The base case PEA uses $21.95/oz Ag, $3.78/lb Cu, $0.94/lb, and $1.33/lb Zn.

"Total acquisition, exploration and development costs are approximately $35 million and significantly, the property is not burdened with royalties, presenting potential financing opportunities for additional drilling and development work at the property," company president Lawrence Page said.

The maximum cash outlay for the project is estimated to be $341 million and paypack is set at around five years. The revenue is pegged at $3.71 billion.

Page said the project benefits from its location which offers "all the elements necessary" to establish a mine, including infrastructure, work force, transportation, miner-friendly legislation, power, access to mills and smelters, and weather conditions for year-round operations.

It is based in the in the Faja de Plata in Durango.

The potential annual mine production for the operation is estimated to deliver 14.2 million oz AgEq, including 5.8 million oz Ag, to the processing facility averaged over a 15-year period.

Red Cloud Securities analyst Timothy Lee called Cerro Las Minitas one of the largest undeveloped silver projects globally, "particularly in the hands of a junior".

"The PEA yields positive economics in the base case, with strong leverage to commodity prices, particularly Ag and Zn. We note that the $341 million initial capex is more manageable in size than many of the development-stage projects in the hands of juniors," Lee said.

"Exploration upside is still strong, and the company has added ~400 metres of strike length since the last resource," he said.

A 2021 mineral resource update showed indicated resources of 137.32 million AgEq and inferred resources of 197.71 million AgEq.

Southern Silver's share price was last quoted at C$0.17 (US$0.13). It has a market capitalisation of C$49.56 million.

Red Cloud has a target price for the company of C$0.85.