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Andean Silver Limited (ASX: ASL) (“Andean” or the “Company”) is pleased to announce that it continues to grow the pipeline of strong exploration targets at its Cerro Bayo Project in Southern Chile, with geophysics identifying another large prospect at the Sinter Hill location.
- Presence of large Sinter Cap at Cerro Bayo indicates potential for an intact epithermal system and corresponding potential for silver and gold mineralisation
- Geophysics survey has supported potential presence of an extended mineralised system, defining over a dozen structural targets extending north from Sinter Hill with many of these corresponding to known surface veins
- New north-south trending structures also identified that demonstrate mineralisation potential over 2km of strike length
- The geophysical results link the target zone at Sinter Hill to the known outcropping veins of Aguila and Meseta with a 2km strike, under shallow cover and previously unexplored
- Only 15% of the Sinter Hill geophysics program completed with key targets of the Cascada trend and south of Sinter Hill yet to be surveyed
- Initial results from Sinter Hill and Pampa La Pera (see ASX release dated 13 February 2025) geophysics programs point to more large-scale targets under shallow cover
- Resource update remains on track for end of this month
Andean Chief Executive Tim Laneyrie said: “The geophysics program continues to show the huge exploration upside at the Cerro Bayo Project. We are rapidly developing a pipeline of strong targets to guide future drill programs and have three rigs currently working on the near mine Laguna Verde resource growth.
“The Sinter Hill feature forms a significant part of the upside potential that Andean saw in the Cerro Bayo Project and we are very excited by the initial results we have seen in the geophysical survey. It has validated the investment to date, and we look forward to seeing the area drilled in the next phase of greenfield exploration drilling.
“The imminent resource update will include Andean’s drilling results for the first time, including the Cristal and Pegaso 7 discoveries announced in 2024.
“The scale of the Cerro Bayo Project continues to grow with every mapping, drilling and geophysics campaign we have completed, which underpins our belief that Cerro Bayo has the potential to be a globally significant silver-gold asset”.
Sinter Hill Prospect
The Sinter Hill prospect is located in the southeast of the Cerro Bayo Project at an elevation of ~1,250mRL, approximately 2.5km south of known mineralisation at the Cascada Vein which sits at an elevation of approximately 850mRL and historically produced 4.23Moz AgEq from 2006-20081 (Figure 1).
The prospect is so-called due to the presence of a geological feature known as a ‘sinter cap’ (Figure 4), which refers to a paleo-surface layer of silica-rich rock formed at the discharge point of a hot spring in an epithermal system, essentially acting as a cap over an underlying mineralised zone. Sinter caps are classic indicators of the presence of an epithermal system due to their direct association with the rising hot, mineral-laden fluids that create the sinter through precipitation as they cool at surface.
An intact epithermal system indicates a high potential for valuable mineral deposits, particularly gold and silver, as the entire process of hydrothermal fluid circulation and mineral precipitation remains undisturbed, preserving the full concentration of precious metals within the system and leading to higher grade deposits.
Sinter Hill therefore represents a high priority prospect for exploration by Andean and the aim of the latest geophysics survey has been to identify potential intact epithermal mineralised zones below and/or extensive vein networks radiating from the Sinter Hill area. The zones identified will form the basis of future exploration and drilling programs, targeting potential significant scale discoveries of high-grade mineralisation which would expand the total resources at the Cerro Bayo Project.
Figure 1. Location of Sinter Hill prospect and Cascada historic underground mine in relation to Cerro Bayo and Laguna Verde silver districts of the Cerro Bayo Project.
Results of Geophysical Survey
The latest phase of the geophysical survey covered broad spaced lines (400m spacing) over the central zone of the northern mapped Aguila and Meseta veins through to the Sinter outcrop (Figures 2 and 3), with only 15% of the Sinter Hill portion of the program completed to date. Key targets at the Cascada trend and the zone to the south of Sinter Hill have yet to be surveyed.
Significant findings from the latest survey results:
- New north-south trending structures that demonstrate mineralisation potential identified by a coincident enhanced resistivity and chargeability high extending over 2km (Figures 3 and 4) of north-south striking veins at an elevation similar to the known Cascada deposit;
- Over a dozen structural targets defined extending north from Sinter Hill, with multiple subparallel enhanced resistivity anomalies stacked along the northern ridge representing both known and unknown veins (Figures 2, 3 and 4); and
- The expression of the eruption breccias at Sinter Hill at surface appears to expand at depth suggesting it is part of a larger, deeper system (shown in C to C’ in Figures 3 and 4).
Previous geophysics survey results by Andean at Cerro Bayo highlighted the effectiveness of the geophysical technique to map out zones of enhanced resistivity and chargeability, which correlate with known outcropping and buried vein trends (refer ASX release dated 13 February 2025). The results identified potential depth extensions to known mineralisation at the Raul prospect and Cerro Bayo resource area, and a new target under shallow cover at the Pampa La Pera area to the west and sub- parallel of the Claudia area.
Click here for the full ASX Release
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Silver Price Update: Q2 2025 in Review
Unlike gold, however, silver also saw gains as industrial demand strained overall supply.
What happened to the silver price in Q2?
The quarter opened with the price of silver sinking from US$33.77 per ounce on April 2 to US$29.57 on April 4. However, the metal quickly found momentum and climbed back above the US$30 mark on April 9.
Silver continued upward through much of April, peaking at US$33.63 on April 23.
Volatility was the story through the end of April and into May, with silver fluctuating between a low of US$32.05 on May 2 and a high of US$33.46 on May 23.
Silver price, April 1 to July 17, 2025.
Chart via Trading Economics.
At the start of June, the price of silver soared to 14 year highs, opening the month at US$32.99 and rising to US$36.76 by June 9. Ultimately, the metal reached a year-to-date high of US$37.12 on June 17. Although the price has eased slightly from its high, it has remained in the US$36 to US$37 range to the end of the quarter and into July.
Silver supply/demand balance still tight
Various factors impacted silver in the second quarter of the year, but industrial demand was a primary driver in both upward and downward movements. Over the past several years, silver has been increasingly utilized in industrial sectors, particularly in the production of photovoltaics. In fact, according to the Silver Institute’s latest World Silver Survey, released on April 16, demand for the metal reached a record 680.5 million ounces in 2024.
Artificial intelligence, vehicle electrification and grid infrastructure all contributed to demand growth
At the same time, mine supply has failed to keep up, with the institute reporting a 148.9 million ounce production shortfall. This marked the fourth consecutive year of structural deficit in the silver market.
In a June 11 interview with the Investing News Network (INN), Peter Krauth, editor of Silver Stock Investor and Silver Advisor, said deficits are likely to get worse in the coming years as aboveground stockpiles are chipped away.
“(We have) flat supply, growing demand — demand that’s nearly 20 percent above supply," he said. "And our ability to meet those deficits is shrinking because we’re tapping into these aboveground stockpiles that have shrunk by about 800 million ounces in the last four years, which is equivalent to an entire year’s mine supply. So it’s the perfect storm."
But industrial demand can send the silver price in either direction.
The chaos caused by Trump’s on-again, off-again tariffs has caused some consternation among investors.
While gold and silver have traditionally both been viewed as safe-haven assets, silver’s increasing industrial demand has decoupled it slightly from that aspect. When Trump announced his "Liberation Day" tariffs on April 2, silver was impacted due to fears that a recession could cause demand for the metal to slip.
Although the dip in silver was short-lived, it was one of its steepest falls in recent years.
In an email to INN, Julia Khandoshko, CEO of Mind Money, said a recession could have consequences for silver, but she wouldn't expect them to last long:
“If a global recession really starts, silver will most likely nosedive momentarily. In terms of its 2025 performance, silver growth has been largely bolstered by consolidated precious metals group appreciation, additionally beefed up by relative USD weakness."
Geopolitics and the silver price
Adding to the tailwinds is a growing east-west divide. Due to its usage in industrial components, particularly those related to the military and energy sectors, and its role as a safe haven, silver is being influenced by geopolitics.
June’s price rally came alongside growing speculation that Israel was preparing to attack Iranian nuclear sites. Investors became concerned that war could disrupt international trade and oil movements in the region.
Ultimately, their concerns were proven right, and Israel launched attacks on June 12; the US then bombed key nuclear facilities on June 21. While the escalation is new, the underlying politics have been simmering for years.
Sanctions against Russia have strengthened support among the BRICS nations, which have been working to reduce their reliance on US dollar assets, such as treasuries, and increase trade in their own currencies.
But they may also be working to separate themselves from western commodities markets. In October 2024, Russia floated the idea of creating a precious metals exchange to its BRICS counterparts. If established, it could shake up pricing for commodities like silver, allowing Russia to circumvent sanctions and trade with its bloc partners.
While the exchange is still just an idea, a bifurcated world is not. While the US has targeted most nations with tariffs, it has singled out China. Much of the first half of the year saw the world’s two largest economies escalate import fees with one another, with China even restricting the export of rare earth elements to the US.
Discussions on national security and critical minerals have been at the forefront for the last several years. Still, they have become even more pronounced with the US and China on tense footing.
In a July 9 interview with INN, economist and author Dr. Nomi Prins suggested that national security demands are likely to offset the impact of any economic downturn on the broader economy.
“Even if that’s going to happen, industrial use value — building infrastructure, building national security, national energy priorities — needs a lot of silver, and there just simply isn’t enough supply out of the ground to meet the demand. That’s long-term demand above the ground. This has been a thing, but right now, because of these geopolitical forces and realignments, silver is going to drop more into that industrial role,” she said.
Silver price forecast for 2025
Overall, the expectation is that without new mine supply and dwindling aboveground stockpiles, silver is likely to remain in deficit for some time. Other factors, like Trump tariffs and geopolitics, aren’t likely to disappear either.
Demand could ease off if a global recession were to materialize, but safe-haven investing could offset declines.
For his part, Krauth thinks the silver price is likely to remain above the US$35 mark, but it could fluctuate and he suggested a rally in the US dollar could push the silver price down. However, he also sees some pressure easing on the recession side of the equation if the US signs tariff deals that would eliminate some uncertainty.
“US$40, let’s say by the end of this year," he said, adding, "Frankly, I could see something really realistically above that, maybe an additional 10 percent if the scenario plays out right."
He doesn’t think that’s the end. In the longer term, Krauth sees silver going even higher. He pointed to the current gold-silver ratio, which is around 92:1, compared to an average of 60:1 over the last 50 years.
“So we could go to, who knows, somewhere like maybe 40 or 30 to one in the ratio. That would be tremendous for silver — that could bring silver above US$100. I’m not saying that’s happening tomorrow, but in the next couple of years I would say that’s certainly something that could easily be in the cards,” Krauth said.
Fundamentals and geopolitics aligned for silver in the first half of 2025, and barring a recession, they are likely to provide tailwinds in the second half. Whether the price climbs or continues to find support at US$35 is yet to be seen.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
