Sun Silver more than doubles on ASX debut

Newly minted silver explorer Sun Silver (ASX:SS1) has witnessed a more than doubling in its market value on its first day of trade on the Australian Securities Exchange (ASX). 

The company’s share price climbed to an intra-day peak of $0.50, marking a 150% increase over its initial public offer (IPO) price of $0.20. 

With around 69.7 million shares on issue upon listing, its market value went from just under $14 million pre-listing to nearly $35 million immediately upon debut. 

Shares have since retraced some of the gains, but are still up 90%, with nearly 14 million shares having changed hands by 1:30pm AEST.

Sun Silver lit up the boards at 11am AEST today (15 May) following the completion of a $13 million IPO.

There are very few silver explorers on the ASX. Silver is usually mined as a byproduct to gold because of the volatility in price, which is currently sitting at around US$28.50 ($42.90) an ounce. 

The price briefly flirted with the US$30-per-ounce mark in April, but did not quite hit it. 

ANZ recently revised its earlier predictions up to US$31/oz after the precious metal reached the bank’s previously forecast level of over US$25/oz quite a bit earlier than the anticipated second half of 2024.

Sun Silver’s main project is the Maverick Springs Silver-Gold Project in Nevada, US, which has an existing JORC-compliant resource of 292 million silver equivalent ounces @ a grade of 72.4 grams per tonne (g/t).

The inferred resource comprises 125.4 million tonnes at 43.5g/t silver and 0.34g/t gold for 175.7 million ounces of silver and 1.37 million ounces of gold.

The silver market demand, however, has risen 330% from 48 million ounces in 2014 to 160 million ounces last year, according to The Silver Institute.

This has been assisted by the strong growth in solar panel rollouts around the globe.

The Silver Institute says solar power is currently the leading source of green electricity, having surpassed 130 gigawatts (GW) of newly added capacity for the first time ever in 2020, even with the onset of the covid pandemic. 

Silver’s use in solar cells increased to 140.3 million ounces in 2022.

Supply has been in deficit for the past three years and the demand-supply gap is only predicted to widen.

Sun Silver executive director Gerard O’Donovan says the high level of investor interest resulted in the company closing the IPO three weeks ahead of schedule. 

“Maverick Springs comes to market at a very exciting time for the global silver industry, which is in the middle of a supply squeeze driven by surging industrial demand for the metal and particularly because of its pivotal role in the production of solar panels,” he says.

“According to the IEA, solar is on track to become the dominant form of renewable energy by 2027 – just three years away – surpassing energy derived from coal and gas. 

That should see significant demand for silver, exacerbating the deficits we have seen over the past four years.”

The Maverick Springs Project sits in the Carlin Trend of Nevada and is surrounded by major operations including Barrick Gold’s (TSX:ABX, NYSE: GOLD) Carlin Mine and Kinross Gold’s (TSX:K, NYSE:KGC) Bald Mountain Mine.

Write to Angela East at Mining.com.au 

Images: Sun Silver and Unsplash
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Written By Angela East
Managing Editor Angela East is an experienced business journalist and editor with over 15 years spent covering the resources and construction sectors and more recently working as a communications specialist handling media relations for junior resources companies.