Silver North Resources Ltd. (OTC: TARSF)

Silver North Resources Ltd. is a mineral exploration company that concentrates on silver exploration in Canada and the United States. The company’s primary focus is on the Haldane and Tim silver properties located in the Yukon Territory. The Haldane property covers approximately 8,579 hectares and is situated 25 kilometers west of Keno City in the historic Keno Hill silver district. The Tim property consists of 72 mineral claims in the southeastern Yukon and is subject to a two percent net smelter return royalty that can be earned by Coeur Mining Inc. through funded exploration and cash payments. In addition to these core assets Silver North holds interests in several other Yukon exploration projects such as the White River, Goz Creek, MOR and Goz Creek properties, each at the exploration stage. The company also leases a group of three claims in Nevada known as the Ashby property to Nevada Canyon Gold Corp. and retains a one point zero eight percent net smelter royalty on the Pucarana property in Peru. All of the company’s holdings are currently at the exploration stage and do not contain proven mineral reserves. Silver North’s activities include acquiring exploration rights, conducting geological mapping, geochemical sampling, trenching, and drilling programs to evaluate the potential of its mineral claims.

Silver North Resources Ltd. generates revenue mainly from property option payments received when partners earn interests in its mineral projects. The company also earns interest income on its cash balances and occasionally realizes gains from the sale of marketable securities. Lease payments from the Nevada Canyon Gold Corp. agreement on the Ashby property provide another modest source of recurring cash flow. Option payments are typically structured as staged cash payments and share issuances that are triggered by the achievement of exploration milestones or the passage of time. Because the firm is not yet producing metal it does not rely on the market price of silver for its day to day operations. Instead its revenue stream is tied to the success of option and joint venture agreements that fund exploration work on its properties. The company does not derive income from the sale of concentrate or refined metal and therefore its financial results are not directly affected by fluctuations in commodity prices.

Within the junior exploration sector Silver North Resources Ltd. competes with other companies that are seeking to discover and develop silver deposits in North America. Its competitive position is strengthened by its land package in the historic Keno Hill silver district which has a legacy of high grade silver production and extensive historical mining data. The company’s drilling programs have intersected multiple zones of silver lead zinc mineralization with grades that compare favorably to those of nearby operating mines such as the Keno Hill mine and Coeur Mining’s Silvertip operation. Additionally the net smelter royalty interests it holds in Peru and Nevada may provide future cash flow without requiring further capital expenditure. Key competitors in the region include Coeur Mining Inc. Almaden Minerals Ltd. and various other junior explorers that are active in the Yukon and Nevada mineral belts. Silver North’s ability to retain a significant ownership stake while funding exploration through partner contributions differentiates it from pure play explorers that must dilute equity to finance work.

The company’s customers are primarily optionees and joint venture partners that pay to earn an interest in its exploration properties. Notable examples include Coeur Mining Inc. which funds exploration on the Tim property under an option agreement that includes cash payments and the earning of an up to eighty percent interest. Nevada Canyon Gold Corp. leases the Ashby property and makes annual payments that constitute a steady stream of operating cash. Silver North also works with individual prospectors through option agreements such as the GDR Project in southern Yukon where it issues shares and receives cash payments to earn a full interest subject to a two point four percent net smelter royalty. In addition the firm receives cash from the sale of marketable securities and interest on its cash reserves which are sourced from institutional investors and brokerage platforms. These counterparties collectively represent the company’s revenue generating customer base.