Andean Silver has significantly expanded its Cerro Bayo silver-gold project resource, increasing the Indicated Mineral Resource by 230% to 60 million ounces silver equivalent and raising the total resource to 136 million ounces AgEq. This upgrade sets the stage for upcoming feasibility studies and a major drilling campaign.
- Indicated Resource rises 230% to 60Moz AgEq
- Total Mineral Resource grows to 136Moz AgEq at 211g/t
- 7.9Mt underground resource at 362g/t AgEq for 92Moz
- 12.1Mt open pit resource at 112g/t AgEq for 44Moz
- 60,000m drilling program to start Q3 2026
Resource Upgrade Dramatically Expands Project Scale
Andean Silver Limited (ASX:ASL) has delivered a striking boost to its Cerro Bayo silver-gold project in Chile, announcing a 230% increase in the Indicated Mineral Resource to 60 million ounces silver equivalent (AgEq). The total Mineral Resource now stands at 136 million ounces AgEq at a robust grade of 211 grams per tonne (g/t) AgEq, underscoring the project’s growing scale and economic promise.
The updated resource comprises a 7.9 million tonne underground component grading 362g/t AgEq for 92 million ounces, and a 12.1 million tonne open pit resource at 112g/t AgEq for 44 million ounces. These figures reflect an 86% increase in total tonnes and a 23% rise in contained silver equivalent ounces compared to previous estimates.
Conservative Pricing Underpins Resource Confidence
Notably, the Mineral Resource Estimate (MRE) is based on conservative long-term metal prices of US$45 per ounce for silver and US$3,500 per ounce for gold, well below current spot prices hovering around US$63 and US$4,100 respectively. This conservative approach lends credibility to the resource’s economic viability, even before factoring in potential upside from higher metal prices.
Andean Silver’s Technical Director Tim Laneyrie, who oversaw the resource compilation, highlighted the rigorous data underpinning the upgrade, including over 27,000 metres of recent drilling and extensive geological modelling. The MRE adheres to the JORC Code 2012 standards and incorporates detailed geostatistical analysis, bulk density measurements, and metallurgical recovery assumptions averaging 90% for both gold and silver based on historical processing data.
Major Drilling Campaign to Accelerate Resource Conversion
The company plans to launch a substantial 60,000-metre drilling program in the third quarter of 2026, targeting the near-mine Laguna Verde district and the Cerro Bayo district, where no drilling has occurred in nearly two decades. This campaign aims to convert a significant portion of the Inferred Resource into the higher-confidence Measured and Indicated categories and support the forthcoming feasibility study and initial Ore Reserve estimation.
CEO Matthew Allen emphasised the strategic importance of this drilling, stating it will underpin feasibility studies designed to demonstrate the project’s production and cash flow potential. The drilling will also provide updated geotechnical and metallurgical data, further de-risking the project.
Permitting and Greenfield Exploration Remain on Track
Alongside brownfield resource growth, Andean Silver is advancing permitting for a large-scale greenfield exploration campaign targeting the Droughtmaster corridor, identified through district-wide mapping and geophysical surveys. This multi-year program is expected to commence drilling in calendar year 2027, potentially adding further resource upside.
Financially, the company remains well-positioned with approximately A$53.4 million in cash at the end of March 2026, supporting ongoing exploration and project advancement activities.
Project Geology and Mining Assumptions Support Economic Extraction
The Cerro Bayo project hosts structurally controlled, low-sulphidation epithermal silver-gold mineralisation within volcanic-hosted vein systems. The resource update reflects detailed geological interpretations, including vein and stockwork domains, supported by over 811,000 metres of historical and recent drilling.
Mining assumptions for the resource estimate include underground mining cut-offs based on a Net Smelter Return (NSR) of US$124 per tonne and open pit cut-offs at US$47 per tonne. These parameters align with internal cost studies and historical operating data, establishing reasonable prospects for eventual economic extraction.
The project benefits from existing infrastructure, including a permitted tailings storage facility with remaining capacity, and favourable community and regulatory support in Chile’s Aysen region.
Bottom Line?
The Cerro Bayo resource upgrade transforms the project’s scale and confidence, but the path to production hinges on successful drilling conversion and feasibility outcomes.
Questions in the middle?
- Will the upcoming drilling campaign convert enough Inferred resources to support a robust Ore Reserve?
- How will fluctuating silver and gold prices impact the project’s economic viability given the conservative assumptions?
- What progress will be made on greenfield exploration along the Droughtmaster corridor in 2027?