AbraSilver raises $48.4M for Diablillos in Argentina

AbraSilver Resource (TSXV: ABRA) plans to raise nearly $49 million to fund the development of its Diablillos project in Argentina, which it predicts to be one of the world’s top primary silver mines once in production.

The financing comprises two parts: a bought deal public offering of 8.55 million common shares priced at $2.55 each for about $21.8 million; and a private placement of over 10.43 million shares at the issue price for $26.6 million.

Shares of AbraSilver traded at $2.72 on Friday morning in Toronto for an intraday loss of 1.1% and a market capitalization of $345.8 million. The stock ranged from $1.32 to $3.58 over the past 52 weeks.

Central Puerto SA, Argentina’s leading electricity provider, and Kinross Gold (TSX: K) are the subscribers under the placement, activating their anti-dilution rights as shareholders. Both became shareholders in AbraSilver last April with a combined $20 million investment for a 4% equity interest each.

“We are truly delighted to announce this $48.4-million financing, providing us with immense financial flexibility to accelerate the development of our Diablillos project and continue unlocking its full potential,” stated John Miniotis, CEO of AbraSilver, in a news release.

Increased project value

The value of the Diablillos project was raised late last year following an updated prefeasibility study (PFS) that pegged its after-tax NPV (at a 5% discount rate) at US$747 million, an increase from the US$494 million in the March 2024 study.

According to AbraSilver, the increase in NPV is the result of improved mine sequencing, including accelerated production from the shallow gold zone, which would lead to higher gold grades and production during the first five years.

However, the PFS also showed a 45% increase in capital costs to US$544 million. The company attributed this to general cost inflation, as well as other factors such as exchange rates on imports, updated labour costs and additional spending on waste stripping due to mine sequencing changes.

A definitive feasibility study is anticipated in the first half of 2026 to confirm the mine plan.

The technical report envisions that the open pit mine will produce 7.6 million oz. silver and 72,000 oz. of gold annually (or 13.4 million silver-equivalent oz.) over a 14-year mine life at all-in sustaining costs of US$12.67 per silver-equivalent ounce. AbraSilver has said that this production profile makes Diablillos one of the top 10 primary silver mines in the world.

There are currently several near-surface deposits within the 79-sq.-km property. Together, they hold proven and probable reserves of 42.3 million tonnes grading 91 grams silver per tonne and 0.81 gram gold for 123.48 million oz. of contained silver and 1.11 million oz. gold (or 210 million oz. of silver equivalent).

The project is in Argentina’s Puna region, which is the southern extension of the Altiplano of southern Peru, Bolivia and northern Chile.