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In a recently released article, Making The Case For Investing In Junior Silver Miners, I outlined why I believe silver junior miners are currently a timely investment; they have the potential for leveraged upside compared to silver as well as project development-based upside. 

The first junior silver miner I will highlight is Apollo Silver, which is developing one of the largest emerging silver deposits in the United States. The company also has a newly acquired option on a project in Mexico that clearly has world-class potential.  

Simply stated, while junior miners may be an attractive subsector right now, Apollo Silver (OTC: APGOF) (TSX.V: APGO) (CVE: APGO) is a potential multi-bagger in its own right. Its assets are large and economically prospective enough for it to become an acquisition target with a possible valuation of hundreds of millions of dollars, even if silver prices remain relatively stagnant.
 

Apollo Silver Summary

Apollo Silver is a silver junior mining company advancing the development of two large silver projects. The company’s newly optioned project is the Cinco de Mayo Project in Chihuahua, Mexico, which is possibly one of the largest carbonate replacement deposits (CRDs) ever discovered, according to geology experts.

In the US, Apollo Silver is advancing the cornerstone Calico Silver Project in San Bernardino County, California, which hosts 110 million ounces of measured and indicated (M&I) silver resources and 51 million ounces of inferred silver resources.

This M&I figure makes it one of the largest primary silver deposits in the United States. 

Led by an experienced team with significant mining expertise, Apollo Silver is working to develop and de-risk these projects, which are both worthy of acquisition by a major player. This investment thesis is well summarized in the company’s corporate presentation (May 2025).
 

Apollo Silver Corporate Presentation, May 2025
 

Calico Project

Apollo acquired its Waterloo property (now considered part of Calico project lands) from Pan American (NYSE: PAAS) in mid-2021 for $31 million, and Langry from Pan American and another source. These geographically adjacent assets are together considered one of the largest undeveloped silver resources in the United States, containing over 150 Moz of silver, with a substantial historic barite resource identified on the Waterloo deposit. 

Barium, in the form of barite (barium sulfate, BaSO4), is a crucial weighting agent used in the oil and gas industry for drilling operations and is used for glassmaking and paints. Barite is used to increase the density of drilling mud, which helps to control wellbore pressure, prevent blowouts, and ensure efficient drilling. 

Notably, it is also one of the critical minerals listed by the United States Geological Survey (USGS), meaning that it is considered “essential to economic and national security and also vulnerable to supply chain disruptions due to reliance on foreign imports.”
 

MiningVisuals.com
 

Calico also represents one of the top undeveloped silver projects globally that is not already owned by a major mining company. Being one of these projects, it compares fairly positively against other well-known, undeveloped, non-major-owned silver projects.

For instance, one of the most well-known open pit mines is Discovery Silver’s (TSE: DSV) (OTCMKTS: DSVSF) Mexican Cordero project, which is much larger than Calico with large high-grade veins and very favorable economics —an average all-in sustaining cost (AISC) of less than $12.50/oz AgEq. 

However, when examining overall grades and strip ratios, which are key to conducting a cost analysis at an open-pit deposit mine, Calico surpasses Cordero. Calico has 110 Moz AgEq measured and indicated (M&I) at 100 g/t of silver and 51 Moz AgEq in the inferred category at 77g/t. Cordero has 1,202 Moz AgEq at 52 g/t of silver and 155 Moz AgEq Inferred at 32 g/t.

Calico has a ~1.1:1 strip ratio (very low); that is, 1.1 tonnes of earth moved per ton of resource mined versus Cordero’s 2.0:1 ratio. In other words, Calico is significantly smaller, but its redeeming qualities may contribute to improved attractiveness and profitability. As such, considering its size, Calico compares well against other large developmental silver projects.
 

MiningVisuals.com
 

To date, Apollo’s main achievement is the confirmation of all the old historic resource estimates (which are no longer compliant with new mining rules), where the goal of converting virtually all of its resources to the more reliable “measured and indicated” category was accomplished. (see graphic below).
 

Waterloo Resource Conversion
 

Difficult State-Level Mining Jurisdiction Balanced By Friendly County-Level Jurisdiction

The environmental regulatory burden could be perceived as one of the key hurdles for the Calico project now. California scores last in the USA in the 2023 Fraser Institute Annual Survey of Mining Companies, which ranks the attractiveness of mining jurisdictions. California also scores 40/86 globally, so even though California is in the United States, it is known for stringent environmental regulations and lengthy permitting processes. 

However, San Bernardino within California, is one of the friendliest mining jurisdictions in the entire United States, if it isn’t the most attractive. Investors might be positively surprised by the rate of progress made at Calico if they perceive that California is going to be a drag on the project. 
 

Calico: Upcoming Catalysts

The ongoing progress at Calico, and therefore the associated stock catalysts, includes: 1) securing water, which is in limited supply, in California, 2) addressing any permitting issues, 3) publishing a barite resource in HI of 2025, and 4) updating a PEA when the aforementioned items are complete (possibly to be released in Q1 2026).

It is expected that the barite resource is worth as much as ~15 Moz AgEq. While only amounting to about 10% of the value at Calico, barite is a strategic mineral with limited domestic production. With two military bases near the Calico project that have water rights associated with them that aren’t currently being used, Apollo may be able to negotiate a trade. 

The company also expanded the Calico project in 2025 via the acquisition of the “Mule claims” from Lithium Americas (NYSE: LAC), which approximately tripled the land size of the project. These claims trend along the Calico fault system, and according to the company, “sampling done across the Mule claims by previous operator has identified a large Ag anomaly associated with the same suite of host rocks at the Waterloo property.” Additional exploration plans are not solidified yet, but there appears to be future potential for a massive expansion of a resource estimate with properties similar to Waterloo.
 

Cinco de Mayo Project

Apollo obtained its option to acquire the Cinco de Mayo Project from silver mining powerhouse MAG Silver (NYSE: MAG) in the fall of 2024, which was one MAG’s most prized assets over a decade ago. The project still has company-maker potential; that’s an unquestionable fact in the industry. It just lacks one thing, which is the social license that MAG lost from the local community a few years ago when MAG lost its goodwill and working relationship with the local ejido community. Since that time, some of the locals have remained anti-mining. It’s this suspicious scepticism that Apollo hopes to overcome by working more closely with the community than its predecessor.

Located in Mexico’s Chihuahua State, Cinco de Mayo is a carbonate replacement deposit (CRD) – a type of rich mineralization that has to date contributed to about 40% of Mexico’s historic silver production, about four billion ounces. 

Already, the Cinco de Mayo Project stands out as an emerging precious metals asset that benefits from a historically estimated 154 million ounces of silver equivalent in the less well-defined “Inferred” category, with an impressive high grade of 385 g/t AgEq (silver equivalent). As an aside, the silver equivalent figure is arrived at by converting the combined value of several different metals to a comparable value in silver alone.  

The past operator drilled 445 holes totaling 213,591 meters. Of these, 151 holes totaling 97,610m are located at or near the Upper Manto deposit and were used to model the mineralization. Roscoe Postle Associates Inc. (“RPA”) prepared a technical report and Inferred Mineral Resource, dated November 14, 2012. The historic but now considered outdated resource calculation was estimated at 12.45 million tonnes of 132 g/t silver (Ag), 2.86% lead (Pb), and 6.47% zinc (Zn), 0.24 g/t gold (Au). The total contained metals in the resource are 52.7 million ounces of Ag, 785 million pounds of Pb, 1,777 million pounds of Zn, and 96,000 ounces of Au. The project also hosts an indicated resource of 230,000 oz of gold and 94 million pounds of the industrial metal, molybdenum, in another location called the Pozo Seco deposit. 

With its high-grade mineralization, district-scale potential, and strong geological fundamentals, Cinco de Mayo is a game-changing opportunity in one of the world’s richest silver belts.

Assuming Apollo can earn the trust of the community, it plans to fully leverage its powerful treasury of more than $11 million to drill at least 20,000 metres to expand and upgrade the silver asset’s known parameters, while also testing new high-priority drill targets. 
 

Cinco de Mayo: the Goliath of CRDs?

These CRDs have been mined for several centuries in Mexico and are characterized by large Ag-Pb-Zn sulfide intrusions. The reason that CRDs are attractive is that they have the potential for large tonnage and high grades, and often include base metals, which become by-credits that offer additional value to the ore that’s mined. 

Furthermore, on the chemistry side, sulfide replacement in these carbonate structures helps reduce oxidation. Take note that metal oxides can leach into water bodies, causing contamination and harming aquatic life, as well as having neurological, respiratory, and carcinogenic effects on humans. In contrast, CRDs are relatively environmentally benign, which is very important these days, considering that every project that ultimately receives mining approval must first demonstrate its sustainability.  

In summary, these deposits tend to be large, high-grade,  inexpensive to mine, and have a smaller environmental footprint.

Notably, at least when the Upper Manto within Cinco de Mayo was being explored over a decade ago, it was considered the largest single manto ever discovered in a CRD system, according to Dr. Peter Megaw, who completed his PhD studying CRDs. 

While it's unknown if Cinco de Mayo is the largest CRD find ever, the prolific size of the Upper Manto suggests it could be very large. Since understanding the Cinco de Mayo resource expansion potential (near-term and long-term) is critical to understanding its allure as an acquisition target or a company-maker, a technical dive into CRDs and Cinco de Mayo is worthwhile.
 

CRD Model - Apollo Silver Corporate Presentation, May 2025
 

About CRDs

CRDs have several different structures, with the stock and skarn sourcing mineralization through faults above, and to the mantos in line with the limestone (up and to the side). Large CRD systems, such as those in the Chihuahua Trough of Mexico (e.g., Santa Eulalia, Naica, or Cinco de Mayo), can host multiple mantos (Spanish for layer or blanket), often ranging from 2 to 10 or more, depending on the system’s scale and the extent of mineralization. 

For example, the largest CRD (as opposed to the largest manto within a CRD), Santa Eulalia, a major CRD in Chihuahua, has several mantos identified and has produced over 450 million ounces of silver and substantial amounts of zinc and lead from 50 million tonnes of ore. Each of its mantos is of similar size (hosting about 8 million tonnes of ore), excluding the chimneys (see picture above).
 

How Big Could Cinco de Mayo Be?

The Pegaso Zone only has a single hole testing it, but that hole has substantially robust mineralization and presents a very promising target. The Mo-Au Pozo Seco Zone above the CRD skarn appears to be quite large, further strengthening the speculation that Cinco de Mayo has world-class potential. 

Some have speculated that the deposit contains ~50 million tonnes of ore, given the huge widths of high-grade silver already drilled. Given the current average grade of ~132g/ton, the big picture potential of 50 million tonnes of 132g/ton mineable ore would translate to 212 million ounces of silver. At a conservative $1/oz value of in situ silver, that’s potentially $212 million in value or more. While this is exciting, this is merely speculation, an extrapolation of what is currently estimated. Hence, investors will have to wait and see what the latest drill program yields.
 

Summary of MAG-Apollo Agreement
 

History of Cinco de Mayo and Its Acquisition

So if the asset was so promising, why did MAG hand it over to Apollo in exchange for an interest in Apollo? Back in late 2012, there was local opposition to the mine plans. The opposition’s main issues with the proposed mine were due to perceived disruption to generational farmland, even though this is not a large concern with underground mining compared to open pit mining. 

Unfortunately, MAG ran into serious friction with the locals and lost its reputation. The company subsequently lost its social license and the right to access the property. During this drama, the company lost about $400 million in market capitalization due to the bad publicity.
 

Apollo Looking to Rectify Local Relations

Fast forward to today, and there is an entirely different dynamic between the locals and Cinco de Mayo’s new operators. Collectively, the management team and directors at Apollo have a past history of building successful, mutually constructive relationships with local communities at other mining projects in Mexico as well as in other countries. To this point, the new CEO enjoyed considerable success in winning over the support of tribal groups in Saskatchewan, which helped pave the way for the recent sale of his uranium company for over a billion Canadian dollars.

Apollo’s management is now working on building trust with the Cinco de Mayo locals, especially because Apollo is committed to implementing modern-day ESG practices that can only benefit the communities where it operates. And this kind of help could not come at a better time. Currently, the locals struggle due to the termination of farming subsidies and shuttered manufacturing facilities (⅔), with the last appliance manufacturing facility (⅓) undergoing large layoffs. The remainder of the local economy is farmland, which is also facing pressure from American tariffs and a scarcity of water.

Plus, the economic situation is getting worse for the locals. Hence, for the first time in 13 years, the local government is supporting a pro-mining agenda. It’s worth noting that the Upper Manto deposit at Cinco de Mayo would operate as an underground mine, if it measures up. And this scenario offers a smaller environmental footprint than an open pit mine; plus, underground mines typically don’t use as much water. 

While there is significant resource expansion potential at Cinco de Mayo, the primary near-term derisking event that will unlock shareholder value should be the restoration of a social license.
 

Cinco de Mayo Option Lucrative at Bottom of Lassonde Curve

While the company is translating Calico’s measured and indicated (M&I) resource estimate into a preliminary economic assessment (PEA), it is planning on also using its robust treasury to unlock the “Big Picture” upside for Cinco de Mayo. 

Oftentimes, the market responds most favorably to the excitement in drilling projects where deposits are discovered and resource estimates are generated. In the period during which these projects undergo feasibility studies and development (before mine construction, and for many juniors, before acquisition), market valuations for these companies may languish. Thus, the anticipated upcoming drilling at Cinco de Mayo may be a robust value generator for shareholders.
 

Lassonde curve
 

Brief Note On Management

Andy Bowering, Chairman of Apollo, is a venture capitalist with three decades of operational experience. He has raised over $250 million in development capital for companies in the mining sector. He is a co-founder of Millennial Lithium (sold for CDN $493 million to Lithium Americas (NYSE: LAC)). He is also a co-founder of American Lithium Corp., and he is a director and executive advisor to gold developer Prime Mining (OTCMKTS: PRMNF) (TSX: PRYM).

Recently, the company got a shot in the arm with the recruitment of Ross McElroy, who joined the company as President and CEO, after leading his prior company, Fission Uranium, through a C$1.14B acquisition with Paladin Energy (OTCQX: PALAF).

As well as being a founder of Fission Uranium, McElroy is a seasoned geologist with almost four decades of global mining experience in both exploration and production. He has also held senior roles at BHP (NYSE: BHP) and Cameco (NYSE: CCJ) and has served and continues to serve on multiple public company boards. McElroy is also particularly well-regarded in the industry.
 

Financials

Apollo is currently well-capitalized for the time being with C$11 million in cash (as of May) after an equity raise in late 2024, which included Eric Sprott. The May corporate deck shows $11M in working capital. 

Additional exploration activities will likely cost a few million dollars, so the company will likely need more money within a 12-month horizon.
 

Valuation

Given sufficient data, one can estimate a reasonable net present value (NPV) for a project and deduce what each of the company’s ounces should be worth. To do this, an investor needs to know the annual output of the proposed mine, proposed capital expenditures, energy and other costs, and many more items. 

Unfortunately, for deposits held by juniors that have not reached the PEA stage, other methods are required, such as a rule of thumb to value the company based on resource estimates, rather than proven reserves. For this valuation, I’ll use C$1/ozAg, noting that the company’s projects appear to be cost-efficient based on key qualitative aspects (i.e., low strip ratio, high grade, well-understood geology, etc).

According to the company’s presentation, there are ~160 Moz Ag at Calico, and Cinco de Mayo has about 155Moz AgEq right now, before any Pegaso Zone exploration work. At $1/ozAg, the value of the company should be ~C$315 million, which is more or less a comparable amount to the $400 million MAG lost in market capitalization years ago. 

This translates to C$1.08/share with a fully diluted share count. In the scenario that Apollo proves out additional resources at Cinco de Mayo (or Calico), the in situ value of their silver asset would likely substantially increase, while there would be an additional 20% dilution (ownership paid to MAG/Pan American).

To do a sanity check, it's helpful to compare to projects that were recently acquired where the assets might have a similar production profile. MAG Silver was just acquired by Pan American for $2.1 billion, based on their 44% ownership of the Juanicipio mine, operated by Fresnillo (OTCMKTS: FNLPF). This was based on the production of 18.6MozAg and 39koz Au in 2024, and 292Moz AgEq (estimate) proven and probable. 

SilverCrest was acquired by Coeur (NYSE: CDE) for just under $1.7 billion, based on 78.6 million ounces of AgEq in proven and probable reserves, and 21 Moz AgEq of low-cost production anticipated annually.

In my opinion, Apollo shares are modestly inexpensive given the company’s high-quality assets and sizeable resource estimates. Plus, there’s the potential for some robust upside based on silver price increases and additional exploration activities leading to an expansion of the company’s resource estimates.
 

Potential Risks

Investing in junior miners (mainly exploration projects, but also smaller producers) comes with significant risks. For instance, in exploration, drill results may disappoint, and the funding required for asset development, especially drilling, often leads to significant shareholder dilution. There are also regulatory and political risks

Because many of these risks are company-specific, successful investors like Sprott often distribute investments in junior miners across quite a few well-researched, promising companies to reduce company-specific risks to the overall portfolio. It is wise not to own too much of any specific exploration-stage junior.

Lastly, regarding a silver rally, or short squeeze: if I had a penny for every time I heard about silver skyrocketing…
 

Historical Share Price Performance and Recent Temporary Selloff

Apollo shares sold off about 15-20% around the end of June as Mexican President Claudia Sheinbaum made some remarks at a morning conference that no new concessions would be issued under her administration. However, these remarks don’t apply to Apollo as the company has 29 existing concessions for the Cinco de Mayo project that total ~25,000 hectares. 

Additionally, the environmental impacts of open pit mining appear to be the primary reason mining has come under scrutiny with President Sheinbaum; Apollo’s Cinco de Mayo mine is intended to be an underground mine. It appears that the recent selloff reflects investors’ misunderstanding of the political situation in Mexico as well as some nervousness rather than any tangible or direct concerns that apply to Apollo. In my view, Apollo shares’ recent pullback was a welcome opportunity for well-informed investors.

The weak historical price performance, where the stock declined about 80% from 2022-2023, is presumably attributable to a historical weakness in silver futures. Futures dipped from USD $25/oz to below USD $18/oz, and Apollo shares tracked silver’s poor performance in 2022. Note that silver is now approaching USD $40/oz. Meanwhile, the company’s share structure has only marginally inflated since 2022. So, the stock might still have some catching up to do.
 

Conclusion

The time may be approaching to be a bit more heavily invested in gold and silver junior miners, and Apollo appears to be a good choice for a junior miner portfolio. The company has world-class assets with well-understood value, a treasury of well over $10 million, and proven management with a long history of creating shareholder wealth. 

Regarding its top-drawer management, Apollo’s chairman Andy Bowering tells the truth and puts his money where his mouth is by investing his own money first; in fact, he is one of the largest shareholders of both Prime Mining and Apollo. The appointment of Ross McElroy, who recently sold Fission, which he founded, for over C$1 billion, lends additional credence to the ability of this management team to build multi-million-dollar success stories via the drill bit and by was of a track record of good corporate stewardship.

Plus, both men are known problem solvers with solid reputations for supporting the communities where their companies operate. Now they are resolutely committed to winning back the lost community trust that prevented MAG from realizing the immense value of Cinco de Mayo.

By earning a social license at Cinco de Mayo, in conjunction with successful drilling, Apollo could generate a significantly expanded resource estimate and propel the company's valuation to new highs. In such an eventuality, Cinco de Mayo’s very large, high-grade profile would make this asset a coveted acquisition target for a major mining company. 

Some precious metals market commentators have suggested that Cinco de Mayo is worth ~$1B. So the company could be a multi-bagger in this regard. A resource expansion at Calico and progress on securing water rights could also serve as stock catalysts. 

As such, Apollo shares appear undervalued, and the company, in my opinion, is a quality investment option for a silver junior mining portfolio.

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