Mining entrepreneur Frank Giustra, chief executive of the Fiore Group of companies, is forming a new silver company that will initially have a primary silver asset in Argentina, he told Mining Journal at the 2024 Precious Metals Summit in Beaver Creek in Colorado, US.

"My whole life, I have wanted to do a pure primary silver play, and I've never been able to pull it off because I haven't found the right assets," Giustra said. "We stumbled across one recently in Argentina. It's about 50Moz of indicated at the moment, at around 500gpt silver, which is really high grade. The company that had it was going through bankruptcy, and this opportunity came up. It's going to be called Argento Silver and will probably start trading in early October."

Giustra said that the market for junior mining and exploration stocks is still difficult, despite the gold price of US$2500/oz, which even makes it a challenge for him, a serially successful entrepreneur, to raise funds.

"Much to my chagrin, [the tipping point] hasn't happened yet. I would have expected it by now at $2500/oz gold. When gold was $1800/oz, I thought that once it broke through the old high and made a move into new territory, this sector would pick up, but it hasn't."

"I've never seen a market with such a difference between the gold price and mining stocks. This is a very strange market as the investors have completely disappeared. Investment banks offer us financing, but you sign, and they go and look for investors, and they don't exist. We end up having to place all of those shares ourselves with our own money, our friends, our family. Almost every deal I've done in the last 12 months, we had to place," Giustra said.

The difficulty juniors face in raising finance will likely result in more M&A transactions as companies that can finance or that have experienced greater share price appreciation take advantage of their greater bargaining power to close deals.

"You have a number of single-asset companies out there that have zero sponsorship and investors. One of our strategies will be to consolidate the better opportunities out there, much like we did with Goldcorp 20 years ago, Endeavor Mining 15 years ago and Leagold Mining, which is now part of Equinox Gold," Giustra said. "Bigger is better. Size does matter in this industry, so anything that consolidates this junior sector is good news. You have way too many small developers and single-asset companies that are getting absolutely no investor interest. The objective is to get to a production profile that institutions will be interested in, where you can into the indexes, because that's the only way you're going to get a valuation."

Hiatus

Giustra returned to the sector after taking a hiatus for several years during the bear market a decade ago.

"It is a hard business to shake. It really is. It's an exciting business, even in difficult times. Our lease was coming up on a whole tower floor in Vancouver, and I thought, I just can't retire. So, a couple of years ago, we brought in a whole team of younger people, mostly geologists and engineers, and we started to see the deal flow, and we're back in the business and super busy. Most of our work is M&A opportunities, what we call the buy and build strategy," Giustra said.