Major Acquisition Propels Advance Metals to Significant Silver Player Status
Advance Metals Limited (ASX:AVM) has secured the right to acquire a 100% interest in the high-grade Guadalupe y Calvo Gold-Silver Project ("GyC") from Endeavour Silver Corp (TSX:EDR and NYSE:EXK), propelling the company to a total endowment of over 100 million ounces of silver-equivalent across its three Mexican projects.
The acquisition represents a strategic milestone for Advance Metals as it builds a significant precious metals portfolio in Mexico's premier Sierra Madre Volcanic Belt, one of the country's richest metallogenic provinces.
Guadalupe y Calvo: A High-Grade Gold-Silver Asset
The Guadalupe y Calvo project, located in Chihuahua State, Mexico, brings substantial high-grade gold exposure to AVM's portfolio with a Foreign Resource Estimate of 816Koz gold-equivalent (AuEq) at 2.7g/t Au, including a premium high-grade underground component of 494Koz AuEq at an impressive 5.0g/t Au.
The project's Foreign Resource Estimate contributes 60.6Moz silver-equivalent to AVM's Mexican portfolio, complementing the company's existing Yoquivo (17.2Moz AgEq) and Gavilanes (22.4Moz AgEq) projects.
"The addition of Guadalupe y Calvo transforms our Mexican precious metals portfolio, bringing us to a significant milestone of over 100 million ounces of silver-equivalent. The project's exceptional high-grade gold component provides valuable exposure in the current strong gold price environment." – Dr. Adam McKinnon, Managing Director and CEO of Advance Metals
Historic Production and Exploration Upside
Guadalupe y Calvo has a rich mining history dating back to 1835, with historical production estimated at over 2 million ounces of gold and 31 million ounces of silver. The project has seen extensive modern exploration, with 86,000 meters of resource definition and drilling completed.
Key features of the project include:
- The Rosario vein system extending over 700-800 meters of strike length, with widths up to 60 meters
- Mineralisation remains open along strike and at depth
- Strategic location midway between AVM's existing Yoquivo and Gavilanes projects
Favorable Acquisition Terms
Advance Metals has structured a four-year earn-in agreement with a total consideration of US$4.0 million, including US$1.0 million in exploration expenditure. The majority of payments are back-ended, with Advance serving as the operator throughout the earn-in period.
The transaction includes:
- Initial payments of US$50,000 cash and US$50,000 in AVM shares
- Progressively increasing annual payments in cash and shares
- Annual exploration expenditure commitments
- Upon completion, AVM will grant Endeavour a 2% Net Smelter Return royalty
Understanding Epithermal Gold-Silver Systems
Epithermal gold-silver deposits like Guadalupe y Calvo form relatively near the Earth's surface in hydrothermal systems associated with volcanic activity. These systems typically produce high-grade precious metal veins at depths between 50-1,500 meters below the paleosurface.
Low-sulfidation epithermal systems, such as Guadalupe y Calvo, are characterized by:
- Quartz veins with distinctive banding textures
- Gold and silver mineralisation often associated with adularia and calcite
- Formation in near-neutral pH environments
- Potential for exceptionally high grades in "bonanza zones"
This deposit type has been responsible for significant precious metal production throughout Mexico's Sierra Madre Occidental Volcanic Belt. The formation of these deposits occurs when hydrothermal fluids rise through fractures in the Earth's crust, cooling and precipitating minerals as they approach the surface. The term "epithermal" refers to the relatively low temperatures (generally 150-300°C) at which these deposits form compared to other deposit types.
In low-sulfidation systems like Guadalupe y Calvo, the fluids tend to be more dilute and less acidic than in high-sulfidation systems. This creates conditions that favour the deposition of gold and silver in association with quartz veins. The classic "bonanza" zones, where exceptionally high grades can be encountered, typically form where boiling of the hydrothermal fluids occurs, causing rapid precipitation of precious metals.
Market Position and Growth Strategy
With this acquisition, AVM establishes itself as an emerging player in the Mexican silver sector, which currently produces 25.2% of global silver supply. The company's strategy focuses on high-grade assets in established mining districts with substantial upside potential.
Compared to ASX-listed silver peers, AVM appears significantly undervalued with a market cap to AgEq resource ratio of just $0.11/oz, compared to an industry average of approximately $0.87/oz among similar companies.
Future Plans and Investor Timeline
Advance Metals has outlined a clear pathway to value creation for the Guadalupe y Calvo Project:
Near Term (12 months):
- Field evaluation and target confirmation
- Validation drilling of historic intersections
- Surface exploration across key vein trends
Medium Term (1-3 years):
- Resource conversion from Foreign Estimate to JORC-compliant
- Resource expansion through step-out drilling
- Economic studies on high-grade underground component
With silver prices currently trading above US$36 per ounce and gold near all-time highs, AVM is well-positioned to capitalise on strong precious metals markets as it advances its Mexican portfolio.
Why Investors Should Follow Advance Metals
Advance Metals represents a compelling investment opportunity in the precious metals sector for several key reasons:
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Significant Resource Base: With over 100 million ounces of silver-equivalent across three projects, AVM has established a substantial foundation for growth.
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High-Grade Focus: The company's portfolio emphasises high-grade assets with underground components exceeding 5 g/t gold-equivalent, potentially supporting robust project economics.
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Strategic Geography: Projects located in the prolific Sierra Madre Volcanic Belt, home to many world-class precious metal deposits.
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Exploration Upside: All three projects demonstrate considerable potential for resource expansion, with extensive vein systems still largely untested.
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Relative Valuation: AVM trades at a significant discount to peers on a resource-to-market cap basis, suggesting potential for re-rating as the company advances its projects.
As the company executes its exploration and development strategy across its Mexican portfolio, investors can anticipate a steady flow of news and potential catalysts throughout 2025 and beyond.
Ready to Benefit from Advance Metals' Silver Success?
Discover how Advance Metals' strategic acquisition of the Guadalupe y Calvo Gold-Silver Project could create significant shareholder value. With a total endowment exceeding 100 million ounces of silver-equivalent across three Mexican projects and trading at a substantial discount to peers, AVM offers compelling investment potential in the precious metals sector. Visit https://advancemetals.com.au/investors/ to learn more about this emerging player in Mexico's premier mining region and stay updated on their development milestones.
