The future of Silver Mining in Mexico – new mines, new opportunities?! Defiance Silver Interview

The future of Silver Mining in Mexico – new mines, new opportunities?! Defiance Silver Interview

I would say the strongest certainty we still have in the mining sector is that mines get built in Mexico um we’ve seen mines get built in the last two years in Mexico new mines being opened and we’ve seen projects have some spectacular drill results we’ve seen new exploration projects but what we do know is that it’s not a sector that is going to disappear it has a legacy it has a history and it is a top 10 producer of the big five metal groups so number one producer of silver but copper gold lead zinc it’s in the top 10 of the world for all of those uh all of those Commodities so that’s not going to disappear overnight I’m always a proponent to don’t don’t invest in one company invest in the sector invest in the space find your big names and and then and then you know build yourself an active portfolio defon Sila is a silver exploration Mining Company in Mexico and today with me is Douglas KY he is Executive Vice President of the company DC first of all thank you very much for your time it’s great having you well thank you very much for your time as well I look forward to this interview great absolutely I do so as well so DC you’re not uh in a regular office sitting in Toronto and managing your company you’re right now in Mexico on site uh you’re sitting there because you’re quite often there on site you do have a great knowledge about Mexico maybe we can just start by telling us um where are you at right now and why are you and your company in Mexico what makes Mexico so exciting for investors and for mining companies yes well right now I’m sitting in the the uh heart of silver mining in Mexico uh the zachus mining District uh right behind me which you can’t see because it’s a bit blown out light here uh is the uh the basically the heart of the Cana mining District or the zakas mining District where over a billion ounces of silver has been mined from veins that sit right you know right underneath my apartment underneath the the the hills there on the other side of that Valley is the fres Neo mine and that’s the world’s largest primary silver mine so being in the heart of the world’s largest silver mining jurisdiction is one of the reasons that we’re here in Mexico um Mexico is the top silver producing jurisdiction in the world and zaka state which is the state that we’re in here is the largest silver producing state in Mexico so really there’s no better place to be looking for silver than where it is great absolutely um but if we well if we talk about Mexico there’s always a let’s say bad thing when it comes to mining because it’s one of the most important countries when it comes to mining Silver as you already said but the future of mining in Mexico is a little bit difficult at this moment uh we’re close to Federal elections as they are taking place this weekend please tell us more about the current situation in Mino uh mining situation in Mexico why is it considered to be a little bit tough right now uh when it comes to permitting especially and what do you think what will mining in Mexico be look like in the future what will the elections change here maybe well certainly I mean that’s a very that’s a big question but certainly I mean we have a we have an exciting federal election on Sunday uh what we do know is that there will be a female president elected in Mexico and uh and that’s going to change the face of of of what you know what is the leadership structure of this country and what does leadership mean and it’s you know a young very both both both pres both candidates in basically in the in the As Seen to be the winners of the election are very educated they are very knowledgeable about the industrial sectors and the role of those industrial sectors in Mexico um mining is a huge contributor to GDP and also a huge contributor to jobs so you have about a million direct and indirect jobs in the mining industry in Mexico uh within zakas State mining is the largest contributor to GDP of the state of zakas and I think across Mexico uh it’s about 6% annual GDP now that’s not a that’s not an exact quote but I believe it’s about 6% of the GDP of Mexico is by mines so you’re seeing a sector that has historically been one of the largest drivers of the economy um I think with every sort of you know political campaign or with any type of you know political Endeavor there’s a lot that sort of gets either misinterpreted or misunderstood and I think that’s probably the biggest uh risk right now with mining in Mexico is there’s uncertainty moving forward um there are still projects getting permitted I just saw a colleague of mine’s project just got their uh tailing storage facility permitted from samat so permits are being issued there was a there was a lull there was definitely a period of time um fortunately for us we had the permits to do the work that we were doing so it’s uh it wasn’t necessarily affecting us in the same manner we also sort of uh were able to work with the local environmental offices to be able to amend certain aspects of the permit so there’s often times what you know you hear in the media and then there’s what’s happening on the ground and stalling the mining sector was never the intention of the government I think it was I think what what they’re modernizing their sector to be in line with other uh other International uh mining jurisdictions it’s a no matter where you are the world mining is a very challenging Endeavor and and jurisdictional risk exists in almost all jurisdictions and it just depends on which aspect of it you know permitting delays uh the timeline for permitting um but a lot of other jurisdictions where you do have these risks there’s certainty to that risk whereas with this with the with what’s been happening over the last couple years there a lot of uncertainty and a lot of um of um misunderstanding or lack of understanding of when there will be that certainty put forward I would say the strongest certainty we still have in the mining sector is that mines get built in Mexico um we’ve seen mines get built in the last two years in Mexico new mines being opened and we’ve seen projects have some spectacular drill results we’ve seen new exploration projects become Premier Global particularly silver projects uh Premier Global exploration projects that will become new mins in the next in the next you know five or 10 years and so as an investor I always you know go back to you know why why would you you look at our company or why would you look at it’s because we’ve delivered results for shareholders and in the past we have and when you look at Mexico as an investment space or a climate of investment a lot of shareholders have seen in in in multiple different companies have seen a lot of Success Through mergers and Acquisitions through successful project development through Minds being built and the the the path has been quite clear that if you find a project and follow the regulatory framework you will build your mind now it’s just that uncertainty right now that is is providing a lack of sort of investor confidence or I wouldn’t say a lack of is is is is is diminishing investor confidence when you can go and look in other jurisdictions that have a little more certainty to the to the the steps that that that you have to follow or that that framework that you have to follow do I expect that’s going to change I do expect that is going to change over the next 12 to 18 months with the with a a change of leadership um is it what is it going to mean for mining we don’t know right now that’s that’s an unfortunate truth and that’s an unfortunate fact but what we do know is that it’s not a sector that is going to disappear it has a legacy it has a history and it is a top 10 producer of the big five metal groups so number one producer of silver but copper gold lead zinc it’s in the top 10 of the world for all of those uh all of those Commodities so that’s not going to disappear overnight and then you also have that Legacy in history within the workforce here where you have a tremendously skilled Workforce you have a very highly educated Young middle class but very highly educated uh uh science technology stem engineering like mining Engineers geoscientists environmental Engineers that are here in Mexico that want to work and that will provide the future of Mining and the leadership of the future of Mining and and that’s going to be a dramatic change and we’re going to see that is GNA that’s going to be industrywide but we’re gonna have that locally as well here in the country so I think it’s safe to say that we need Mexico for the entire world going forward right we need the medals we need Mining and um especially for when it comes to electricity e vehicles and all this kind of stuff therefore we need Metals we need Mexico so uh mining there will be more attractive probably in the future and uh that’s that’s a good Insight thank you very much so but we already touched base on it right I mean permitting sometimes is a bit tough in Mexico some something is not as it was before there’s a little bit of uncertainty and if I have a look at the Mexican Junior miners most most of them are at their alltime low right because of the whole situation but if I have a look at your stock you’re really picked up you’re really picked up quite nice actually within the last few weeks and months um why is that what makes you so special and why are you able to to manage and navigate through this turbulent times well I think uh you know sector wide um we’re seeing a lot of companies being at they’re close to all-time lows um and I think you know the Mexican space has had its has had its additional downward pressure and that’s I think we’re seeing that reflected in the new investor confidence coming into the to the investment space here versus okay we’re particularly more depressed in Mexico because just cross- sector wide and and yes of course as you say the the uh the defiant shareholders have benefited from uh an increase in share price in the last since we did our last financing um but I think for us we also we we really have attempted to just maximize our dollar value so the previous fin we we closed the financing in March but the previous financing we did was in 2021 and so we were able to really maximize that and we ticked off every single Milestone including going through a a legal process where we had a property illegally transferred out of our company and we litigated for it and we had that returned so that was of course a real you know a really big uh downward pressure on on our stock was having that large asset taken away from us now we have that back 100% I was just down there I just got back to Zach teas yesterday but I was down at the toal project but if you look at what we said we were going to do and set out as our goals uh we we achieved those milestones and so our investors put trust in us to deliver results which we did the market we can’t control that I think everybody uh everybody who’s who’s been investing in the mining space does understand that there is a a volatility of the market that can never be controlled that volatility that can go on the way down but that volatility can also go on the way up and that’s where you you have those those big you know those big fast gains like you said in 2020 2021 those big huge clips that we had so the um the the the idea that you want to invest in a company with the um with the right management I think is is really it it’s also what they’re doing what their track record has been so we have a track record in this country of building out large assets and selling those assets to produc producers and some of those are in production now some of them are going into production but we also have that that management knowledge and that that Brain Trust and that intellectual property of what are the steps that are required and some of those are kind of you know um there’s a a Nuance to some of those things when and and that in jurisdictional nuances wherever you are if you’re in Canada if you’re in Quebec or if you’re in British Columbia those are two very different jurisdictions that you’re working in but if you’re in Nevada or if you’re in Arizona like those are very different jurisdictions as well if you have Mexico there are these cultural and um operational nuances that you have to do to build these projects along and and we like to think of ourselves as understanding them that and as soon as we we we say that you know we’ve got it all figured out that’s that’s probably a time to say well are you sure you have it all figured out we don’t but we’re willing to learn and what we’ve evolved with is now is with the technology behind it so we’re bringing in that latest technology so that we can speak to our investors and they’re up to speed with as you say you nailed it with the electric vehicle production so Tesla’s putting a gigafactory in Mexico just just outside of Mexico City but that that whole uh infrastructure that’s around is a tech you know is a technology focused infrastructure what what we’re using and consuming Metals for there’s the raw industrial demand but then there’s also that high- Tech component to it so that when we’re so we’re now using the top industry scientists on our side and that’s where we’ve branched out on those little you know those steps and Frameworks for developing so that’s uh that’s you know I think what we’re seeing right now is that people look at our company and they say okay in the last years they’ve done everything that they said they were going to do including winning a lawsuit on our toal property we’ve ticked all those boxes and so now when you’re faced with the decision do I invest in what company which is they go and they look at us okay what’s your track record well we have a track record of exit strategies for mines in Mexico okay we have a track record for financing we’ve raised you know tens of millions of dollars and spent that diligently we we we put the money in the ground with a low overhead GNA we have a strong technically focused datadriven scientifically focused like geoscien driven team of people who are hungry to make discoveries and then we have the I the the understanding of the framework of how to do business here in Mexico and so that’s sort of that you know that basket that that we present as an opportunity to investors and and so when you’re faced with okay do I invest in this company this company I mean I’m always a proponent to don’t don’t invest in one company invest in the sector invest in the space find your big names and and then and then you know build yourself an active portfolio but uh when you building that portfolio you look for the teams that that you can communicate with and that are spending time on site like I’m I’m down here in zakas most of the year if I’m not meeting with investors so it’s uh it’s it’s and we put our money where our mouth is management is a strong shareholder of the company so we do invest in in in our private placement but we I think we’re about six to eight% fully diluted just management ownership so so that’s great so the management has skin in the game as we say right uh you also experience you do have a track record and as already said uh if we look at Define silver all the U things you said that you’re going to do all the M Milestones that you wanted to achieve you achieve them but let’s talk about the future what kind of Milestones can investors expect within the let’s say 12 to 18 month uh in the future what what can we expect from uh what kind of news release can we expect uh definitely the big ones here are uh resource estimate update on the Santa Casio project uh resource estimate update on the toal project um additional exploration results from the zakas district so we’re the second largest land owner in the zakas district and it’s a billion ounce historic silver camp and our next door neighbor Capstone mining is a large underground copper silver mine and then across the valley is the fres Neo mine we’re surrounded by operating mines and we put together a a very very highquality land package that has delivered results we’ve made exploration discoveries on it we’ve got a resource estimate underway we’ve got historical mining of over 100 million ounces of silver we have area play that is very it’s a lookalike to the to the the freso district over on the other side of the valley which we’ve drilled discoveries on already we put out spectacular surface results there as well and so we’re seeing uh this evolving story but we have to deliver on the exploration results which as I said you know we drilled the third highest grade silver drill hole in all of Mexico the largest silver producing country in the world in the first quarter of 2024 so our model Works our exploration uh thesis Works our our our exploration team is is outstanding we put them up against just about anybody in the world to find ounces of silver or you know other types of deposits too but what you can expect is really those fundamental pieces that are are are building the story and and are the pillars of the of the of the story so an updated resource estimate at Santa Casio which is a historic mine uh updated resource at tal which right now is already 1.8 million ounces of gold and 813 million pounds of copper in a measur and indicated category so we already have a large resource on that so but updated resource estimate at to ongoing exploration in the zachus district which in a you know in a more lofty silver market where we’re drilling these high-grade silver drill holes I think you can expect that there’ll be at least eyes on the story I don’t it’s impossible to predict what the market how the market will respond but we do have the news flow to at least support these you know building these mile or reaching these Milestones that we’ve been talking about so those are kind of the three biggest ones that I can talk about right now that sounds really good really interesting and it sounds like uh we will have an exciting future here for your company but um we touched base on the company now let’s talk about the the let’s say macro situation here I mean Silva has seen a great increase uh as you already say said it’s it’s hard to control the market in general right it’s it’s tough for junior miners at the moment but no we really break through the $30 uh Market when it comes to comes to Silver we’re still above that um how long will it take until really the industry picks up uh like we have seen it in let’s say 2020 2021 uh what what does it need now for the mining companies to go back up again I mean you have seen a lot of Cycles a lot of ups and downs you do have a lot of experience what are your thoughts on that well I think that’s a pretty there’s there’s always the philosophical when do investors show back up into a market and I think they show up when there you know they show up when there’s money to be made you know that’s when the inv shows up that’s when the big funds show up it’s they di they move into the industry when there’s money to be made and it’s when those big when those larger funds when those more generalist funds when those larger investors generalist you know High net worth individuals when they’re seeing that this uh which historically mining has kind of been on two fronts there’s there’s the more industrial front but then there’s the the and that’s that’s that’s a more solid you know that’s trading on commodity prices that’s your bigger your larger mining companies and we’re starting to see the the them close up starting to see their share prices be reflective of what they’re producing uh that hasn’t quite happened yet and that’s usually a leading indicator um another leading indicator is the m&a space and where we are in the m&a cycle traditionally the m&a cycle indicates when we’re entering into a bull market and then when we’re exiting a bull market and you look for how much m&a has occurred when it’s occurring because that trickle down m&a is what you want you want the majors and it trickles down to the mid- tier mid-tier consolidation and then that trickles down to the Juniors where it’s either the mid-tiers and the majors are buying the Juniors we haven’t really seen that happen yet there there’s been the rare occasion there always is there always is in the bad markets there’s still biots that happen but that m&a cycle is I think for me a really strong leading indicator but also kind of tells you where you are in that curve of the mining space um the value Traders they look like they’re starting to trickle in I mean stocks that are trading are trading pretty well and they’re they’re they are turning up like Defiance has been doing quite well but then there’s other names in the space that have been have been picking up steam and and some of those are your C more more more advanced cash flowing uh you know cash flowing mid tiers in Mexico you’ve seen mag silver do really well um there’s a couple other stories that are are are I think right for uh either consolidation in the m&a space or are are going to see that that value Trader show up just based on the fact that metal prices are up they’re producing and they’re producing at a low cost because of the jurisdiction that they’re in so I you know I think we’re still in the early Innings I I’m hesitant I do believe and this is I know I shouldn’t say it too fast but I do believe the bottom went in in February um could we get down there again I mean The Summer’s always traditionally uh or historically a tough time for the junior space but it it seems to be that there’s a bit of a a window right now happening we’re seeing a lot more financings go through we’re seeing a lot more um uh traditional style financings go through so your broker placements your your prospectus placements your your bought deal for private placements um and then non- broker raises of course and then in Canada we have those prospectus exempt life financings that a number of companies did take that option and and I think they’re great because they brought new investors in but the volume’s starting to show up as well and so we’re seeing more consistent volume across the market and that shows I think that gives investor confidence in that when you have volume and you have that sort of liquidity in the stock your investors can come in confidently knowing that they can get out if they want to get out and if that volume isn’t there then why would you invest into a sector you’re effectively buying private companies and they’re trading on appointments so you need to have that volume because that volume is the macro indicator of bigger funds coming in generalists because they want to come in they say okay I’m going to stick this cycle out but I want to be able to get out of my position on my on my Accords and and then it’s trading trading more like the physical commodity versus the stock because when you take the physical commodity you take ownership but then you can sell it and so if you take the stock if you take ownership and you can’t sell it then what good is it for you right absolutely great thank you very much for your Insight so let’s say we are at a bottom right now and we’re at the the beginning of the bull cycle for the junior companies um then it’s always good to have like a a great company and we already talked about Define Sila maybe for the end you can summarize for us why should someone consider investing into Define Sila maybe today what are the key points of the company what we expect what are your personal three main reasons to invest we have one of okay why would you invest in defiant silver we have a team of people with over 200 years cumulative exper experience working in the mining industry management had like our Senior Management operational management has over a hundred years cumulative experience taking projects from early stage discoveries through to large silver and other districts through to m&a financing them along the way we have success with financing but we have success developing projects in the jurisdiction that we work in we have a a stable of port a portfolio of projects that we could have we have two Standalone assets so we have the Santa Casio asset or the zachus district aset we’re the second largest landowner in one of the best worldclass silver mining jurisdictions in the world so it is it is the place to be if you want to be looking for silver is in Mexico but if you want to be looking for silver in Mexico you want to be looking in the Freson zachus districts you have every major Mining Company in the world with silver exploration projects in this in this district and the third is that we understand and we put our money where our mouth is so we purchase you know management insiders uh control about 20 management insiders control about 20 maybe even 30% of the stock um we participated in the financings the last finance that we did management participated over 10% of the stock but we’re very diligent with because of that we’re very diligent with our spending and like I said our last financing before that was in 2021 we did this raise and then we’ll continue to buy stock in the open market we really stand behind what we do we put our money where our mouth is so three things team assets and that we are uh a strong shareholders like uh like our current shareholders but like shareholders as well great DC uh thank you very much for sharing your story with us to pitching us Def and Sila is always great to have an insights of exciting companies and especially for giving us insights on the current situation on Mexico thank you very much for all your time is there anything else for the end you would like to uh you would like to mention or at well no absolutely not just keep an eye on defiance we have lots of great news coming out we have our updated resource estimate on Santa CIO we have updated resource estimate on to Paul like I said 1.8 million ounces of gold 83 million pounds of copper right now so full scale all Commodities that are of importance in this EV Evolution right now or VV Revolution but uh it’s I think if you’re listening to this interview you’re at a really interesting time in the mining space and a really interesting time that you’re you’re viewing these mining companies right now because you’re seeing them at alltime lows so um I encourage you all to to just build your portfolios look at them and then reach out to us and Yan can get you guys in contact with any of uh with any of me or our team here and be happy to hear hear from you and if you have any more questions about Mexico and what’s happening in Mexico happy to spend some time to to make sure that everybody’s comfortable with uh comfortable with the space great thank you very much for your time and talk to again uh talk again to you soon great

Defiance Silver – Silver Exploration & Mining in Mexico! Interview with Douglas Cavey of Defiance Silver about the potential of Mining Stocks in Mexico!
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