This article is a sponsored feature from Mining.com.au partner Unico Silver Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
One of the largest economies in Latin America, Argentina is also resource-rich with vast untapped potential.
Precious metals, in particular, landed in the top 10 Argentinian exports in 2023, generating around US$2 billion ($3.2 billion) and accounting for 3.1% of total exports.
The Fraser Institute Annual Survey of Mining Companies 2023 ranked Argentina as the fourth most attractive region in the world for investment with a median investment attractiveness score of 74.13.
The country’s Policy Perception Index score jumped almost 15 points, from 49.54 in 2022 to 64.40 in 2023.
Todd Williams, Managing Director of small cap explorer Unico Silver (ASX:USL), says with respect to policy, provinces exert a huge influence on mining and therefore it is critical to be in one of the pro-mining states such as Santa Cruz, San Juan or Salta.
“Within these provinces, the risk of an economic mineral discovery being blocked on political or environmental grounds is extremely low,” he tells Mining.com.au.
While historically the cost and inflationary risks of mining in Argentina have been “amplified”, according to Williams, President Javier Milei – who was elected in 2023 – has taken steps to combat this.
“Importantly, this was recognised by President Milei who has introduced the RIGI – incentive regime for large investments – resulting in fiscal stability and reduction in taxation (export duties, corporate tax rates) and lending costs for major projects,” he notes.
“This policy was the catalyst for major investments by BHP (ASX:BHP) and Rio Tinto (ASX:RIO) into Argentina.”
Williams says anecdotally, Argentina is host to more “company making discoveries” when compared to neighbouring Chile and Peru.
“This is because in those countries, the landscape is dominated by very well-funded miners, and there are very few opportunities for retail investors to participate in new discoveries,” he explains.
“The excellent geology coupled with very low tenement holding costs – approximately one tenth of Chile – has meant that savvy entrepreneurial groups who understand the political cycles can make real discoveries and create value for their shareholders.”
Williams pointed to the recent US$4.1 billion joint takeover of Canadian copper explorer Filo (TSX:FIL) by BHP (ASX:BHP) and Lundin Mining (TSX:LUN) as a prime example of this.
Filo’s flagship Filo del Sol project is located in the rapidly emerging Vicuña district, where three projects owned by NGEx Minerals (TSX:NGEX) have yielded four large-scale discoveries valued at over C$8.5 billion ($9.4 billion).
What initially attracted Unico to Santa Cruz was the prospect of making a major gold discovery like Andean Resources’ Cerro Negro discovery, which was acquired by Goldcorp – now part of Newmont (NYSE:NEM) – in 2010 for C$3.4 billion.
‘Camp-scale’ precious metals potential
Unlike most precious metal districts in Latin America, Santa Cruz was overlooked by the Spanish conquistadors and has no history of artisanal mining, even though mineralisation outcrops at many projects.
Mining operations began at AngloGold Ashanti’s (NYSE:AU) Cerro Vanguardia mine in 1998 and was followed by a flurry of exploration.
This was followed by several new discoveries between 2007 and 2011, which culminated in a cycle of mergers and acquisitions and seven mines being permitted and constructed.
“It is a dynamic but relatively new mining ecosystem,” Williams says.
Santa Cruz is host to majors such as Newmont, AngloGold Ashanti, Pan American Silver (NYSE:PAAS), and intermediate to junior mining companies like McEwen Mining (NYSE:MUX), Hochschild Mining (LSE:HOC), and Cerrado Gold (TSX-V:CERT).
Two of the largest pure-play silver resources – Joaquin and Cerro Leon – that were discovered during the 2007 to 2011 exploration cycle are now in Unico’s possession.
Joaquin is host to a rare pure-play silver resource, with 93% of the economic value attributable to the silver metal, and it also represents the consolidation of the project into a single junior explorer for the first time.
The transaction included the Cerro Puntudo tenements, which host the “other half” of the Joaquin deposit.
The area was never drilled to resource status because it was held by mining giant Yamana Gold (NYSE:AUY) and formed part of the acquisition of Yamana’s Latin American assets by Pan American Silver in late 2023.
Williams describes the opportunity as “camp scale” in the sense that Unico has consolidated 100% ownership in two adjacent silver districts – a strategy employed by many up-and-coming explorers.
GoGold Resources (TSX:GGD) did something similar back in March 2019, when the explorer inked an option agreement to acquire the Los Ricos Project in Jalisco state, Mexico, which gave the company control of 45 concessions spanning 24,000 hectares that host several historical mining operations.
The rationale for the consolidation was the belief that GoGold could unlock a large-scale exploration project. The company had been watching and waiting for eight years to make its move.
A Feasibility Study released in January 2025 on the Los Ricos South Project estimates it will have a 15-year mine life producing 80 million payable silver equivalent ounces.
An initial Preliminary Economic Assessment for Los Ricos North shows a 13-year mine life producing 110.3 million payable silver equivalent ounces.
Meanwhile, in late 2021 Dolly Varden Silver (TSX-V:DV) consolidated a “high-grade” silver and gold district in British Columbia, Canada with the acquisition of the Homestake Ridge Project and subsequent option agreement to acquire the Big Bulk Copper-Gold Porphyry Project two years later.
Dolly Varden says singular ownership solidifies the amalgamated project as among the largest undeveloped precious metal assets in Western Canada.
Elsewhere in Argentina, and further north in the Chubut province, Pan American Silver owns the Navidad Project, which is host to more than 700 million ounces in silver resources.
Williams says it is one of the largest undeveloped silver deposits in the world.
At the junior end, AbraSilver Resource (TSX-V:ABRA) is one of the most successful explorers to advance to silver development, according to Williams.
“AbraSilver is also an excellent case study for the potential trajectory of USL,” Williams tells this news service.
“When I first entered Argentina, AbraSilver acquired the Diablillos silver-gold resource from Silver Standard – now SSR Mining – an advanced resource with potential to grow, and has since developed a large reserve of 210 million ounces silver equivalent and attracted interest from Kinross Gold (NYSE:KGC) and Eric Sprott.”
Unico has mapped out a strategy to become a +300-million-ounce silver development company.
The junior explorer has leveraged over 170,000m of historical drilling to define opportunities to expand the current 160-million-ounce resource through low-risk and high-confidence resource extensions, drill testing known veins along strike and at depth.
In October 2024, Unico launched a maiden drilling program at the Cerro Leon Project. The program was upsized to 50,000m following a $22 million placement that attracted strong demand from institutional investors out of North America.
The program will include 25,000m of drilling across both Cerro Leon and Joaquin.
Phase-two diamond drilling kicked off in January at Cerro Leon, with two rigs drilling 10,000m to test the vertical continuity of mineralisation across all priority prospects and expand the resource.
Phase-one drilling has returned grades of up to 3,134 grams per tonne silver equivalent at the Chala prospect, with mineralisation uncovered outside the resource at a number of prospects.
Archen returned the highest hit so far of 17m @ 429g/t silver equivalent from 92m.
The program is expected to be completed in Q1 2025.
“Drilling at Cerro Leon continues to return significant mineralisation within multiple structures that fall outside of the current mineral resource, including the Karina, CSS, and Archen-Chala prospects,” Williams says.
Unico anticipates a revised resource will be completed in the latter part of 2025.
Write to Angela East at Mining.com.au
Images: Mining.com.au & Unico Silver
