Silver Elephant Mining Seeks Path to Unlock Value at Main Project

• Silver Elephant Mining has a flagship asset - the Pulacayo silver-lead-zinc project in Bolivia with over 100 million ounces of silver resources.
• The company signed a deal with NDM Mining to truck and process 800,000 tons of high grade oxide material from Pulacayo over 5 years, generating $5 million upfront for Silver Elephant.
• The cash from the oxide material will fund Silver Elephant's operations and advancing studies on restarting underground mining at Pulacayo.
• The company also has a 200 million ton thermal coal project in Mongolia that could generate cash flow if coal prices rise again.
• Key upcoming catalysts include further payments from NDM Mining, advancing Pulacayo underground studies, and potential coal sales if prices recover. The goal is to reach a construction decision on Pulacayo underground mining in 2024.

About Silver Elephant Mining

Silver Elephant Mining Corp. is a Canada-based mining company focused on silver, lead, and zinc opportunities. The company was founded in 2007 and is headquartered in Vancouver, British Columbia. Silver Elephant's flagship asset is the Pulacayo Project, a 100% owned silver-lead-zinc deposit located in Bolivia. With over 100 million ounces of silver in the ground, Pulacayo ranks as one of the largest undeveloped silver deposits globally. Beyond Pulacayo, Silver Elephant also holds the coal project in Mongolia called Ulaan Ovoo.

Silver Elephant is led by Founder, Chairman and CEO John Lee, who has over 20 years of experience in the mining industry. Lee founded the company in 2007 and has steered its growth and development over the past decade. Under his leadership, Silver Elephant has raised over $50 million to advance its projects.

Interview with John Lee, Executive chairman & CEO of Silver Elephant Mining

Seeking Near-Term Cash Flow at Pulacayo

At Pulacayo, Silver Elephant is focused on generating near-term cash flow from an oxide zone while it works to advance permitting on the larger sulfide deposit. The oxide zone contains around 6 million ounces of silver with an average grade of 239 g/t silver.

To monetize the oxide resource, Silver Elephant recently signed a deal with NDM Mining to truck and process 800,000 tons of oxide material at NDM's facility located 180 km from Pulacayo. NDM will pay Silver Elephant's operating costs, reimburse them for technical expertise, and provide $5 million in upfront cash payments. The cash payments are spread over 5 years, with $3 million expected in the first 16 months.

For Silver Elephant, this oxide monetization deal provides non-dilutive funding that covers overhead costs for the next 2 years. It also allows the company to advance permitting and engineering studies on the larger sulfide deposit at Pulacayo in a capital efficient manner.

Advancing the Pulacayo Sulfide Project

The main prize at Pulacayo is the large sulfide deposit which contains 95 million ounces silver along with significant zinc and lead credits. The sulfide mineralization starts from surface and has been traced over 1500 meters in strike length and 700 meters depth. It remains open for expansion in multiple directions.

Given the project's scale, Silver Elephant sees potential to develop Pulacayo into a large open pit mining operation targeting 30,000 to 50,000 tons per day. However, the company recognizes that current market conditions require a more modest approach.

As a result, Silver Elephant plans to use the oxide cash flows to fund internal engineering studies focused on a smaller, higher grade sulfide mining scenario of 300 to 600 tons per day. This initial operation would target near-surface, high-grade mineralization zones grading over 400 g/t silver. By staying small and selective, the goal is to reduce upfront capital and get into production faster.

The internal studies will assess potential mine plans and economics to determine if Pulacayo could generate positive cash flow at current silver prices. If the results are encouraging, Silver Elephant may follow up with a more formal 43-101 technical report. The end goal is to reach a construction decision in 2024 assuming all the pieces line up.

Ulaan Ovoo Coal Project Provides Optionality

In addition to Pulacayo, Silver Elephant owns the Ulaan Ovoo coal project in Mongolia. Ulaan Ovoo contains over 200 million tons of high quality thermal coal and is fully permitted for mining. With coal prices hitting record highs in 2022, the project generated over $500,000 in net cash flow for Silver Elephant.

Looking ahead, the company plans to keep costs low and remain flexible at Ulaan Ovoo. If coal prices strengthen further, Silver Elephant can ramp up production to generate incremental cash flow. Any coal profits will be viewed as a bonus and re-invested into advancing Pulacayo.

Conclusion

With its large silver resource, near-term cash flow potential, and experienced management team, Silver Elephant offers investors an intriguing speculative opportunity. The company's modest $10 million valuation appears attractive relative to Pulacayo's size and exploration upside.

However, Silver Elephant is not without risks. Its shares have declined steadily from previous highs as Pulacayo has taken longer to advance than hoped. Bringing the project into production remains dependent on favorable silver prices and financing. Investors will need patience as the turnaround story unfolds.

Those comfortable with the risks could view current prices as a buying opportunity. But less risk-tolerant investors may prefer waiting for more de-risking catalysts before establishing a position. Either way, Silver Elephant provides leveraged exposure to any resurgence in silver prices. It remains a stock to watch as management executes on plans to unlock Pulacayo's potential.