Magma Silver (TSX-v: MGMA) / (OTCQB: MAGMF) has 100% control of the high-sulfidation silver (“Ag“) / gold (“Au“) Niñobamba project. Randypata & Joramina are two of three contiguous concessions spanning an 8×2 km corridor in the mineral-rich Ayacucho region of Peru.
Permitting & drilling programs are advancing, with a focus on resource expansion & NI 43-101 compliance. Management received a drill permit and a US$1M (initial) up to 4,000 meter drill campaign on the Joramina zone is planned for March.
Recent silver price selloff less scary on 5-yr horizon…
For the first time, this highly prospective land package is being developed under one roof. Magma’s enterprise value {market cap + debt – cash} is C$25M, far too low in my view, given the following commentary.
Niñobamba was exciting when Ag was $50/oz, it’s extraordinary at $89. And, readers are reminded that near-month Ag futures hit an ATH of ~$122/oz late last week!
Niñobamba is an hour from Ayacucho with daily flights to Lima, Peru. The 4,100 hectare Project is right next to a major highway, and 7 km from the power grid. The Randypata zone was re-staked during COVID-19. It was previously held by Newmont, and a 2% NSR lapsed.
In today’s dollars, previous operators (Newmont, AngloGold, Bear Creek, Rio Silver) invested roughly C$20M across exploration activities. There’s evidence of a sizable, shallow deposit, potentially amenable to an open-pit mining, using high-margin, low-tech risk, heap-leach processing.
According to this recent YouTube video, the Project’s near-surface grades, even at 1 gram/metric tonne (“mt”) Au + 2 oz/mt Ag, would be a gross value of ~US$336/mt of rock at spot prices.
Yet, operating costs are estimated at just US$40/mt due to the goal of simple, open pit, low-risk, low-cost heap-leach processing. This suggests the potential for strong margins, with ample room to remain profitable at moderately lower Ag/Au prices… Or, if costs were to rise to US$50+/mt.
Niñobamba includes multiple zones, the main Niñobamba deposit, Randypata (with a 2 km higher-grade Ag anomaly), and Joramina. The system is thought to be comparable to Pan American’s former Alamo Dorado mine.
Recent 2025 field programs (trenching, sampling) confirmed, and in some cases exceeded, historical results, including multiple high-grade grab samples.
Drilling is set to commence in March, starting at the fully-permitted Joramina zone. Surface preparation, trenching, and sampling continue across all zones. Importantly, new community access agreements are anticipated within the next few months.
In my opinion, Niñobamba stands out as a low-risk, high-reward, near-surface Ag/Au project with promising economics, strong backing, and imminent catalysts for drilling & surface exploration in the midst of an EPIC precious metals bull market.
A key attribute of Niñobamba is its anticipated amenability to low-cost open-pit mining, and heap-leach mining methods. The following image recaps why I believe the Project could become another successful mine in the region. To be clear, it’s early days.
Drilling highlights include; [72.3 m of 1.2 g/mt Au], [56.0 m of 1.0 g/mt Au + 99 g/mt Ag, [21.0 m of 1.32 g/mt Au + 102 g/mt Ag.
The Joramina zone has a higher-grade channel Au-only sample of 17.4 m of 3.1 g/mt Au. For a C$25M company, the mgmt. team, board & advisors are quite impressive. Three grams Au Eq. in a shallow setting is attractive.
Magma has an excellent team. CEO/Exec. Chair Stephen Barley has over 40 years’ experience in public markets, having held several executive & director roles with natural resource companies with projects around the world.
Director Michael Townsend is one of the founding partners of Altus Capital Partners. He’s a Founder or co-Founder of several small-cap technology & resource companies. Both Barley & Townsend have considerable networks of peers & investment groups backing them.
Mr. Townsend owns directly & indirectly a total of ~2.2M shares, and has made dozens of open market purchases in the past six months.
Independent Dir. Arndt Roehlig has served on numerous Canadian company boards, including as president & CEO of various companies.
Advisor Jeff Reeder, P.Geo has over 21 years’ experience in Peru and has spent a lot of time in Mexico. Advisor Joe Sandberg has 45+ years under his P.Geo belt, an expert in precious metals & copper porphyry systems.
Magma Silver has access to a dataset that includes drilling & samples records & assays, and internal (never made public) economic / fatal flaws studies done by Newmont when Au was a quarter and Ag a fifth of today’s levels.
This implies that metallurgical work and other critical mine plan metrics passed the test of reasonableness at that time. Notably, $1,200 Au was used vs. today’s price of $4,990!
Management believes there’s a significant amount of Ag & Au on the Project, but it’s NOT yet NI 43-101 compliant.
Given that Newmont did at least one internal economic study that did not kill the project at much lower prices, I presume Newmont thought it had the potential to be a decent-sized resource.
Make no mistake, this is a high-risk investment proposition in a C$25M company. However, what better time to take on significant risk (for commensurate outsized return potential) than in a robust bull market (recent pullback notwithstanding).
Importantly, M&A in the precious metals space has barely just begun. Ag/Au producers are printing money. They need to bolster long-term pipelines with M&A of producers, but also development projects, including early-stage plays.
Readers are reminded that among the Top-10 Ag producing countries are China, Russia, Bolivia & Kazakhstan. The Western world needs long-term sustainable sources outside of countries like these.
Peru will remain a leading Ag/Cu/Au producer with companies including; Grupo México/Southern Copper, BHP, Glencore, Freeport McMoran, Teck Resources, Anglo American, First Quantum, Buenaventura (BVN), MMG Limited, HudBay, Fortuna Mining & Hochschild Mining Plc leading the way.
The following table depicts the primary risks, as I see them, and mitigating factors…
First off, community relations, license to operate… Magma is extending the active access agreements with local communities in the Joramina/Randypata area, and is well into negotiations to obtain access agreements for the Niñobamba Main area.
A local Peruvian team + consultants help manage community relations, environmental baseline work & permitting.
Ongoing community relations efforts are focused on securing additional agreements as exploration expands at Niñobamba.
To address community relations, and permitting / regulatory risks, it’s critical to note that GM Carlos Agreda Minaya, Senior Field Geo Edgar Leon Choque & long-time advisor Jeff Reeder have very extensive boots-on-the-ground experience in Peru. {see bios above}
Funding risk is unavoidable. However, consider that a large capital raise was done in 4Q/25 when the Ag price was ~$44/oz. vs. today’s $89/oz. Eric Sprott is a significant investor in Magma Silver. The Company enjoys strong financial backing.
Regarding high elevation, at $89/oz the incremental costs & logistics to make high-altitude operations safe, efficient and profitable are NOT prohibitive. See the following table of projects with the same or higher elevations.
All eyes are on assets that have tremendous blue-sky potential in Western-friendly jurisdictions, strong management teams, boards & advisors, substantial boots-on-the-ground, and favorable relations with local communities.
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