Welcome to Virtual Investor Conferences. My name is Greg Young, and on behalf of OTC Markets, we are very pleased you have joined us for our next live presentation from Outcrop Silver. Please note you can submit questions for the presenter in the box to the left of the slides. You can also view the company's availability for one-on-one meetings through the Schedule Meetings tab found on the conference platform. At this point, I'm very pleased to welcome Ian Harris, President and Chief Executive Officer of Outcrop Silver, which trades on the OTCQX Best Market under the symbol OCGSF and on the TSXV under the symbol OCG. Welcome, Ian.
Thanks for having me and doing another one of these updates. Look forward to any questions that anyone might have, but I'll just get right into it and get right into the slides. Outcrop Silver is a company whose main asset, Santa Ana, is based in Colombia, and it's one of the richest, highest-grade silver deposits in the world. And I hope to be able to explain why that's so special. Obviously, lots of forward-looking statements. I encourage everyone to do their own due diligence. And mostly because I don't know who's in the audience, I won't spend too much time on it. I hope you're here because you're believers and understanding where silver is today. But the big backdrop in silver is that it's been, for the last three years, under a very significant deficit.
The deficit is estimated to be over a billion ounces cumulatively by the end of this year. And that is close to the entire production of silver in the world. So imagine an industry that's producing about 800 million ounces and a cumulative deficit of 1 billion ounces. So this has been driven mostly by solar, which in 2023 grew 64% for solar demand. And for the first time ever, silver is now becoming a true industrial metal where the majority of demand is coming from industrial use. The other big one is historically silver trades lagging behind gold, and we've always seen a huge appreciation of gold. So there's some expectations that sooner or later, I think it's a question of time for silver to really start to really go. Now. Okay, can you hear me again? I got disconnected.
Okay, so I'm sorry about that technical issue, but I'll just get right back into it. I think I was making the comment that the majority of actual silver production doesn't come from silver mines. Less than a third of all silver production actually comes from primary silver mines, which really explains the rarity of a pure primary silver play. It also, when things really can get out of hand, there's also not easy for additional production to come online. So that bodes very well for potential silver producers such as Outcrop Silver. But where are we sitting today? In 2023, Outcrop Silver came out with an initial resource estimate of about 37 million ounces, an extremely high grade, one of the highest grade undeveloped resources in the world, if not the highest grade.
A very high percentage of it was in the measured and indicated category, and 73% of the value is silver. The other quarter is gold. So it's not a polymetallic sulfide deposit, which is also important, and I'll go into that. In April of this year, we started a drill program and quickly moved from one drill to two drills, trying to demonstrate the pathway of expansion of the deposit. And I've got some slides that help explain that in deeper depth. But our biggest number one concept this year was test as many new targets as possible. And we're excited in June and September and October, and recently have been putting out new discovery holes on some additional veins within the overall system. And an overall goal to get down to the south of it in Mangos by the end of the year.
We are currently drilling on Mangos. We've really been able to execute very well on what we were planning to do this year. A little bit of background on, first of all, there's very few high-grade silver projects in the world. This isn't a select listing. It's because there's so few projects that exist that are non-developed with an Indicated Resource, and you can see Santa Ana stands ahead. This is great as important because it's the first indicator of economic potential of a project, right? Also the leverage the project has to future metals prices. Santa Ana stands above a very small existing pack. Why this year was it so important for us to test so many different targets? This is our existing resource estimate. You can see each individual vein can add a significant amount of ounces.
It's not that one is 80% of our resource. Every time we start drilling out a vein, it adds a significant amount of resource, and all of them seem to be very high-grade silver and primary silver. So if I tell you our internal goal is to get over 100 million ounces, then obviously we need more veins. And that's why it's so important to be able to test those veins and to be able to build up that inventory of potential resources on the project. When you look at this in terms of the overall project, if you look up in that top right-hand corner, the northeastern section of the project, the green lines represent veins that were included within the resource estimate. And you can see a couple of things.
First of all, there's no veins down to the south, and there's more veins available to us in the northeast. And that's for some reason. That's where all the drilling on the project has been done to date, and it's where the majority of the work on the project has been done. So this year it was all about big step-outs, getting down towards the south to demonstrate if we have 37 million ounces up here and starting to see a pathway of a much, much larger, much, much larger resource and to start doing the mapping, testing, and increase our inventory of potential targets. And that's what we've been doing this year. And you can see it here. You have all the resources up in the little green lines, and the orange lines are really drilled off.
It's about testing all these targets in the second bracket, these names that I mentioned, Aguilar, Jiménez, La Ye. This year it was about testing those targets, and that's why it's so exciting that we've been able to put out discovery holes to date for different individual veins to date, and at the same time looking to generate more targets more in the south. It's very easy to see where these additional resources from the project are going to be coming from. With that work, this is an example of Aguilar. Really, we're trying to build just enough information that we trust that we have a knowledge of this vein system. Aguilar, it was very serendipitous because we found a couple of blind targets within that system.
But it is just to have enough information to, at the end of this year, we're developing basically a simple table. And it is, what is the overall strike? What is our average success rate? What do we think the average grade of the vein potential is and the average width? And that's important because then we can basically calculate how many ounces are we going to produce off of X amount of drilling, how much does our drilling cost, but then how much does it cost us to convert silver veins into silver resource, right? Because today we have 37 million ounces. We're sitting, call it $60-80 million market valuation, but easily over $2 an ounce per ounce in the ground. That is what underpins the valuation of the company.
That means we want to be spending dramatically less than that $2 number to add additional resources. We obviously want to be adding those resources to the veins that add us the most amount of ounces for the least amount of cost, right? That way we know that our valuation is improving. We're creating value off of the exploration drilling that we're doing and being very systematic about it. Really, our focus moving forward can be more on adding those additional ounces in the most cost-effective way possible. That ensures that we'll be creating value even if silver continues to move sideways, somewhat sideways because it's obviously up now. Even our overall high potential obviously is that we have such a leverage to overall silver price.
But even if it takes time, we know that we're adding value to our shareholders with the execution of the work on the ground. The other very exciting thing about the project is the mineralogy, right? It's a very special project because the majority of the silver is a silver sulfide, argentite, right? And why is that important? And it's important because it floats by itself. And really a standout of Outcrop, and it's multiple standouts. One of the big standouts is obviously the grade being one of the highest grade, if not the highest grade undeveloped silver project in the world, right? It is also the recovery, right? We are seeing through flotation alone with gravity, a 96% recovery of silver and a 98.5% recovery of gold, which is spectacular. But another thing is that a lot of silver projects are actually sulfide deposits.
The recovery of the silver is associated with some sort of sulfide. But we are seeing extremely high grades of our concentrates based on just flotation and gravity alone. And that means that as a minimum, we would be producing a high-grade precious metal concentrate. And potentially, it's high enough grade that you could direct smelt it and create doré directly from your own concentrates without the need for leaching. And that's important because if you can get things into doré, and we've even got some feedback on our pricing, we'd be seeing a 98-99% payable for our production. Because if you, for example, produce silver and it's a zinc concentrate or just a sulfide concentrate or a lead concentrate, sometimes the terms you only get paid actually 75% of the silver value within that. And so that's another big standout for the project.
We have extremely high grade. Once you produce it and send it through a mill, we're seeing 96% recovery potential, so you're seeing a very high recovery, and then the product that you're producing also produces a very high payable, so that bodes extremely well for the project, and I call it the trifecta. You're having high grades, high recovery, and a high potential payable, meaning that that economic value is retained through the production cycle, and obviously, that is probably one of the main criteria of what becomes a mine. Grade is king, and then obviously recoveries and payables are next, but the other thing is that we have the potential to produce a high-quality product with a high payable without the use of leaching, so a very efficient underground operation without the use of cyanide.
We've also done the test work to show that this would be most likely a non-acid generating final product. So from an environmental footprint, it could probably be one of the most efficient silver mines in the world. When we look at Colombia, Santa Ana is located in the historical metal mining district of Colombia. Actually, silver mining actually started here about the 1500s and maybe forgot about a little bit. We have an operating gold mine directly to our south that's producing 500 tons per day. But the biggest gold mines in the country are producing close to Buriticá is 200 plus 200,000 ounces. Segovia is over 200,000 ounces. Marmato is working towards getting up to 200,000 ounces. So it's a very strong area in terms of knowledge and comfort and a mining history.
One of the nice things about silver is that we don't suffer through the issues that many of these guys have, which is with small miners. Most small miners, they produce gold through amalgamation, most times with mercury. And because a, we're silver, which is much less attractive than gold for a small miner, but also because our silver is a sulfide, they can't amalgamate it. So we see no small miners within our area. And so we don't see that potential conflict between a large guy and a small miner, which has been wonderful for us. And then the other, obviously, a huge piece, and I guess a little bit of my background. I am a mining engineer. I have 30 years working within the industry. And previously, for example, I started the construction of the Mirador project in Ecuador.
It became the first industrial scale mine in the history of Ecuador. And I like to be involved. This is my sweet spot. I like to be involved in projects that are normally post-resource and looking at how they become future mines. I live in Medellín, although I'm right now in Vancouver. I do live in Medellín of my 30 years. Almost 25 of those have been working, and a lot of those living in South America. I'm fluent in Spanish. And I think not only are the technical merits critical, right? But what makes a project and converts it into the mine is this part of having not just doing nice things locally or having people that like you, but extremely strong locally, having a national reputation and driving political will is what gets these types of projects going.
And I won't go into all the different things because I like talking about some of the results that we've had. And one of the biggest ones and one of the proudest moments we had this year is in the town of Falan, which is our office. Our core shack is sitting in the town of Falan. It's the closest community to our project. This year, they came out with their letters, FALN, and you can see the letters there in the center of town square. It's become a theme within Colombia, so everybody can use the hashtag and tag things on social media. But each one of the letters represented something about the municipality. And the letter L stands for legacy. And it was the legacy of silver and the future potential and opportunity with silver.
And you can even see the geologist looking at a piece of core in the letter. And for me, that means we've gone beyond whether or not the community supports us or likes us because that can come and go, right? We're a part of the community's identity, right? It's a source of pride for them. This rich history of silver and this overall potential of silver. We're obviously the only silver company within this area. So we're a part of their identity. And for me, that is the result of amazing work that's going on on the ground. In Tolima, which is the department that we're in, we're also very lucky to have a very forward-thinking governor and individual secretaries. And we've become a partner with them and a demonstration of how companies and government can work together in order to maximize benefits locally.
We're also seeing that swell towards overall political will overall in Colombia. So for us, really everything is aligned. We've been able to execute on our operational strategy. And then our strategy of how to build a mine in terms of building strength locally and generating political will has been working, and we're on a very solid pathway. I gave a little bit of an introduction to myself. A very new addition to the company is Robert Scott, who came from Great Bear. So a huge addition to the project. Diana Álvarez is our Country Manager and was recently named one of the most influential women in Colombia. Guillermo is our Vice President of Exploration, who comes from Mexico and has the background on how to drill, and our success rate after Guillermo has joined has gone up dramatically in understanding these veins.
And then by coincidence, he was also in Fruta del Norte in Ecuador when I was also there at Mirador. Kathy came from Silvercorp. She actually has the most experience within this group for investor relations. And then even on the ground and a part of the directors, Joe was the original exploration geologist who discovered the project. He continues on as a director. Ana Milena Vásquez is the president of Women in Mining. He used to be executive vice president of Collective Mining. So overall, it's an extremely strong board, extremely strong management team. I would argue probably one of the strongest management teams in Colombia in terms of overall talent. And then the other thing is obviously how are we structured? The great news is that Eric Sprott has always been our largest shareholder.
Then earlier in this year, about a month or two months ago, he came in and put an additional CAD 5 million into the company and increased his ownership to 19% ownership, which I took as a strong checkmark that not only have we been executing on our strategy, but showing strength in market that he wanted to see an additional position within the company. And I also think he believes strongly in the overall story behind what could happen in silver in a very short term, that it could get very explosive. But seeing him at 19% is a personal source of pride. And today, we are sitting on about CAD 7 million. We'll end the year with about CAD 7 million. So we're strongly positioned into next year to be able to execute on our plans for next year.
So overall, in summary, Santa Ana is a spectacular project in terms of its grade, its potential, its recoveries, potential payables. We put in a plan in 2024 of demonstrating and hitting as many new targets as possible to build the base work of how to increase this resource, and we've been executing on that. We're one of the very, very few primary silver projects in the world, and obviously the macro looking at what the potential for silver could go on a significant run. We're highly leveraged to it, so everything is strongly bodes well for us, and even looking into the future of turning this into a future silver mine, we've been doing the base work, and that work is showing strong fruit, so with that, I probably will just move directly into the questions. Okay.
And so the first question is, do you plan on updating the resource estimate after the 2024 drill campaign? Is it complete? So no, we're not planning on doing an updated resource based on the 2024 drilling, but it is the basis. It's not like the drilling doesn't count towards our resource, but it wasn't focused on resource drilling. Because I explained earlier, we want to be the 2025 drilling will be a higher focus on just resource, but we're going to be adding resources in the area that adds pounds or adds ounces in the ground for the cheapest possible. Way below, actually, we have an internal threshold of CAD 0.50. We want to be adding new ounces at less than CAD 0.50, CAD 0.50 per ounce, which is way higher than our current valuation to make sure that the work that we're doing is creating value.
We look at, we'll be starting that work in the first quarter of next year, doing it internally and preparing. But I think we're really looking at the end of 2025 when we'll be looking at doing an updated resource. Is the CAD 7 million in capital sufficient to support the 2025 initiatives? Our overall budget for 2025 is CAD 12 million. We're just a little bit short to do our next in the best interest, and it's the cheapest cost of capital or what we need for our budget and also where we are, but we're strongly positioned. Can you discuss your milestones and drill programs for 2025? Yes.
So our overall milestones for 2025 currently are to do 24,000 meters of additional drilling, focusing that drilling in the areas that produce ounces as cheaply as possible to put us in a position where we're looking at an updated resource by the end of 2025. So we would continue to see, I think you can see it. We've had a very strong news flow since after summer of last year, and we will continue to put a lot of news flow out. And we'll also continue to do a lot more regional work. You saw there's less lines down in the bottom, the southern section of the deposit, and we want to increase our regional work because the more targets we have, the more effectively we can add additional resource to the book. So is Santa Ana a green or brownfields project?
And it depends which optics you look at it. In the 1500s, the Santa Ana and the Frias mines were in operation. So it's a quasi-brownfields project, but we're talking colonial times when mining, and there's been some smaller mining operations. But overall, in a permitting perspective, it would be treated as a greenfields project. And maybe I'll go in a little bit about the strategy, but if you've seen some of the biggest mines, Buriticá, Silencio, Marmato, moving towards 200,000 ounces of gold a year, they're very large operations, 2,000, 3,000, 4,000 tons per day. I don't think that Santa Ana, even at where we would like to get, it's probably within that 1,000 to 1,500 tons per day operation. But all of them started at a smaller scale and then expanded. And there's reason for that. Just like Santa Ana, these are very high-grade but narrow veins.
So building up your production profile, adding as many working faces as possible, and slowly building up your production so you're never getting into a situation where you have a hungry mill, right? And I think we've seen that in market that mills have been oversized, people can't keep them fed, and then the working capital kills them. So it's a better approach to start at a smaller scale and continue to increase your production as you have the production available. And it's obviously a lot easier to permit that way, which is one of the advantages. And we are looking at 2025, and perhaps a key catalyst is actually getting into the permitting process for the Santa Ana.
Even though it's way ahead of us, we will not be doing a normal project development in terms of PEA, pre-feas, or feasibility until we get close to that 100 million ounce internal target. Sorry, I got long-winded on that reply, but do you plan on updating the resource? I think I explained that one. Is Santa Ana explaining that one? Can you discuss the miles? I think I went through, and I think we've got all of the questions, right, but again, in summary, 2024, we put together an ambitious plan to change from just putting out an initial resource to demonstrate how the project can grow dramatically. I think we're also starting to put the de-risking the projects in terms of future production profile, and we've executed on the plan that we told market we would do.
I think, actually, our guidance for 2024 was originally 10,000 meters before the end of the year, and we're probably going to hit 14,000, and next year will be 24, so I'm excited that we've done the work. We're executing. We've positioned the company very well. We've shown the potential in terms of grade and the leverage to overall silver price, so I'm excited that we have a plan that can create value for shareholders over 2025 and are extremely leveraged with an expectation that silver price could run and will be one of the standout performers if that does because there's so few primary silver projects out in the world, so thanks, everybody, and always available for additional questions, even outside of the conference. Thanks.