Honey Badger Silver’s flagship is PC Silver, a silver-zinc-lead project in the Mackenzie Mountains of the Northwest Territories sitting in a carve-out inside Nahanni National Park Reserve, about 200 km west of Fort Simpson. Honey Badger picked it up recently and holds seven other silver assets in northern Canada, including Nanisivik. In this interview, I asked about the history of the asset, permitting and the park carve-out, the access road, upcoming study work, treasury, and how they intend to restart a mill that has been sitting since 1982.

TL;DR

The pitch is that this is a restart, not a build. The CEO told me the mine and the road are already permitted, roughly 5 km of underground development from as far back as 1973 is still in good shape, and independent consultants told them the mill is in better condition than some mills currently operating. A PEA and a fresh mineral resource estimate were promised to the market before the end of September, and management is currently restricted from trading because draft numbers are coming in. He is guiding to what he calls small scale production, meaning a proof of concept run producing limited concentrate, in summer 2027, with commercial production closer to 2028. Treasury is about C$7 million. The PEA will only carry silver, zinc and lead, possibly copper, so germanium and the other metals are not in the economics yet. Chad, the CEO, owns about 15 percent at an average cost of roughly 15 cents, with Eric Sprott second largest. His valuation claim, in his own words, is that the stock is “eye-wateringly” undervalued and trading at about one tenth of peers on a market cap per silver equivalent ounce basis.

What have they done for shareholders lately?

They closed the acquisition roughly five months ago and filed Q2 results, which are on SEDAR+ and are the first set covering the new asset. JDS has been commissioned for the PEA and it is on time and on budget by his account. They have started rehabilitating the underground, are about 10 percent through the 5 km, and he says it has been faster and cheaper than expected. They are re-assaying old core after the University of Toronto called to tell them there is germanium at Prairie Creek that the historical assay sheets never looked for. He also says they now hold roughly 868,000 individual files of historical data, covering something like 17 past economic studies, which is what allowed the PEA to be turned around so quickly. The existing resource is still the October 2021 number from the prior owner, close to 10 Mt measured and indicated at 139 g/t silver, about 10 percent zinc and 9 percent lead, plus 6.44 Mt inferred at 150 g/t silver, roughly 13 percent zinc and 7 percent lead. He said in passing that the zinc grade is closer to 12 percent than 10 percent.

How much money do they have and what are they spending it on?

About C$7 million in the bank, which he pointed out is more than they had at closing, helped by roughly C$2 million to C$3 million of warrant exercises. The last raise was C$11.5 million closing in April at 16 cents with a full warrant at 24 cents for three years, and roughly 70 million shares and warrants from that deal recently came off the four month hold. Share count is 227 million out, 338 million fully diluted including 16 million options and 95 million warrants. Money is going to the PEA and MRE, underground rehabilitation, mill assessment work, re-assaying core, and marketing, with more than 80 investor meetings booked including Beaver Creek. I asked when they next go to market and he said he does not know, it depends on burn rate. For the bigger capital, he wants the road funded by government, which he says has expressed interest in covering 100 percent of it, and the mill and mine funded as non-dilutively as possible through concentrate prepayments, debt, offtake or a zinc stream. He would not put a number on the road, saying the cost comes out in the PEA.

Upcoming catalysts

Technical: PEA and mineral resource estimate before the end of September, covering silver, zinc and lead and possibly copper only; underground drilling from the 930 level starting in the fall, targeting areas not previously drilled and assaying for the unusual metals; a germanium resource targeted before year end; a feasibility study starting immediately after the PEA and potentially finished in Q1 2027.

Operational: news on restarting individual pieces of equipment, with the mill restart named as the critical path item, and independent mill experts going to site soon.

Corporate: smelter and offtake agreements, potential Canadian or US government funding announcements, news on the other portfolio assets, and Impact Benefit Agreements that already exist but still need to be activated. Production guidance is a limited proof of concept run in summer 2027 and commercial production closer to 2028.

Risks

They have C$7 million against a mill restart, a mine restart and a road, and the road funding is a government expression of interest rather than cash in the bank, on a government timeline he admits may not match his own. The free trading paper from the 16 cent financing is being worked through and the CEO could not say when that ends, and insiders including him are currently blacked out and cannot support the bid. The PEA is built on historical data with updated prices and costs, not on new work, so it is not a de-risking event in the usual sense. Restart cost and schedule are genuinely unknown. Labour is a real constraint, with roughly C$65 billion of government backed projects competing for the same northern workforce. More permits will be needed as production scales beyond the current authorisations, concentrate shipping depends on a winter road until bridges are built, and the project has a long record of owners who said similar things and did not finish. He was also candid that the company may not be the one that builds it, since larger buyers are already circling.

Honey Badger CEO Interview

VERY IMPORTANT WARNING

Please note that this company has not paid Resource Talks for the creation of this content. This website is a business that charges for the creation and publication of content. This means there will always be a potential conflict of interest which means you can never rely on anything said herein.

By consuming this content, you acknowledge that Resource Talks and/or its affiliates and/or their personnel may own, have owned, or will own interests in and/or may have a business relationship with some or all companies/entities mentioned/featured in this publication. You further acknowledge that entities which may be referenced or featured in this publication or their related parties may hold an interest in Resource Talks or its affiliates, which may create further conflict of interest.

The information provided herein is general & impersonal in nature and meant for entertainment purposes only. The reader acknowledges and agrees that the information does not constitute a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. The author is not a licensed investment advisor. He is just another talking head on the internet. He might own shares of companies mentioned in this publication. Always assume he doesn’t know much more than a potato does. The mining & exploration space is among the riskiest sectors to invest in. The risk of anything mentioned in this publication is 100% loss of capital. If you don’t read the official documents provided by the company on http://www.SedarPlus.ca, you will lose all of your money.