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This Silver Project Looks Great, If Mexico Lets It Happen | Kootenay Silver La Cigarra PEA

The Deep Dive Jun 19, 2026

Summary

Kootenay Silver's La Cigarra PEA projects a $763 million after-tax NPV at $50 silver, and $1.3 billion at spot pricing.

The company trades near 0.1x NPV on a $111 million enterprise value, a discount partly attributed to Mexican open-pit permitting risk.

A planned 14-year open pit averaging 4.6 million ounces of silver yearly carries $332 million initial capital and $1,873 per ounce AISC (all-in sustaining cost — what it really costs to produce an ounce).

The production plan includes inferred resources (less certain resource estimates), so further exploration is needed before the project can advance to pre-feasibility.

Permitting for open-pit mining in Mexico remains the key overhang, even in Chihuahua where mining has operated for centuries.

Key points on Silver Tiger Metals

  • The host cites Silver Tiger in the state of Sonora as one example that Mexican permitting is slowly starting to move forward, though a long list of would-be operators is still waiting for approval.

Key points on Kootenay Silver Inc

  • The host argues Kootenay's new PEA for La Cigarra in Chihuahua, Mexico shows a $763 million after-tax NPV at a 5% discount rate, a 41% IRR, and payback inside two years — based on $50 silver as of the recording (around 2026-06-19).
  • The host notes the plan is a conventional open pit producing an average of 4.6 million ounces of silver per year over a 14-year mine life, with years 1-5 front-loaded at about 6.2 million ounces, and over 94% of revenue expected from silver despite it being effectively a lead-zinc mine.
  • The host lays out the capital and cost picture: $332 million initial capital plus $80 million sustaining, operating cash costs of $16.85 per silver equivalent ounce and all-in sustaining costs of $18.73 per ounce — figures he thinks look low versus current market realities, warning costs almost always rise through the development curve.
  • The host highlights the valuation gap: the $763 million NPV translates to about C$1.1 billion against an enterprise value of roughly $111 million at recording time, roughly a 0.1x multiple on the base case and 0.06x on the spot model ($67+ silver, $1.3 billion NPV, 64% IRR), with another 261 million ounces on other properties not counted.
  • The host cautions the project carries inferred resources requiring more exploration before pre-feasibility, permitting for a Mexican open pit is a major risk despite Chihuahua's mining-friendly district (two operating neighbors, 450 million ounces produced since 1650), and the PEA news release was light on mine plan, processing, and infrastructure detail.

Steve Hyland's takeaways

  • Top takeaway The host's core thesis is that La Cigarra is a real deposit with real economics — long life, low cost on paper — trading at a steep discount to its NPV, but that the discount reflects the Mexican open pit permitting overhang and a PEA that is 'the best case version of a story' with its hardest chapters still to be written.
  • He frames the market context as of recording (around 2026-06-19): silver around $70 an ounce following a January blow-off top above $120 and a $61 gut check the prior week, noting $70 silver felt like a dream a year earlier and that studies commissioned at $95 silver now look poorly timed.
  • He argues the economics get more compelling at spot pricing — NPV jumping from $763 million at $50 silver to $1.3 billion at $67+ silver with the IRR rising from 41% to 64% — while cautioning that PEA-stage numbers are preliminary and costs almost always rise through development.
  • He flags three flip-side risks: inferred resources in the production plan requiring more exploration before pre-feasibility, the open pit in Mexico as a big permitting risk, and a 'black box' PEA light on mine plan, processing, and infrastructure detail.
  • He treats Kootenay as a single-asset developer for valuation purposes even though it also holds the Columba and Promontory properties with a combined 261 million ounces of silver equivalent, since La Cigarra is now its most advanced asset.