Its minimum A$10 million initial public offering will make the company debt-free, with 100% ownership of the Manuka silver project in New South Wales’ renowned Cobar Basin and put it on track to pour its first silver doré in October.

The company will spend A$3.3 million refurbishing the 850,000 tonne per annum processing plant, but before getting started on the 52 million ounce silver resource, it will kickstart the cashflow by processing 516,000t of silver oxide ore that is already waiting on the ROM pad.

CEO Nick Lindsay is enthused not only about the project and the potential in the greater 940sq.km exploration licence area beyond the mining lease – but also about silver itself.

“Silver is the queen of tech metals and people should not forget that,” he said.

“Everyone knows its currency role as an investment metal but it also has an industrial role.

“Most people know it’s in electronics because of its superior electrical and thermal conductivity but it also generates energy, photovoltaic cells can’t function without silver, so the renewable market depends on silver.

“Lithium is just used in batteries but silver is too, and silver is more versatile – it’s the catalyst for generating hard plastics and its antibacterial properties are being used for water filtration and in more and more products, from bandages to odourless socks.”

He said the physical silver market had been in deficit since 2004 and with demand growing through more industrial, health and renewable energy applications, he expected the price to continue to rise.

Silver has been moving higher – it was worth around US$18/oz on the spot market in early April, a gain of more than 15% over 12 months.

Manuka’s main shareholder ResCap Investments was founded on metals trading and hedging, and Lindsay confirmed the board would hedge a component of its silver production.

“As for how much, that’s a discussion the board has to have,” he said.

“It won’t be 100% but it will be enough to cover ourselves and leave us open to the upside.”

ResCap acquired the Manuka project a year ago from administrators, putting the plant on care and maintenance with the intention to restart production.

As for how Manuka Resources intends to succeed at an operation where the two previous owners went under, Lindsay has a ready and detailed response.

“We have the luxury of learning from other people,” he explains, “and inheriting a plant where the process design issues had been ironed out, and a track record of steady production.”

He said the plant, which cost about $60 million to build originally, would cost $100 million to replace and had been running well before it was turned off in December 2015 for reasons unrelated to the operation.

In its last 12 months of production, it processed 518,523 tonnes of ore with a grade of 96g/t silver and a recovery rate of 72% (silver pour, pictured above).

Long story short, Lindsay said Manuka had a three-stage operation planned. Before that and immediately following the IPO, the plant would undergo much-needed deferred maintenance and a tailings dam uplift before a production ramp-up over 12 months.

The first stage of operations, in the second half of this year, involves the re-start of the plant and processing the silver ore stockpile.

The second stage in mid-2018 is the re-starting of mining from the two existing pits, then the two planned pits on the mining lease, to provide fresh silver ore for processing.

The longer-term stage is mining the deeper sulphide material, which Lindsay is keen to investigate.

“It’s a weathered deposit, it’s like a layer cake, and when we get to the primary material below the oxide the characteristics change,” he said.

The existing 52 million ounce resource uses a cut-off grade of 22g/t silver but there is a 4 million tonne lens grading 100g/t silver for 13 million ounces (with a 70g/t cut-off) and Manuka will conduct infill drilling and metallurgical testwork before restarting the mining operation (heap leach tanks, pictured).

“There’s a big asset in the ground and it’s ready to go, we just need to define it a little bit more,” Lindsay said.

“We can’t high-grade the orebody but we can select the optimal blend using the 100g/t material.

“It has a really good high-grade lens that lends itself to selective mining and good blends.”

Meanwhile Manuka has the perfect starting point with the ROM stockpile containing 516,000 tonnes at a grade of 70g/t for 1.16 million ounces of silver, which will generate instant cashflow.

“That gives us 12 months to get all our ducks lined up for mining and processing fresh ore,” Lindsay said of the company’s enviable position.

“There’s no big capital expenditure and the facilities including the camp, airstrip and road to site are in good condition.

“There is water 5km away and we self-generate power, and we’re looking at the different permutations for a hybrid energy set-up.”

The company has two exploration objectives, starting with spending A$1.29 million post-IPO over two years updating the mineral resources within the mining lease.

“We’ve also allocated funds to probe the primary ore underneath the oxide system,” he said.

“And there are high levels of lead and zinc values in places, but they haven’t been extensively or comprehensively tested in the past and that is a high priority on the mining lease.

“We have the space and it’s not hard to build a flotation circuit.”

Manuka will at an appropriate time turn its attention to the seven exploration licences spanning 940km² which Lindsay said already contained numerous geophysical targets, some of which had never been investigated.

The licences lie on the western margin of the Cobar Basin, which hosts major mining operations including CBH Resources’ Endeavour silver and base metals mine, CSA Cobar’s copper-gold mine, and Aurelia Metals’ high-grade gold-lead-zinc-silver Hera mine.

“We’ll be using our land position to look for world-class lead-zinc-silver deposits up there or even copper-gold like some on the eastern side of the basin,” Lindsay said.

“We don’t know enough about the mineralising mechanisms yet in the licence area so we have to challenge that and we will be exploiting that opportunity.”

The IPO is expected to close within weeks and Lindsay is confident of producing first silver in October.

He has previously worked in Cobar and most recently spent 7.5 years advancing the Nueva Esperanza silver project in Chile, accepting the role at Manuka partly due to his affection for silver, but also for the exploration opportunities and the possibility of building it into a substantial project.

For investors, the company offers exposure to a pure silver play and Manuka intends to become a premier silver investment on the ASX.

“Another factor that sets us apart is that we’re going to produce silver doré, not a concentrate, it’s money at the mine gate,” Lindsay said.

“We’ll be pouring silver in October, that’s our first major benchmark.

“We’re going to be the only producing silver stock on the ASX and silver is a really sexy metal.”