Silver Metal Group’s Cash Reserves Plummet to $3k After Texas Project Sale
Silver Metal Group has completed the sale of its Texas Project, shedding operational costs and debt, while focusing on exploration planning amid tight cash reserves and ongoing capital raising efforts.
- Texas Project sale completed, operational control transferred to Danola Pty Ltd
- Exploration planning underway for Webbs and Lachlan Fold Belt projects
- Quarterly exploration expenditure of $217k with minimal operational activity
- Cash reserves critically low at $3k, with debt funding negotiated
- Company pursuing immediate capital raising to sustain operations
Strategic Asset Divestment
Silver Metal Group Limited (ASX: SMG) has officially completed the sale of its Texas Project, a move that aligns with its strategic shift away from non-core assets. The transfer of leases to Danola Pty Ltd was approved by Queensland authorities in January 2025, following operational control passing to the new owner in November 2024. This divestment removes significant operational costs and debt burdens from Silver Metal’s balance sheet, potentially streamlining the company’s focus and financial structure.
Exploration Focus and Project Planning
Despite the sale, Silver Metal remains active in exploration, completing detailed planning and budgeting for resource definition and potential expansion at its 100% owned Webbs Project in the New England Fold Belt. Parallel efforts are underway across multiple projects in the Lachlan Fold Belt, including Harry Smith, Conrad, and West projects. However, the December quarter saw no substantive exploration or development activities beyond mine maintenance at Texas, reflecting a transitional period for the company.
Financial Position and Funding Challenges
The financial snapshot for the quarter reveals a challenging liquidity position. Exploration expenditure totaled $217,000, while cash on hand dwindled to a mere $3,000 by quarter-end. The company has secured access to debt funding, notably a secured loan facility with Charrua Capital, LLC, providing some breathing room. Directors have also extended financial support and are actively negotiating further capital raising to meet operational commitments. Silver Metal’s confidence in securing additional funding is high, based on its track record over the past two years.
Share Structure and Corporate Governance
Post a recent share consolidation, Silver Metal has 81.35 million fully paid ordinary shares on issue. The company continues to maintain compliance with ASX reporting standards and corporate governance principles, with competent person statements affirming the technical validity of exploration data. The board remains engaged in steering the company through this period of transition and capital restructuring.
Outlook and Market Implications
Silver Metal’s divestment of the Texas Project marks a clear pivot towards concentrating on its core exploration assets in New South Wales. The company’s ability to successfully raise additional capital will be critical to sustaining exploration momentum and advancing resource development. Investors will be watching closely for updates on funding progress and any emerging exploration results that could enhance the company’s valuation and operational outlook.
Bottom Line?
Silver Metal’s next moves on capital raising and exploration results will be pivotal in defining its recovery trajectory.
Questions in the middle?
- How soon can Silver Metal secure the additional capital it needs to sustain operations?
- What are the timelines and expected outcomes for exploration programs at Webbs and Lachlan Fold Belt projects?
- Could the sale of Texas Project signal further asset rationalisation or strategic shifts?
