eResearch is pleased to publish a 45-page Initiation Report on Silver Bullet Mines Inc. (TSXV:SBMI).
We are Initiating Coverage with a Speculative Buy rating and one-year price target of $0.80.
You can download our 45-page Equity Research Report by clicking on the following link: eR-SilverBullet-SBMI-IR-2021-12-07_FINAL
Company Description:
Silver Bullet Mines is a Canadian-based silver and copper exploration and development company that recently went public and raised over $6 million. SBMI’s main asset is the Black Diamond (BD) Property near Globe, Arizona, with silver and copper-gold porphyry projects. The BD Property hosts five past-producing, high-grade silver mines. The Company’s current focus is the BD Property and restarting production at the Buckeye Silver Mine in Q1/2022. The area around Globe is well known for its copper mines, thus SBMI is also exploring for copper-gold porphyry targets, with a focus on the exploration around the historical copper mines and the mineralized prospects on its property.
Investment Thesis And Upcoming Catalysts:
- Near-term Cash Flow De-risks the Project: Work is already underway to get the Buckeye Mine back into production in Q1/2022.
- Pre-production Sweet Spot: Research shows that exploration companies can experience upward stock price movement starting at the time they make a mine construction decision to the time of first pour.
- Strong Management Team: Management has extensive experience and geological knowledge of the region.
- Fully Funded for 2021: With its recent $6.1 million oversubscribed financing, SBMI is fully funded to restart production at the Buckeye Mine and deliver on its 2021 exploration and development programs.
- Upcoming Catalysts:
- Buckeye Mine: Restart of silver production expected in Q1/2022.
- BD Property & Other Projects: Exploration results.
Financial Analysis & Valuation:
- The last financing was done in July 2021 at $0.30 and a significant amount of site work has been completed at the Buckeye Mine since then.
- We value SBMI based on an estimate of $11.25 million in cash flow over a 12-month period from restarting production at the Buckeye Mine.
- Assuming a 5x Cash Flow Multiple, this would value SBMI at $0.80 per share based on the fully-diluted share count of 69.9 million shares. The fully diluted number assumes all options and warrants are exercised, which would increase the treasury by approximately $6.1 million.
We are Initiating Coverage with a Speculative Buy rating and one-year price target of $0.80.
You can download our 45-page Equity Research Report by clicking on the following link: eR-SilverBullet-SBMI-IR-2021-12-07_FINAL
FIGURE 1: SBMI 2-Day Stock Chart – Started Trading on December 6, 2022
Notes: All numbers in CAD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
