KTN.V - Fundamentals.


Kootenay Silver Inc. (KTN.V) is an exploration company actively engaged in the discovery and development of mineral projects in Mexico and in British Columbia, Canada. Claiming one of the largest junior portfolios of silver assets in Mexico, KTN.V provide significant leverage to silver prices; > 144Moz Silver Eqv. (M&I)* & 35.7Moz Silver Eqv. (Inf.).


KTN.V is primarily focused on the expansion of its current silver resources, new discoveries and the near-term economic development of its priority silver projects (Columba, Copalito, La Cigarra, Promontorio Mineral Belt).


High Grade Drill Discovery (Columba and Copalito):

Columba Silver Project has over 10 kilometers of vein strike exposed on surface with high silver grades. In Total 84 holes have been drilled in 2019 and 2020 with impressive results.


▪ 650 gpt Ag over 7.45m within 159 gpt Ag over 39.9m (F VEIN)

▪ 982 gpt Ag over 1.9m within 721 gpt Ag over 4.07m and 200 gpt Ag over 25.85m (Z VEIN)

▪ 1186 gpt Ag over 4.6m within 112 gpt Ag over 70.5m (B VEIN)


Copalito Silver and Gold Project contains more than 10KM of vein strike with six principal veins of up to 15M width.

Both Columba and Copalito have drilling campaign currently underway.


La Cigarra

Claim covers over 20KM of 40KM trend with an area of over 500M onces of silver produced. The current focus is to (1) build new geological model to optimize grade with intent to (2) advance to updated resource and (3) PEA decision.


Promontorio Mineral Belt

Host two major silver discoveries (Promontorio & La Negra). Optioned to Pan American from 2016 to June 2019 (spent $US 3.6M to advance) KTN.V is targeting (1) First resource estimate in preparation of (2) PEA decision.


Progress with La Cigarra and Promontirio Mineral Belt are contingent on satisfactory completion of each steps.


Note that KTN.V has a number of other "Generative Exploration" project. In essence, KTN.V grants external exploration companies a right to earn an interest in properties subject to exploration expenditures and share payments made by them) such as Cervantes/Aztec, Mark Project/Kennedy Group, Meachen Bend Project and Moyie Anticline Program.


In addition, KTN.V has two earn in option agreement: 1) Two Times Fred: Centerra Gold (KB) Inc.; 70% earn-in option 2) La Mina: Capstone Mining; up to 100% earn-in option.


Thesis

Silver is known to be used a currency, an hedge against inflation, as well as for numerous industrial applications.


Other than in currency and as an investment medium (coins and bullion), silver is used in solar panels, water filtration, jewellery, ornaments, in electrical contacts and conductors, in specialized mirrors, window coatings, in catalysis of chemical reactions, as a colorant in stained glass and in specialized confectionery. Its compounds are used in photographic and X-ray film. Dilute solutions of silver nitrate and other silver compounds are used as disinfectants and microbiocides (oligodynamic effect), added to bandages and wound-dressings, catheters, and other medical instruments.


The currency/inflation hedge argument is well known. However, Doomberg has two excellent pieces which explains the issue at hand along with of the possibility of further rise in silver prices based on consumer demand.


There are actually two conspiracy theories widely proposed (and often co-mingled) by the precious metals crowd. The first is that the official precious metals vaults (COMEX, London Bullion Market Association (LBMA), etc.) don’t have the gold and silver they claim to hold. The second is that the big banks collude to suppress the price of gold and silver via the futures market on behalf of the Bank for International Settlements (BIS), aka the bank for central banks. As a card-carrying member of the precious metals crowd, I’m a believer in the second but dubious on the first. Well, more specifically, I don’t think the first has to be true in order for the second to be true, and the second is way more important. They are essentially unconnected conspiracies.


The usage of silver for industrial applications is also worth exploring. A piece from Frank Holmes in Forbes outlines the usage of Silver in both Solar Power and 5G. (Source: Silver Institute).


Between now and 2030, PV manufacturers are projected to consume a staggering 888 million ounces of silver, according to CRU. To put that in perspective, that’s 51.5 million ounces more than the combined output from global silver mines in 2019.


Even if it is predicted that demand will decline in Solar: "silver is for sure the material you have to use".


The global rollout of 5G technology, still in the very early stages, will increase production for goods such as semiconductor chips, cabling, microelectromechanical systems (MEMS), Internet of things (IoT)-enabled devices—all of which require silver. In 2019, the amount of silver used in the applications stood at 7.5 million ounces, or 0.75 percent of annual output. By 2025, that amount could more than double to 16 million ounces and, by 2030, triple to 23 million ounces, according to estimates by Precious Metals Commodity Management.




News releases


Aug. 25 - Announces Closing of $7.0 Million Equity Private Placement: Issued 17,500,000 Units at a price of $0.40 per Unit (Warrant 0.55 cents) for aggregate gross proceeds of approximately $7,000,000. Eric Sprott, through 21764123 Ontario Ltd., participated to maintain his proportionate equity interest in the Company by acquiring 2,500,000 Units.


Oct. 5 - Discovers Broad Area of Silver Mineralization at J-Z Zone at Columba Project, Mexico: Announce recent drilling results confirm the discovery of a broad zone of high grade hydrothermal breccias and encompassing low to medium grade quartz stockwork system at the J-Z Zone at the Columba silver project.


New holes reported in this release include holes CDH-20-061 to CDH-20-066.


Oct. 27 - Announces Results from 29 Holes of the First Ever Drill Program at the Copalito Silver-Gold Project, Mexico. A total of 4,153 meters, increased from the originally planned 3,000 meter Program, over 40 drill holes. Reported in this release are holes 5 to 33 with holes 1 to 4 previously announced in July 2020, highlighted by hole BDH-20-004 intercepting 3.2 meters of 1,297 gpt silver and 0.285 gpt gold.


Nov. 12 - Intercepts 933 GPT Silver Equivalent Over 2.25 Meters From Final Drill-Holes at Copalito Silver-Gold Project: Results are part of the first ever drill program with previous results announced in July and October 2020.


Dec. 17 - Kootenay Silver and Aztec Minerals Sign Joint Venture Agreement for the Cervantes Project: As noted in the Aztec press release dated July 30, 2019, Aztec has completed its earn-in and exercised the option to acquire a 65% interest in Cervantes. Kootenay retains the remaining 35% interest.


The parties will hold their interests in Cervantes indirectly through share ownership in a joint venture company, Aztec Minerals (Mexico) JV. Corp. The joint venture company indirectly owns 100% of Cervantes through its wholly owned subsidiary, Minera Azteca Dorado S.A. de CV.


Jan. 12 - Reports on 2020 Milestones and Outlines Strategic Plans for 2021: In the past year, the Company completed two large drill programs totaling over 13,000 meters, collectively on the Columba and Copalito properties. Based on the results seen to date, both projects hold great promise for the discovery and development.


Details related to the Company’s plans for 2021, will be announced in the coming weeks in addition to assay results received from the remaining 17 holes drilled at the Columba high grade silver project.


Financing: Received cash proceeds of $2.5M during Q4, 2020 from the exercise of 8,478,150 warrants exercised at $0.30.


Jan. 20 - Intercepts 1,186 GPT Silver Over 4.6 Meters Within 112 GPT Silver Over 70.5 Meters at Columba Project, Mexico: Final 17 core drill holes completed from its 2020 Phase II drill program, which totaled 9,114 meters over 43 holes, at its Columba high-grade silver project (the "Property") located in Chihuahua State, Mexico.


The 1,186 gpt silver intersection from hole CDH-20-082 intercepting the B Vein is the highest silver grade reported to date over widths greater than 4 meters. These results, combined with previous drilling, indicate that significant high-grade silver potential is being delineated in several areas within the Property.


Jan. 26 -Aztec Joint Venture Plans two Phase Exploration Program in 2021 at Cervantes Gold-Copper Project, The plan calls for a two-phase, $1.13 million CDN exploration program in 2021 for the Cervantes porphyry gold-copper property in Sonora, Mexico. The first phase calls for an $85,000 program of sampling and mapping. The second phase is a $1.05 million dollar drilling program to start sometime in the fall.


Feb. 23 -Kootenay Silver With Joint Venture Partner Aztec Minerals Initiates 2021 Exploration Program at Cervantes: As Operator of the Cervantes Joint Venture, Aztec has mobilized a field crew to conduct a +500 soil sample program aimed at extending previous soil grids and covering targets with limited historic exploration.


Previous core drilling by Aztec Minerals completed in 2018 at Cervantes is highlighted by a near surface intercept within the California Zone, returning a 160 meter interval grading 0.77 gpt gold, 0.13% copper and 3.4 gpt silver.


Mar. 3 - Commences Drilling at Columba High-Grade Silver Project, Mexico: The focus on step out and infill drilling on the high-grade F-vein and its associated hanging wall vein, a new discovery blind to surface.


Other high-grade results such as found in holes CDH 20-030 (415 gpt silver over 11.15 meters including 721 gpt silver over 4.07 m) in the JZ area and CDH 20-082 (1,186 gpt silver over 4.6 m) in the B Vein are targeted for expansion.


Mar. 17 - Trenches 33.0 Meters of 2.67 gpt Gold Including 9.0 Meters of 5.29 gpt Gold at Male Gold Project: Of the eight trenches, positive results from five (trenches 0,2,4,5,6) were received with results for the remaining trenches (1, 3 and 7) not encountering any significant veining or values.


Mar. 25 - Commences Drilling at Copalito High-Grade Silver & Gold Project, Mexico: Drilling will be guided by detailed structural mapping to test veins such as 5 Senores located in the southern area where good continuity and grade potential has been shown for at least 600 meters of strike length.


Mar. 30 - Signs Option Agreement to Grant Centerra Gold Inc.: whereby Centerra is granted an option to earn a 70% interest in the Two Times Fred property located in the Nechako Plateau of Central British Columbia.


A total of C$6 million in exploration expenditures and C$500,000 in cash payments must be incurred and made over a four-year period for Centerra to earn a 70% interest. The first year requires a work expenditure of $1 million with a minimum commitment of $650,000. Current plans for this year's work include up to 1,000 meters of trenching and 20 drill holes. Upon the fulfillment of these conditions, the companies will enter a standard joint venture agreement with Kootenay retaining a 30% interest, and funding of further work will be done on a pro rata basis amongst JV partners.


Apr. 15 - Provides Drilling Update on 5,000 Meter Program Underway at Columba High-Grade Silver Project, Mexico: The Company has completed 12 core drill holes totaling over 1,800 meters, testing the F Vein as part of the 5,000-meter drill program. Results will be announced when received and compiled (i.e. laboratory delays).


Apr. 22 - Provide Update on Ongoing Drill Program at Copalito: Drilling is proceeding as scheduled at the Copalito silver-gold project, located in Sinaloa State, Mexico. To date, the Company has completed 1,600 of the planned 3,500 meters (the "Program") over 19 shallow drill holes, ranging from 50 to 160 meters in depth.


The Program has focused primarily on the 5 Senores vein, with drilling now stepping out to test the Agua and Chiva Veins. The Company will announce results when received and compiled.


May 6 - Hits Several High-Grade Intercepts in the Hanging Wall and F Vein at Columba: First six core drill holes completed for the FY 2021 campaigns are completed.


May 13 - Intercepts 2,176 gpt Silver Equivalent Over 1.18 Meters Within a Wider Interval of 399 gpt Silver Equivalent Over 10.5 Meters at Copalito Silver-Gold Project, Mexico


May 25 - Intercepts 809 gpt silver over 2.63 meters within 354 gpt silver over 9 meters in the F Vein at Columba


June 7 - Intercepts 19.43 Meters of 306.04 Gpt Silver Equivalent Including 7.97 Meters of 456.13 Gpt Silver Equivalent Within The 5 Señores Vein at Copalito Silver-gold Project, Mexico. results from five additional core holes recently completed on the 5 Señores Vein at the Copalito silver-gold project.


Summary


Financing

August 2020, KTN.V raised $7M through the issuance of 17.5M shares at $0.40 cents. (Warrant 0.55 cents). Eric Sprott, via 21764123 Ontario Ltd., participated by acquiring 2,5M shares (14% of the total units).


January 2020, KTN.V reported having received $2.5M in Q4 2020 from the exercise of 8.4M at $0.30 cents.


Joint Venture and Option Agreement

December 2020, KTN.V signed a Joint Venture Agreement with Aztec Minerals for the Cervantes Project. A joint venture company, Aztec Minerals (Mexico) JV. Corp. will represent the interest of both parties (Aztec;65%, KTN.V; 35%).


January 2021, A two phased exploration program was announced for 2021. 1) Sampling and Mapping 2) Drill program. In Febuary 2021, a +500 soil sample program was initiated.


March 2021, An option agreement was signed with Grant Centerra Gold Inc. Centerra is granted an option to earn a 70% interest in the Two Times Fred property located in British Columbia. A total of C$6 million in exploration expenditures and C$500,000 in cash payments must be incurred and made over a four-year period for Centerra to earn a 70% interest. Once these conditions are met both companies will form a JV; KTN.V retains 30% of the interest.


Drill Results

For the past year KTN.V has been drilling in both Columba and Copalito. Below is a high level summary.


Columba: Since the beginning of 2021, three sets of results have been reported.


Jan 20, 2021.

CDH-20-069: 58 gpt silver over 79.0 meters including: 152 gpt silver over 10.1 meters, and 325 gpt silver over 3.1 meters.

CDH-20-070; 170 gpt silver over 3.78 meters;40 gpt silver over 27.75 meters

CDH-20-076; 40 gpt silver over 94.06 meters including: 272 gpt silver over 1.0 meter within 97 gpt silver over 7.0M.

CDH-20-079: 179 gpt silver over 9.05 meters, including: 290 gpt silver over 5.35 meters; and 525 gpt silver over 1.58M

CDH-20-082: 112 gpt silver over 70.5 meters, including: 691 gpt silver over 9.0 meters;1186 gpt silver over 4.6 meters; including 1,455 gpt silver over 1.55 meters and 1,055 gpt silver over 1.5 meters and 1,045 gpt silver over 1.55 meters.

CDH-20-084 :47 gpt silver over 25 meters, including: 126 gpt silver over 7 meters;208 gpt silver over 2.45M.


May 6, 2021

CDH-21-90: 503 gpt silver over 1.2 meters including 889 gpt silver over 0.55 meters

CDH-21-89: 439 gpt silver over 2.7 meters including 533 gpt silver over 0.57 meters

CDH-21-87: 559 gpt silver over 1.09 meters within 4 meters of 200 gpt silver;


May 25, 2021

CDH-21-091: 271 gpt silver over 0.85 meters within 189 gpt silver over 1.55 meters

CDH-21-092: Hit 3 different Vein sets in the Hanging-Wall Vein, F Vein and a Footwall Vein.

  • 368 gpt silver over 0.94 meters within 217 gpt silver over 2.44 meters in the Hanging-wall structure

  • 439 gpt silver over 1.14 meters within 321 gpt silver over 2.94 meters in in the F Vein

  • 255 gpt silver over 2.9 meters within 130 gpt silver over 8.0 meters in the Footwall

  • 425 gpt silver over 2.37 meters within 230 gpt silver over 9 meters in the F Vein System.

CDH-21-094: 985 gpt silver over 1.5 meters and 809 gpt silver over 2.63 meters within 354 gpt silver over 9 meters

CDH-21-096: 425 gpt silver over 2.37 meters within 230 gpt silver over 9 meters and 86 gpt silver over 30 meters



Copalito: Below are the three most recent sets of result not that the emphasis is heavily on the 5 Señores Vein.


Nov. 12, 2020

BDH-20-040: 933 gpt silver Eq over 2.25 meters and 311 gpt silver Eq over 9.05 meters (5 Señores Vein)

BDH-20-039: 93.78 gpt silver Eq over 27.4 meters (5 Señores Vein).

BD- 20-037: 735.3 gpt silver Eq over 2.25 meters and 211.48 gpt silver Eq over 10 meters (5 Señores Vein)


May 13, 2021

BDH-20-041: 325.52 gpt silver Eq over 1 meter within 86.28 gpt silver Eq over 5.75 meters (5 Señores Vein)

BDH-20-042: 2,176.84 gpt silver Eq over 1.18 meters within 213.68 gpt silver Eq over 21 meters (5 Señores Vein)


Jun. 7, 2021

BDH-21-045: 325.59 gpt silver equivalent (“Eq.”) over 1.31 meter within 126.51 gpt silver Eq. over 8.35 meters.

BDH-21-046: 3,488.77 gpt silver Eq. over 0.22 meters within 306.04 gpt silver Eq over 19.43 meters

BDH-21-047: 114.56 gpt silver Eq. over 1.0 meter

BDH-21-48: 288.60 gpt silver Eq. over 2.2 meters within 12 meters grading 96.05 gpt silver Eq.(5 Señores Vein )

BDH-21-49: 248.07 gpt silver Eq. over 1.68 meters within 79.19 gpt silver Eq. over 10 meters (5 Señores Vein)


In Short

So far in 2021, KTN.V has traded as high as $0.45 cents and as low as $0.265 cents. Of late valuation has been trending down despite relatively steady silver prices and impressive drill results in both Columba and Copalito.



May 26 2021, a day after the latest Columba results, Fundamental Research set a price target to $0.61 cents. However, the selling pressure continued and is in part explained because Eric Sprott (a major shareholder) recently sold.


Mr. Sprott now owns and controls 30,150,000 common shares and 16,875,000 common share purchase warrants representing approximately 9.4% of the outstanding common shares on a non-diluted basis and approximately 13.9% of the outstanding common shares on a partially-diluted basis.


Indeed, he still retains a significant position. Note that he has participated in a many financing efforts for KTN.V in the past and one as high as $0.40 cents (warrant $0.55 cents). Thus, the recent activity is not necessarily a bearish signal.


Meanwhile, KTN.V is now testing S1 ($0.28 cents) appearing not to be valued on exploration potential or fundamentals.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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