➡ The article discusses the increasing interest in stable coins backed by gold and silver, with companies like Tether considering entering the silver market. It highlights the growing demand for silver, especially in the production of new technologies like solid-state batteries. The article also mentions the financial growth of mining companies, which are seeing significant margin expansions despite the current economic climate. Lastly, it discusses the scarcity of silver projects and the potential for significant growth in this sector.

➡ The Tonopah district, known for its rich deposits of silver and gold, is set to become one of the world’s lowest-cost mines. The district has already produced 100 million silver equivalent ounces and is expected to double its output by next year. A new resource is set to be released in September, which will further optimize production and potentially increase the project’s throughput, making it a top-tier producer in the industry. The district’s location in Nevada, near existing infrastructure and resources, adds to its advantages.

➡ The silver mining company, Blackrock Silver, is doing well even with the current price of silver. They are transitioning from exploration to development, expecting significant progress in the next six to eight months. This includes expanding their deposit and obtaining necessary permits. The company encourages questions and can be reached at their website, blackrocksilver.com.

I know there’s a tendency people say, all right, gold’s hitting all time record highs. How come silver is still below its 1980 high, which is certainly true. You know, on one hand I wonder sometimes it was only at $50 for less than two days. So in either case, if you can relax that data point for a second and look back, here’s how silver and gold with silver in the blue, gold in the red since the beginning of last January. And you can see, like you mentioned, as the gold price has leveled off in the past month or two.

Silver catching up. Well, hello there, my friends, Chris Marcus here with you for Arcadia Economics in quite an exciting time in the gold and silver markets. Because while we’re recording on Monday and silver has actually come back down in a touch, not over 40 yet, a little below 39 and will be fascinating, obviously we have inflation. Well, we don’t really have inflation metrics coming out this week. We have government misguided calculation of how much price increase the inflation has caused, but a lot going on, new tariff wars and certainly an exciting time in silver. And fortunately joined by my old friend Andrew Pollard of BlackRock Silver, who’s made a lot of progress on his project, obviously well versed in what is going on in the silver and gold markets as well.

So, Andrew, great to have you back on here. Really nice to see you. And more than anything, how are you doing today? Before we jump on in, it’s great to see you too. It’s been a couple of years at least since I was last on here. I’m doing great. I’ve probably lost a lot of hair since then, but the outlook’s never been brighter. And you know, from, you know, what we’ve done personally at blackrock, the project’s come a heck of a long way since we were last discussing it and it looks like it’s lining up perfectly in terms of catching the right cycle to actually, you know, quickly looking at developing this thing and bringing it online.

Yeah, and we will certainly get into that because I know we have a lot of BlackRock shareholders in our audience. Although first let us start with a look at the gold and silver markets. Here we are again on Monday midday, 3355 on gold, which has actually been a bit quiet over the past week. Although as we will touch on in a moment, we do have a new, new trade war brewing and this time it is Mexico in the crosshairs. Oh, not that one, actually. Yes, it is that one here. As we see, Donald Trump slapped 30 tariffs on imports From Mexico and the European Union continuing volatile negotiations with trading partners.

It certainly has been a volatile first half of the year with the tariffs and we’ve seen that impacted and impacted or reflected in the gold price. Although here I know what everyone, well, not everyone’s favorite, but a lot of us here in Arcadia love our silver. And interesting you see that on early Monday morning we got as high as 39, 56.8 has sold off a little bit back below 39. But Andrew, like you said, it’s been far too long since we caught up. But first, any thoughts on what we’ve seen seen in these gold and silver rallies over the past year and a half now? And actually, before you answer that, there’s one last thing I’m going to pull up for you to comment on because obviously I’m sure you hear people saying all the time, when is silver going to start catching up to gold? Right.

Yeah. Well, I mean you’ve seen the silver’s doing what it’s historically done, which is gold was doing all the heavy lifting, you know, up until very, very recently. I mean you saw the gold silver ratio hit 105 to 1 and then you know, gold sort of been consolidating really since there was that 90 day pause on the, the, the, the, the first liberation day tariff wars. And silver’s now caught up and closed that gap. So, you know, gold’s been consolidating sideways roughly for the last, you know, month or two and silver’s now broken out. But you know, anyone that’s been involved in, you know, true silver bull runs, think early 2000s, think, you know, 2011, you know, even though silver’s been grinding higher and it’s looking pretty good, this, it looks very strong.

But this is not the, this is not that, that breakout that, that really represents the silver move just yet. It’s just, it’s just pairing up and moving back to more historic norms with the, with gold there. So I think the outlook for both is pretty darn good. I mean, obviously gold’s path forward has been driven largely by central bank buying and obviously the debt spirals. You saw a move significantly with all of the initial tariff threats. Those subsided recently and then they’re going to be coming right back into focus come August 1st. So that might cause the next big leg up there.

Silver. You, you know, you’re seeing increasing silver’s move from, you know, precious metal with an industrial component to now an industrial metal with a precious component. Right. And the fundamentals on the industrial side are looking better. And better by the day. You’re seeing solar installations in China outpace any projections for this year. Already you’re seeing battery technology coming online that’s actually going to make it an intermittent source of power to a baseload source of power very, very quickly. And that’s getting a lot of attention in America, you know, with respect to the AI data center revolution.

And they need to find a way to scale that up. So you know, I guess at the end of the day I focus on what we can control. And what we can control at blackrock is we’ve got a one heck of a good project. It’s going to work in really any pricing environment because of the grade. Obviously we love to see the speculative interest come back in the industry and see investors start to pile back in. This is the first time in many years where you’re seeing massive volume return and a lot of more discussion online.

But this isn’t the breakout that people are waiting for just yet. I think this is early days for that. Yeah. And you touched on how we are finally starting to see people come back in and that is certainly something that we’ve talked about on here. I know you’ve been seeing where it’s been building and actually ended up following the typical pattern that we always hear some of the old timers like Rick Rule or others where they talk about first the money goes into gold, then silver, then the gold stocks and the silver stocks. Then eventually if, if the price hasn’t crashed by then we make it into the juniors.

And that was really the theme of what I saw last week at the Rick Rule symposium. I know you’ve been seeing this and living it where I mean there were two years ago a lot of companies couldn’t get a financing done. Now they’re over subscribed. And as you mentioned, I’ll pull this chart back up because this is for a silver report I’m almost finished with. And it was interesting. I know there’s a tendency people say all right, gold’s hitting all time record highs. How come Silver is still below its 1980 high, which is certainly true. You know, on one hand I wonder sometimes it was only at $50 for less than two days.

So in either case, if you can relax that data point for a second and look back, here’s how silver and gold with silver in the blue, gold in the red since the beginning of last January. And you can see like you mentioned, as the gold price has leveled off in the past month or two. Silver catching up. So for this historic rally we are now actually doing all right on the silver side. And Andrew, you talked about the fundamentals quite a bit and I’ve been wondering, you know, why did silver move exactly when it did? And let me pull up this which I think will help to explain that a little bit because one, obviously we’ve, we’ve had the, the solar demand, we’ve been seeing the deficits and then along with that now you can add in that the banks are even getting concerned about the free floating silver supply.

So for a while it was you and me, a bunch of other guys, David Morgan and come on and say hey this seems like it doesn’t add up but here’s Robert Gottlieb. This came out late last week, former JP Morgan Precious Metals Managing director. So and he mentioned something we’ve talked about before. Had to bar the metal back and we all know that there isn’t much free floating stock around in silver. Daniel Galley of TD securities has talked about this plenty. He mentions here our estimates of LBMA’s silver free float now stand at its lowest level in recorded history.

Obviously seen a lot of metal come from London to New York. I’m assuming so far that if there’s new tariffs on China that would exclude silver. But it’s, it seems like now this isn’t just people on YouTube or bloggers talking about it but the banks are, I mean there you’re also seeing, I, I mean you’re seeing a lot of new stable coins come back come to market that are backed by gold. I, I was told, I’m not sure if it’s official but I know that Tether was looking at creating, getting into the silver business too. You know they’re huge owners of gold, right? I mean that gold backed security, right.

So if they come in, if Tether comes in with their capability they’d be swinging a big bat and would eat up a lot of annual production I guess right off the, right off the bat there as well I guess yet to be seen. But it doesn’t just have to be them too. I mean you’re seeing whole new financial products come out of thin air tied to physical which already, I mean silver’s already at a structural deficit in terms of production versus consumption. Consumption is only going up as you know, look at even, even when it comes to like the new solid state batteries that, you know, Samsung for example, if that rolls out the way that it’s poised to very quickly that uses, it’s got kilograms of silver in it.

So you know it’s a good place to be just based off the fundamentals. But it’s such a small market too that any new buying can seriously spike the charts. But also if it’s structural in nature, then it can lead to not the crazy blow off tops that go parabolic and then fall right back down like you saw in 1980. It can just lead to a nice grinding higher. And know as business cases goes for the mining companies, you know, to your point about, you know, last year versus this year, the difference is last year there were some standout precious metals companies that were seeing massive margins but most everyone was treading water.

This year is the one where everyone’s gotten their house in order. They’ve been paying off the debt on their books. You’ve seen absolutely blowout margin expansion across the board. Not just the tier one names but the small scale producers all the way up to, you know, Core, you know, Core came out with their financials in May. You know, it’s a $5 billion company and they rallied 45% on the back of that within a few weeks and they’re even higher now. Right. So people are seeing that, you know, mining gold and silver, you know, this is one of the few industries out there that really isn’t looking at stagflation decline.

You know, people aren’t spending as much. You saw Amazon prime sales were down like 45 year over year just a few days ago. This silver at these levels, gold at these levels, this is one of the few industries that’s going to be seeing massive margin expansions and they’re still trading at horrible valuations compared to how other similar, I guess, cash flow businesses are currently commanding. So that’s the real big difference here. Yeah, and I appreciate you mentioned the structural deficit because something that I think maybe people could guess yet is I don’t hear it laid out perhaps as clearly.

Is that where we are now? If nothing changes? We are running a deficit now that’s without, like you said, if the Samsung battery becomes widely adopted, if industrial demand grows. You mentioned, and I was stunned as I had heard about these Amazon, Microsoft building their own energy centers. And then I see, I believe it was the Department of Energy saying we need to double or triple the grid by 2020. I’m like that’s not really that far away. So it’s hard to see what is going to change to resolve that. And Andrew, you also touched on what might be part of the resolution.

You mentioned how we’ve started to see some M and A come into the silver space with Silvercrest, Gatos, Mag Silver as well. Anything you could touch on because especially if demand continues the way it is, do you see that starting to come down into the junior side of the market or anything you can touch on there would be great, right? Yeah. Well, what you’ve seen in the last year or so is almost all of the really high margin single asset producers in the silver space with a production profile that will move the needle for the large caps.

They’ve all been bought. So you can tell we’re early in the cycle from, I guess, an equities point of view, because generally it starts with the producers and then it goes down to the developers. And that’s where you’ll see the big premium acquisitions come in. Because right now they’re just buying cash flow and they’re paying, you know, a premium for it. But then everyone has to start looking a few years into the future. Right, who’s next? Who’s going to be the next Silvercrest? Who’s going to be the next Meg? Who’s going to be the next Gatos? And what’s very unique about silver is it’s, it’s not a big pond or a swimming pool, it’s a hot tub.

I mean, there’s just not that many true silver projects out there globally. And then you look at which ones can be brought online within, say the next five years, that will move the needle for someone. And there’s like five of them in the world. When you factor out by, you know, jurisdictional issues, when you factor out by what can actually be built quickly with the least amount of headaches and what’s actually going to have the most bang for your buck, that is what your margin per ounce will be. You know, that puts us in a really crazy position.

You know, we’re the only domestic asset in America that actually has the potential of coming online in the Trump administration. Our grade profile where we’re 55% higher head grade than the next closest silver developer in the world. So it’s the highest grade silver development story in the world. And you know, in mining, greatest king, greatest margin, and you know, we can get this permitted. You know, we’re sort of, we only made the discovery five years ago and you know, this year on the drills is pretty much going to be it in terms of getting everything we need to do done at surface so that we’re in a position to break ground on this thing by the end of the next year.

That’s upgrading our ounces, adding mine life, getting this thing permitted, optimizing the mine plan and production profile. And all of that. So this is going to be a hugely consequential year and it’s happening just at the right time. The project’s finally stepping into the spotlight with credibility at the same time that people are actually, well, that the spotlights are shining back on the industry and you know, whether it’s us that builds this and you know, from an economic point of view, I mean, this is going to get built either way or someone buys us to build it and have to pay a significant premium to do so.

All we know is, you know, we’re staring down the barrel of 3 to 4 highly consequential re rates all within the next 12 months. Yeah. And Andrew, in there, you mentioned how there are not a lot of silver projects out there, which was again, when I remember when I was looking at the Silver Institute, their table of 20 largest producers, you’re under 10 million by the time you’re getting there. And which is another reason to make. It’s not like we can say, all right, we’ll get all hands on deck, fast track a few permits and the silver comes out of there.

So obviously that the dynamics in silver, along with what you’re doing, like you said, is a nice match. And it’s been great to see how things have come along. Although, Andrew, perhaps just maybe you could give a quick recap if anyone is hearing about BlackRock for the first time and missed some of the history. Just give an overview of the project and then certainly a few things to touch on, including the resources and what it’s going to be looking like going forward. Yeah, well, you know, the history is one of my favorite things about our project because this, you know, this district that we’ve consolidated and brought exploration to for the first time since the mid-1920s was one of the most famous and consequential discoveries in Nevada mining history.

It’s the reason why to this day, if you go on the highway in Nevada, it says, welcome to the Silver State. This is the historically the second largest silver producer in all of Nevada. Second only the Comstock load. But whereas the Comstock petered out naturally, Tonopah stopped producing in the mid-1920s due to some technical issues of the day. And you know, when we were able to consolidate what we saw as the unmind extension of this district, we proved very early on that they did not stop mining here because they ran out of gold and silver. They stopped mining due to technical issues, really, their reliance on electricity when electricity wasn’t all that reliable in the mid-1920s.

And also the Emergence of the Great Depression, which sent a lot of the companies belly up. But to put in perspective for you, between 1900 and 1930 the Tonopah district produced about 400 million silver equivalent ounces. You know, 178 million ounces of silver and 1.8 million ounces of gold. So what makes this very unique globally even is the fact that it’s just silver and it’s just gold at this really, you know, crazy 100 to 1 silver to gold ratio. But there’s no lead or zinc or copper in here, meaning very, very clean metallurgy. So not only is the grade a standout, but because it’s just gold and silver, it means that you’re not having to go through all these separate steps.

And you know, you don’t have to do flotation processes in, in your flow sheet, you don’t have to get smelters involved, you don’t have to make leadens in concentrate. So not only are we higher grade, but it’s cheaper to actually process. Which leads itself to crazy economics. So you know, picking up from the last two mines that operated in this district now, you know, I guess all the figures I’m going to lay out here, I’ll caveat by saying these are all stale because we’re coming out with a new resource in like five weeks. But just based off what we currently have, we’ve already drilled out a hundred million silver equivalent ounces here.

We’re showing potential between now and our expansion resource in, you know, Q1 of next year to effectively double the strike length from our existing resource to what we think we can drill out by then. And you know, just last year, I think it was in September, we, we put out our first preliminary economic analysis on this thing. And it shows just based off of that last resource, this has the potential to be one of the lowest cost mines in the world. We’re looking at doing 8.6 million silver equivalent ounces at under $12, all in sustaining costs.

So you know, it’s, it’s, you know, what I can say is with all the work we’ve done since then, not only do I think we’ve got good potential to see costs move down continue, continue to move down. We’ve got a resource coming in September which is really us focused on going back and optimizing the early years of production with infill drilling program. So we did, we converted using the mine plan that we laid out in that pea. That pea at $1900 gold and $23 silver showed a 2.3 year payback period. So what we want to do is effectively de risk the whole decision to break ground on this thing and develop it by using that mine plan to drill out the first two to three years of production.

We’ve now released all of those drill holes. We put that out in July, you know, all of these drill holes that made it into there and our stock since moved about 50% on the back of that because people can see that the ounces in those early years are really as good as they look. And you know, when you optimize a mining project in the early years, that has a huge leverage on all of the economics. We think our grade profile in the early years is going to ratchet up fairly significantly between what that last PA was based on and what we come out with in the coming months.

And that’s going to really, really drive the economics on this further and beyond that, you know, once we get all the expansion drilling done and we’ve had some blowout discoveries this year on the expansion side, you know, we think we’ll probably be able to increase the throughput at the project, which would bring this, you know, potentially well over 10 million ounces a year, which would take this to a tier one producer in the industry. And you know, this. All of the other developers, I mean, you’re looking at Mexico, Peru, Bolivia, Canada. You know, we’re on private land in Nevada, three and a half hours from Vegas.

You know, next to a town, we’ve got power, we don’t have to build man camps. There’s 20 hotels and motels. I mean, this is a great place to be. And I think, you know, what we’ve shown on the drills over the last few years is that the history books on this very famous district, the final chapters, you have to be written. Yeah, Andrew, it’s funny as you mentioned that, because I know you’ve told me that many times how there is the local infrastructure. Although in the past couple of years I’ve taken a couple of mine tours and seen how, you know, it’s a couple of hours.

But when you think about getting equipment there and all sorts of different things that come along with that. So certainly advantageous thing there. And guess if you have Vegas three hours away, you can get some of the mining investors, you know, down in the neighborhood here too. And yeah, we got to get you there too. Yeah. So Andrew, perhaps could you just give us a timeline? Obviously you have drill results that have been coming back, but just so people know what to expect, obviously you talked about the resource but if you could just lay that out one more time in a timeline.

So yeah, for people. So, so really, you know, the, the biggest catalyst of the year for us is going to be this resource which comes out in September, which is finally going to give us a significant M and I credit. I expect, you know, that M and I grade profile is going to be unlike anything in the industry certainly amongst the developers. And I think when all said and done, this is going to be one of the highest grade producers in the world, you know. So we’ve got that resource coming out in early September is what we’re looking at there.

It’s already well underway. We’re getting the drills back very shortly here to push forward on more expansion drilling. You know, just this year on the expansion drilling we found a 1.2 kilometer new zone which very shallow and we’ll be drilling out. In addition, we’ve locked in 500 meters of strike potential already and we’ve got another 500 meters of strike to go. So all goes according to plan, we’ll be adding about 2.2km of strike to our existing resource area. And our existing resource area as it stands is about 2km of strike. So you know, if we can double that in the next six months, that’s going to be pretty impressive.

So resource September, more, more drilling in the interim. We’ve got a lot of cash to do that already. Resource, the expansion resource. In January we’re going to roll all of that into a new economic study which is going to be, you know, a new mine plan showing economics. And those economics won’t be at nineteen hundred dollar gold and $23 silver like our last one which had amazing numbers there. You know, we had a 40% after tax IRR at $1900 gold. So imagine what it’s going to be once we come out with our new assumptions. But pea, you know, end of Q1 early Q2 and then we’re getting all our, everything we need to do to get this permitted next year in terms of environmental data collection, in terms of optimizing our initial decline and test mining area we’re doing right now.

So we want to be in a position by, you know, Q2 when we have this new pea, when we have this mine plan and we have all the data we need to hand to the regulators, we want to hand that over and then we think we’ll be in a position to have a permit in place by the end of next year which will allow us to break ground and eventually start test mining this thing and when I say test mining, that’s you know, producing up to 100,000 tons of silver while we, while we work our way underground and get to that really high grade zone that we’re looking at.

Well I say congratulations to you Andrew, because I know we talked certainly during the market was active a couple years ago than the tougher times and it’s testament to you for continuing to bring this forward. And you know, I congratulate all the people who’ve been investing in silver where you know, not like there’s a finish line but these past couple days have been nice to see people feeling good about what they’ve been so patient about. And I guess Andrew, just in closing here. Oh actually one other thing that I wanted to mention there is that you know this is with our silver price just under 39 today.

Now in the, since Friday and today I’ve seen silver forecasts of how high silver will be between before the end of the year anywhere from 70. I got one, someone says it’s gonna go to $200 by the end of the year. That would certainly be an exciting occasion if it did. I will say that when I see the bigger numbers given what we’ve talked about with the supply. Also if you people look at what happened with the cocoa market when that finally ran into a bigger issue, I think that if you’re getting the bigger numbers, I wonder if you might not need something like that.

But fortunately, Even at the $39 price, if silver stays here, that’s extremely good conditions for the miners. And regardless of what one chooses to believe, the upside is the other things. And I appreciate you laid out in the beginning of why there are issues and certainly I think we’ve all learned never to rule out how low silver can go in the short term. But you still need the stuff if we’re going to operate the world like we did now. So great, great to hear just how everything has come along. And I’ll pull your website up one more time and if you could just let folks know the best way if they have questions, want to get any more detail about anything, how they can reach you.

Yeah, no, you can reach out andrew@blackrocksilver.com our website at blackrocksilver.com there as well. And yeah, you know, I think, you know, the market right now we’re trading like an exploration company. You know, we, we have tightened up quite a bit but I think the market’s going to be surprised just how quickly we’re going to be able to move from being seen as an explorer to a near term developer and everything we’re doing, this is the most exciting six to eight month, I think, period that we’ve had since we made our discovery and upgrading the confidence in the deposit from the market’s point of view, expanding and showing just how big this thing can get and ultimately getting a permit in hand.

That’s, you know, we’re staring down the gun of some major moves here and yeah, it’s a good time to be coming back and getting in front of your audience because they’ve been with us from the start. Yeah, well, I sure appreciate that. Although there’s part of me saying like, all right, let’s wrap up, go out there, get, get finished. It’s going to be exciting and I know you have a lot to finish up there, but it seems like it’s really on a great track and we’ll have to check in again before the end of the year for an update.

And just great to see you again. Thank you for your insight into Silver and the news about blackrock and we’ll check back in with you again soon. Andrew, you too. Cheers.
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