Investor Insight

Pinnacle Silver and Gold presents a compelling investment opportunity in the precious metals sector as it continues to advance its existing projects and pursue new opportunities, offering investors an attractive entry point into the dynamic world of silver and gold exploration.

Overview

As an exploration company focused on silver and gold projects in the Americas, Pinnacle is strategically positioned to capitalize on the growing demand for these valuable resources. The company’s investment appeal stems from several key factors:

• A robust pipeline of projects at various stages of exploration and development
• Strategic focus on high-potential areas in North and South America
• Effective capital management practices
• Aggressive expansion strategy through strategic acquisitions

The company’s business strategy involves the acquisition of past-producing mines that can be put back into production quickly to generate cash flow. By focusing on high-grade, underground mines, Pinnacle can leverage low capex, a smaller operational footprint, easier and faster permitting process and protection against metal price volatility. At the same time, the company conducts brownfield exploration for resource expansion, increasing its potential for district-scale discovery.

Pinnacle’s emphasis on creating shareholder value is evident in its approach to project selection and development. The company’s portfolio is carefully curated to balance near-term production potential with long-term growth prospects, offering investors exposure to both immediate returns and future upside.

Company Highlights

• Pinnacle Silver and Gold is a Canada-based exploration and development company dedicated to building long-term shareholder value with its silver- and gold-focused assets in North and South America.
• The company has built an asset portfolio entirely within mining-friendly jurisdictions with clear legal requirements and regulations that provide confidence in the future of each project.
• Both the Argosy Gold Mine and North Birch Project are located in the Red Lake District in Northwestern Ontario, a region famous for gold production.
• The company is led by an impressive management team with decades of experience managing mining companies that operate in the Americas.

Key Projects

Argosy Gold Mine Project

The 100 percent owned Argosy Gold Mine project is located in the northern part of the Birch-Uchi Greenstone Belt of the Superior Province of the Precambrian Shield, and just 10 km northwest of First Mining Gold’s Springpole deposit, which contains 4.7 million ounces of gold in the indicated category. The Birch-Uchi Belt lies between the prolific Red Lake and Pickle Lake Greenstone Belts and contains similar geology. Located 110 kilometres east-northeast of Red Lake, the property hosts the most significant past-producing gold mine in the Birch-Uchi Belt, with 101,875 oz of gold produced at 12.7 grams per ton (g/t) between 1931 and 1952.

Diamond drilling in October 2002 by a previous operator confirmed the extension of the gold mineralization below the old workings with intercepts of 11.75 g/t over 1.55 m and 14.39 g/t over 0.7 m on the Number 2 Vein, 100 m below the old mine development. Additional intercepts of 14.67 g/t over 1.7 m on the Number 3 Vein, and 12.02 g/t over 1.29 m on the Number 8 Vein highlight the potential to build resources on parallel, un-mined veins.

There is exceptional exploration potential on the property and the company is actively expanding its exploration efforts to delineate the full extent of the mineralization.

North Birch Gold Project

The 3,850 hectare, 100 percent owned North Birch gold project lies in the northwestern corner of the Birch-Uchi Greenstone Belt in the Red Lake mining division of northwestern Ontario, roughly 110 km northeast of the town of Red Lake. The Birch-Uchi Belt is considered to have similar geology to the Red Lake Belt but has seen less exploration and is about three times larger. The North Birch project covers a geological setting identified from airborne magnetic surveys and interpreted as a favorable environment for gold mineralization. The property covers an intensely folded and sheared iron formation similar in appearance to the one hosting Newmont Goldcorp’s Musselwhite Mine (past production, reserves and resources exceed 8 million ounces of gold), some 190 kilometers to the northeast. In addition, the stratigraphy underlying the bulk of both properties is interpreted as Cycle I volcanics, which are thought by some workers to be equivalent to the Balmer Assemblage, host of the prolific Campbell/Red Lake gold orebody (more than 20 million ounces of gold in past production and reserves) in the adjacent Red Lake Greenstone Belt.

Located about 4 km from the Argosy Gold Mine, North Birch has undergone minimal previous exploration, making it a largely grassroots prospect. The property covers an interpreted geological setting that is considered to be highly prospective for both iron formation hosted and high-grade quartz vein hosted gold mineralization.

Expansion into Mexico – El Potrero Gold-Silver Project

In a strategic move to diversify its portfolio, Pinnacle has signed a letter of intent for an option to acquire a high-grade El Potrero gold-silver project in the Sierra Madre Trend of Mexico. This expansion underscores the company’s commitment to growth and its ability to identify and secure promising opportunities in key mining jurisdictions.

El Potrero lies within 35 km of four operating mines, including the 4,000 tons-per-day (tpd) Ciénega mine by Fresnillo, Luca Mining’s 1,000 tpd Tahuehueto mine, and the 250 tpd Topia mine owned by Guanajuato Silver. The El Potrero property had undergone small-scale production from 1989 to 1990 and contains a 100 tpd plant that can be refurbished/rebuilt at relatively low cost.

The property hosts a 4 km strike length of a northwest-southeast trending epithermal vein system with high-grade gold and silver mineralization. The veins are brecciated and hosted in andesitic volcanics of the Tertiary Lower Volcanic Series near the contact with the overlying Upper Volcanic Series. Multiple small mines, accessible by adits into the side of the hill, exist along the system and some have been exploited in the 1980’s and possibly before. Vein widths are reported to be in the 0.5 to 10 meter range. Vein textures indicate the mines may be sitting fairly high in the epithermal system implying good potential to extend the mineralization to depth.

Under the terms of the agreement, Pinnacle will earn an initial 50 percent interest immediately upon commencing production. The goal would then be to generate sufficient cash flow with which to further develop the project and increase the company’s ownership to 100 percent subject to a 2 percent NSR. If successful, this approach would be less dilutive for shareholders than relying on the still challenging equity markets to finance the growth of the company.

Management Team

Robert Archer – President and CEO, Director

Robert Archer has more than 40 years’ experience in the mining industry, working throughout the Americas. After spending more than 15 years with major mining companies, Archer held several senior management positions in the junior mining sector and co-founded Great Panther Mining, a mid-tier precious metals producer, where he served as president and CEO from 2004 to 2017 and director until 2020. He joined Pinnacle as a director in March 2018 followed by his appointment as CEO in January 2019 and president in October 2021. Archer is a professional geologist and holds an Honours BSc from Laurentian University in Sudbury, Ontario.

David Cross – CFO

David Cross is a CPA and CGA with over 21 years’ experience in the junior sector with a focus on finance and corporate governance. He is currently a partner of Cross Davis and Company LLP Chartered Professional Accountant, which specializes in accounting and management services for private and publicly listed companies within the mining industry, and has recently been appointed CFO of Ashburton Ventures.

Colin Jones – Independent Director

Colin Jones is principal consultant for Orimco Resource Investment Advisors in Perth, Australia. He has almost 40 years’ experience as a mining, exploration and consulting geologist in a number of different geological environments on all continents. He has managed large exploration and due diligence projects, and has undertaken numerous bankable technical audits, technical valuations, independent expert reports and due diligence studies worldwide, most of which were on behalf of major international resource financing institutions and banks. Jones holds a Bachelor of Science (Earth Sciences) degree from Massey University, NZ.

David Salari – Independent Director

David Salari has worldwide experience in the design, construction and operation of extractive metallurgical plants. He is an engineer with more than 35 years of experience in the mining and mineral processing field. He is currently the president and CEO of DENM Engineering.

Ron Schmitz – Independent Director

Ron Schmitz is the principal and president of ASI Accounting Services, providing administrative, accounting and office services to public and private companies since July 1995. Schmitz has served as a director and/or chief financial officer of various public companies since 1997, and currently holds these positions with various public and private companies.

Oil market shaken as investors lose faith

Uncertainty took many shapes in the third quarter, for the oil segment it materialized as shifting sentiment.

“In early September, for the first time on record, the net position of hedge funds on the ICE exchange turned short from long. Oil demand from China is decelerating, but OPEC+ remains committed to hiking its output from December onward; the cartel’s unity is teetering, with Angola having left in January, the UAE fighting for a higher oil quota, and other members exceeding their allowed production levels,” he said.

Tense geopolitical dynamics as the Ukraine war continues and relations deteriorate in the Middle East paired with the looming US election further fueled uncertainty, factors that usually add tailwinds to the oil market.

However, surplus supply concerns outweighed any support during the third quarter. Prices dipped to a year-to-date low on September 10, touching US$69.21 (Brent), and US$65.69 (WTI).

All eyes on America for oil outlook

For Phoenix Capital CEO Adam Ferrari the weak oil prices may be indicative of larger trouble.

suppressed Q3 price movement coincided with a decline in the US’ red hot mergers and acquisitions segment, which registered its first quarterly decline after six consecutive periods of growth.

Between July and the end of September the US energy sector saw US$12 billion in M&A deals, a quarter-over-quarter drop from Q2’s US$54 billion, but still historically high.

“2024 was a big year for mergers and acquisitions—consolidation across the sector is at an all-time high. Prices softened in Q3, and we saw the US rig count dip. Producers here are moving cautiously, likely waiting to see what happens with the election,” Ferrari said.

Regardless of the short term turbulence, Ferrari and the Phoenix Capital team are optimistic about the market’s long term fundamentals.

“We’re still bullish on crude oil for the next two to five years,” he said. “ Global demand continues to surprise on the upside, even as many developed nations try to reduce their reliance on oil. The reality is, oil isn’t easily replaced, so worldwide demand keeps rising.”

Aside from the US economic outlook, Ferrari pointed to geopolitical strife as an ever present current in the market.

“Geopolitics are always part of the equation for oil,” he said. “The Middle East is crucial for global supply, and any political instability or potential military conflict there tends to push prices up. It’s about risk—there’s always a premium on oil because of that underlying geopolitical uncertainty.”

US natural gas prices inch higher in Q3

US natural gas prices held in the US$2.15 to US$2.92 range through most of Q3, despite slipping to a quarterly low of US$1.89 at the end of July.

“As is generally the case, US natural gas prices were largely influenced by domestic developments,” said FocusEconomics’ Cunningham, noting that Q3 values fell by US$0.10 on average quarter-on-quarter.

“Prices sank in July due to a combination of extremely high inventories and the closure of Freeport, a major LNG export terminal; however, since then, they have trended upward, aided by a hot summer, decelerating production amid a record-low gas rig count and the reopening of the Freeport LNG terminal,” he added.

These trends were further evidenced in the Dallas Fed’s survey, which notes, “the natural gas production index declined from 2.3 to -13.3, suggesting natural gas production decreased in the quarter.”

A Q3 reduction in natural gas output isn’t likely to push prices higher in the near term, according to Ferrari.

“In Q3, the story was all about supply. The US is sitting on an abundance of natural gas, and that’s keeping a lid on prices,” he said. ‘That said, the ongoing shift toward natural gas for power generation is a long-term positive. US producers have also been able to lock in higher prices through the futures market, allowing them to keep drilling.”

Global tensions keep natural gas prices on edge

Natural gas is also prone to geopolitical volatility, although less from the Middle East and more from in Ukraine.

“The impact on the US natural gas market from geopolitics is largely due to spillovers from the Asian and European natural gas markets; to fuel natural gas demand, these two regions rely heavily on LNG imports, including from the US. In particular focus is the war in Ukraine; Kyiv has refused to extend a gas-supply agreement with Russia — which remains a major supplier to Europe — beyond the end of this year,’ Cunningham explained.

Tensions will likely carry through as European countries are diversifying sources away from Russian gas after the country’s the invasion of Ukraine, leading to heightened reliance on LNG imports from the US and other allies.

Supply concerns have also been exacerbated by recent Middle Eastern conflicts, which are threatening key supply routes and adding price volatility. Additionally, export restrictions from countries like Norway have raised European energy security fears as winter demand nears.

What’s ahead for oil and gas in Q4?

When asked what oil market trends investors should watch through Q4 and into 2025, Cunningham pointed to the ongoing conflict.

“At the moment, the eye of most oil analysts is locked on the Iran-Israel conflict, with crude prices surging the most in over a year in the week to 4 October,” he said. “That said, traders will also be looking out for future OPEC+ meetings, along with economic data from China and monetary policy decisions by the U.S. Fed.”

On the gas side, the US reaction to the election is top of mind.

“In Q4 in the U.S., aside from the election, the weather will remain a key factor to watch; last winter was warm, supporting inventories and setting the stage for the relatively bearish market seen so far in 2024,” said Cunningham. “ A normal 2024/25 winter would help whittle down stocks to more typical levels, supporting a recovery in prices. In 2025, weather will remain key to track, along with geopolitics, U.S. economic growth and demand from Asia and Europe.”

The US election is also a main focus for Ferrari.

Q4 is all about the US presidential election. If Democrats take control of the House, Senate, and presidency, we could see U.S. oil supplies tighten, which would drive prices up. Beyond Q4, I’m focused on demand growth. People have been predicting a decline in oil demand for what feels like a decade, but aside from the COVID downturn, it just hasn’t happened. I don’t expect demand to soften for at least another 5 to 10 years,” he said.

When it comes to gas, he is taking a more long term view.

“I’m watching the long-term trend of shifting to more natural gas for power generation. If you look at grids that rely heavily on renewables, like California’s, power prices are significantly higher compared to states like Florida that use more natural gas. California’s power prices are double Florida’s, largely due to their renewable energy reliance,” said Ferrari.

How will the US election affect crypto?

The current political climate in the US has created a complex landscape for digital asset traders.

As the race between Republican Donald Trump and Democrat Kamala Harris remains competitive, market participants are adjusting their strategies in anticipation of potential shifts in regulatory frameworks.

Trump’s campaign has been characterized by a supportive stance toward cryptocurrencies, while Harris has expressed her intention to create a more structured regulatory environment for digital assets.

But while the election may create short-term volatility, experts believe it will take time for its full impact to emerge.

“The biggest changes for mid-longer term crypto policy and direction won’t be seen until after the week has passed and seats around the president are filled or maintained,” Paul Howard, senior director at Wincent, told Bloomberg.

As voters head to the polls, analysts continue to monitor the potential impact of the election on regulatory approaches to cryptocurrencies, as well as the broader economic implications of the election outcome.

Click here for more on what a Trump or Harris victory could mean for the crypto industry.

1. Kazakhstan

Mine production: 21,227 metric tons

Kazakhstan is the largest uranium producing country in the world, and its total output of 21,227 metric tons in 2022 accounted for an impressive 43 percent of global uranium supply.

When last recorded in 2021, Kazakhstan had 815,200 MT of known recoverable uranium resources, second only to Australia. Most of the uranium in the country is mined via an in-situ leaching process.

Kazataprom (LSE:KAP,OTC Pink:NATKY), the country’s national uranium miner, is the world’s largest producer, with projects and partnerships in various jurisdictions. News that the top uranium producer may miss its production targets for 2024 and 2025 was a large contributor to uranium prices breaking through the US$100 level this year.

One of the company’s most significant uranium operations is the Inkai in-situ recovery (ISR) mine, a joint venture with Cameco( TSX:CCO,NYSE:CCJ) who holds a 40 percent interest. According to the mining database MDO, Inkai produced 8.3 million pounds of U3O8 in 2023.

2. Canada

Mine production: 7,351 metric tons

Canada’s uranium output in 2022 was 7,351 metric tons. The country’s production fell dramatically since hitting a peak of 14,039 MT in 2016 as the country’s mines closed due to low uranium prices in the late 2010s. However, uranium production in the country began to rebound in 2022.

Saskatchewan’s Cigar Lake and McArthur River are considered the world’s two top uranium mines. Both properties are operated by sector major Cameco. MDO highlights Cigar Lake and McArthur River as having uranium grades that are 100 times the world average. The company made the decision to shutter operations at the McArthur River mine in 2018, but returned to normal operations in November 2022.

In 2023, Cameco produced 17.6 million pounds of uranium — equivalent to 7,983 metric tons — which was still below its originally planned production of 20.3 million pounds for the year. The company has set its guidance at 22.4 million pounds for 2024.

Uranium exploration is also prevalent in Canada, with the majority occurring in the uranium-rich Athabasca Basin. That area of Saskatchewan is world renowned for its high-quality uranium deposits and friendly mining attitude. The province’s long history with the uranium industry has helped to assert it as an international leader in the sector.

3. Namibia

Mine production: 5,613 metric tons

Namibia’s uranium production has been steadily increasing after falling to 2,993 MT in 2015.

In fact, the African nation overtook longtime frontrunner Canada to become the third largest uranium-producing country in 2020, and went on to surpass Australia for the second top spot in 2021. Although Namibia slipped back below Canada in 2022, its output for the year was only down by 140 MT from 2021.

The country is home to three key uranium mines: Langer Heinrich, Rossing and Husab. Paladin Energy (ASX:PDN,OTCQX:PALAF) owns the Langer Heinrich mine. In 2017, Paladin took Langer Heinrich offline due to weak uranium prices; however, improved uranium prices over the past few years prompted the uranium miner to ramp up restart efforts. At the close of 2024’s first quarter, Langer Heinrich achieved commercial production once again.

Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) sold its majority share of the Rossing mine to China National Uranium in 2019. Rossing is the world’s longest-running open-pit uranium mine, and recent expansion efforts have extended its mine life to 2036, according to MDO.

The Husab mine, majority owned by China General Nuclear, is one of the world’s largest uranium mines by output. As part of its effort to increase output, MDO reports that a pilot heap leach project is underway to assess the economic feasibility of processing lower-grade ore. The results of the pilot project are expected by 2025.

4. Australia

Mine production: 4,087 metric tons

Australia’s uranium production totaled 4,087 metric tons in 2022, down significantly from the 6,203 MT produced two years prior. The island nation holds 28 percent of the world’s known recoverable uranium resources.

Uranium mining is a contentious and often political issue in Australia. While the country permits some uranium-mining activity, it is opposed to using nuclear energy — at least for now. ‘Australia uses no nuclear power, but with high reliance on coal any likely carbon constraints on electricity generation will make it a strong possibility,” according to the World Nuclear Association. “Australia has a significant infrastructure to support any future nuclear power program.”

Australia is home to three operating uranium mines, including the largest-known deposit of uranium in the world, BHP’s (NYSE:BHP,ASX:BHP,LSE:BHP) Olympic Dam. Although uranium is only produced as a by-product at Olympic Dam, its high output of the metal makes it the fourth largest uranium-producing mine in the world. The mining database MDO reports that In BHP’s 2024 fiscal year, uranium output from the Olympic Dam operation totaled 3,603 metric tons of uranium oxide concentrate.

5. Uzbekistan

Mine production: 3,300 metric tons

In 2022, Uzbekistan was the fifth largest uranium producing country, with output of 3,300 metric tons. It entered the top five in 2020, with an estimated 3,500 MT of output. Domestic uranium production had been gradually increasing in the Central Asian nation since 2016 via Japanese and Chinese joint ventures.

Navoi Mining & Metallurgy Combinat is part of state holding company Kyzylkumredmetzoloto, and handles all the mining and processing of domestic uranium supply. The nation’s uranium largess continues to attract foreign investment; strategic partnerships with French uranium miner Orano and state-run China Nuclear Uranium were announced in November 2023 and March 2024, respectively.

6. Russia

Mine production: 2,508 metric tons

Russia was in sixth place in terms of uranium production in 2022 with production of 2,508 metric tons. Output has been relatively steady in the country since 2011, usually coming in around the 2,800 to 3,000 MT range.

Experts had been expecting the country to increase its production in the coming years to meet its energy needs, as well as growing uranium demand around the world. But in 2021, uranium production in the country dropped by 211 MT year-over-year to 2,635 MT; it fell by another 127 MT in 2022.

In terms of domestic production, Rosatom, a subsidiary of ARMZ Uranium Holding, owns the country’s Priargunsky mine and is working on developing the Vershinnoye deposit in Southern Siberia through a subsidiary.

In 2023, Russia surpassed its uranium production target, producing 90 MT more than expected. Rosatom is developing new mines, including Mine No. 6, which is slated to begin uranium production in 2028.

Russian uranium has been an area of controversy in recent years, with the US initiating a Section 232 investigation around the security of uranium imports from the country in 2018. More recently, Russia’s ongoing war in Ukraine has prompted countries around the world to look more closely at their nuclear supply chains.

7. Niger

Mine production: 2,020 metric tons

Niger’s uranium production has declined year-on-year over the past decade, with output totaling 2,020 metric tons in 2022. The African nation is home to the producing SOMAIR uranium mine and the past producing COMINAK mine, which account for 5 percent of the world’s uranium production. Both are run by subsidiaries of Orano, a private uranium miner, through majority owned joint ventures.

Global Atomic (TSX:GLO,OTCQX:GLATF) is developing its Dasa project in the country, and expects to commission its processing plant by early 2026. Niger is also home to the Madaouela uranium asset, which was the flagship project of explorer GoviEx Uranium (TSXV:GXU,OTCQB:GVXXF).

A recent military coup in the African nation has sparked uranium supply concerns, as Niger accounts for 15 percent of France’s uranium needs and one-fifth of EU imports. In January 2024, the government of Niger, now under a military junta, announced it intends to overhaul the nation’s mining industry. It has temporarily halted the granting of new mining licenses and is working to make changes to existing mining licenses in order to increase state profits.

This past summer, Niger’s government revoked GoviEx Uranium’s Madaouela mining license along with Orano’s operating permit for its Imouraren uranium project.

8. China

Mine production: 1,700 metric tons

China’s uranium production grew to hit 1,700 metric tons in 2022, up by 100 MT over 2021. The country’s uranium production climbed during the 2010s from 885 MT in 2011 to 1,885 MT in 2018, and held steady at that level until falling to 1,600 MT in 2021.

China General Nuclear Power, the country’s sole domestic uranium supplier, is looking to expand nuclear fuel supply deals with Kazakhstan, Uzbekistan and additional foreign uranium companies.

China’s goal is to supply one-third of its nuclear fuel cycle with uranium from domestic producers, obtain one-third through foreign equity in mines and joint ventures overseas and purchase one-third on the open uranium market. China is also a leader in nuclear energy; Mainland China has 56 nuclear reactors with 31 in construction.

9. India

Mine production: 600 metric tons

India produced 600 metric tons of uranium in 2022, on par with output in 2021.

India currently has 23 operating nuclear reactors with another seven under construction. “The Indian government is committed to growing its nuclear power capacity as part of its massive infrastructure development programme,” as per the World Nuclear Association. “The government has set ambitious targets to grow nuclear capacity.”

10. South Africa

Mine production: 200 metric tons

South Africa produced 200 metric tons of uranium in 2022. It is another uranium-producing country that has seen its output decline over the past decade — the nation’s uranium output peaked at 573 MT in 2014. Nonetheless, South Africa surpassed Ukraine’s production (curbed by Russia’s invasion) in 2022 to become the 10th top uranium producer globally.

South Africa holds 5 percent of the world’s known uranium resources, taking the sixth spot on that list.

Investor takeaway

From an investment perspective, Starlink displays incredible promise. The company’s ties to Musk, a man with an established track record of successful technology startups, has generated considerable interest out of the gate. Yet even ignoring the connection to Musk, Starlink has a massive potential addressable market thanks to ongoing demand for better connectivity and a relative dearth of viable options for edge computing.

Trends such as distributed work and the proliferation of internet of things devices will only further drive this demand.

With that said, it’s best to exercise a degree of restraint where Starlink is concerned. Although the company will very likely be a sound investment once it or SpaceX goes public, there is currently a great deal of exaggerated hype and speculation surrounding it. Anyone who chooses to add Starlink shares to their portfolio if the company does go public should first ensure they understand what to expect — something they cannot do by listening to hype alone.

Big pharma ETFs

Many of these funds have diverse holdings across some of the most important sectors in the pharmaceutical industry, including pain therapeutics, oncology, vaccines and biotechnology. Data was gathered on November 5, 2024.