Thomson Resources Share Price up on Silver Move (ASX:TMZ)

Thomson Resources Share Price up on Silver Move (ASX:TMZ)

At time of writing, the Thomson Resources Ltd [ASX:TMZ] share price is up more than 3%, trading at 16 cents.

This on a down day for the market.

It’s a bullish looking chart for the TMZ share price, with a big spike materialising at the end of January:

ASX TMZ Share Price Chart - Thomson Resources Shares


We look at TMZ’s latest announcement, which details the acquisition of a silver project in Queensland. With stimulus money flowing through the system, we examine the outlook for the TMZ share price and small resource stocks generally.

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Highlights from TMZ’s silver move

Here are the key bits from today’s announcement:

  • Thomson Resources acquires 100% of the Texas Silver Project (“Texas”) for a total of approx. A$2.5 M for the permitted mine infrastructure, mine and exploration leases, JORC 2012 silver — gold resources, connection to the state power grid and approx. A$3.3 M to replace the existing rehabilitation bonds for the mine leases.
  • Texas, along with the recent acquisition of Webbs and Conrad Silver deposits1 and the earn-in and JV on Mt Carrington Silver-Gold ProjecT, is another significant step in Thomson’s consolidation of a large silver dominant resource in the NSW and Queensland border region.
  • Thomson will now control silver – gold, base and technology metal resources that could underpin the Company’s Fold Belt Hub and Spoke Silver centralised processing Strategy.
  • Texas and Mt Carrington Projects both have comparable levels of permitted mine infrastructure, giving optionality for the location of the proposed centralised processing facility.  The Texas has a significant JORC 2012 silver – gold resources

The company also notes that the Twin Hills deposit historically produced ~1.4 Moz of silver.

You can see how the project fits into their Queensland strategy below:

Thomson Resources - Twin Hill Silver Deposit

Source: Thomson Resources Ltd

It’s a fairly compelling mix of resources that they are pursuing, as the map shows.

Outlook for TMZ share price

TMZ has a broad spectrum of resources, suitable to different market environments.

Around the market I’ve noticed a lot of small-cap explorers struggling to move up the charts as the resources they are pursuing move higher.

TMZ is an exception to the rule here, on the back of steady positive news flow.

You can see the silver chart below as well:

Silver Chart - Thomson Resources Ltd


While a lot was made of the GameStop crowd trying their hand at the silver market, the underlying features of the silver market could drive the price higher, regardless of what the online crowd does.

That’s because it’s an important industrial metal, in addition to being a precious metal.

With even more stimulus on the cards via a US bill that’s making its way through the Senate at time of writing, together with a mammoth infrastructure bill — I’m bullish on silver.

Along with the other base metals that TMZ has in its projects.

If bond yields do rise however, and the market sells off, it will be interesting to see what happens to the gold price in that environment.

A solid stopgap for TMZ then.

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Lachlann Tierney

For The Daily Reckoning Australia