database validation at Webbs to prepare a maiden resource estimate for the high-grade silver base metal deposit. Additionally, a large geophysics program is underway in the Texas District to identify targets for a planned second-quarter drill program, which will prioritise high-grade Silver Spur-style targets. Preparations are also ongoing for the metallurgical and process study for the centralised processing facility.
Independent consultants HSC have completed an updated resource estimate for the Twin Hills deposit (attached). This is 8.11 million tonnes at 50.2 Ag g/t, 0.06 Au g/t for 13.1 million ounces of silver. That is a 39% increase on the 2022 resource.
The new estimate also classifies 4.5 Moz Ag in both measured and indicated categories where the 2022 had only 7.2 million in the indicated category.
A drill proposal consisting of around 5,000m, costing roughly $1.5 million has been designed. HSC modelling suggests the potential for the program, depending on some success, to increase the confidence with 8.2 Moz Ag into measured and 4.4 Moz into indicated with an overall increase in Moz to 15.4.
The drill program will need to be fine-tuned depending on access and early results.
Preliminary work by HSC suggests that the 2022 model is not sustainable with very narrow lodes having been interpreted.
A wider estimate, utilising lower grade assays has resulted in a first-pass figure of 1.8 Mt at 16 g/t Ag, 1% Zn, 0.4% Pb (~70 g/t AgEQ) for 1 million oz Ag, 4.1 Moz AgEQ. The ounce numbers are similar to the higher grade more tightly constrained 2022 model (0.7Mt at 54 Ag, 2% Zn, 0.7% Pb – 1.2Moz Ag, 3.4 Moz AgEQ).
Several prospects look to have potential for follow up (see map below).
In very general terms there are prospects to the west (Hornet) and east (Argentum) as well as a 14km long NW-SE trend that runs semi-continuously from Silver Spur through Twin Hills to Tornado and Branch Creek. Limited drilling of these targets has been carried out and that historic drilling will be assessed going forward.
H&S Consultants Pty Limited (HSC) was approached by Silver Star Resources (Texas) to provide a review of Mineral Resource Estimates (MREs) for the Twin Hills deposit in southeast Queensland. Twin Hills is one of three deposits, together with Silver Spur and Mt Gunyan, that comprise the Texas Polymetallic Project located 2 km north of the Queensland-NSW border.
Australian Mining Consultants (AMC) produced an MRE for the Twin Hills deposit in 2022 for Thomson Resources, that reported a significantly smaller resource than the 2016 MRE by DataGeo Geological Consultants for Moreton Resources Ltd. The 2022 MRE did not include any measured resources, while measured resources accounted for 29% of total metal in 2016.
A preliminary review by HSC identified some potential differences between the MREs based on limited information in reports provided by Texas, including:
HSC recommended the following steps to progress the review:
Texas then requested HSC to implement this proposal and also provided HSC with access to a large amount of information via SharePoint.
Based on the data provided, HSC has made the following observations:
Figure 1: Section 6,807,683.5mN:
Left = AMC 2022 model,
Right = 2012 model
Respective mineralisation wireframes in red and 19/06/2013 topography in black.
Note: low default drill hole grades [dark blue] on AMC model, compared to missing grades [white] on 2012 model.
Histogram analysis shows that the drill hole samples form a single log-normal distribution, with a possible small low grade population around detection limit. There is no obvious justification for using a 20g/t Ag grade threshold because there is no valley in the histogram around this value – in fact, this value corresponds with the peak frequency of the histogram.
Figure 2: Resource classification in Long Section
Above = 2012 @ Ag > 26.5 g/t cut-off grade.
Below = 2022 @ eqAg > 25 g/t cut-off grade.
The figures to the left show some of the differences between the 2016 and 2022 MREs:
Figure 3: Histograms of Grade Distributions
Top = 2024 drill hole grades – length weighted
Lower Left = 2012 block model grades – volume weighted Lower Right = 2022 block model grades – volume weighted
Histograms of the models show weirdly distorted grade distributions caused by the imposition of inappropriate 20g/t Ag grade thresholds to define mineralisation. Therefore, both models are almost certainly conditionally biased, and the AMC model appears worse.
It appears that Global Ore Discovery performed a data validation exercise prior to the 2022 AMC estimate and sorted out several issues. Therefore, HSC used these files as the basis for the check estimate:
Unfortunately, Global Ore Discovery did not produce a report, although there is some documentation in their spreadsheets.
Historically, a 20g/t Ag grade threshold has been used to define mineralisation at Twin Hills and this seems to originate from work by Cube Consulting in 2010. However, it appears that Cube basically accepted the existing grade threshold used by Alcyone and based their interpretation of strings provided by Alcyone: “A total of four wireframes based on 20m spaced sectional interpretations were created using a nominal low-grade cut-off of 20g/t Ag. In the absence of any geological logging or mapping Cube felt this was a reasonable statistical lower cut-off grade.”
Cube boundary analysis seems unconvincing and none of their histograms show a convincing break at 20g/t Ag. Therefore, HSC concludes that 20g/t Ag is not an appropriate grade threshold for interpretation. It is also too close to the cut-off grade. HSC used a grade threshold of ~1g/t Ag based on analysis of the global histogram.
HSC generated a check estimate using the Global Ore Discovery database, with the exclusion of holes PD86TH5, PD86TH6 and PD86TH7, because they were flagged as “Dip incorrect. Grid incorrect.” in TH_DHDownholeSurvey_GO_Validated_V2.xlsx. AMC also excluded these holes and two of these holes show excessive deviation.
The check estimate was restricted to a nominal 1.0g/t Ag outline generated in section view and encompassing the earlier interpretations. Estimates were generated by recoverable MIK (multiple indicator kriging) using a set of 14 indicator thresholds. This model used a panel size of 10x25x10m, with an assumed SMU (selective mining unit) of 5.0×12.5×5.0m and an assumed grade control pattern of 5x10x5m.
Results are shown below, with 2024 using block selection criteria as close as possible to 2016. The 2024 estimates use a slightly higher cut-off grade to achieve a similar average silver grade.
| Year | Cut-off | Mt | Ag g/t | Au g/t | Moz Ag | % MozAg |
|---|---|---|---|---|---|---|
| 2016 MRE | 26.5g/t A | 8.37 | 51.0 | 0.080 | 13.7 | 100% |
| 2022 MRE | 25g/t EqAg | 6.10 | 48.0 | 0.060 | 9.4 | 69% |
| 2024 Check | 30g/t Ag | 8.11 | 50.2 | 0.060 | 13.1 | 95% |
In terms of classification, if the quality of drill hole data is assumed to be reasonable, then around half of the estimate might be classified as measured.
However, one major issue is the general lack of QAQC data for the pre Alycone holes, which constitute the majority of the drilling: “There is no record of standards or blanks being included with samples submitted to the Laboratories prior to Alcyone’s involvement. Field duplicates were taken from the RC and PC holes.” Alcyone holes comprise ~ 10% of the total database.
The majority of the other holes are open percussion holes (OPH), a method not generally considered suitable for resource estimation. The Alcyone analysis of diamond core and RC versus open hole Ag assays suggests a positive bias in the open hole results. There is no recovery data for most holes apart for the small proportion of diamond core holes.
The majority of OPH were drilled by Macmin between 1995 and 2002 and comprise ~54% of total meterage drilled; these are between 30 and 60 metres in depth. There are also three deeper holes (150m) drilled by CRAE in 1982 that appear to be OPH; Hughes 1982 reported about the CRAE drilling that: “At this stage, verification of grades obtained by percussion drilling is necessary. A short diamond drill hole immediately adjacent to PD81TH2 should achieve this test, followed by lateral testing of the mineralised zone to ascertain grade and tonnage of the resource by the type of drilling deemed to be most appropriate”.
In order to address these issues, HSC generated some additional check estimates including:
The models including and excluding the open percussion holes (OPH) were assessed over a 300m interval (6,807,600-6,807,900mN) where the coverage OPH and other hole types are broadly comparable. This comparison shows very similar results, as presented in Table 2, although the model without OPH does show marginally lower average grade. However, this comparison does not show a significant bias due to the OPH.
| Check Model | Mt | Ag g/t | Au g/t | Moz Ag |
|---|---|---|---|---|
| Includes OPH | 26.5g/t A | 51.7 | 0.071 | 8.39 |
| Excludes OPH | 5.169 | 50.3 | 0.075 | 8.35 |
| % Difference | 2.4% | -2.8% | 5.3% | -0.5% |
HSC then took the initial classification (CLASS24) for the model including the OPH and downgraded it by one class for blocks influenced by >50% (CLASS24A) and >25% (CLASS24B) OHP holes. From the initial 58% of metal as Class 1 (potentially measured), these changes reduced measured to 42% and 34% of metal, which is not too severe. The majority of OPH are shallow and drilled from surface, so are largely mined out apart from a few deeper holes. The most conservative new estimate (>25% OPH) is still more optimistic than the 2016 MRE Class 1.
| Class | Mt | Ag g/t | Au g/t | Moz Ag | %totMoz |
|---|---|---|---|---|---|
| CLASS24 | 4.546 | 52.3 | 0.070 | 7.64 | 58% |
| CLASS24A | 3.122 | 54.4 | 0.084 | 5.46 | 42% |
| CLASS24B | 2.550 | 55.0 | 0.091 | 4.51 | 34% |
| 2016 MRE | 1.640 | 75.8 | 0.100 | 4.00 | 29% |
So the overall impact of either excluding the OPH or downgrading the resource classification for blocks influences by OPH was limited.
The 2024 check model was generated at the request of Texas as a “second opinion” to try and resolve the differences between the 2016 and 2022 MREs. Results of this work suggest that the 2016 MRE is more likely to be correct.
The 2024 model is merely an independent check estimate and was never intended to replace the earlier MREs reported publicly under the JORC code. The check model is a quick and simple “order of magnitude” estimate, and a more comprehensive exercise would be required to generate an estimate that could be reported publicly to JORC 2012 guidelines.
The Texas District’s inferred and indicated resource comprises 11.26 million tonnes grading 54g/t AgEq, equating to 16.2Moz of silver, alongside 18,500 tonnes of zinc, 10,500 tonnes of lead, and 600 tonnes of copper. This significantly exceeds the district’s total historical silver production of 4.2Moz, coupled with small-scale, high-grade base metals production.
Eoin was educated at Trinity College, Dublin, Ireland, and spent ten years in the resources industry, exploring copper, zinc, uranium, gold, and silver before emigrating to Australia in 1989. Near-mine exploration followed at the significant base metal deposits of Broken Hill and Macarthur River. Moving to WA in 1997, Eoin supervised the drill out and resource estimation of the first million-ounce underground gold resource at Jundee Gold Mine. Eoin was Joseph Gutnick’s lead geologist for many years, and then at Consolidated Minerals from 2001, Eoin was in charge of the successful manganese exploration at Woodie, which discovered 15 million tons of ore, increasing both the mine life and resource base 4-fold, as well as managing successful iron ore, chromite and nickel exploration. Eoin was Managing Director of ASX-listed India Resources Limited (IRL) for three years starting in October 2006. IRL’s Surda copper mine broke a 50-year production record in its first full year.
*Silver Equivalent Ag Eq (g/t) = [Ag (g/t) + 64.5 x Au (g/t)+ 26.1 x Pb(%) + 125.1 x Cu(%) + 37.8 x Zn(%)] calculated from prices of US $28.12/oz Ag, US $1814/oz Au, US $10117.5/t Cu, US $2228.5/t Pb, US $3061.5/t Zn and metallurgical recoveries of 85% Ag , 85% Au, 90% Pb, 95% Cu , 95% Zn estimated from test work.
Silver Star has engaged Seismic Drilling to undertake a 3-month drilling program. They will arrive on-site in in the later part of 2024 to begin the drilling program. Seismic will focus half of the drilling program on upgrading the existing resources by validating earlier drilling, which our geological team believes will yield higher net resources, and the balance of the time exploring three potential discovery sites that the Geological team have identified.
The Seismic Drilling company delivers safe results to the highest technical standard. Their management team has more than 100 years combined experience working across all major drilling techniques.
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Historical core assays were primarily tested for base metals using the limited technology available at the time, and the costs were prohibitive. Reassessing and assaying these historical core samples could confirm additional silver resources that have not yet been reported due to JORC requirements. Previous assays have identified commercial quantities of other minerals. There has also been significant discussion regarding the presence of other critical metals in samples taken by various entities, beyond the primary minerals of silver (Ag), copper (Cu), gold (Au), nickel (Ni), and zinc (Zn).
Recent XR gun sample images have revealed significant indications of high-grade iridium (Ir) and platinum (Pt). Professional assays conducted by a competent provider will enable us to determine whether these metals exist in mineable quantities and whether they present a value-added opportunity. Assaying the existing samples will provide a more comprehensive understanding of the minerals available for processing. All new drilling and exploration work will be tested for the full range of minerals.
Seed capital raising
Engineering drawings for Crushing plant
Establish on-site
laboratory for assaying
and quality control.
Completion of Geological Data review and resource upgrade
Drill team arrive onsite to commence drilling program to upgrade resources
Independent expert's Report Completed for ASX listing
Engineering drawings of CIL plant
Upgrades commerce on refining, smelting and purifying facility
Final Submissions for tenders of the crushing plant
Mining Team mobilisation onsite to commence Stage One upgrades
Final Submissions for tenders of the CIL Plant
Extraction of Silver: Commence processing of slurry ponds for initial silver production.
Independent expert's Report Updated valuation Completed for ASX listing
Commence IPO listing IPO capital raising is completed and listed on the ASX and progress to operational mine
Lodgement with ASX of application for in-principle advice as to suitability for admission and waiver application(s)
Receipt of conditional approval from ASX as to suitability for admission and decision in respect of waiver application(s)
Receipt of final expert/third party reports and audited accounts
Finalisation of draft prospectus
Completion of verification process
Board and DDC approval of final prospectus
Lodgement with ASX of listing application (Appendix 1A and Information Form and Checklist)
ASIC exposure period ends (unless extended)
Offer opening date
Completion of investor roadshow
Bookbuild
Offer closing date
Receipt of conditional admission letter from ASX
Issue and allotment of IPO shares
Issue of holding statements
Satisfaction of all ASX conditions to admission
Commencement of trading of Company shares on ASX
10 million AUD to be raised via IPO at 20 cents per share This updated structure reflects the dilution of existing shareholders after raising the additional $10 million, based on the new post-money valuation of $25 million.
Texas Silver has initiated a comprehensive 6-part asset revaluation plan. This includes optimising existing reserves and exploring new opportunities for extraction and processing. The potential to add millions of ounces to our reserves significantly enhances the project’s value and investment appeal.
Current silver supply and demand models indicate a looming shortage, which is expected to drive up prices. As an approved and regulated mine, Texas Silver is well-positioned to capitalise on these favourable market conditions, unlike greenfield and greyfield projects that face longer timelines and regulatory hurdles.
Our planned 2024 drilling program, combined with the review of previous drilling results and the analysis of historical tailings, is expected to yield substantial increases in silver reserves. Additionally, the potential acquisition of new tenements further positions Texas Silver for significant growth and profitability, making it an exceptionally attractive investment opportunity ahead of the IPO.
With 150 million shares on issue and 19.5 million ounces of silver to JORC, this represents 0.13 ounces of silver per share in Texas Silver. If we use the arbitrary value of say a net value of $10 per ounce, of silver to allow for the recovery production and smelting cost this would value each share in Texas Silver at $1.30 per share.
