Highlander Silver

No change in view here. HSLV has completed the Bear Creek acquisition and its permitted Corani project adds big long-tail value upside. Great backers, great management, great access to capital and great margins at half the current silver price. High-grade gold-silver drill results from the San Luis project continue to inspire confidence in resource growth potential there.

Nothing new here in terms of my view. I'm long HSLV through Bear Creek Mining warrants (BCM.WT). I like the long-term outlook for HSLV given that the Corani project is permitted and that HSLV has such gold-plated backers in its shareholder registry. Once HSLV completes the acquisition of BCM near the end of February (BCM shareholders have overwhelmingly approved the transaction), the BCM warrants will continue on as HSLV warrants. At times the BCM warrants actually trade at a discount to their intrinsic value (i.e., BCM share price minus the warrant strike price of 42 cents) which I find odd, but for me, the warrants are simply a way to play the upside of HSLV with less capital. There could be some pressure on HSLV when BCM holders get their HSLV stock in exchange on closing, but I don't think there will be a problem finding buyers for it. HSLV is my main exposure to silver and I'm quite happy to own it given its exploration and development upside, its gold-plated shareholder registry, and its ready access to capital.

I've mentioned HSLV in the past and I'll keep this brief, but Highlander is buying Bear Creek Mining (announced in December), which has a large (~400 million ounces, and could grow), permitted, silver development asset in Peru (Corani). I think this is a great deal for both parties and HSLV's gold-plated backers (the Lundins, Sprott, and Richard Warke, among others) will mean that access to capital will never be a problem here. In junior mining, access to capital is a big deal, and HSLV has that in spades.

The company is actively drilling and hitting some very high gold-silver grades at its Bonita vein target within its San Luis gold-silver project and there's no reason to think those high grade hits won't continue. HSLV is very well funded with over $60mm in cash and is expected to close the Bear Creek acquisition in Q1. Because of its proforma >$1B market cap and daily trading volumes, HSLV will qualify for inclusion in the SILJ ETF later this year and potentially the GDXJ a little after that, which would be big positives in terms of money flow.

The company is also planning a U.S. listing in Q1 and an updated feasibility study on the Corani silver project in Q3. Bear Creek was a bit of a fallen angel, so HSLV has cut a great deal by acquiring it in a deal that's sure to be a win-win for both sides.

Niall Glynn at Velocity Capital Partners knows this one cold and has been on it since the early days, so anyone wanting to get up to speed in a hurry should give him a call.