2025.05.16
Silver47 Exploration (TSXV:AGA) and Summa Silver (TSXV:SSVR) this week announced that they have entered into an arm’s length agreement for an at-market merger, pursuant to which Silver47 and Summa have agreed to combine their respective companies by way of a court-approved plan of arrangement. The combined company is expected to continue under the name Silver47 Exploration Corp.
“This merger with Summa fits perfectly with our desire to scale up, providing better access to capital. We believe that this transaction is accretive to shareholders, and we look forward to unlocking further value by growing our resources and advancing them toward development. This transaction will hold several high-profile projects within one of the world’s top mining jurisdictions,” said Silver47’s CEO Gary Thompson.
According to the news release, the combined company will become a premier high-grade silver focused explorer and developer with a portfolio of silver-rich projects in the United States (Alaska, Nevada and New Mexico). Collectively, mineral resources amount to approximately 10Moz silver-equivalent (AgEq) at 333 g/t AgEq of indicated mineral resources and 236Moz AgEq at 334 g/t AgEq inferred mineral resources, with substantial upside and a shared vision for significant additional silver discovery and consolidation.
Galen McNamara, CEO of Summa, stated: “This merger with Silver47 is a transformative step toward our shared vision of building a premier precious metals company moving towards 1 billion silver-equivalent ounces in the ground, anchored in America’s most prolific mining jurisdictions. By uniting Summa’s and Silver47’s high-grade projects, we expect to create a leading silver development company with the scale, expertise and ambition to unlock value for our shareholders and lead the next wave of development in the U.S. silver sector.”
Under the terms of the transaction, Summa shareholders will receive 0.452 shares of Silver47 in exchange for each Summa share held. Upon completion of the transaction, existing Silver47 and Summa shareholders will own approximately 56% and 44% of the outstanding Silver47 shares, respectively. The consideration represents a no-premium transaction to Summa’s 20-day volume-weighted average price (VWAP).
The companies listed several key points rationalizing the transaction:
Red Mountain
Located 100 kilometers south of Fairbanks, Alaska, Red Mountain is situated on Alaskan state-managed lands, free from Bureau of Land Management (BLM) or indigenous claims, covering approximately 620 square kilometers of highly prospective stratigraphy with highways, railway, and power within 30-80 km.
Silver47 owns 942 mineral claims and one mining lease, providing extensive exploration opportunities over a 60-km trend in a mining-friendly region near infrastructure.
The company says there are over 5,000 permitted drill sites on multiple untested geochemical and geophysical anomalies, which should indicate to investors a high potential for new discoveries.
The area hosts several world-class deposits and mines, including Fort Knox due west, and Pogo Northern Star to the south.
In particular, Silver47’s Red Mountain project is nestled among several multi-million-ounce volcanogenic massive sulfide (VMS) and sedimentary exhalative (SEDEX) deposits, all located within the North American Cordillera, the mountain chain running along the Pacific coast of the Americas.
As seen on the map below, this includes Teck Resources’ Red Dog mine in Alaska, Barrick Gold’s former Eskay Creek mine in northwestern British Columbia now being developed by Skeena Resources, Windy Craggy, Macmillan Pass, Myra Falls, Sullivan, Trixie and Jerome.
On Jan. 12, 2024, Silver47 came out with a mineral resource estimate for Red Mountain. The combined open-pit/ underground inferred resource amounts to 15.6 million tonnes at 335.7 g/t silver-equivalent (AgEq), containing 168.6Moz AgEq.
The VMS-SEDEX project is polymetallic, containing silver, gold, zinc, copper, lead, antimony and gallium.
Recent exploration has identified significant concentrations of critical minerals, including antimony (up to 0.623%) and gallium, which Silver47 says enhances the project’s strategic value amid growing demand for such elements.
Red Mountain has, so far, nearly 40,000m of drilling on the two main deposits, Dry Creek and West Tundra Flats.
Both are open for expansion and it is “conceptually” estimated that $10M in drilling may add 8-12 million tonnes of underground material, in my view a better-than-fair tradeoff between further dilution and in-situ increased shareholder value.
High-grade intercepts at the Dry Creek deposit area include 22.3 meters at 601 g/t AgEq (150.6 g/t Ag, 0.82 g/t Au, 5.86% Zn, 2.60% Pb, 0.13% Cu) from a depth of 18.9 meters.
Hughes
The Hughes project, located in central Nevada’s prolific Tonopah mining district, is Summa’s first flagship silver-gold asset. Anchored by the high-grade past-producing Belmont mine, one of the United States’ most prolific silver producers between 1903 and 1929, Hughes hosts indicated mineral resources of 0.98 million tonnes at 333 g/t AgEq totaling 10.3 million silver-equivalent ounces, inferred mineral resources of 2.44 million tonnes at 421 g/t AgEq totaling 32.9 million silver-equivalent ounces, and inferred tailings mineral resources of 1.26 million tonnes at 68 g/t AgEq totaling 2.74 million silver-equivalent ounces, all as reported in an NI 43-101 technical report dated March 3, 2025.
Recent drilling has confirmed high-grade mineralization, with intercepts such as 1,450 g/t silver equivalent (812 g/t Ag, 8.4 g/t Au) over 3.0 meters in hole SUM23-59 at the Ruby discovery, underscoring significant resource expansion potential. Strategically positioned near existing infrastructure, Hughes leverages modern exploration techniques to unlock new targets across its underexplored land package spanning a 4-km extension of the historic Tonopah mining district.
Mogollon
The Mogollon project, covering southwestern New Mexico’s prolific Mogollon mining district, is Summa’s second flagship silver-gold asset. As the largest historic silver producer in New Mexico, with 13.1 million ounces of silver and 271,000 ounces of gold produced prior to World War II, Mogollon hosts an inferred mineral resource estimate of 2.72 million indicated tonnes at 367 g/t AgEq, totaling 32.1 million silver-equivalent ounces as reported in the March technical report. Recent drilling has confirmed high-grade mineralization, with intercepts such as 448 g/t silver equivalent (129 g/t Ag, 3.88 g/t Au) over 31.0 meters in hole MOG22-05 at the Consolidated target, underscoring significant resource expansion potential. Spanning 31.2 square kilometers and centered on the 7.5 km-long Queen Vein, Mogollon covers a vein field totaling approximately 77 km in cumulative strike length that remains largely unexplored.
AOTH analysis
Apart from the high quality of the deposits in the merged company — Red Mountain, Hughes and Mogollon, all with resource estimates — I like the merger for a couple of reasons. First and foremost is the fact that bolting Summa Silver onto Silver47 allows for year-round exploration including drilling. Whereas Silver47 on its own is limited in the amount of work it can do each year because of Red Mountain’s location in Alaska.
While it’s possible for a junior resource company to work in the winter, doing so is far more expensive and everything takes longer and more effort to accomplish. It also magnifies the risk of injuries. Summa Silver’s projects in Nevada and New Mexico can be worked year-round.
The lifeblood of a junior resource company is news flow and the ability to work two projects all-year round and one project for up to half a year, will provide more news for shareholders that is often a catalyst for upward share price movement.
I also like the scalability that the merged company provides. To play in the big leagues, junior silver miners need to grow beyond the $30-50 million market caps of so many silver plays. This is typically done through takeovers and mergers.
A good example is Pan American Silver’s recent acquisition of MAG Silver. Among the benefits to Pan American shareholders, MAG states that the transaction adds 44% ownership interest in Juanicipio, one of the best silver mines globally: Juanicipio is a large-scale, high-grade, low-cost silver mine located in Zacatecas, Mexico, with significant exploration upside and operated by Fresnillo, a world-class precious metals producer.
For MAG shareholders, the deal offers an enlarged growth pipeline with exposure to Pan American’s La Colorada skarn project in Mexico and the potential reopening of Pan American’s Escobal mine, one of the world’s best silver mines with past production of 20Moz of silver per year.
It’s all about building an inventory of high-quality silver assets, i.e., silver in the ground with potential to find more.
It’s also important to note that with almost 250 million silver-equivalent ounces, Silver47 is 25% of the way to their 1 billion AgEq target. This is what scalability — growing in the silver space — looks like.
Silver47 Exploration Corp.
TSXV:AGA
Cdn$0.57 2025.05.15
Shares Outstanding 70.4m
Market cap Cdn$28.5m
AGA website
Richard (Rick) Mills
aheadoftheherd.com
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Richard does not own shares of Silver47 Exploration Corp. (TSX.V:AGA). AGA is a paid advertiser on his site aheadoftheherd.com
This article is issued on behalf of AGA
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