Andean Silver Launches A$40M Placement to Restart 136Moz Chile Silver Mine
Key Takeaways
- Andean Silver has launched a A$40 million non-underwritten institutional placement at A$2.45 per share — a 13.7% discount to the last close — to fund restart activities at Cerro Bayo in Chile.
- Pro-forma cash reaches approximately A$83M with zero debt, funding six active drill rigs, a scoping study targeted within six months, and a Feasibility Study and maiden Ore Reserve targeted by end CY27.
- The Cerro Bayo resource stands at 136Moz AgEq across 20.0Mt at 211g/t AgEq, with the Indicated category growing 230% to 60Moz AgEq in the June 2026 update — underpinned by drill intercepts including 2.4m at 15,558g/t AgEq at Trinidad.
- The project sits on top of fully built, warm-idle infrastructure including a 500ktpa SAG/ball mill, 2Mtpa crusher, and 14MW power station — eliminating the capital and time burden that confronts greenfield developers.
- The global silver market ran a cumulative 650Moz supply deficit from 2021 to 2024, with London vault stocks down 29% and Shanghai Gold Exchange stocks down 45%, leaving approximately 5.8 years of auditable supply at current consumption rates.
Andean Silver launches A$40M placement to accelerate Cerro Bayo restart
Andean Silver (ASX: ASL) has launched a A$40 million non-underwritten institutional placement at A$2.45 per share to fund restart activities at its Cerro Bayo silver-gold project in Chile. The offer price represents a 13.7% discount to the last closing price of A$2.84 per share on 28 August 2026, and a 5.8% discount to the 10-day volume weighted average price of A$2.60.
Approximately 16.3 new fully paid ordinary shares will be issued under ASX Listing Rule 7.1, ranking equally with existing shares. At the offer price, the pro-forma market capitalisation is A$561M, with pro-forma cash of approximately A$83M (derived from cash of approximately A$42.7M as at 30 June 2026, plus the A$40M raise before costs). Canaccord Genuity and Euroz Hartleys are acting as Joint Lead Managers and Bookrunners, with Jett Capital Advisors LLC as Co-Manager.
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What the capital will fund — three parallel workstreams
Proceeds are allocated across three concurrent priorities:
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Resource upgrade and growth: Six rigs are currently operating, upgrading the Mineral Resource Estimate (MRE) to Measured and Indicated classifications and testing key growth targets. Greenfield permitting is underway targeting more than 200 drill pads in the Juanita to Droughtmaster corridor, with drilling expected to commence in 2H CY27.
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Studies and development: A scoping study is underway and targeted for delivery within 6 months. A Feasibility Study and maiden Ore Reserve are targeted by end CY27.
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Early works: Mill refurbishments, underground dewatering, and infrastructure upgrades are planned to advance restart readiness.
The indicative activity roadmap across the programme period is set out below. Note that this timetable is indicative and subject to change.
| Activity | Q3–Q4 2026 | Q1 2027 | Q2 2027 | Q3–Q4 2027 |
|---|---|---|---|---|
| Resource Infill Drilling (x4 rigs) | ✓ | ✓ | ✓ | ✓ |
| Cerro Bayo Resource Extension Drilling (x2 rigs) | Q4 2026 start | ✓ | ✓ | ✓ |
| Scoping Study | Q3 2026 start | Delivery targeted | — | — |
| Feasibility Study | — | Q1 2027 start | ✓ | Targeted completion |
| Early Works | — | Q1 2027 start | ✓ | ✓ |
A 136Moz resource sitting on top of built infrastructure
The Cerro Bayo project hosts a total Mineral Resource Estimate (a JORC Resource — a concentration of mineral in the Earth’s crust with reasonable prospects for eventual economic extraction, classified by confidence level) of 20.0Mt at 211g/t AgEq for 136Moz AgEq, as at 15 June 2026 (refer ASX release 30 June 2026).
| Category | Tonnes (Mt) | AgEq Grade (g/t) | AgEq (Moz) | Type |
|---|---|---|---|---|
| Indicated | 3.5 | 417 | 47 | Underground |
| Inferred | 4.4 | 318 | 45 | Underground |
| Total Underground | 7.9 | 361 | 92 | Underground |
| Indicated | 1.2 | 330 | 13 | Open Pit |
| Inferred | 10.9 | 88 | 31 | Open Pit |
| Total Open Pit | 12.1 | 112 | 44 | Open Pit |
| Indicated | 4.7 | 395 | 60 | Total |
| Inferred | 15.3 | 155 | 76 | Total |
| Total Resource | 20.0 | 211 | 136 | Total |
The Indicated resource category grew 230% to 60Moz AgEq in the June 2026 MRE update, reflecting the impact of sustained infill drilling across the district. Recent drill results near the mill underscore the grade quality on offer: Trinidad returned 2.4m at 15,558g/t AgEq (including 1.4m at 25,340g/t AgEq), while Delia SE returned 3.1m at 3,356g/t AgEq (both from ASX release 7 July 2026).
The Cerro Bayo resource upgrade delivered a 230% expansion in the Indicated category to 60Moz AgEq, a result that directly informed the decision to accelerate the feasibility timeline and underpins the placement rationale.
Critically, the project sits on top of infrastructure that is already built and on warm idle: a 500ktpa SAG/ball mill, a 2Mtpa crusher, a 14MW diesel power station, an assay laboratory, workshops, and a permitted tailings storage facility (TSF). That package eliminates a major capital and time hurdle that would otherwise confront a greenfield developer. Cerro Bayo operated for more than 30 years under Coeur (1995–2008, averaging 2.4Moz Ag/year) and Mandalay (2011–2017, averaging 2.8Moz Ag/year), at silver prices roughly one-tenth of current levels — a context that frames the restart value case without requiring any forward production targets.
Why silver — and why now
Silver is an unusual commodity: it functions simultaneously as an industrial metal and a monetary store of value. That dual role makes it sensitive to two different demand forces at once.
On the industrial side, silver’s conductivity makes it indispensable in photovoltaic solar panels (approximately 20 grams per kilowatt of capacity installed), 5G network infrastructure, solid-state batteries, water purification systems, and electrical circuit manufacturing. These are structural, multi-decade demand drivers tied to the global energy transition and technology buildout — not cyclical or speculative.
On the monetary side, silver competes with gold as a hedge against currency debasement and financial instability, which means investor demand can rise sharply during periods of macro uncertainty.
The supply picture is the critical issue right now. From 2021 to 2024, the silver market ran a cumulative supply deficit of approximately 650Moz, meaning demand consistently exceeded what miners and recyclers could supply. That gap has been met by drawing down physical vault stocks, and those stocks are now materially lower:
- London vaults: down 29% (approximately 827Moz remaining)
- CME: down 10% (approximately 319Moz remaining)
- Shanghai Gold Exchange (SGE): down 45% (approximately 40Moz remaining)
- Shanghai Futures Exchange (SHFE): down 42% (approximately 44Moz remaining)
At current consumption rates, approximately 5.8 years of auditable vault stocks remain. That is not a comfortable buffer. For Andean Silver, it positions a 136Moz project being advanced through active studies directly into a structural supply-demand dynamic that the broader market is only beginning to price.
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Strong institutional backing and a clear path forward
The corporate structure heading into the raise is straightforward: 212.7 million shares on issue, a pre-raise market capitalisation of A$604M at A$2.84, cash of approximately A$42.7M as at 30 June 2026, and zero debt.
The institutional register is substantial. 54.5% of the company is held by Australian and global institutions, including Equinox (7.7%), Scotia Asset Management / 1832 (6.7%), and Sprott Inc. and Sprott Silver Miners (5.7%). The stock was included in the GDXJ index in March 2026, and sell-side coverage spans Canaccord, Euroz, Argonaut, SCP Resource Finance, and Exploration Insights.
The project’s social licence position is equally well-developed. Cerro Bayo holds 23 existing environmental approvals (RCA), with a voluntary Environmental Impact Assessment (EIA) approved in 1994. Approximately 90% of the historical workforce was hired locally, and a restarted operation has the potential to generate 500 to 600 direct jobs in a town of approximately 4,000 people — a transformational employment impact for the region.
The key near-term milestones are the scoping study delivery within 6 months and the Feasibility Study and maiden Ore Reserve targeted by end CY27.
The indicative settlement timetable for the placement is:
- Trading halt: Monday, 31 August 2026
- Placement announcement and trading resumes: Wednesday, 2 September 2026
- Settlement of new shares: Tuesday, 8 September 2026
- Allotment and quotation of new shares: Wednesday, 9 September 2026
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