Hillgrove Resources (HGO) Conference Transcript

Summary of Hillgrove Resources (HGO) Conference Call - July 23, 2025 Industry Overview - Precious Metals Market Dynamics: Investors tend to favor gold during global uncertainty, but silver historically outperforms gold in bull markets. In the 1970s, gold increased from $35 to $850, a 24 times return, while silver rose 35% during the same period [1][2] - Silver's Dual Utility: Silver serves as both a store of wealth and an industrial commodity, utilized in electronics, electric vehicles (EVs), and green energy technologies. This dual demand is expected to drive silver's value as the world decarbonizes [3] - Supply Constraints: Approximately 75% of silver production comes from Latin America, Russia, and China, regions known for geopolitical instability. The majority of silver is a byproduct of other mining operations, making supply inelastic to price changes [4][5] Market Conditions - Deficits in Silver Supply: The Silver Institute reports annual deficits of 100 to 250 million ounces, which is significant given that it represents about a quarter of global production. These deficits are expected to persist due to rising demand driven by decarbonization [5][6] - Macro Economic Factors: Factors such as massive money printing, increasing U.S. debt, and declining confidence in fiat currencies are pushing investors towards precious metals as a hedge against inflation. Central banks have increased gold purchases, but silver remains undervalued [6][7] Investment Opportunities - Gold to Silver Ratio: The current gold to silver ratio is approximately 86:1, significantly above the historical average of 65:1. A reversion to the mean could result in a 45% price increase for silver [7][8] - Paris Silver Project: The Paris Silver Project, owned by Investigator Resources, is highlighted as a compelling investment opportunity. It contains 57 million ounces of high-grade silver and is located in a stable jurisdiction [9][10] - Financial Position: Investigator Resources has a market cap of approximately $48 million and $5 million in cash, positioning the company well to complete its definitive feasibility study (DFS) and continue exploration [11] Project Development - DFS and Project Economics: The DFS is underway, with previous studies indicating a potential for $480 million in free cash flow. The silver price has increased by 70% since the last study, suggesting an additional $650 million upside [12][13] - Cost Optimization: The company is exploring ways to reduce operational costs, including transitioning to alternative power sources and optimizing tailings management, which could further enhance project economics [14][15] Exploration Potential - District Scale Exploration: The Paris project is part of a 15-kilometer silver corridor with confirmed widespread mineralization. Recent drilling results indicate significant silver grades in nearby areas [16][17] - New Acquisitions: The company has acquired the Athena project, which was historically drilled for iron ore. Initial results show promising silver grades, and further drilling is planned [18] Conclusion - Investment Rationale: With soaring demand for silver as both an investment and industrial commodity, coupled with supply constraints, the Paris Silver Project represents a low-cost, high-grade opportunity fully leveraged to the rising silver market. The ongoing DFS and exploration efforts further enhance the investment case for Investigator Resources [19][20]