Silver Bullet: Metallurgy by Magnet

A year ago Silver Bullet Mines (SBMI.V) was very much on track to begin producing silver at its Buckeye Mine near Globe, Arizona. Great grade, a completed mill, time to make concentrate and then smelt that concentrate into doré bars.

SBMI fired up the smelter, poured in the concentrate and got this:

I don’t know much about smelting, but I do know that is not what you want to see. Something was contaminating the concentrate.

Call in the mineralogist!

“The Company thanks Dr. Andrew Macdonald, a mineralogist with Harquail School of Earth Sciences at Laurentian University, for his assistance. Initial results from his work indicate the presence of a highly magnetic iron alloy in the mineralized material. The iron alloy smelts at temperatures of over 3000 degrees F, which is above the silver smelting temperature of roughly 1800 degrees F, and therefore it interferes with the silver smelting process. SBMI has confirmed this thesis by using a high intensity magnet to pull the iron alloy from the concentrate prior to smelting.” (SBMI press release February 15, 2023)

Yup, the solution to the iron contamination is nothing more complicated than a big, honking, magnet. This is what a doré bar is supposed to look like. (Ideally, about 100 times this size.) It was produced from the Buckeye concentrate in February 2023.

I invested in SBMI’s initial placement and have had high hopes for the company simply because the silver grades at the Buckeye Mine are very, very impressive. I did not check the metallurgy because, when I invested, there had been very little metallurgy done. That could have been a major investment error had the material been contaminated with something less amenable to a simple “fix”. Fortunately, it looks like the big honking magnet solution works and now we’ll see if it can scale. No reason why it shouldn’t.

Looking forward to a stream of news on both cleaning up the concentrate and finding and processing more silver.

Assuming the material can be “cleaned up” at scale, there is every chance SBMI will be producing saleable product in the near future. At that point, its current share price of $0.225 will be a thing of the past. Producing doré bars at the site will trigger a market re-rating of SBMI as a silver producer. Can’t wait.

Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently hold shares in SBMI.V and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.