Would you please make welcome Joe to talk about Silver Mines Limited, everyone?
Thank you. Thank you for the introduction. I'll skip past the disclaimers. But here to talk about Bowdens primarily. It's been around for a long time. People are probably very aware of it and probably aware of some of the issues that it's had, particularly through the permitting process. But I guess fundamentally, we look at it, it's 100% owned. It's the fifth largest undeveloped silver project in the world. It's obviously the largest in Australia by a significant margin. We have 180 million ounces of silver, and we tend not to talk about silver equivalents.
So it's 180 million ounces of silver, of which 91% of that is in measured and indicated. So there's been a lot of work done on this project over the years and a lot of money spent. The optimization for this project was released in December 2024, so just over 12 months ago, and the reserve was about 72 million ounces. We'll go into the details of that a little later. That gave us a mine life of 16.5 years, averaging just under 4.5 million ounces a year of mined silver production.
So it's a, it's a significant and probably one of the most leveraged silver projects in the world, and there's significant potential to, to, to extend the mine life, which we'll go through. Capital structure. Look, I mean, in terms of the, the, the comment I'd really wanna make on this is that, you know, for, for, for a long time, Silver Mines was the, the, the proxy for, for the silver price on the Australian market. Now, there's, there's a, there's a whole load of new entrants in the market, which, you know, we love to see, and, you know, we're, we're huge fans and supporters of anything silver-related.
But we still provide enormous liquidity for investors, and you know, over the last two years, we average about AUD 2.5 million of trading a day, which for a company at our stage of development is pretty impressive. Cash at bank finished calendar year 2025 with just over AUD 40 million in the bank, and there's about AUD 8 million of in the money options, which expire end of June. So we'd hope to get those in. Again, we talk about how globally significant Bowdens is, and as you'd all be aware, you know, silver is largely a function of by-product credits from lead, zinc, and copper mines.
And so there aren't that many pure silver projects or silver development plays available to investors. So when we have one of the largest, we're very sort of keen to point that out, very proud of that, and we are about the fifth largest based on measured indicated resources. Again, we tend not to sort of look at the inferred resources. And certainly we're one of the most advanced. You know, we have an optimized feasibility study. We're in the process of finalizing the definitive feasibility study, which will be out mid-year. And, you know, when you look at that slide or the graph on the right-hand side there, you know, interestingly, the flags underneath it...
I mean, Australia, we're the only one in Australia of any global significance. And you see a lot of Latin or Central American flags there, and as tragic as it was, for Vizsla, I mean, Vizsla, their Panuco project is, when we talk to institutional investors, they sort of say that we're the next cab off the rank after Vizsla. And obviously, we have had some delays with the permitting in New South Wales, which is incredibly frustrating, but I'd rather be dealing with that than Sinaloa and drug cartels. So, you know, there's an element of security in our jurisdiction.
So the study itself, look, I mean, this is, this is in the process of being updated right now, for the, for the definitive feasibility study . Pre-production capital costs of AUD 300 million and just over AUD 330 million. You know, that number's 14 months old, so, you know, I think there's usually considered to be a, a bit of inflation coming there. It, it's a, it's a high-margin business, though. I mean, our life of mine all-in sustaining cost is less than AUD 25, which current spot price is, is, well, today is about AUD 100. Importantly, we use US$29 silver price, which with, with, with a FX of 0.68 or 0.67, sorry, so a AUD 43 silver price. So, yeah, this is a...
This makes a lot of money over a very long period. Sorry, one other point is our leverage to the silver price there. You know, despite comments out there about, you know, the lead of this project or zinc, I mean, under our study numbers, it's 85%, it's over 85% of the revenue comes from silver. If you look at those numbers at spot, it's about 93%, so this is very, very leveraged to the silver price. Quick chart of the production profile. I'd say I don't tend not to like to put silver equivalents in, but we were actually asked by one of our investors to include this. But, you know, it's a very strong ramp up to, you know, over 5 million ounces per annum.
There's a drop in year six through to year eight, which is scheduling based. We believe there's plenty of opportunities to fill that gap, whether it be through debottlenecking the plant once it's up and running, or a very high-value potential underground development scenario, which we'll talk about a little bit later. In terms of the development itself, we've deliberately tried to keep it as simple as possible. So it's a very simple open pit. It's a five-stage open pit. This life-of-mine strip ratio is less than 1.5 to 1, 2 million tons per annum of ore, so it's 5 million tons of material movements per annum, which is...
Our plan has day shift mining only, so there's no night shift mining here, and that's not a permit restriction, that's just we don't, we just don't need to be doing night shift mining. The first five years is pioneering a hill down, so for the first four and a half years, all of the waste movement's downhill. And so there's huge elements of this project that, yeah, it's not the highest grade project in the world, and we've never sort of hidden or been, you know, tried to hide that fact, but the other aspects of this pit make it very simple. So the mine design, say five stage, very simple, seven trucks, one excavator.
The metallurgy is, originally we were going to do a two-stream concentrate, just with the lead with 80% of the silver, and then zinc with the remaining 20% of the silver. The problem with that profile is that the zinc concentrate, you only get paid 70% of the silver. So we looked at doing a bulk concentrate about 18 months ago, and the numbers were well, it was a bit of a game changer for the project, really. Recoveries went up sort of 6%. All of the silver reports to, you know, a concentrate that gets paid 95%-96% for. So, and again, it just simplifies the project. It takes cyanide out of the process plant, so there's no cyanide going into the tails.
So all in all, a great development for us. I'd highlight, just highlight here, on the underground or the what we deem sort of the underground to the base of the pit, and the deepest this pit gets at the moment is 160 meters. Yeah, we see these as sort of opportunities for higher grade underground development scenarios, and we'll be drilling here a bit later. Interestingly, one of the aspects that's sort of being thrown at us right now is that, you know, we ran the optimization at $29 silver. We're gonna be running the DFS probably around $35, somewhere around that number.
And when you just look at the Whittle shells, the Whittle shell for $35 drops out close to 50 million tons versus our reserve at 29 of 32 million tons. And while the guys were doing the exercise, I said, "Can you just run the Whittle shells at 50 just to show me what it does?" And needless to say, at $50 or so, $50 US an ounce, this there is no underground here, the open pit just pushes all the way down. In terms of the next steps, I mean, 2025 was probably a year we'd like to forget, just in terms of the delays created by the permitting aspects in New South Wales.
But we believe we're well through that now, and progressing on a known and navigable route through that process. But in the short term, the DFS, we're expecting that mid-year. We expect to then commence drilling on the underground and look at underground studies. And, you know, the permitting aspects, we don't, we're not gonna get it in the first half of the year, but we certainly aim or would be aiming to get to have those permits back at the end, you know, before the end of the second half of the year. So the key takeaways for Valens for me really are that, you know, it's scale.
It's long life, low cost, and expansion opportunities or extensions to the mine life. So huge optionality for investors. It's in a low jurisdiction environment. It's a simple process. You know, I'm not trying to be flippant. There's no such thing as an easy mine, but we've tried to keep it as simple as possible. You know, the strip ratio is low. There's no pre-strip, day shift mining only, small trucks, simple metallurgy. And so we think that presents a great opportunity for a very long period of significant free cash flow generation.
Just to take a bit of a sort of a move across the water, during last year, we spent quite a lot of time looking at potential assets with a preference for Tier One jurisdictions, and by that I mean, geopolitically Tier One. So we really kept the search to Australia, Canada, North America, and certain parts of Latin America, Chile, and a bit of Argentina. And we came up with some... two what we believe to be absolutely cracking assets in California, and everyone says, "Oh, California, you must be mad." But hey, we've been dealing with New South Wales for long enough, so California feels like a bit of a dream, actually. And I would just highlight that this is, that this California is California.
This is San Bernardino County. It's the largest county in North America, and there are more mines in San Bernardino County than any other county in North America. They are very pro-business, pro-mining. So we've picked up two projects there. Calico was an area of interest to us from just from our global search. Just to the south of our tenements there, there's two projects, Waterloo and Langtry, which are owned by Apollo Silver, which is a TSX-listed company. It's about 175 million ounces there unmined, and they're going through their studies now. And we sort of...
That was presented to us as just to look at the geology, and my team of geologists looked at the Waterloo and Langtry and said, "That looks really interesting." And they said, "But that land to the north looks really, really more interesting." And whether it be serendipity or luck, about six weeks later, we got approached by an individual who said, "Actually, we've got some land in California available. Do you want to have a look at it?" And we had a look at it, and it was like, wow. So again, no one's looked at this project for 100 years, essentially. There was 25 million ounces of very high-grade silver mined here at the end of the nineteenth century, early twentieth century, and no one's been back.
There, there's a valley on the, to the, to the south of the project called Wall Street Valley or Wall Street Gully, and they were just pulling out tons and tons of silver back in the late 1800s. We've gone back to first principles here. We've done, we've recently completed the mapping. We've done a very extensive rock chip sampling, and the green lines you see on the map there, they are all zones of alteration or epithermal vein systems. There's 42 kilometers of it on these, on these tenement packages, and in some places, it's 10 centimeters wide, in other places, it's 5 meters wide. So we're just working up drill targets now, and, you know, once we've worked up the drill targets, we'll be submitting the drill plan to, the, the local county office.
And the permitting time for this will be about five months to get on there. So we're very much looking forward to hitting this, and I think, you know, there's gonna most of the chip samples coming back are generally over 150 grams, between 150 and 400 grams silver, and a lot of barite, which is also a critical mineral in the U.S. as well. Forty miles to the west, we picked up this Kramer Hills Project, and it's gold, it's not silver, but it just looked sort of too good to not wanna pick it up, really.
The history here, there was a gold rush here in the early 20th century, and it was a very unsuccessful gold rush. They found all these veins, they started mining the veins, and they petered out very quickly. You know, between 2 and 5 meters, they just disappeared, or they weren't very naturally extensive. And the biggest mine that was developed in the 1920s was Sherald, which mined 5,000 tons. So they and all of the old-timers' reports made these complaints that, you know, the veins stopped, and it just went into what they considered micro gold. And it turns out that micro gold is about 2 grams, so we're fairly happy with that. So we've got 8 kilometers of strike of this major shear zone.
And after the 1920s, no one looked at this until 1981 when BP Minerals picked up the ground, and they started drilling and obviously followed up on these systems that the old-timers were mining. They drilled out five open pits for about just under 8 million tons at just under 2 grams. In 1986, they decided they didn't wanna be in minerals anymore, so they decided to divest it to a junior resources company from Vancouver, who subsequently got it permitted, fully permitted five pits with a heap leach project. They commenced production, or they commenced development.
They took 20,000 tons out of the first pit, put it on heap leach pads, and it failed to irrigate because they hadn't taken into consideration the clay, which was quite common back in those days. It then got bought by an old-timer prospector who spent 20 years trying to get the gold out of that heap leach, and he died, and we're dealing with his widow. So this isn't a project that's been through many hands. We know there's gold there. Due to ASX restrictions, we couldn't release the resources that were there. So we've put a JORC target on it of about 445,000 ounces. And just to put that into context, the resources that were in the resour...
In those five pits was about 400,000 ounces, and that was just drilled down to 30 meters, free dig, oxide gold, and we know there's a sulfide system underneath as well. There was one hole from the 1920s. It was a water bore hole for the Sherald Mine, where they intersected extensive amount of or intersection of sulfides at depth as well. So going through the final stages of permitting this, we hope to be drilling here before midyear. So we're very excited by this, and it just gives a bit of news flow while we're waiting for permitting. So 15 seconds to go. I'll leave you with the investment highlights.
Look, we believe we present the best leverage to silver on the ASX, and probably one of the most leveraged companies to silver in the world. It's a long... Bowdens is a long-life, low-cost development, and there is significant re-rate potential here. It's a very asymmetric trade, and we are 100% confident that the permitting issues are now well behind us, and we'll have that permit back by the end of the year. And on the exploration front, watch this space. You know, the rings will be turning.