$12M Drilling Campaign to Expand High-Grade Silver Resource in 2025

• Outcrop Silver's flagship Santa Ana project in Colombia is one of the world's highest grade primary silver projects, with 75% of its value in silver and exceptional recovery rates of 96-99% for silver and gold.
• The company has an ambitious $12 million exploration plan for 2025 to drill 24,000 meters with two drills, focusing on efficiently converting targets to resources at about 50 cents per ounce.
• Outcrop Silver has attracted significant investment from Eric Sprott, who now holds a 19.9% stake, making it one of his top five investments last year.
• The company believes it is well-positioned in the small peer group of primary silver companies, with proper valuation based on grade, recovery, and concentrate quality.
• CEO Ian Harris sees potential for industry consolidation among the small group of quality primary silver companies to improve access to capital and create value.

Outcrop Silver is advancing its flagship Santa Ana project in Colombia, positioning it as one of the world's highest-grade primary silver projects. In this interview at PDAC 2025, CEO Ian Harris outlined the company's exploration strategy, financial position, and views on the silver market. With 75% of the project's value derived from silver, the company represents one of the few genuine primary silver opportunities available to investors. The project features exceptional recovery rates between 96-99% for silver and gold, helping to attract significant investment from prominent silver investor Eric Sprott, who now holds a 19.9% stake in the company.

2024 Achievements and Strategic Execution

In 2024, Outcrop Silver implemented an ambitious exploration plan that included securing over 100 right-of-way agreements to facilitate drilling access. This groundwork allowed the company to quickly mobilize drilling operations, with a second drill added by June to accelerate target testing. By year-end, the company had successfully tested targets extending to the southern boundary of the property, setting up favourable conditions for resource expansion in 2025.

2025 Exploration Strategy

For 2025, Outcrop Silver has allocated a $12 million budget to drill 24,000 meters with two active drilling rigs. The company has developed a systematic approach to prioritize drilling targets, analyzing factors such as average grade, thickness, success rate, and strike length to calculate potential ounces and drilling costs per target. This methodology allows them to rank targets based on "ounces per meter" efficiency.

Harris emphasized their focus on capital efficiency: 

"The goal is to do it at around 50 cents... basically our cost to convert to resource, and our valuation is much higher than that number. So we believe even if markets continue, we are putting in a plan that securely will create more value for less money than we're spending."

The Sprott Investment and Valuation Metrics

Eric Sprott's substantial investment in Outcrop Silver, bringing his ownership to 19.9% (the maximum allowable before triggering takeover provisions), represents a significant vote of confidence. According to Harris, this places Outcrop among Sprott's top five investments last year, despite the company's relatively small size compared to his other holdings.

The investment appears driven by Outcrop's fundamental qualities: exceptionally high grades, strong recovery rates, and quality concentrate product. Harris notes that Outcrop falls within a small peer group of primary silver companies with similar valuations based on resource size, but differentiates itself through superior grade and recovery characteristics.

Interview with CEO Ian Harris

Primary Silver: A Distinct Investment Category

Harris emphasized the importance of being a true primary silver project (defined as having over 50% of value derived from silver) rather than a "silver equivalent" producer. This distinction creates greater leverage to silver prices and results in different valuation metrics compared to gold or copper companies.

Harris pointed to silver's unique market dynamics, explaining how price movements can be more explosive than other metals: 

"If I said do you believe that it's possible that silver could double in price this year, the argument would be yes, there's a realistic possibility of that happening this year. Is there a possibility of copper going two times this year? No."

Industry Consolidation Potential

Harris indicated that consolidation within the small group of quality primary silver companies could create value by improving access to capital. He drew parallels to the growth strategies of established players like First Majestic Silver.

While avoiding specific details about Outcrop's M&A intentions, Harris acknowledged that the company is "actively reviewing" opportunities and suggested that combining companies with complementary attributes (such as pairing high-quality resources with advanced-stage projects) could be beneficial in the current capital-constrained environment.

"The opportunity is when there's some bifurcation... it's not like you're in the club and you get a 10% bonus, it's a true bifurcation. When it's such a tight market, it's so hard to raise capital. Being able to raise capital affects your valuation." 

The Investment Thesis for Outcrop Silver

• Pure Primary Silver Exposure: One of few companies with 75% of project value from silver, providing maximum leverage to silver prices
• World-Class Grades & Recovery: Santa Ana features exceptionally high silver grades with 96-99% recovery rates for silver and gold
• Efficient Resource Expansion: $12 million 2025 drilling program targeting resource conversion at approximately $0.50/oz, well below market valuation
• Strategic Backing: 19.9% ownership by Eric Sprott, one of his top five investments last year
• Clear Path to Value Creation: Systematic approach to prioritizing drilling targets based on calculated ounces per meter of drilling
• Potential Catalyst in Colombian Politics: Upcoming presidential election in 14 months may bring renewed support for mining investment
• M&A Potential: Positioned to participate in sector consolidation as either acquirer or target
• Limited Primary Silver Peer Group: Part of a small group of true primary silver companies, creating scarcity value in the sector
• Strong Position in Silver Supply Dynamics: Primary silver mines represent less than 25% of global production, limiting supply elasticity

Macro Thematic Analysis

The silver market presents a uniquely compelling investment case based on structural supply-demand imbalances that could drive significant price appreciation. 

However, critical changes in market dynamics have eliminated traditional relief valves that previously prevented sustained price spikes. Government silver stockpiles that once backed silver certificates have been depleted, and modern permitting timelines (reaching 29 years in the United States) severely limit the industry's ability to rapidly increase production. Meanwhile, industrial demand continues to grow, with solar panel manufacturing now accounting for approximately 25% of consumption - demand that remains relatively price-inelastic.

Primary silver mines produce less than 25% of global silver supply, with the majority coming as byproducts from base metal operations. This creates a scenario where even significant silver price increases won't necessarily trigger proportional supply responses from byproduct producers who make decisions based on their primary metals.

When investment sentiment eventually shifts positive, the stage is set for a potential supply squeeze. As Harris explains: 

"If I told you we had accumulated a 100 million ounce deficit in gold, it would be insanity. If I told you we had accumulated a 30 million ton deficit in copper, which is basically a year's production in both those assets, it'd be through the roof. And silver can build up that kind of momentum because it can build up a very large deficit before that physical crunch could happen."

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