Cinderella Story: Silver waits for lead role as WA explorers revive golden age mines

Triple Eight Capital thinks the silver price is gaining momentum towards US$50 per ounce
Demand is growing and exceeding supply, with this year’s shortfall expected to drop by 19%
Elevated commodity prices mean good things for ASX silver hunters like Errawarra Resources and Horizon Minerals

Silver, historically known as the ‘Cinderella’ metal given it always misses the ball, is finally stepping out of gold’s shadow and carving its own path as the spot price continues to gain momentum, running at a premium to this time last year.

Strong industrial demand in the face of persistent supply deficits and increased investment interest amongst economic uncertainty are among some of the factors influencing the precious metal’s spot price surge.

Last week, silver prices rose above US$34 per ounce, hitting their highest level since October 2024 and extending weekly gains to nearly 4% as escalating global trade tensions fuelled demand for safe-haven assets.

Investment firm Triple Eight Capital reckons the silver price is strengthening towards US$50 per ounce over the next couple of years for several reasons, one being that supply simply isn’t keeping up with demand.

The relatively small silver market has been in deficit since 2019, with this year’s shortfall expected to drop by 19% to 149Moz.

Meanwhile, demand growth is expected to rise due to silver’s use in photovoltaic solar panels which accounts for about 20% of total demand and is growing at 20-25% per annum.

With demand growing and exceeding supply, Triple Eight Capital’s Roscoe Widdup told Stockhead prices could go even higher this year.

“Silver is typically a by-product, which means mine supply is less elastic to price than other metals,” he said.

“Unless mine supply changes materially, you ultimately need scrap to balance the market out.

“We saw prices hit $48/ounce in 2011 and there is no reason why this level isn’t possible – if you assume 3% pa inflation, that’s >US$70/ounce in today’s terms.”

What does the silver price hike mean for ASX companies?

Elevated commodity prices boost a company’s capacity to fund drilling and exploration efforts and generally lead to a healthy wave of market action including M&A deals.

It also allows companies to rethink their corporate strategies, paving the way for the revival of old mines that might be gathering dust as a result of previous price crashes.

Case in point is Errawarra Resources (ASX:ERW) and its recent acquisition of silver-rich tenements in WA’s Pilbara, a top tier mining jurisdiction often ranked among the most attractive globally for mining investment.

The company signed binding agreements for a 70% stake in the historical Elizabeth Hill silver project, 70% of the silver rights to the Pinderi Hills project tenement package and 70% ownership of three tenement applications surrounding Elizabeth Hill.

The project, which was shut down in 2000 when silver prices were about A$5 an ounce (nearly seven times below current prices) previously produced 1.2Moz of silver from 16,000t of ore at a head grade of 219g/t silver in only one year of production.

ERW, which will be renamed West Coast Silver (ASX:WCE) subject to shareholder approval, is the first explorer to consolidate the additional highly prospective underexplored areas for silver mineralisation.

ERW executive director Bruce Garlick said the company is now planning to explore and grow the asset with drilling campaigns as soon as possible.

“The grade is as good as anything out there and has all the fundamentals to become a key contributor to the silver market,” he told Stockhead.

“If you look at at the current gold to silver ratio which sits roughly 90:1 you can see silver is significantly undervalued.

“Coupled with a rapidly growing industrial demand and significantly less production it can only lead to price spikes.”

A sleeping silver giant

Another example is Horizon Minerals (ASX:HRZ), owners of the Nimbus silver-zinc project, 10km from Kalgoorlie’s Super pit which was placed on care and maintenance in 2007 after producing 3.6Moz of silver from 318,000t of ore processed at a grade of 353g/t.

As prices peaked at nearly $49 per ounce in 2011, the former MacPhersons Resources was hoping to bring the mine back to life, but a sharp correction quickly swallowed those plans when prices fell below $20 by mid 2014.

Now, with silver prices rebounding to ten-year highs, HRZ non-executive chairman Ashok Parekh told Stockhead Horizon is looking at putting a few holes into the VMS deposit this year to test the potential for repeat high-grade lenses at Nimbus along strike.

He believes the mine is a sleeping giant, holding 20Moz of silver at an average grade of 775 grams per tonne plus 110,000oz of zinc.

“Now that we’ve acquired Poseidon Nickel and their two plants, we’re in a better position to put the silver-zinc through a concentrator ourselves – we never had that option before,” he said.

“The mine is very, very high-grade but it’s been a non-core asset given we’re producing gold, so we’re looking to potentially maximise the resource.

“We spent about 20 million dollars on the mine previously and the deposit has been limited because of a lack of drilling but now it could all come to fruition.”

Other silver opportunities in WA

Antipa Minerals (ASX:AZY) has exposure to the metal via its Minyari Dome project in WA’s Paterson region, an exploration hot spot since about 2018 with the likes of Rio and Greatland Gold controlling assets within the vicinity.

Over the last seven or so years, the region has seen its endowment grow by about 20Moz of gold and 3.4Mt tonnes of copper from greenfields discoveries with around 54Moz of silver also found alongside some cobalt.

AZY controls 4000km2 of land in the Paterson, with its latest scoping study revealing a 130,000oz per annum operation at Minyari over 10 years at all-in-sustaining costs of A$171 an ounce.

A 33% increase was made on the gold resource last year, with the updated resource now sitting at 47.6Mt at 1.51g/t gold, 0.18% copper, 0.43g/t silver and 0.03% cobalt.

Contained metal is estimated at 2.3 million ounces of gold, 84,000 tonnes of copper, 661,000 ounces of silver and 13,000 tonnes of cobalt, for a contained gold equivalent of 2.9 million ounces at 1.90 g/t.

Further south in WA, Everest Metals Corporation (ASX:EMC) is preparing to kick off drilling activities at the Mt Dimer Taipan gold-silver project in Q2 this year.

Previously drilled high-grade gold-silver systems include intersections of 8m at 13.55g/t gold from 80m as well as 4m at 23g/t gold from 80m, with exploration focused on expanding the current 722,000t inferred resource grading 2.1g/t for 48,500oz of gold and 3.48g/t silver for 89,000oz silver.

East Kimberley explorer Boab Metals (ASX:BML) is making headway on the approvals process at its Sorby Hills project, about 50km from the regional centre of Kununurra.

The Western Australian government recently provided consent to key amendments to the project’s EPA approval, paving the way toward a targeted FID in the second quarter of this year.

Sorby contains a 47.3Mt resource, comprising 1.5Mt lead at 3.1% Pb and 53Moz of silver at 35g/t silver with a 2024 FEED study highlighting pre-production capital costs at A$264m, an NPV of A$411m and an average annualised EBITDA of A$126m.

At Stockhead, we tell it like it is. While Errawarra Resources, Everest Metals Corporation and Antipa Minerals are Stockhead advertisers, they did not sponsor this article.