Andean Silver has raised A$40 million through a discounted placement to accelerate production restart plans and resource growth at its Cerro Bayo silver-gold project in Chile, underpinning its push toward feasibility studies and early works.
- A$40 million placement priced at A$2.45 per share
- Pro-forma cash position of approximately A$82.7 million
- Six drilling rigs active targeting resource upgrade and growth
- Scoping study due early 2027, feasibility study by end 2027
- Funds allocated to early works including mill refurbishments and dewatering
Capital Raising Strengthens Andean Silver’s Cerro Bayo Push
Andean Silver Limited (ASX:ASL) has bolstered its financial firepower with a A$40 million placement at A$2.45 per share, a 13.7% discount to its last traded price, to accelerate the restart of its Cerro Bayo silver-gold mine in Chile. The raise lifts Andean’s pro-forma cash pile to approximately A$82.7 million, enabling parallel progress on production restart activities and an aggressive resource upgrade campaign.
Managing Director Matthew Allen highlighted the strategic timing: "The highly successful Placement puts Andean in an extremely strong position to create further growth on several fronts at the same time." With six rigs drilling across the district, the company is focused on converting inferred resources to indicated and extending known mineralisation along multiple veins.
Resource Growth and Exploration Ambitions
The Cerro Bayo project hosts a substantial mineral resource base, with 20 million tonnes at 211 grams per tonne silver equivalent, containing 136 million ounces AgEq. The recent resource upgrade delivered a 230% increase in the indicated category to 60 million ounces AgEq, underpinning the company’s development plans. Andean is targeting a district-wide resource upgrade with a greenfield permitting campaign underway to enable more than 200 drill pads along the Juanita to Droughtmaster corridor, with drilling scheduled to commence in the second half of 2027.
This resource push is supported by a robust drilling fleet of six rigs, maintaining momentum from recent high-grade intercepts such as 2.4 metres at 15,558 g/t AgEq near the mill. The company’s strategy includes rigorous infill drilling and exploration of new targets to extend the mine life and scale production potential.
Advancing Studies and Early Works for Production Restart
Alongside exploration, Andean is fast-tracking economic studies critical to the mine’s restart. A scoping study is expected in early 2027, followed by a feasibility study and maiden ore reserve by year-end. Early works will commence in parallel, including mill refurbishments, underground dewatering, and infrastructure upgrades leveraging the existing 500,000 tpa SAG/ball mill and 14 MW power station, which remain on warm idle.
The company emphasises the operational advantages of Cerro Bayo’s infrastructure and its high-grade silver-gold mix. With a permitted site and strong social licence, including local workforce engagement and environmental approvals dating back to 1994, Andean aims to demonstrate the project’s near-term production and cashflow potential.
Investor Support and Market Position
The placement attracted strong support from both new and existing institutional investors domestically and offshore, including notable shareholders such as Sprott, Equinox, and Scotia Asset Management. The raise was managed by Canaccord Genuity and Euroz Hartleys as joint lead managers, with Jett Capital Advisors as co-manager.
Andean’s market capitalisation stands around A$561 million post-placement, with zero debt and a cash position that provides a runway to advance the Cerro Bayo project through critical milestones. The company’s focus now turns to delivering on its resource growth ambitions and progressing the restart studies that could unlock value for shareholders.
Bottom Line?
Andean Silver’s fresh capital injection lays the groundwork for a pivotal year ahead, but the market will be watching closely for tangible progress from the upcoming scoping and feasibility studies and the translation of drilling success into a viable ore reserve.
Questions in the middle?
- Will the scoping and feasibility studies confirm the economic viability of restarting Cerro Bayo at scale?
- How effectively can Andean convert its large inferred resource base into indicated and proven categories?
- What timelines and capital requirements will emerge from early works for production restart?