With relatively high silver grades being reported, Canada Silver Cobalt Works (CCW.V; CCWOF.OTC) is attracting attention as a potential silver play – especially if we see a return to rising silver prices.

Drills are turning as we speak on the company’s Castle East project, and given the exceptional grades it has encountered to date, some investors are watching drill assays closely and wondering what the next resource update will bring.

Dear Fellow Investor,

They’re the kind of silver grades that draw the interest of some of the most ardent silver bugs.

That’s what the Robinson zone at Canada Silver Cobalt Works’ (CCW.V; CCWOF.OTC) Castle East project in northern Ontario has been generating.

Based on just 3,000 meters of drilling, the company was able to generate an inferred resource for this zone, released in May 2020, of 7.56 million ounces grading an average of 8,582 grams per tonne silver uncut or 250.2 ounces/ton!

Just a rough, back-of-the-envelope calculation puts the value of that rock at US$5,700 per ton for its silver content (assuming silver at US$22.78 per oz).

At those grades, if they are maintained, it obviously may not take much expansion via the drill bit to grow the size of Castle East’s silver resource.

Adding to the allure of this resource is its location in Canada’s silver-cobalt heartland, a region in northern Ontario that has produced more than 500 million ounces of silver over the past 120 years.

A drill program designed to help make Castle East the next big contributor to that total is underway at this moment… and perhaps fortunately for investors only finding out about Castle East, just as silver prices have paused from their bull run and a welcome correction has occurred in the stock prices of silver juniors for investors looking to get in.

Unusually Strong Silver Grades

The Robinson zone lies on the Castle East section of the Castle property (1.5 km east of the past-producing underground Castle Mine) and has generated exceptionally high-grade silver assays that helped to build the resource so quickly.

In the case of the two intervals pictured below, it’s silver you can clearly see.

These visible silver intervals in Holes 19-08-W01 and 19-08-W02 from Robinson graded 50,583 g/t silver over 0.6 meters and 70,380 g/t silver over 0.3 meters, respectively.

Granted, those intervals contain native silver that may or may not repeat extensively within the zone. But even with a significant reduction of those grades in future drilling and resource updates, the company is hopeful that silver grades will still be among the highest being reported and conditions will be conducive to eventually establish a producing underground mine at Castle East.

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Tunneling Down To Robinson

Based on the depth of these holes, CCW is working on permits to drive a ramp (tunnel) down to the resource at Robinson.

Doing so would not only give the company access to the known resource, but it would also allow it to establish drill pods along the ramp’s path in order to pursue a program of underground drilling to more effectively and cost-efficiently expand that resource.

As it stands, a 50,000-meter surface drilling program, funded in part by a recent financing, is already enjoying success building out the zone.

The first 9,000 meters have hit into more high-grade at Castle East (e.g., 0.4 meters of 3,452 g/t silver) and have expanded the targeted exploration area to 135 meters east-west, 100 meters north-south and 256 meters vertically.

That expansion represents a significant 500% increase in the known mineralized zone there. It also bodes well not only for the rest of this surface drill program, but for the eventual underground ramp access CCW plans to have.

Infrastructure Could Lead To Cash Flow

That access could also prove pivotal in allowing the company to monetize some of the high-grade rock it has already outlined on this zone.

Monetization is possible because CCW has recently acquired a lab and metals processing facility in the nearby town of Cobalt.

The Temiskaming Testing Lab (TTL), once a provincial government multi-function facility that serviced the entire industry in the area, has a high-capacity bullion furnace capable of producing silver and gold dore bars. This capacity should allow CCW to process bulk samples taken from Castle East.

Already, the company has established “proof of concept” by producing three silver bars at TTL from the waste material left behind by the past-producing Castle mine.

Potential Upside From A Silver Bull Market

Right now, management’s plan is to continue the surface drilling at Castle East to vector in toward potential new discovery areas.

It will also accelerate the permitting process for Castle to build that underground ramp, which will allow CCW to really test the zone with underground drilling from a position much closer (than drilling from the surface) to the higher-grade veins that are identified by the current surface drilling or intercepted along the way as the ramp is constructed.

With a location near significant mining infrastructure and a skilled labor pool, Castle is ideally positioned to become a mine again, either by continuing to grow the resource at Castle East or by redeveloping the past-producing underground Castle Mine – or both. (The company has permitted underground access at the Castle Mine and drilling underground prior to the Robinson discovery encountered high-grade silver and cobalt veins not previously known about or mined by former operators, the last of which was Agnico Eagle 1979-1989.)

Betting that the current program would generate high-grade silver sent CCW on a run from its mid-March lows at C$0.29 to mid-August highs at C$0.70.

However, the intervening weakness in silver prices has weakened the share price from its high and given investors a lower-priced entry point to invest in Canada Silver Cobalt Works.

At this point, the early results of the current drilling at Castle East show signs that the company might be able to expand its resource estimate.

Investors who know about CCW are watching closely and they are likely to be joined by more investors as additional drill results are released and word spreads about this high-grade silver discovery – especially if the silver market resumes its upward climb and brings more investors into the sector.

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