After a long period of non-material events, management and Board of Alianza Minerals (ANZ.V) decided it was time for a thorough change in many aspects. On August 10, 2023 they announced a name change into Silver North Resources, with a new ticker to go with that (SNAG.V), a 5 to 1 roll back, renewed focus on their fully owned silver projects and leaving the prospector generator model, and divesting/optioning out of copper/gold projects currently in their portfolio. The renewed focus was driven by the fact that Haldane is a rare opportunity to explore and make greenfields discoveries in an existing high grade silver district. Management believes their time is better spent focused on that.
As the company was low on cash, a financing was announced soon after, when Silver North released the news on August 29, 2023 about the undertaking of a C$1.5M non-brokered private placement, in order to fund exploration at their flagship Haldane Silver project in the Yukon.
In this article I will discuss with CEO Jason Weber the turn of events that eventually led to their strategy change, a cancelled financing last year, developments with partners and projects this year, the strategy itself and events/catalysts to expect in the near future.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Although general sentiment for junior miners wasn’t exactly positive the last few years, when looking at the chart below it becomes clear Alianza Minerals was at a dead end road, heading for 1c as it couldn’t raise any money without diluting itself into oblivion, which eventually could become a dead spiral:
Let’s take a brief look into past events first so far, to provide more context. Alianza Minerals was only actively drilling at their Klondike property last summer, at which partner Allied Copper was earning in at the time through the Cloudbreak Alliance. As a reminder, this would have been an extremely profitable venture for Alianza, as they paid just C$105k for the Klondike property, and Allied Copper would have to pay C$2.6M in cash and shares plus a royalty for 100% ownership in 3 years, and spend no less than C$4.75M in exploration expenditures in total. At these terms, exploration definitely had to be successful in order to continue.
However, on November 30, 2022 the results of the first 5 holes came in, highlighted by best intercepts 1.06m @ 4.26% Cu and 11.4m @ 0.34% Cu, indicating this could be a pretty long journey. Allied Copper already started contemplating a different direction around that time, focusing more on lithium brines in Alberta, and in February they decided it was time to terminate the Klondike option agreement with Alianza.
CEO Jason Weber had this to say about the future of the Cloudbreak Alliance, and the turn of events around Klondike, which is 100% owned again: “With the changes in management at Allied Copper/Cloudbreak and their divergence from the business model, the Alliance still holds the Stateline and Klondike properties, but will not be generating any new targets to move forward. Interest in the two properties is high. Prospective suitors have toured the properties and additional property tours are probable. Klondike is attractive in that the results of the 2022 drill program were encouraging, including one significant result where copper mineralization was intersected at depth on a splay of the target structure. The main target structure was not reached and a promising drill target remains to be tested here.”
Before Klondike was terminated, the company also tried to pull off a financing in December 2022. A C$1M non-brokered flow through raise was announced on December 12, 2022, only to be cancelled 4 days later on December 16, 2022. The news release provided the following explanation for this remarkable timing: “The timing of the Offering was delayed, putting the pre-year end closing in question and the potential to raise funds at a later date at better prices has increased, so the Company has decided to defer raising funds at present.” After talking to CEO Weber, it turned out that the raise was delayed because of the inefficiencies of dealing with a number of different groups in the holiday season, creating all sorts of pressure on the December 31 deadline for flow-through financings. However, the potential for better prices at a later date didn’t exactly crystallize.
A golden rule in junior mining finance has always been if you can take the money, take it. So I wondered if there wasn’t the option to raise less, or non flow-through in January, or a combination of FT and non-FT, especially with the loyal backing of Pacific Opportunity Capital and Fruchtexpress. CEO Weber had this to say: “Flow through was considered but the market for flow through softens early in the new year, and with the junior markets out of favour the interests in financings in general was low. If we were to raise money it had to be sufficient to complete a program at Haldane anyway.”
As a consequence of the cancelled financing and a soft junior market through the spring, Silver North/Alianza was unable to commit to an early summer drilling campaign, and started to contemplate the rebranding and restructuring to Silver North and an autumn program at Haldane. The company had announced the outline of drilling/exploration plans for this year on January 30, 2023 and still plans to execute much of what was outlined in January this Fall. I have always loved the geological thesis behind this project, as the host rocks clearly resemble the rocks that host the abundance of high grade silver mines and deposits the Keno Hill Silver District is famous for.
These plans were pretty comprehensive according to the news release:
“Management is planning airborne electromagnetic and magnetic surveys to help map lithologies, refine target structures (strike extensions and offsets) and potentially identify new target structures that may be silver bearing. This work would be followed up by trenching where applicable and diamond drilling. Drilling will target the extensions down plunge on the West Fault target where high-grade silver mineralization has been identified over an area 100 meters by 90 meters in size, and on two structural levels within the West fault structure. Drilling would aim to build on previous intersections at West fault including 1.8 metres of 818 grams per ton silver, 3.47% lead, 1.03% zinc and 3.14 metres of 1,315 grams per ton silver, 2.43% lead, 2.91% zinc (true widths), with grades and width increasing at depth. At least four holes are planned to test the extensions of this mineralization on 50 metre stepouts.
Drilling is also planned for the Bighorn target located 3 kilometers to the northwest of the West Fault. The Bighorn target was identified from soil geochemical sampling that returned anomalous values for lead and silver in soils. The only drill hole at this target returned 125.7 grams per ton silver and 4.39% lead over 2.35 metres from previously unrecognized vein structures. Trenching and groundwork in 2022 programs was able to refine targeting at Bighorn, and additional drilling will test this target for its potential to host wide, high grade silver mineralization. Additional drilling will also target the Main and Middlecoff targets, and any targets generated from the geophysical data and trenching.”
Besides own exploration, another important regional development is ongoing next door. At the moment, Hecla Mining is ramping up production, having produced over 182,000 ounces of gold in Q2, trying to iron out the mining/milling kinks that plagued new acquisition Alexco at Keno Hill, and full production is planned for Q4, 2023. Establishing the Keno Hill Mine as a profitable silver mine (as a reminder the most significant step to help in this regard was to retire the silver stream Alexco was feeding prior to the Hecla acquisition) backed by a large producer is a very favorable development for the district and thus also for Silver North.
The second most important project for Silver North is the Tim Silver project, also in the Yukon. Coeur Mining, which has optioned the Tim Silver project, hasn’t been very active since 2021. It compiled the results from a sampling and mapping program in 2022, but didn’t disclose the results in a news release.
According to CEO Weber, the required permits for drilling are now in hand. Coeur’s previous program was successful in identifying drill targets that resemble the setting at Coeur’s Silvertip Miine, 19km to the south of Tim. The exploration team at Coeur has been very successful in adding ounces the resource at Silvertip over the last few years and is eager to take their knowledge and apply it to Tim. This next program has not been fully articulated to Silver North, but Coeur is eager to test the targets they have generated at Tim with drilling. Management should have a clearer picture on this shortly.”
The fully owned Twin Canyon gold project in Colorado also has seen its fair share of prioritizing drill targets, and a drill permit for a 13 hole, 3,950m RC drill program was granted on January 11, 2023. Alianza has been actively seeking a partner to conduct the first drill program at Twin Canyon, but hasn’t been able to come to an agreement with interested parties. I wondered if Silver North is still actively pursuing a partner, or will be focusing more on Haldane, and potentially divest projects like Twin Canyon. CEO Weber stated: “We really like the Twin Canyon target and will find a partner to tqke it on, and do the drilling to test their tqrget ideas.”
Silver North has other projects in its portfolio, like in Nevada and Peru, but is actively looking to divest those or find partners for them. According to CEO Weber, they are receiving a good deal of interest in the project portfolio and will move the non-core projects on, so they can fully focus on their silver projects.
I also asked him if he could describe the process that eventually led to the strategy change, from being a multi-metal hybrid prospect generator to a silver focused explorer, focusing on their fully owned flagship Haldane project. He elaborated that they felt that Haldane, and by extension, Alianza was not getting the recognition for the silver discoveries made to date (and the potential for new ones) especially considering that the project is located in one of the world’s highest grade silver districts with over 100 years of production history. As a silver focused junior explorer, the company can more efficiently direct its efforts in unlocking the value at Haldane with a much simpler and streamlined story for investors. Management also feels strongly that the outlook for silver is very positive, especially when one considers the vital role silver plays in the transition to a green economy in everything from solar panels to electric vehicle. This theme holds true for the broader application of technology to society, such as 5G technology and silver’s applications. Silver North is now likely better able to appeal to investors who see this same value.
Besides this, I’m curious (no doubt other investors are as well) what activities, timelines and catalysts he has in mind for Silver North, after the financing will be closed. He commented the following: “An autumn drill program at Haldane is our primary focus going forward, both to expand the West Fault mineralization with additional high grade intersections, as well as following up the Bighorn discovery made in 2019. This discovery was never followed up due to the discovery at West Fault. The longer term goal is to define the extents of West Fault while also continuing to test the almost 12 km of prospective vein strike length to make additional discoveries like West Fault. To date, under 500 metres of this strike length has been tested by drilling – plenty of room remains to additional silver veins. Drilling at Tim funded by Coeur should provide an additional catalyst for investors and of course the divestment of the now non-core projects will provide additional news flow.”
Conclusion
It hasn’t been an easy year for Silver North Resources/Alianza Minerals, or for most junior companies for that matter. But management took this time to undertake a strategic review of its business and where the most value could be created. Identifying that the Haldane Silver project has tremendous potential to create this value, and silver could be in strong demand following the ongoing renewable energy paradigm shift, they took this opportunity to reinvent themselves with a name change, roll back and strategy change. CEO Weber has big plans for Haldane, and I’m curious if, after the current C$1.5M financing will be closed, upcoming autumn drill programs can prove up lots more high grade silver. Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Alianza Minerals is a sponsoring company. All facts are to be checked by the reader. For more information go to www.alianzaminerals.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
As the company was low on cash, a financing was announced soon after, when Silver North released the news on August 29, 2023 about the undertaking of a C$1.5M non-brokered private placement, in order to fund exploration at their flagship Haldane Silver project in the Yukon.
In this article I will discuss with CEO Jason Weber the turn of events that eventually led to their strategy change, a cancelled financing last year, developments with partners and projects this year, the strategy itself and events/catalysts to expect in the near future.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
Although general sentiment for junior miners wasn’t exactly positive the last few years, when looking at the chart below it becomes clear Alianza Minerals was at a dead end road, heading for 1c as it couldn’t raise any money without diluting itself into oblivion, which eventually could become a dead spiral:
Let’s take a brief look into past events first so far, to provide more context. Alianza Minerals was only actively drilling at their Klondike property last summer, at which partner Allied Copper was earning in at the time through the Cloudbreak Alliance. As a reminder, this would have been an extremely profitable venture for Alianza, as they paid just C$105k for the Klondike property, and Allied Copper would have to pay C$2.6M in cash and shares plus a royalty for 100% ownership in 3 years, and spend no less than C$4.75M in exploration expenditures in total. At these terms, exploration definitely had to be successful in order to continue.
However, on November 30, 2022 the results of the first 5 holes came in, highlighted by best intercepts 1.06m @ 4.26% Cu and 11.4m @ 0.34% Cu, indicating this could be a pretty long journey. Allied Copper already started contemplating a different direction around that time, focusing more on lithium brines in Alberta, and in February they decided it was time to terminate the Klondike option agreement with Alianza.
CEO Jason Weber had this to say about the future of the Cloudbreak Alliance, and the turn of events around Klondike, which is 100% owned again: “With the changes in management at Allied Copper/Cloudbreak and their divergence from the business model, the Alliance still holds the Stateline and Klondike properties, but will not be generating any new targets to move forward. Interest in the two properties is high. Prospective suitors have toured the properties and additional property tours are probable. Klondike is attractive in that the results of the 2022 drill program were encouraging, including one significant result where copper mineralization was intersected at depth on a splay of the target structure. The main target structure was not reached and a promising drill target remains to be tested here.”
Before Klondike was terminated, the company also tried to pull off a financing in December 2022. A C$1M non-brokered flow through raise was announced on December 12, 2022, only to be cancelled 4 days later on December 16, 2022. The news release provided the following explanation for this remarkable timing: “The timing of the Offering was delayed, putting the pre-year end closing in question and the potential to raise funds at a later date at better prices has increased, so the Company has decided to defer raising funds at present.” After talking to CEO Weber, it turned out that the raise was delayed because of the inefficiencies of dealing with a number of different groups in the holiday season, creating all sorts of pressure on the December 31 deadline for flow-through financings. However, the potential for better prices at a later date didn’t exactly crystallize.
A golden rule in junior mining finance has always been if you can take the money, take it. So I wondered if there wasn’t the option to raise less, or non flow-through in January, or a combination of FT and non-FT, especially with the loyal backing of Pacific Opportunity Capital and Fruchtexpress. CEO Weber had this to say: “Flow through was considered but the market for flow through softens early in the new year, and with the junior markets out of favour the interests in financings in general was low. If we were to raise money it had to be sufficient to complete a program at Haldane anyway.”
As a consequence of the cancelled financing and a soft junior market through the spring, Silver North/Alianza was unable to commit to an early summer drilling campaign, and started to contemplate the rebranding and restructuring to Silver North and an autumn program at Haldane. The company had announced the outline of drilling/exploration plans for this year on January 30, 2023 and still plans to execute much of what was outlined in January this Fall. I have always loved the geological thesis behind this project, as the host rocks clearly resemble the rocks that host the abundance of high grade silver mines and deposits the Keno Hill Silver District is famous for.
These plans were pretty comprehensive according to the news release:
“Management is planning airborne electromagnetic and magnetic surveys to help map lithologies, refine target structures (strike extensions and offsets) and potentially identify new target structures that may be silver bearing. This work would be followed up by trenching where applicable and diamond drilling. Drilling will target the extensions down plunge on the West Fault target where high-grade silver mineralization has been identified over an area 100 meters by 90 meters in size, and on two structural levels within the West fault structure. Drilling would aim to build on previous intersections at West fault including 1.8 metres of 818 grams per ton silver, 3.47% lead, 1.03% zinc and 3.14 metres of 1,315 grams per ton silver, 2.43% lead, 2.91% zinc (true widths), with grades and width increasing at depth. At least four holes are planned to test the extensions of this mineralization on 50 metre stepouts.
Drilling is also planned for the Bighorn target located 3 kilometers to the northwest of the West Fault. The Bighorn target was identified from soil geochemical sampling that returned anomalous values for lead and silver in soils. The only drill hole at this target returned 125.7 grams per ton silver and 4.39% lead over 2.35 metres from previously unrecognized vein structures. Trenching and groundwork in 2022 programs was able to refine targeting at Bighorn, and additional drilling will test this target for its potential to host wide, high grade silver mineralization. Additional drilling will also target the Main and Middlecoff targets, and any targets generated from the geophysical data and trenching.”
Besides own exploration, another important regional development is ongoing next door. At the moment, Hecla Mining is ramping up production, having produced over 182,000 ounces of gold in Q2, trying to iron out the mining/milling kinks that plagued new acquisition Alexco at Keno Hill, and full production is planned for Q4, 2023. Establishing the Keno Hill Mine as a profitable silver mine (as a reminder the most significant step to help in this regard was to retire the silver stream Alexco was feeding prior to the Hecla acquisition) backed by a large producer is a very favorable development for the district and thus also for Silver North.
The second most important project for Silver North is the Tim Silver project, also in the Yukon. Coeur Mining, which has optioned the Tim Silver project, hasn’t been very active since 2021. It compiled the results from a sampling and mapping program in 2022, but didn’t disclose the results in a news release.
According to CEO Weber, the required permits for drilling are now in hand. Coeur’s previous program was successful in identifying drill targets that resemble the setting at Coeur’s Silvertip Miine, 19km to the south of Tim. The exploration team at Coeur has been very successful in adding ounces the resource at Silvertip over the last few years and is eager to take their knowledge and apply it to Tim. This next program has not been fully articulated to Silver North, but Coeur is eager to test the targets they have generated at Tim with drilling. Management should have a clearer picture on this shortly.”
The fully owned Twin Canyon gold project in Colorado also has seen its fair share of prioritizing drill targets, and a drill permit for a 13 hole, 3,950m RC drill program was granted on January 11, 2023. Alianza has been actively seeking a partner to conduct the first drill program at Twin Canyon, but hasn’t been able to come to an agreement with interested parties. I wondered if Silver North is still actively pursuing a partner, or will be focusing more on Haldane, and potentially divest projects like Twin Canyon. CEO Weber stated: “We really like the Twin Canyon target and will find a partner to tqke it on, and do the drilling to test their tqrget ideas.”
Silver North has other projects in its portfolio, like in Nevada and Peru, but is actively looking to divest those or find partners for them. According to CEO Weber, they are receiving a good deal of interest in the project portfolio and will move the non-core projects on, so they can fully focus on their silver projects.
I also asked him if he could describe the process that eventually led to the strategy change, from being a multi-metal hybrid prospect generator to a silver focused explorer, focusing on their fully owned flagship Haldane project. He elaborated that they felt that Haldane, and by extension, Alianza was not getting the recognition for the silver discoveries made to date (and the potential for new ones) especially considering that the project is located in one of the world’s highest grade silver districts with over 100 years of production history. As a silver focused junior explorer, the company can more efficiently direct its efforts in unlocking the value at Haldane with a much simpler and streamlined story for investors. Management also feels strongly that the outlook for silver is very positive, especially when one considers the vital role silver plays in the transition to a green economy in everything from solar panels to electric vehicle. This theme holds true for the broader application of technology to society, such as 5G technology and silver’s applications. Silver North is now likely better able to appeal to investors who see this same value.
Besides this, I’m curious (no doubt other investors are as well) what activities, timelines and catalysts he has in mind for Silver North, after the financing will be closed. He commented the following: “An autumn drill program at Haldane is our primary focus going forward, both to expand the West Fault mineralization with additional high grade intersections, as well as following up the Bighorn discovery made in 2019. This discovery was never followed up due to the discovery at West Fault. The longer term goal is to define the extents of West Fault while also continuing to test the almost 12 km of prospective vein strike length to make additional discoveries like West Fault. To date, under 500 metres of this strike length has been tested by drilling – plenty of room remains to additional silver veins. Drilling at Tim funded by Coeur should provide an additional catalyst for investors and of course the divestment of the now non-core projects will provide additional news flow.”
Conclusion
It hasn’t been an easy year for Silver North Resources/Alianza Minerals, or for most junior companies for that matter. But management took this time to undertake a strategic review of its business and where the most value could be created. Identifying that the Haldane Silver project has tremendous potential to create this value, and silver could be in strong demand following the ongoing renewable energy paradigm shift, they took this opportunity to reinvent themselves with a name change, roll back and strategy change. CEO Weber has big plans for Haldane, and I’m curious if, after the current C$1.5M financing will be closed, upcoming autumn drill programs can prove up lots more high grade silver. Stay tuned!
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter, in order to get an email notice of my new articles soon after they are published.
Disclaimer:
The author is not a registered investment advisor, and currently has a long position in this stock. Alianza Minerals is a sponsoring company. All facts are to be checked by the reader. For more information go to www.alianzaminerals.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
