AbraSilver Resource (TSX: ABRA; US-OTC: ABBRF) is raising C$45 million ($32 million) through a bought-deal share offering to advance early works at its Diablillos silver-gold project in Argentina, as the company targets a construction decision next year and production by the end of 2029.

The Toronto-based explorer agreed to sell 3.06 million common shares at C$14.70 each, according to a Thursday release. Underwriters led by National Bank Financial, Beacon Securities, and Raymond James hold an overallotment option for an additional 339,000 shares, which could bring gross proceeds to nearly C$50 million. The financing is expected to close around July 29.

Shares of AbraSilver declined 5.3% to C$14.81 in morning trading Thursday on the TSX, giving the company a market capitalization of approximately C$2.41 billion.

Use of Proceeds and Recent Milestones

The new capital will fund early works slated to begin this quarter at the Diablillos project in Salta province, as well as the purchase of long-lead equipment. The proceeds represent a preparatory funding step ahead of a potential construction decision, with the DFS estimating initial capital costs of US$722 million including contingency.

The financing follows a series of milestones for the project, including a definitive feasibility study (DFS) released last month, final environmental approval, acceptance into Argentina's Large Investment Incentive Regime (RIGI), and continued exploration success beyond the current mine plan. RIGI is intended to support large-scale investment projects in Argentina, making its acceptance relevant for mine developers seeking to move from study-stage work into construction planning.

"The recently completed definitive feasibility study highlights Diablillos as a robust, high-margin, long-life precious metals project with significant production potential and substantial exploration upside," AbraSilver stated.

Drilling Results

The Diablillos project is located approximately 160 km south of the town of Salta in northwestern Argentina.

On July 13, AbraSilver reported drill results indicating further resource growth beyond the limits of the DFS. Hole DDH-26-036 at the Oculto West zone intersected 109 metres grading 221.2 grams silver and 0.72 gram gold from 114 metres downhole, including a higher-grade interval of 14 metres grading 580 grams silver and 0.23 gram gold from 135 metres.

The results "highlight continuity of high-grade oxide silver-gold mineralization in a previously untested area at Oculto West and beyond the DFS mine plan," said Scotia Capital mining analyst Eric Winmill.

Resource and Feasibility Study

Diablillos hosts 232 million measured and indicated tonnes grading 33 grams silver and 0.34 gram gold, containing 248.1 million oz. silver and 2.5 million oz. gold. The project also contains 49.3 million inferred tonnes grading 12 grams silver and 0.26 gram gold, for 18.4 million oz. silver and 420,000 oz. gold.

The DFS outlined a 25-year open-pit mine with an after-tax net present value of approximately US$3 billion, a 42% internal rate of return, and initial capital costs of US$722 million including contingency. The operation is expected to produce an average of 20 million silver-equivalent ounces annually during its first five years, before averaging roughly 10 million silver-equivalent ounces over the mine life. The next steps investors and project watchers typically track after a DFS include detailed engineering, procurement of long-lead items, project financing arrangements, and a formal construction decision.

La Coipita Project

AbraSilver is also developing La Coipita, a copper-gold porphyry project in Argentina's San Juan mining district near the Chilean border, through a joint venture with Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK). The Miocene porphyry-epithermal belt hosting the project contains world-class deposits including Filo del Sol, Los Azules, El Indio, Veladero, Pascua Lama, and El Pachon.