Hello and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you have joined us for our Metals & Mining Conference. Our next live presentation is from Outcrop Silver. Outcrop Silver is a Canadian mining company focused on the identification, acquisition, exploration, and development of mineral properties in Colombia. Please note you may submit questions for the presenter in the box to the left of the slides. You can also view a company's availability for one-on-one meetings by clicking the "Book Meeting" in the top toolbar. 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 back, Ian.
Thank you for having me, and always happy to be here and help talk about, and for many, I hope, an update on Outcrop Silver. You know, the big, big summary is that we are one of the richest primary silver deposits in the world, and we're located in Colombia. I'll get into what primary silver means, and I'll hopefully not bore too many people. First, obviously, there's a lot of forward-looking statements in this presentation, and I encourage everyone to do their own due diligence. I'll try not to dwell on this part too much. You know, silver has gotten interesting recently because over the many, many years now, over the last three or four years, there's accumulated about a billion ounce supply deficit, you know, between supply and demand. The big part of that has been a dramatic increase in solar demand, right?
For the first time in history, industrial use for silver has actually passed investment or jewelry or these other areas. At the same time, there has not been a lot of investor investment. There is an anticipation that there will be, and through history, it has happened multiple times where silver price has fairly large runs in price. There are a lot of reasons for that. This one is actually setting up different because of that true, it is not an investor demand, but there is a true industrial demand associated now with solar. The other part is that silver normally trails gold price, and gold is now at historical levels. A lot is going in the right direction for silver.
Another big reason for the squeeze is what happens is that despite a billion ounces per year in production that comes from about 80% as mining, 20% as recycling, only about CAD 200 million, CAD 230 million actually come from primary silver mines. Primary silver mines are mines that actually the majority of their production is silver, right? It is their primary product. It is over 50% of their production and value is silver. There are very few of them, right? Which means that you cannot add additional production on very quickly. To put that into context, we have a supply-demand deficit over four years of over a billion ounces and an entire production of only a billion ounces, right? Only CAD 800 million coming from mines.
That kind of puts everything together of why there's an interest, obviously, in silver explorers and companies that have a silver resource, especially primary silver resource. There's another reason, because while normally these companies trade to a significant beta to silver price. You know, as a prime example, at the end of the year, silver had a bit of a low, so was Outcrop. We trade pretty tightly to silver price. Since then, from the beginning of the year to today, I think we're up about 10%-12% in silver price, making a nice little run for the start of the year, and Outcrop Silver is up 20%. It gives a good idea that if you want exposure to silver, there's normally a bigger exposure in the explorers.
I'd like to be able to tell a story today, and I like being in a position to tell this story today that I don't know, and I can't tell you when that catalyst will happen that really makes silver go on a run, because it means, you know, a silver price increasing, there's more investment, there's a physical shortage or whatever, and spikes can happen, right? Where today we're around the CAD 32 per ounce range, and historically it's gone up to CAD 50. There's expectation that things could get even higher this time. It's got a lot of volatility in price. I don't know when that's going to happen. I believe it's going to happen, but I like that today I can tell a story that independent of that, I believe that we have a strong value proposition with our plan that we have for 2024.
Sorry, 2025. It's because of the work that was really done in 2024 last year. A little bit of the history back in 2023, Outcrop Silver put out an initial maiden resource. The first calculation of resources, and it was about 37 million ounces. That's an important number, and I'll get into why. Another nice thing, reason we're called primary silver, is because 73% of that value is based on silver. The other 27% is gold, right? We're a true precious metal mine. We're not a zinc or a sulfide or lead or any of these other things. We're a true silver mine. One of the only new districts in the world, right? The majority of production comes out of Mexico, Peru, and China.
To have another district that provides a little bit of diversification in portfolios, it's nice to see that there's something building out here in Colombia. After that resource was put out, we said, we have to demonstrate where the rest is going to be coming from. How are we going to increase this resource? I've got some maps that really help show that. Last year with multiple discoveries. The initial resource is really based off of seven veins, and really it's only six, each one contributing an important portion of the resource. Already this last year we had an additional four discoveries, which we knew we have a strong pathway of saying where we're going to be increasing our resource.
Next is, you know, I wish this list was longer, but I'll be honest, there's not very many companies out there that are in development stage. They have a resource, they have something in the indicated resource grades, they're true primary silver. The list is pretty short, but Santa Ana stands out in terms of what you're seeing here is the blue bar is pure silver grade. We're at 446 g per ton pure silver. If you add on a silver equivalent, which is converting those gold ounces into silver ounces, we're at 614. Even if you look at just on a pure silver component, we're still, you know, the highest grade deposit out there of the high grade deposits, right?
Next is what I was trying to explain earlier. This is the previous resource, but what you can see is every time we add a vein, we are adding additional, we added additional resources with each one of them. The majority of those are still open. It is the importance of why having these new areas to drill on was so important for us last year. This is what it looks like in terms of a map. If you look in this top upper hand northwestern section of our claim block, the blues are the titled areas, the areas that we can drill on currently. Green are registered blocks that we are working to convert to title. Even within that block, the majority of the work was done in that northeastern section.
The resource is based off of these green lines, which are resource, but are open, and orange are the areas that we've closed off. We basically determined the total resource potential in this area. We knew that if we want to go from 37 to much larger numbers, we had to jump down within this block. If you look last year, we had discoveries on Guadua, Jimenez, Aguilar, and Aguilar is actually proving interesting with the news we put out yesterday, because there seems to be multiple, multiple veins in it, Morena, La Ye, et cetera. We are currently all the way down at Los Mangos. Those are the ones that have a little bullet. We have converted the top five already to discovery. We have moved all the way down the bottom.
You can see, I think even visually where we could go from 37, where our internal goal is we want to make sure we get to a resource over, you know, at that 100 million ounce mark, which seems to be a very important psychological number for market. Move through this and convert more discoveries and push them. If you can look at it in terms of a chart, this was the work that was done last year where we converted the upper half as the resource, hitting targets down on the bottom and pushing things more to expand the overall resource.
Maybe now is a time to explain the logic and one of the reasons why I'm excited that what we have in store for us in 2025, because Outcrop Silver, because it's a primary silver deposit and some of the other reasons I'll get down to further in this presentation, we're really grouped within a valuation of other similar companies, right? There's a kind of a premium valuation, which is about CAD 2 per ounce in the ground, right? Is what the market valuation is. If you look at Dolly Varden or Vizsla or some of these other guys, they all have a similar valuation because of the uniqueness of the projects. That means that I can today say, okay, I know the one way to, there's two ways for the valuation of the company to go up.
I talked about a beta to silver, silver price can go up, obviously I do not have a huge impact on that. Where I can create value is by increasing the number of total ounces. I am very excited because this year, because we did the work last year, we know we are going to be drilling, we know where we can get additional ounces. This year is going to be focused on not discovery, not testing, but more focused on the resource development, right? I know that we can add additional ounces around a CAD 0.50 per ounce mark this year. Our value in market is about CAD 2 per ounce in the ground. That is exciting because we have a CAD 12 million program. We are going to be drilling 24,000 meters this year and looking to do an updated resource.
I know I can spend 12 and basically, you know, return value to shareholders at a 4x, right? Even if, like me, I'm a believer that one day that silver price will run, there will be a significant change in value in silver. We are highly leveraged to that silver price. The bigger news is that even before that happens, we've got a plan in-house ready to go with high level of confidence to create value even if things continue to trade sideways. The news yesterday, and it was one of the exciting serendipitous things that happened, Aguilar ended up having multiple parallel veins to that same system. Yesterday was a new one, which was La Lupe, which we put out news once again showing high grade primary silver within this quarter.
I won't bog down too much into the geology, but know that now the focus is going to be on resource development, right? If you're curious, then the other reasons I implied this, one of the other reasons that we're getting one of these in the better premiums in terms of valuation within market is it's not just because it's the highest grade, but it also has an amazing mineralogy because 88% of our silver is Argentite, which is a silver sulfide. Why is that important? It's important because, A, small miners, they don't like, they don't want silver anyways, but you can't amalgamate Argentite. We aren't seeing any small miner problems within our area, but we're also showing incredible recoveries based on flotation and gravity alone.
We're showing 96% recovery in silver and a 98.5% recovery of gold and producing even on a rougher concentrate, which is kind of the first pull without even cleaning, you know, incredible high grade precious metal concentrates. Why is that important? That's important because you'll get paid for it. If we are producing a lead concentrate, then maybe we only get paid 70% of our value, but this is a 98% type payable concentrate and it's also so high grade, you could direct smelt it. That's neat because without cyanide. We could produce a very valuable concentrate even without leaching. You have, I call it the trifecta, very high grade, very high recoveries and a very high potential payable. The value is maintained of that very, you know, high value material that would be coming out of the mine.
Next, we're in Colombia, but we're also in one of the classic mining districts. Also, bigger mines that are in similar systems of these narrow high-grade veins, but even at very high, these are obviously the majority of these are gold mines. Segovia is 2,000 tons per day. Buriticá 4,000 tons per day. Marmato is 2,000 and growing, and it's going to grow to a 200,000 ounce a year production levels. I never would assume that we'd get to those kind of levels. We're also in an area that's known for mining. Actually, Santa Ana over 400 years ago was an important silver district for the Spanish Empire. Directly to our south, directly to the south is the Porvenir mine, which is directly to the south.
Even closer as there is an operating mine, it is a private mine, it is a gold mine, but it is a 500 ton per day project. It is really an area that knows mining. Something I guess we were talking about even before this came on, I actually live in Medellín, Colombia. Of my 30 years in the industry, 25 of those almost now have been working and living in South America. A big portion of those living. I am fluent in Spanish because I like working on projects that become future mines. That means really developing strong relationships on the ground and really providing leadership and taking these forward. I will not talk about the specific programs that we do because I think it is more important, actually the results, right?
One of the most proudest things that happened last year for me was that the town of Falan, which is the town closest to our project, put up the letters of what Falan means. In each one, that represents an important part of that. If you look in at the L, right? The L, you see a geologist looking at a piece of core, but it's about the legacy and the future of silver. We are now part of the identity of that community. It's more than just support. We're actually a part of them and a part of what they see as their future. Also true regionally, we're very close with Tolima, which is the regional government and a part of their big development plans.
They obviously love the idea of being associated with being a new potential silver production area and associated with a clean energy transition. I told you a little about myself. I'm a mining engineer. My background is mostly in South America. Previously was Senior VP and Country Manager and later Chief Engineer for Corriente and started the construction of the Mirador mine, which was the first industrial scale mine in the history of Ecuador. Also with me, Kathy on the line today, lots of experience in the silver industry previously from Silverc orp. Thyana Alvarez, our Country Manager, is just recently named one of the most influential women in Colombia. Guillermo is from Mexico and has lots of experience in these narrow high-grade vein mines.
Joe, a director, he was the previous CEO who discovered it, discovered the Santa Ana project, put together that first initial resource, which obviously I'm more about the development piece. Ana Milena, who's now the director of Freeport-McMoRan for Colombia, previously the executive vice president of Collective Mining and the president of Women in Mining. Lots and lots of very, very strong management and abilities that really rounded out. I forgot Rob Scott, who just joined us as COO, was previously the CFO of Great Bear. Looking at our overall share structure, it's another one of my big goals this year is continuing to clean up the structure and have some ideas not ready to share. The big one is last year at the end, Eric Sprott personally increased his percentage of ownership up to 19%.
We're currently probably a little over CAD 5 million in the bank with a few months behind us. Our total spend this year is going, our current budget this year is CAD 12 million. It is nice coming into this year, you know, things are looking good, silver is going the right way and also with a healthy treasury. Okay. In summary, I think I love this concept that we have one of the highest grade projects, incredible recoveries, have a nice pathway of how we're going to be increasing our resource that we executed on our plan last year of knowing where we can drill with a higher level of confidence. We now have the ability to start drilling out and creating additional resources for the project. We know that we'll have a positive impact on our valuation on a higher level than we're actually spending.
We are also highly leveraged to overall silver price. That is it. I can now turn to some of the questions. I will just read them out. There is a question here and I will go right to it. Ian, thank you for your presentation. Currently about 3% of my portfolio is in Outcrop. I recently am looking at Libero Copper and I am curious where you spend the majority of your time? One of the nice things is I do live in Colombia, right? The offices of those two companies are combined. There are a lot of synergies between the two companies. Obviously, a big portion of my time is dedicated to Outcrop Silver and backed with an absolutely amazing team. Both projects are in Colombia, both teams are in Colombia.
We serve similar, a lot of the things are overlapped, but they have independent operational executing on the ground. I would say it's a little heavier on the Outcrop side because obviously that's the most significant valuation. Next question. At what point do you start thinking of PEA? This is a great question. We talked about value creation and I won't try and get too far in it, but right now our value is off of our resource. I know that we get a valuation that's about CAD 2. It's very similar to some of our peers. It's CAD 2 per ounce in the ground. That is where our valuation comes from, right? There is a different valuation when you move into project development. You can kind of that step off point for silver is really when you get over that 100 million ounce number.
I really see us starting a PEA. Our internal goal would be able to do that at the end of two years, right? I do believe that we'll take an important step towards that bigger goal this year. We know where it's going to be coming from, et cetera. In the next year to get really close to that number. That's when we start. It doesn't mean we're not starting to get the data and the information put together. The other piece is obviously we are also looking at a smaller scale pilot strategy, which would mean getting a permit into place smaller. When we get to that point where we're ready, it's easier to expand a permit. We're trying to have our cake and eat it too, but I know what my valuation is based on today.
My valuation is based on ounces in the ground. It's the clearest pathway to create significant value for shareholders at a lot less expensive than the capital that we're bringing in. Milestones for 2025 and what does the CAD 5 million cash balance cover for your 2025 initiative? Overall, we corporate, not just drilling, but entire company. We have some internal goals, but we have a CAD 12 million budget this year. That is for 24,000 meters this year. The big goal is to be doing an updated resource based on the end of that drilling. Probably looking into the first quarter of next year or as soon as possible, doing an updated resource where we can show the value created and the drilling that we've done this year. We have about CAD 5 million in the bank today.
Obviously, sooner or later we are going to be looking at a financing, but obviously we would like to do that at a reduced cost of capital. We've got some runway. There's some wind in the sail, also in the TSXV, also in silver. We will be able to take a, we'd like to take advantage of, you know, the least diluted financing that we can possibly do. I think I covered off, do you foresee a need for capital raising in the near future? We'll definitely be doing a capital raise this year too, as I explained, but timing is, you know, probably based on when the cost of capital is the best. When do you think you'll be issuing an updated resource? The second, third, or fourth quarter this year?
No, this year is mostly focused on executing on that resource calculation or the resource drilling and then getting all that drilling done this year and updating the resource. Internally, we are looking at the second quarter of this year to start building and doing our own internal calculations because we do not want to miss the mark. I do not like missing the mark and making sure that we can make a significant increase. Okay. How much, okay, next question. Interesting question. I see this a lot on Twitter. How much of the company do you own? Did you purchase your shares on open market? I joined the company in June of 2023. The company was already in existence, already had its resource estimate out. I have come in as President and CEO.
I'd like to share that I do not take a full salary at Outcrop. I figure that that is the most largest interest of shareholders. You'd probably be surprised to say I don't even know how many options that I have sitting out there because I'm very project oriented, but I focus my energy on creating value for the shareholders. I'm aligned through options and also aligned by not taking a significant salary at Outcrop. I don't even know what that actual number is. I do have some shares of Outcrop, but I do not even know how many there are. With that, I don't see any additional questions. I'll give it a couple of seconds because I think we still have a little bit of time. Otherwise, I appreciate everybody's time. As you can see, contact information is there.
I will be honest, the best way to get an answer is through Kathy. She is perfect at finding me when she does not know the answer and providing those answers. I obviously love telling the Outcrop story. More than happy to continue to do this and provide updates as we move forward. Thank you.