en.Wedoany.com Reported - Silver Tiger Metals has obtained the first construction permit issued to a foreign company in Mexico since 2019. Construction of the heap leach silver/gold operation at its El Tigre project in Sonora has been underway for approximately 3.5 months, with the first gold and silver pour targeted for December 2027.
At conservative prices (approximately $70/oz silver, $4,200/oz gold), the independent after-tax net present value (NPV) of the heap leach project is approximately $800 million, with an internal rate of return (IRR) of 92%, generating approximately $100 million in annual after-tax net cash flow over an initial 10-year mine life. A separate preliminary economic assessment (PEA) for the underground mine, released in January 2026, indicates a 15-year mine life, an NPV of approximately $830 million, and an IRR of 110%. Combined, the two projects have a theoretical NPV of $1.7 to $1.8 billion and annual after-tax cash flow of approximately $200 million.
A key structural advantage of El Tigre is that the underground orebody lies entirely outside the open-pit heap leach footprint, allowing both operations to proceed simultaneously. This is uncommon in Mexican mining, where underground ore beneath heap leach pads is typically sterilized. The exploration team has resumed drilling on the Northern Vein, located 700 meters outside the current mine plan, targeting an additional 3 million tonnes at approximately 350 g/t silver equivalent. This could expand underground resources from 4 million to 7 million tonnes and materially alter the mine plan.
Construction has been underway for approximately 3.5 months, with a 50-person construction camp fully operational. Long-lead procurement items are in progress, with earthworks, site clearing, and leach pad construction set to begin in June 2026. The specific timeline is as follows: concrete and civil works targeted for October 2026; crushing circuit for January 2027; Merrill-Crowe refinery for February 2027; stacking operations from April to May 2027; commissioning in October 2027; and first pour in December 2027. The project team reports that current progress is ahead of the Gantt chart schedule.
In a recent interview, company CEO Glenn Jessome noted that the current mine plan for the heap leach operation utilizes only 60% of the material within the optimized pit shell, with the remaining 40% retained for later recovery, extending the project's potential life and cash generation capacity. For the underground project, Silver Tiger already owns an 800 tonnes-per-day mill, matching the capacity assessed in the PEA. Underground capital expenditure is estimated at $86 million, of which approximately $17 million has already been spent on shared infrastructure as part of the heap leach construction, resulting in an adjusted incremental cost of nearly $69 million to build the underground. For debt financing of the underground project, the company is evaluating more favorable terms arising from changing market conditions.
Despite construction progress and the PEA release, Silver Tiger's share price in June 2026 was approximately half its January peak, when silver was trading at similar prices. Management believes the share price is disconnected from operational progress, primarily due to broader weakness in the precious metals market and macroeconomic uncertainty. The company's stock trades at a substantial discount to the combined NPV of the two projects. Management identifies the path to re-rating as executing the construction plan, with the key catalyst being the first pour in December 2027.
With the metallurgical and geotechnical drilling programs for the heap leach and underground projects completed, the company's exploration team has resumed drilling on the Northern Vein. Section 24 of the recently released PEA includes a preliminary mine plan around these areas, estimating an additional 3 million tonnes of resources at a grade of approximately 350 g/t silver equivalent. El Tigre's larger land package covers 25 kilometers of potential epithermal strike, with all work to date conducted within a 2 to 3 kilometer range. This Northern Vein drilling represents the first step beyond this window.
Silver Tiger's operating permit in Mexico is one of its core advantages, received after a long wait following a freeze on permits amid heightened regulatory scrutiny of the mining sector in Mexico. The company completed a $60 million bought deal financing near the market peak in January, bringing its cash position to approximately $100 million, after which the board approved construction. The company has appointed KCA, previously responsible for overall engineering work, as the lead construction firm. Chief Operating Officer Francisco Albelais previously oversaw the construction of two large heap leach projects for Argonaut Gold in Sonora.
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