Skip Navigation Links

Bookmark and Share
Defiance Silver Corp. (DEF|TSX Venture Exchange; DNCVF|OTC; D4E|Frankfurt): Advancing its District-Scale Zacatecas Silver Projects, and Tepal Gold/Copper Project in Mexico; Chris Wright, Chairman and Douglas Cavey, VP Corp. Dev. Interviewed

on 5/5/2021
Defiance Silver Corp. (DEF|TSX Venture Exchange; DNCVF|OTC; D4E|Frankfurt) is an exploration company, advancing its district-scale Zacatecas Projects, located in the historic Zacatecas Silver District and the 100% owned Tepal Gold/Copper Project in Michoacán State, Mexico. We learned from Chris Wright, who is Chairman of the Board of Defiance Silver, and also from Douglas Cavey, who is VP of Corporate Development, that they have an option to acquire 100% of the Zacatecas project and to acquire the 2.5% NSR that exists on the project. At the Tepal project, they have Measured and Indicated resource at 1.8 million ounces of gold and 800 million pounds of copper, and a robust 2017 PEA. The company recently acquired an option to acquire the NSR that exists on the project. This year, Defiance is working to move both of these projects forward, and are currently actively drilling. Defiance is managed by a team of proven mine developers, with a track record of exploring, advancing and developing several operating mines and advanced resource projects.

Defiance Silver Corp.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Chris Wright, Chairman and CEO of Defiance Silver Corp. and also Douglas Cavey, who is VP of Corporate Development. Chris, could you give our readers/investors an overview of your Company and what differentiates your Company from others?

Chris Wright:Defiance Silver is a Mexican-focused exploration and development Company. We have two projects, one is located in Zacatecas State just outside the city of Zacatecas. Our Zacatecas silver project, came to Defiance with a preliminary 17-million-ounce silver Inferred resource. We have an option to acquire 100% of the project and to acquire the 2.5% NSR that exists on the project. The other asset that we have is our Tepal Gold Copper Project, located in the State of Michoacán, which is southwest of Guadalajara. We own that 100% outright. It has a PEA on it, updated as recently as 2017. It has a measured and indicated resource of 1.8 million ounces of gold and more than 800 million pounds of copper.

Defiance is working to move both of these projects forward. We're actively drilling at San Acacio and are well into an initial 5,000-meter drill program, which has been expanded to 10,000 meters. What differentiates us from other junior exploration and mining companies in Mexico is that we have a very robust resource, but we have two standalone projects, which is not standard for junior mining companies.

We have a lot of upside exploration potential at both projects and have built out a world-class team. We did a complete Management overhaul in 2019 and brought in a new technical team in the fall of 2019, with Doug and the OreQuest Team joining up. They have a long history of working in Mexico and have been very successful in previous iterations of finding mines, most notably their previous work with Orko Silver, and developing them to the point that they were acquired by larger players in the sector. Our Tepal asset has a really good amount of torque to the underlying commodity prices, to gold and copper prices. Our Management and insiders are highly aligned with shareholders' interests.

My firm, Windermere Capital, and our funds still are the largest shareholders and we still own more than 25% of the Company. Management and insiders own another 4% or 5% and then we have institutional ownership that makes up another 10% of the Company. The company has a very tight share structure and is well-aligned with shareholders. I think the other interesting thing that makes us attractive, is that we are actively drilling, we have permitted ground, and we have more targets than we have meters in this current drill program. There are near-term news items and catalysts that will be coming out on a steady basis in the months and quarters to come.

Dr. Allen Alper: Well, this is an exciting time for silver and it also will be an exciting time for your shareholders and stakeholders, with all the drilling and exploration that you're doing. Sounds like that market and your Company are moving forward together.

Chris Wright: It was a very difficult space to be in for the last several years. The way the world has changed recently, I think that the macro set up for silver, gold, copper and just commodities in general is really quite favorable. The supply / demand dynamic is positive. When you look at what's happening globally, with the monetary policy and what seems to be emerging with fiscal policy, I haven't had a chance to jump on and see what President Biden's saying currently, but with his press releases I expect that there's going to be more money spent on infrastructure. All of this bodes well for underlying demand for commodities. Definitely a good environment to be in, versus what we were looking at over the last number of years through the bear market.

Dr. Allen Alper: I noticed today Brian London put out a report saying, "Buy silver now".

Chris Wright: I haven't seen that, but I would agree.

Dr. Allen Alper: Yes. He said this was the time. He pointed out the printing of money and he thinks this is going to be a great bull market for silver, so he recommended it very strongly. Maybe Doug could tell us more about the key goals of the Company and how the Company is moving forward.

Douglas Cavey: The Company's moving forward by offering a very pragmatic, well-prescribed system for exploration. We're using a team of experts to operate our projects and to advance our projects, using many of the modern geoscience tools available. Some are the oldest geoscience tools available; mapping, surface sampling and soil sampling, but then we are also using trace elements, geochemistry and 3D modeling and integrating all of that information and using that to target drilling in a linear fashion.

We're fortunate to have Zacatecas in a globally-prolific silver district. We have a team of experts, who are looking at the near-term resource upside of the Zacatecas silver asset, where we know there is a mineralized envelope and a resource envelope. We know how to drill those in a way that we can qualify the historical knowledge and bring it into a modern resource estimate and qualify the historical mining of the district and target new resources in a fairly well-understood mineralized district.

But there's a tremendous amount of potential to discover more epithermal vein-style, more Cozamin type mesothermal-style deeper, hotter copper targes. We have a lot of different phases of mineralization that we can target on our assets. Our Company goals are really a blueprint for what most company goals should be: creating a systematic, discovery-focused exploration program, targeting a pipeline of targets, so that we not only have resource drilling happening, but we're feeding into that with an excellent profile of targets. In the last 12 months, we've tripled our land position and put more than 20 kilometers of strike length of veins into our portfolio in Zacatecas, so there is a lot land inventory to explore and drill in the future.

That linear exploration, which is really the most pragmatic way to approach a project, is the exact same thing that we're doing over at Tepal, as well. Tepal is an advanced project that's different from Zacatecas. It doesn't have that 450-year mining history. With Zacatecas, it's 25 kilometers away from the world's largest primary silver mine and we're in a belt of geology and deposits that have produced historically a cumulative 10% of the world's silver ever. By operating in a pragmatic way, where we design our programs to work up targets through systematic geoscience, we feel that the potential to add to the pipeline of targets is greatly increased and we're doing the exact same thing on both of our assets.

Dr. Allen Alper: That sounds like Defiance Silver is in an excellent position, in an area known for silver discovery and production and you have great projects moving forward. Chris, maybe you could tell our readers/investors a little bit about yourself and your team.

Chris Wright: I'm a finance guy and I come to the Defiance story by way of an initial investment that my firm and our funds made in Defiance, back in 2014. My firm is Windermere Capital and we run a couple of natural resource focused funds, one strictly in mining. In 2014, we had taken a look at Defiance, and as you'll recall 2014 was a much different environment than we're in right now. Junior mining companies were having a lot of difficulty getting anyone's attention, let alone their money. Defiance was quite distressed and we were looking at it at a time when the company only had the San Acacio land package. We were quite encouraged by the potential there so we took a majority stake in the Company with an eye towards really helping the Company find its way through the bear market and turn things back on when the environment improved.

Fast forward to the Spring of 2019, that’s when I joined the Board as Chairman. Shortly thereafter I took on the role of CEO. My background is very much from the business/finance side, not the technical side. Doug and his team were introduced to me in 2019 and we were fortunate enough to be able to lure them in to come and do some targeting work for us. We quickly gave them the mandate to tell us what we had and if the assets were as good as we hoped they were. If so, how should we move them forward? I'm happy to report that they were encouraged by what they found and came up with a great plan that we've been working on rolling that out ever since.

Douglas Cavey: We've been working in Mexico for over 25 years and we were part of a team (VP Exploration Director, an in-country technical team) of a large discovery (La Preciosa, >250 Million ounce Ag) about three and a half hours north of Defiance’s silver projects. We like the discovery-focused geoscience and taking projects from an early stage through to advanced drilling. We saw that this project had that chance. Since then, we've been extremely fortunate to bring in ultra-smart geoscientist, Jen Roskowski, who's our principal geologist. She has reinvented our database, targeting, our models, and helped to bring this project up, using the most modern geoscientific and targeting knowledge. She came to us after working with a major for a long time and was able to look at this deposit from the 100,000-foot-view, down to the 50,000, 25,000, and then where we are right now drilling. That has proved vital to the understanding of the controls of the district.

Our in-country technical team have been involved in all aspects of mineral exploration and mining on some of the largest discovery campaigns as well as some of the largest operating mines, operations that have been in production for hundreds of years. We have a really knowledgeable team of people that we're working with on the technical side. I think there are a number of excellent ideas and targets, but because of the capital markets conditions or the commodity price conditions, they haven’t ever been tested.

Right now, we're in a situation where we have so many things working in favor of the Company and in this Team of people: Miguel Davila, Jennifer Roskowski, Stephanie Sykora, Luis Gaspar, Jonathan Davila, Armando Vasquez, people that are just out working eight days a week, 25 hours a day to make sure that a discovery happens, that we outline new resources, or look at the district scale potential of these projects.

Dr. Allen Alper: It's great that you have a strong and knowledgeable technical Team to do the geology exploration and development. And you have Chris, who has the financial background that is necessary in the mining industry, to get the backing for the drilling and mining. That sounds like a very well-balanced team. Chris could you tell our readers/investors the primary reasons they should consider investing in Defiance Silver?

Chris Wright: I think it's a very interesting time to be looking at Defiance Silver. We talked about the macro situation not only for silver, but also for the global monetary and fiscal environment. With regard to Defiance, you have to focus on the key points: the first is that we're starting with a very robust resource base. Tepal has 1.8 million ounces of gold and more than 800 million pounds of copper. There's a tremendous amount of exploration upside not only at Tepal, but also in Zacatecas. We talked about the Team; it really is about the people and we’re confident in the team we’ve built. We've given them the mandate and the environment to be able to go back and do this the right way.

We're well-funded after financing in the fall. We've had a number of warrants exercised and the treasury has never been as healthy as it is now. Our exploration budget is fully-funded for the next 12 to 18 months and we have flexibility to increase or accelerate our work. We talked about the leverage to commodity prices. If you get into the PEA on Tepal, they ran that original PEA in 2017 a gold price of US$1,250 and US$2.50 copper. And they came out with that $170 million post-tax NPV that's U.S. dollars for the project. When you plug in $1,500 gold and $3 copper that doubles to $345 million U.S. dollars.

Results from the projects we’re drilling are coming in. We're using pragmatic, geoscience-based processes to add ounces, which is what this business is all about. I'll tell you we're still the largest investors, Windermere, in our funds and are in the business of generating returns for our investors. Given the market environment and where the projects are, the team that we have, and the fact that we're funded, it's a good time to be looking at Defiance like the whole sector.

Dr. Allen Alper: It looks like you've given excellent reasons for readers/investors to consider investing in Defiance Silver. It's great to see that Management and the Board are aligned with the shareholders. It sounds like 2021 is going to be a very exciting time for your shareholders and stakeholders. It looks like now is the time for investing in silver, so those are very compelling reasons to consider investing in Defiance Silver. Is there anything else you'd like to add?

Douglas Cavey:Defiance has a silver asset, a base metal asset. We have high-grade silver. We have historically high-grade base metals. We have over 800 million pounds of copper at Tepal. We have 1.8 Million ounces of M&I gold at Tepal. We have a growing target base on both of our Assets. It's a Company that is well-positioned to benefit in this commodities market that we're in right now. Because it's not just the precious metals market that we're experiencing right now, it's truly a commodities market. And we have really excellent exposure to a lot of different base metals and precious metals resources here.

Dr. Allen Alper: With electrification of the world, with electric vehicles, etc. copper is going to play an important role. It is one of the most important elements in electrification of the industry.

Dr. Allen Alper: It's great to have all those elements and metals that you have access to developing and exploring.

Chris Wright
Chairman of the Board

Tel: +1 (604) 343-4677


Disclaimer | Terms Of Use And Privacy Statement

© Metals News. All rights reserved.