VRIC JV Video: Trinity One buys Ecuador’s Silver-1

Key Concepts

• Silver One Mine (Ecuador): A past-producing, high-grade silver asset acquired by Trinity 1 Metals.
• Exploration Target: 100 million ounces of silver at 600 g/t, within a 5 million ton tonnage.
• Tailings: Existing 200,000 tons of tailings containing approximately 100 g/t silver, representing a potential early revenue stream.
• Vein System: The Silver One mine features a vein-type silver deposit with potential for significant expansion.
• Market Capitalization: Trinity 1 Metals currently has a low market cap of $9 million, positioning it as an undervalued opportunity.
• Ecuadorian Mining Jurisdiction: Ecuador is emerging as a mining-friendly jurisdiction with streamlined regulations and government support.
• Past Production & Permitting: The mine has a history of production and existing permits, facilitating rapid project advancement.

Trinity 1 Metals & the Silver One Mine Acquisition – A Detailed Overview

Introduction & Acquisition Details

Thomas Wood, CEO of Trinity 1 Metals, announced the recent acquisition (January 15th) of the Silver One mine asset located approximately 20 km from Kanka, Ecuador. The company is positioned as having the lowest market capitalization ($9 million) among venture exchange companies with a past-producing silver asset. This acquisition represents a significant opportunity due to the current silver price ($104/ounce) compared to the $4/ounce price during the mine’s previous operation in 1994.

Asset Overview & Historical Production

The Silver One mine is a past-producing, high-grade silver asset. Historical mining (1990-1994) yielded approximately 1,000 g/t silver. Trinity 1 Metals has established an exploration target of 100 million ounces of silver at 600 g/t, representing a 5 million ton tonnage. Crucially, this target is pure silver and does not include the 2 g/t gold, or the presence of lead and zinc also found within the ore body. The deposit is a vein-type system, characterized by high silver concentrations.

Early Revenue Potential: Tailings Reprocessing

A significant benefit of the acquisition is the presence of approximately 200,000 tons of tailings from previous milling operations (100 ton/day mill). These tailings contain approximately 100 g/t silver, offering a potential early-stage revenue opportunity. Trinity 1 Metals plans to conduct shallow drilling on the tailings dam to confirm tonnage and grade, with the goal of developing a processing flowsheet and initiating met testing. Successful reprocessing would provide non-diluted funding for further exploration.

Exploration Strategy & Project Scale

Trinity 1 Metals has an “aggressive drilling program” planned to define the extent of the silver deposit. The current exploration target is based on a single vein, with the potential for expansion along strike and depth. The company intends to drill down to 500 meters (compared to the previous mining depth of 90 meters) and extend the explored strike length from 500 meters to 1 kilometer. The specific gravity of the ore is estimated at three, suggesting a 3 million ton resource within this single vein. Multiple veins are present in swarms and stacked formations, indicating a potentially conservative exploration target of 100 million ounces. A second zone, the Chanaste sector, is believed to have similar tonnage and grade, further enhancing the project’s upside. Wood estimates the potential value of the 100 million ounces of silver at $10 billion at current spot prices.

Acquisition Terms & Expertise

The acquisition deal with the previous owners (represented by lawyers in Quito and Cuenca) involves staged payments totaling $540,000 over 18 months, with the majority of the payment back-ended. Additionally, Trinity 1 Metals issued 5 million shares as part of the transaction. Importantly, the company secured the services of John Bolanos, the previous project geologist with 30 years of experience at the Silver One mine, as their lead project geologist.

Ecuadorian Mining Jurisdiction & Infrastructure

Ecuador is described as a “fantastic place to do business” with increasing government support for mining investment. The country is actively restarting its mining cadastray and streamlining mining laws. The Silver One project is already fully permitted for drilling, possessing a medium-scale mining license and a current environmental report from 2007. The mine benefits from existing infrastructure, including 3.6 kilometers of underground workings from previous mining operations, which will reduce drilling costs by allowing access from underground rather than surface. The presence of nearby large-scale mining operations (Lundin Gold and Mirador) demonstrates the viability of mining in the region and the economic benefits it brings to local communities.

Social License & Water Access

The Silver One mine has a history of positive relationships with the local community, having previously provided employment without significant social issues. Trinity 1 Metals intends to engage with the community to restart the mine and generate economic opportunities. Water access is not identified as a concern, likely due to the mine’s past operation and established infrastructure.

Notable Quote:

“At the moment, our market cap is $9 million. So we are the lowest market cap silver company on the TSX with a past producing silver asset.” – Thomas Wood, CEO of Trinity 1 Metals.

Conclusion

Trinity 1 Metals’ acquisition of the Silver One mine in Ecuador presents a compelling opportunity in the silver market. The asset’s high-grade silver, existing infrastructure, advanced permitting, and potential for significant expansion, combined with the company’s low market capitalization, position it for substantial growth. The planned exploration program and potential for early revenue from tailings reprocessing are key catalysts for value creation. The favorable mining environment in Ecuador further supports the project’s potential for success.