CEO'S MESSAGE ABOUT SILVER
IS IT SILVER'S TURN TO SHINE BRIGHTLY?
I think the time is right to share some thoughts about the silver market and, more generally, about the prospects for commodities in 2023 and beyond. Today’s financial and economic cross-currents make it difficult to predict what next year will bring for investors in the commodities space, but we are able to assess specific fundamentals that can help guide us as we look to the future.
Across the board there has been underinvestment in most commodities over the past decade, whether in oil and gas, precious metals or base metals. The result will be a multi-year bull market for commodities underpinned by positive supply-demand fundamentals.
For several reasons silver will lead the charge with higher prices. Years of suppression of silver prices in the futures markets have masked and contributed to a growing physical shortage of silver. Price suppression was easy for the banks on the COMEX. Frequently, the volume of futures paper ounces of silver traded on COMEX in a week would exceed the global annual production of silver, so the shorts had all the power.
Market distortions cannot last forever (even if sometimes it seems as though they will never end). Everything has now changed, because physical silver inventories at the COMEX and LBMA are being drained to meet industrial and investor demand and the bullion banks are going long in the futures market. The premium for silver coins over the future’s price has never been larger and industrial users are scrambling to get their hands on silver. Long wait times for delivery have become the norm.
The global supply shortfall of silver is very real and a short squeeze is on the horizon. Demand for silver is relentlessly growing for all kinds of uses, from jewelry to electronics, for solar panels, green energy, and investment (as a store of value and inflation hedge). Global production of silver has no ability to keep up and supply can only be rationed through much higher prices.
WHAT DOES ALL OF THIS MEAN FOR CMX SHAREHOLDERS?
Increasing prices for silver will bring renewed attention to the Clayton Silver Mine, which was never mined out. Mineralization remains open to the north, south and to depth. Very little historical drilling was carried out to confirm more resources. One hole drilled in the 1960’s intersected high grades of 4 oz Ag/t, 5.37% zinc and 5.75% lead across 22 feet at a depth of 1425 feet.
Recent staking of new lands surrounding the patented claims increased CMX’s land position by two-thirds to 1,134 acres, adding both value and potential to the project. Next year will be an exciting time for shareholders of CMX as we drill to confirm the tremendous upside potential of the Clayton Silver Property.
CMX EXPANDS CLAYTON LANDHOLDINGS
The Company has completed its 2022 claims staking program surrounding its 100%-owned Clayton Silver Property in Idaho, USA. The Company surveyed and staked 22 lode claims on federal Bureau of Land Management land, adding approximately 450 acres to CMX’s landholdings. The staking has added significant prospective acreage to the Company’s silver/lead/zinc project, bringing the total land position to 1,134 acres, a 66% increase in the area covered. Prior to staking the new claims, CMX’s land position was comprised of 29 patented mining claims and 2 patented mill sites aggregating 565 acres, plus 6 lode claims aggregating 119 acres.
The 22 new claims are adjacent to and surround the Company’s patented claims and cover the historic Rob Roy mine immediately north of the Clayton patented claims. The Rob Roy mine produced silver, lead and zinc from several underground workings. Limited information indicates the Rob Roy mine operated prior to the 1950’s. CMX’s comprehensive review of the historical geological data for the Clayton Mine suggests exploration potential for mineralized vein systems and deposits on the new claims, in addition to exploration prospects adjacent to the previously mined south and north ore bodies on the patented Clayton Mine claims. Mineralization on the Clayton Silver Property is open to the north, south and to depth, all of which is untested.
Jan Alston, President & CEO of CMX stated: “An important part of CMX’s strategy is to gain control of land surrounding the Clayton Mine prior to starting our drilling program in 2023. The property is very much underexplored and has significant upside potential to add shareholder value. We expect 2023 will be an exciting transformative year for CMX.”
Ore sorting testing results are pending for the Company’s historic Clayton Mine stockpile, which is estimated to contain up to 1,000,000 tonnes of metal-bearing rock. The earlier 2014/15 evaluation program collected over 3,000 kilograms of sample material from 16 locations selected to ensure representative results. Analysis of the samples confirmed the presence of gold in each sample. In particular, assays confirmed gold values up to 2.84 gm/t with an average of 0.80 gm/t for the 16 locations sampled. Statistical averages of the 16 locations for the mine stockpile sampling program were: gold – 0.80 gms/t; silver – 24.31 gms/t; lead – 0.44%; zinc – 0.27%.
CMX CLAYTON STOCKPILE TESTING
The Company announces that testing of samples taken from the Clayton Mine Stockpile is nearing completion. The testing was undertaken with no upfront cost to CMX pursuant to the agreement with Sulphide Remediation Inc. (“SRI”) announced on May 31, 2022.
Under SRI’s supervision, 600 kilograms of materials were collected from nine locations on the mine stockpile located adjacent to the old Clayton Silver Mine. These locations were the same as the locations used by the Company for its 2014/15 stockpile sampling program. Approximately 536 kilograms were shipped to Sydney, Australia for testing in TOMRA’s ore-sorting laboratory facility. TOMRA is a world-leader in state-of-the-art precision ore sorting technology used to high-grade mine stockpiles of unprocessed rock to enhance the grade of material delivered to a mill. Dual Energy X-Ray Transmission technologies differentiate between rocks based on small fluctuations in density profiles and are effective at removing sulphides and concentrating valuable metals. The sorted rock can be treated at existing mills/smelters where valuable metals will be extracted and sulphides will be safely handled. SRI has some of the world's leading experts in crushing, screening and ore sorting.
The testing program results will be used to determine the best ore-sorting process for the Company’s stockpile. Jan Alston, President & CEO of CMX stated: “Positive test results will confirm our assessment that there should be significant value realized from processing the stockpile material, based on the stockpile sampling program conducted in 2014/15. We expect the application of modern technology will unlock near-term value for CMX shareholders and provide funds for future exploratory drilling programs targeting significant prospects for additional resources adjacent to the old mine workings.”
The Company’s historic Clayton Silver Mine stockpile is estimated to contain up to 1,000,000 tonnes of metal-bearing rock. In the 2014/15 evaluation program, over 3,000 kilograms of sample material were collected from 16 locations selected to ensure representative results. Analysis of the samples confirmed the presence of gold in each sample. In particular, assays confirmed gold values up to 2.84 gm/t with an average of 0.80 gm/t for the 16 locations sampled. Statistical averages of the 16 locations of the mine stockpile sampling program were: gold – 0.80 gms/t; silver – 24.31 gms/t; lead – 0.44%; zinc – 0.27%.
Subject to positive results from analysis of the samples taken from the stockpile and confirmation of suitability of the material for the ore sorting process, SRI at its cost will construct and deliver an optimal ore sorting system to the Clayton Mine site. The system will be capable of processing from 3,000 tonnes to 4,000 tonnes per day. SRI will manage all aspects of the stockpile processing program. After deducting operating expenses from the revenue received for the processed stockpile material from the toll mill or smelter, the net profits will be shared 50:50 between CMX and SRI.
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