Thompson Resources provides excellent exposure to rampaging silver price
We have only just covered gold’s rally to a multi-year high of US$1950, and as has traditionally been the case, silver is likely to follow suit.
Silver is currently priced at US$27.70 (AUD $35.72), a notable 22.6% increase from November lows of US$22.60 (AUD $29.13).
Yet, the price of this precious metal still remains below highs of US$29.26 (AUD $37.73) achieved in August 2020, suggesting we could see a sustained outperformance in the near to medium-term.
As COVID-19 induced volatility is likely to weigh on markets well into 2021, the precious metals are projected to remain a safe-haven target for investors.
Thomson Resources’ (ASX:TMZ) dual exposure to gold and silver provides it with an impressive asset base, making it well worth considering in the current environment.
Thomson is a NSW focused explorer, with an existing gold portfolio and pending 100% acquisition of two transformational silver assets in the first months of 2021.
In a company update provided on December 24, Thomson advised that its exploration drilling programs for 2020 had concluded and the due diligence on the Webbs and Conrad Silver projects was nearing completion, with finalisation anticipated early January 2021.
In November, Thompson announced it was to acquire a 100% interest in the Webbs Silver Project and Conrad Silver Project in the New England Fold belt in NSW, with the acquisition providing Thomson with a combined silver portfolio of about 33 million ounces.
The Webbs project is Australia’s highest grade undeveloped silver asset and will be complemented by the Conrad Silver Project.
Like Webbs, Conrad holds historical significance as it has a very large “in-ground value”; one which the previous owner demonstrated to have a value of almost $1 billion.
Both projects have seen historic silver production and have a resource defined compliant with the JORC Code 2004 as follows:
- Webbs: 1.5Mt @ 345g/t Ag Eq – 16.5 million ounces Ag Eq
- Conrad: 2.65Mt @ 206g/t Ag Eq – 17.5 million ounces Ag Eq
Thomson is aiming to further expand its silver resource base over the coming months, both organically and via acquisitions.
The company currently has a market capitalisation of about $40 million, and having recently raised $6 million, Thomson appears well-funded for near term exploration.
Aside from silver, Thomson has a number of quality intrusion related gold systems in NSW and Queensland, where it is undertaking extensive rolling drilling programs that build on previous high grade results.
Thomson is focused on building a strong silver resource base in 2021, whilst being supported by existing gold assets, clearly exhibiting the potential for share price upside in the coming year.