Silver Mines lifts Bowdens silver reserves to 93.5 million ounces with strong DFS

Bowdens Project Reserves and Mine Life Expansion

Silver Mines Limited (ASX:SVL) has significantly lifted the stakes on its Bowdens Silver Project in New South Wales, announcing a 30% rise in silver ore reserves to 93.5 million ounces. The Definitive Feasibility Study (DFS) released today outlines a two-stage development plan, with an initial 16-year mine life targeting 65.4 million ounces of silver, followed by a second stage extending operations to 26 years in total.

The updated Ore Reserve totals 47.9 million tonnes at 60.8 grams per tonne silver, alongside zinc and lead credits. This increase in reserves and mine life reflects additional drilling, refined geological modelling, and improved metallurgical recoveries, underpinning the project’s position as one of the world’s premier undeveloped silver assets.

Robust Economics Despite Rising Costs

While capital costs have risen by 37% since the 2024 study to an estimated A$455 million, the DFS still projects compelling financial returns. Using a conservative silver price of US$45 per ounce and an AUD/USD exchange rate of 0.70, the project delivers a pre-tax net present value (NPV5%) of A$1.04 billion and an internal rate of return (IRR) of 31.5%. The payback period is estimated at a swift 3 years from production start.

The all-in sustaining cost (AISC) is estimated at A$32.91 per ounce, or US$23 per ounce, reflecting inflationary pressures on mining costs and expanded infrastructure needs, including filtered tailings management. Sustaining capital over the life of mine has also increased markedly to A$91 million, largely due to the extended mine life and associated tailings storage requirements.

Production Profile and Revenue Mix

Over the first five years, Bowdens is expected to produce an average of 4.7 million ounces of silver annually at an AISC of A$20.47 per ounce. Silver is forecast to contribute 91% of total revenue, with zinc and lead making up most of the remainder, positioning Bowdens as a highly leveraged silver project with critical minerals credentials in zinc and silver.

The project’s design incorporates a low strip ratio of 1.47:1 in stage one, supporting cost efficiency, while stage two anticipates a slightly higher strip ratio of 1.69:1 over the extended 26-year life. Processing throughput is planned at 2 million tonnes per annum, consistent with prior studies.

Regulatory Approvals and Next Steps

The company is now focused on securing development consent from the New South Wales government, a process that remains uncertain in timing but is expected to progress. Following consent, Silver Mines will pursue federal environmental permits and the state mining lease necessary to commence construction.

With the DFS complete, Silver Mines plans to advance Front-End Engineering and Design (FEED) studies and finalise its biodiversity offsetting strategy ahead of development activities. The company is also engaging potential funding partners to secure the A$455 million capital required to bring Bowdens into production.

Technical Confidence and Risks

The updated Mineral Resource Estimate (MRE) and Ore Reserve are underpinned by extensive drilling, metallurgical test work, and geological modelling, with 92.6% of the production target classified as Measured Resources. However, stage two of the mine plan, covering 18.3 million tonnes, remains at a pre-feasibility study level and carries higher uncertainty.

Key risks flagged include the timing and outcome of regulatory approvals, commodity price volatility; particularly silver and exchange rates; and potential capital cost inflation. The company also notes the absence of binding offtake agreements and the need to manage concentrate marketing and tailings infrastructure risks.

Silver Mines’ Managing Director Jo Battershill highlighted the project’s potential to deliver long-term employment for over 200 locals and significant financial returns to government and investors alike. The Bowdens Project stands as a critical minerals development with strong community and economic benefits in a region transitioning away from coal.

Investors should watch closely how the regulatory process unfolds and how Silver Mines manages funding and development milestones in the coming months.