Under the Spotlight – Gary Thompson, CEO Silver47

Rick Mills, Editor/ Publisher, Ahead of the Herd:

Gary let’s first talk about the synergy, the advantage of merging with Summa Silver, for the company and its shareholders and then we’ll get into the financing and the different properties, but I really want to talk about this merger because I think that it was brilliant move on both company’s part.

Gary Thompson, CEO, Silver47:

Sure, I’m happy to. Well, I think there’s lots of reasons why this merger came together. It was interesting that both companies were independently looking to grow, as any business wants to grow.

In this business there’s two ways to grow as a mining exploration company and one is through the drill bit, obviously making discoveries, growing the resource, which we plan to do, but the other is through M&A. And what’s unique about this opportunity, the Silver47 and Summa merger, is that we basically have two like-minded companies. When I originally sat down with Summa CEO Galen McNamara it became clear that that we had a similar strategy to grow and grow quicker so doing M&A is a quicker way to get bigger.

Why get bigger? Well larger companies have better access to capital and larger companies attract more institutional investors, and if you look at our respective companies, we’re still largely a retail story, and while that’s great getting bigger is better for all.

You attract more capital and one thing about this business it is capital-intensive, so there’s good rationale for that. What we liked about the Summa assets is that they’re in the US, so we’re combined to form a premier US-focused silver company, and I think that should resonate with silver investors.

We can talk about our goals and ambitions, but those are some of the rationales. As far as synergies and teams go, both companies had a small team, we’re still running lean and mean, and I think combined we’re a stronger company.

RM: It’s nice to have some southern properties as well, not be in that class of northern stock.

GT: It is. Red Mountain is a great project in Alaska, and while there is potential to drill some of the targets through the winter, it’s also more expensive and having the combined Silver47 and Summa now brings projects that we can drill in Nevada or New Mexico basically all season.

Importantly for us, we can drill Alaska in the summer, and then we can drill New Mexico and Nevada in in the fall/winter months, so it just creates a good synergy, a good all-round news flow to grow this business.

RM: That’s so important in this business, it’s a hell of a bonus really for a company to be able to work north and south, have that year-round news.

GT: Yeah, absolutely.

RM: Should shareholders of both companies consider the deal between Summa and Silver47 a merger of equals?

GT: If you look at the transaction, you’ll see it as a merger of equals just based on the market. We took a 20-day volume-weighted average price preceding the announcement, and then we adjusted the share ratio.

When we were first talking, we had pretty much the exact same market cap, just that we had raised a bit of money prior to, so we had a little bit bigger market cap. It works out to 44% and 56% on the exchange so it’s a .452 exchange ratio for Summa shareholders. If you look at the pro-forma structure, it will be about 126 million shares on a combined basis.

RM: You raised $9.8 million in Silver47, and I see you just upsized another private placement to $6 million.  What are you going to do with the $15.8 million?

GT: We have field crews on site at Red Mountain as we speak. We’re planning to drill basically from now until the snow chases us out of there, so most of those funds will be going into drilling generally and a good chunk of that budget will be spent at Red Mountain this summer. Mostly drilling to expand the resource.

We know that the inferred resources of 168,000,000 oz silver-Eq at Red Mountain are contained in two zones — the Dry Creek and West Tundra Flats. Both of those zones remain open for expansion and that’s our goal; most of the drilling is going to focus on expanding that resource.

The mission would be to come out with a new restated resource either late this year or early 2026. And then after that we’ll see how the dust settles on the budget. We haven’t formally made the decision, obviously the merger isn’t done yet, but it’s going to be, “Pick one of the Lower 48 projects to work on in the fall/ winter months.”

I don’t think we can do both at this stage. While $15 million is a lot of money, we’re going to spend most of that at Red Mountain. We’re not going to be working three projects all at once, so we need to pick one, we need to pick either New Mexico or Nevada to work in the winter months and spend the balance of the budget.

As a junior exploration company, that’s where the value is created, is by the drill bit so we’ll see how the budget plays out as far as what’s left over at the end of the year and go from there.

RM: Any idea how many meters?

GT: My guess is we’re probably looking at something about 8,000 meters, maybe more.

RM: That’s a substantial drill program.

GT: If we could get 10,000 meters that’d be great, we’ll see how it goes.

RM: Back to the merger with Summa – we’re going to get to Red Mountain last – but I want to talk about Summa’s properties because part of being a merger and part of standing out from your peers when you’re a silver company, or a precious metals company, is the amount of silver and gold that you have in the ground, or what you think, and others think, you have in the ground.

The discovery potential in Summa’s properties that you’re bringing in really interests me. Yes, they have resources. But you’ve also got what I consider some very high-quality discovery potential.

GT: The big-scale near-term opportunity that I see in Summa is the Mogollon project in New Mexico. The reason I say that is because when I looked at the mineralization and the drilling that was done, to me it looks like what you’d expect to see in Mexico. A classic silver-gold vein district in Mexico, but we happen to have this Mogollon project in New Mexico, in the USA.

There’s work that’s been done to date and there was some past production of high-grade gold and silver up until World War II. So, Summa published an inferred resource earlier this year of 32,000,000 oz of silver -equivalent at 367 grams per tonne, so good grade, good metallurgical recoveries – 97% for silver, 98% for gold.

But what is interesting to me is the amount of vein structure that has not been drilled, 77 kilometers of vein structures of silver and gold.

Most of the previous work, and the work that Summa has done, has been focusing around 2.4 kilometers of these vein structures so I think for the next drill program we can focus just on that 2.4 kilometers and get a meaningful growth in resource. And then you’ve got this whole vein field that hasn’t even been drilled yet. That to me is the big-scale, blue-sky potential that we haven’t even really gotten going on yet.

RM: Summa’s CEO Galen McNamara said that it is one of the greatest and this is a quote, “The district is one of the greatest remaining vein fields left in the US.” He might be right.

GT: Well, I was kind of surprised when I first started looking at it that this was the kind of vein field, like I say you’d expect to see in Mexico, and we have this thing in the US, so I think he is right and there’s just so much growth potential in front of us there.

We’d love to have multiple drills turning on that all fall throughout the winter and into the spring, see how that goes. You could potentially drill all year round and again it goes to the scale.

If we get our way and our vision and the silver market cooperates, and we can raise bigger chunks of money then there is potential for us to be drilling multiple projects at the same time but right now we’re taking it a step at a time with what we have.

RM: And second, the Hughes project in Nevada.

GT: It’s also attractive as it’s in a good place to be working, just off the highway in Tonopah, which was a historic mining town.

Blackrock Silver that has over 100 million oz silver-equivalent on the west side of the district, and Summa has the east side of the district. They just haven’t done anywhere near as much drilling; I think Blackrock has drilled like four-five times as many meters. So, Summa just hasn’t had the time to do more drilling, and we also see significant growth potential there.

They also put out a resource on the Hughes project of significance. Both resources were published this year, and the Inferred resource was 33 million ounces of silver-equivalent and then there’s another 10 million ounces in the Indicated category. A good grade and they’re getting some impressive gold intercepts.

If you look at their website the presentation says they had a 2.8-meter interval of 2,200 grams per tonne silver plus 21 grams of gold, so that’s almost 4 kilos on a silver-equivalent basis.

So, lots of drilling could be done there, it’s just going to take some time.

From Silver47’s perspective we see this Summa merger as an accretive transaction to shareholders, and as we advance and start to drill these things out, we see this company growing quite substantially over the short term.

RM: Between the Kennedy, a new project that has 22 km of veins and no systematic modern exploration, the Hughes and Mogollon, you’ve got an awful lot of silver drilling potential. That’s three great silver projects that obviously need a lot more drilling.

Your flagship property is Red Mountain is a bit of a different beast than veins it being VMS and SEDEX. You’re concentrating on VMS mineralization on the east side of the property. To me this property is unique because there are so many surface showings.

GT: Yes, gossans are rusty rocks that are exposed at surface, so you get weathering and oxidation of the sulfides that make up the mineralization.

They are usually good first indicators for geologists.

What’s interesting about Red Mountain, it’s called the Bonnifield District, and these are old Devonian rocks that were formed on the ocean floor. You can see it happening today because there’s analogs, they call them black smokers that you can see on the bottom of the ocean floor that are forming as we speak. They’re vents, expel sulfides containing gold, silver, copper, lead, zinc and many other minerals like antimony and gallium and they become these continuous layers of massive sulphide (metal where there is no rock just metals)

If you look at some of the world-famous VMS camps, some of them are still running 100 years later.

So, we’ve put together this Red Mountain project, it represents about 60 kilometers of favorable geology. I mentioned earlier there’s a SEDEX deposit on the west which is more sedimentary-hosted, and the more volcanogenic massive sulfide, the VMS targets represent the east half of a massive 620-square-kilometer block so it’s a huge land position.

It’s a geologist’s playground because there’s no shortage of gossanous targets that have not been drilled and there’s been a lot of Geochem.

There’s been north of $30 million that’s been spent on this project and there’s a lot of surface showings that we’re going to be following up on this year to see what else we might have at surface in addition to the two resource areas.

So yeah, there’s lots of smoke, lots of targets and we plan to flush out more of these as we advance on the project.

RM: Where do you plan on starting the drill program up there? When somebody looks at the map you’ve got several areas highlighted, where are you going to start drilling and in what direction are you going to move?

GT: Well right now, the main focus of the budget and the program is to expand the known resource, one of them is called West Tundra Flats, it’s literally a flat tundra, it’s got rolling hills but it’s reasonably flat there, so I think that’s earmarked for the first few holes and it’s pretty much wide open.

The other one is called Dry Creek; those two targets are about 2.7 kilometers apart so do they connect? They appear to be on the same formation, but we don’t fully understand the mineralized horizons, but we plan to sort this out soon. 

We’re not sure if the two zones connect or not but in any event those two zones are open for expansion. We’ve got pads being built on both and will be drilling soon.

RM: You talked about a current resource estimate; can you delve into that a little bit please?

GT: At Red Mountain we published our initial maiden inferred resource, 15.6 million tonnes at 335.7 grams per tonne silver-equivalent is the grade, which works out to 168.6 million silver-equivalent ounces. We also use a zinc Eq because there’s a lot of zinc in the system, there’s gold, there’s copper, lead and then most recently last year we did a review and identified antimony and gallium, which are our critical minerals and of national security to the US, so we plan to do the metallurgical work this year to include the antimony and gallium.

There has been significant metallurgical work done by previous operators and we’re in that sort of 70-90% range on the precious and base metals, but we don’t know what kind of recoveries we can anticipate from antimony and gallium.

Why they’re important is because both of those commodities, the prices have shot through the roof, so they’ve become high-value minerals now and if we can get those into the resource that’s going to add significant value.

We’re going to be adding value on the precious and base metals as it is but it’s just another added value that we think we’d like to see in the next restated resource. We’d better do that work and see where it lands.

RM: The last drill program gave you some hope that you are vectoring onto higher-grade precious metals, that’s interesting.

GT: That was quite interesting because we only drilled half a dozen holes in 2024, and we were looking at some of the best gold intercepts we had.

There was 2.5 meters of 250g/t silver, 15 grams of gold, 22% zinc, 7% lead and 0.42% copper, plus meaningful amounts of antimony and gallium. So just an impressive hole.

In hole 106 there was a 24.5-meter-wide interval and within that you see there was three intervals, one was 2.5 meters of massive sulfide, another one was 0.9 meters of massive sulfide which also had over 200 g/t silver, 8 g/t gold, 21% zinc and on and on, and then there was another 5m interval that was not quite as massive, so within that 24.5 meter interval you’ve got the smaller massive sulfide which are just basically metal, there’s not much rock in those intervals, it’s pyrite, sphalerite, galena and pyrite, chalcopyrite that make up those very rich horizons, so pretty exciting.

We do have some modeling ongoing to look at the zonation between the gold and silver and the base metals and see what kind of patterns we can find that will help us vector into more precious metals.

If you look at the resource at Red Mountain, about 33% of the resource is precious metals and the rest is zinc, copper and lead. So, there’s room to grow that and improve on that grade, that’s one of our ideas is to focus more on the precious metals part of the system and see if we can flush that out.

RM: There’s a number high-grade gold and silver VMS but they’re almost all just not that well known.

GT: There’s precious metals-rich Eskay Creek. Obviously. that’s a world-famous one but the one that Hecla’s mining in Alaska is called Greens Creek. I was looking at some of the core that they had at Roundup last year and there’s impressive silver and gold grades that are coming out of that VMS, so there’s certainly room to improve and that’s one of the things we’re looking at.

If you look at some like Kidd Creek and La Ronde, out in eastern Canada, those things generated huge amounts of silver and gold. And I like to remind people that some of the biggest silver deposits are base-metal deposits. Sullivan is a world-famous lead zinc mine that produced 300 million ounces of silver.

There are some VMS camps that are still in operation, like I say these things tend to form in clusters and pods and once you’re on a trend there’s likely more than one and we’re seeing in our case we have two that we’re working on, but we believe there’s more to be had. So, I feel like we’re going to be here awhile in this district. We have the whole district, like I said we’ve got a geologist’s playground here to go look for a lot more.

RM: VMS are more interesting in that you can use the mineralization you’re finding to vector into the smoker, like certain metals drop out in the hotter water around the black smoker, and then others drop out the further you get into the colder water.

GT: You tend to see more copper-rich mineralization in the vent because it is a little bit more temperature-sensitive when it comes out and it interacts with the seawater; you tend to see copper fall out of solution sooner. So, when you find those copper-rich zones they tend to be maybe closer to the feeder zone.

Obviously, that would be nice because you also get gold in there and you get silver and the other base metals in there too, but it seems that the zinc and the silver and the lead dissipate over a broader area, which is why you get these lenses.

The West Tundra Flats is a good example, we have a mineralized horizon over a kilometer by 1.5 kilometer or more so far that we’ve drilled, so the mineralization can travel quite far from the vent.

RM: You have to like polymetallic deposits.

GT: Yes, it’s one of those things where the base metals will pay for the mine and the gold and silver will be the gravy.

RM: You mentioned the critical metals antimony and gallium, you are in Alaska, President Trump is eager to secure US security of supply for critical metals. I wonder if you have talked to the government in terms of grants and loans.

GT: Well, we’re certainly looking at that, in fact we have engaged an organization that focuses on these grants from the US government.

President Trump signed several new executive orders providing additional funding for these metals, and what’s unique about Red Mountain, if you look at the critical mineral potential we’ve got copper, we’ve got tin, we’ve got zinc, we’ve got antimony and we’ve got gallium, in addition to the precious metals.

So, I think as we advance this, I think the short answer is yes, we believe that there will be some access to those funds. Once we get that metallurgical work done and more importantly the antimony and gallium, we’ll have a better idea of what sort of quantity of those metals we think we have contained within the resource.

I really hope that it’s enough that we can get it into the next restated resource because it’s not currently in the resource, and so we’ve been working on that, we’ve got some consultants that are helping us. They’ve got several capital pools available from the DoE, the DoD, DERPA, there’s several sources of capital for these critical minerals so we’re just trying to find the best one that fits us.

In some cases, it’s quite unique because they could be grants or they could be direct investments which are non-dilutive to shareholders. Certainly, those would be very attractive for us if we could get some of that capital, but they also provide loan guarantees just to help on overall funding of this project.

Our goal for Red Mountain, and we’ll see how the drilling goes but if we have the success we think we could deliver, get this into a new stated resource and then move it into a PEA if we have enough tonnes and what I think is enough tons is sort of 18 to 20 million tonnes, right now we’re at 15.6Mt.  We plan to drill enough material that we could get it into a PEA and that’s going to be an important milestone for the project and perhaps to access some of those DoD funding opportunities.

RM: We must remember you are in Alaska, you’re open to all those executive orders trying to create security of supply for all the different critical metals in the US, I applaud President Trump and he’s very concentrated on it.

GT: Yeah, that’s huge and we’ve seen the new Trump administration are very positive for mining in general in the US, and I would go so far as to say that the US is probably one of the best places in the world right now to be developing a mine.

RM: Well Alaska certainly is because he wrote an executive order signaling it out for help.

GT: There’s a meeting of officials in Anchorage this week actually and they’re talking about how they can fast-track these projects through the development cycle so I’m very excited to be working in Alaska, it’s a great place to operate.

RM: Absolutely. Gary is there anything else that you want to talk about? I think we were thorough.

GT: I would just recap that Silver47 and Summa were good, strong, independent companies, but I think on the merger we go from an inferred resource 168,000,000 oz silver Eq to inferred 246,000,000, so it’s a big jump in resource on just one merger and it takes our precious-to-base-metal ratio from 33% to 60% so we’re now quite high on the precious metals.

Our mission is to continue to grow so we don’t think that we’re done on the M&A side, we’re going to continue to look for opportunities to rapidly grow this company.

RM: What’s your target amount of silver and precious metals?

GT: We’ve said our goal as a company, including the Summa deal, is we’re targeting a billion ounces of silver-equivalent, so we’re almost 25% of the way there and if you could bring in another 100 or 200 million oz on another merger, you can see how you can get to 400 or 500Moz quick. And then obviously drilling you’re going to be adding ounces, so yeah, it’s an ambitious goal but a guy’s got to have a goal and we’re taking the aggressive strategy to grow this company rapidly.

The other thing I would add is that we do have a near-term goal to get listed on the New York Stock Exchange as well.

RM: Excellent, a hungry CEO and team. We’ll leave it there.

GT: Thank you.

Silver47 Exploration Corp.
TSXV:AGA
Cdn$0.50 2025.02.19
Shares Outstanding 70.4m
Market cap Cdn$49.3m
AGA website

Richard (Rick) Mills
aheadoftheherd.com

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Richard does not own shares of Silver47 (TSX.V:AGA). AGA is a paid advertiser on his site aheadoftheherd.com

This article is issued on behalf of AGA.