Kuya Silver Corp. (CSE:KUYA) - Mill Acquisition Supports 3Mozpa Silver Target

Why It Matters

Owning the mill cuts processing costs and unlocks third‑party revenue, while a funded balance sheet and aggressive resource growth set Kuya up for sustained cash flow and a higher market multiple.

Key Takeaways

• Acquires Camila mill for $9M, ending processing fees
• Balance sheet $12‑15M, no near‑term equity raise needed
• Targets 100M oz silver resource in three years
• Plans two 350‑tpd plants, 3M oz annual output by 2028
• First profitable quarter expected within two reporting periods

Pulse Analysis

The Camila mill acquisition marks a strategic inflection point for Kuya Silver. By internalising concentrate processing, the company removes third‑party fees, gains direct control over power costs via a hydro‑grid connection, and creates a platform for processing contracts with neighboring miners. This vertical integration not only improves margin resilience but also diversifies revenue streams, a rare advantage for a junior silver producer operating in Peru.

Beyond the mill, Kuya’s exploration footprint has expanded dramatically from a 45‑hectare core to roughly 4,500 hectares. Recent surface prospecting identified six new vein systems within five kilometres of the Bethania mine, and underground drilling targets a 50‑metre extension that could add a million ounces per ten metres. If the company meets its three‑year goal of 100 million ounces, it would shift from a modest producer to a significant player, attracting institutional capital and potentially re‑rating its stock.

Financially, the company’s cash balance of $12‑15 million eliminates the immediate need for equity raises, allowing it to fund the Bethania processing plant from operating cash flow. Management’s confidence in achieving profitability within two quarters signals strong cash generation potential, especially given current silver price dynamics. A profitable quarter would likely trigger a re‑valuation by growth‑oriented investors, positioning Kuada Silver for a higher valuation multiple and broader market exposure.

Original Description

Interview with David Stein, President & CEO of Kuya Silver

Our previous interview: https://www.cruxinvestor.com/posts/kuya-silver-kuya-buy-cheap-sell-high-silver-developer-717

Recording date: 3rd March 2026

Kuya Silver (TSXV:KUYA) is a silver producer operating the Bethania Silver Mine in central Peru, and it is approaching one of the most consequential periods in its short history. The company has production underway, a mill acquisition closing imminently, a fully funded balance sheet, and an exploration programme just getting started.

Kuya began processing silver concentrate through the Camila toll mill in late 2024. In January 2026, the company announced it would acquire Camila outright for approximately $9 million including planned improvements, closing expected before the end of March. Owning the facility eliminates third-party processing fees, reduces operational risk, provides access to lower-cost hydro-grid power, and creates an opportunity to generate third-party processing revenue from smaller regional miners. The logistics are already in place as Camila sits on the route between the mine and the export port, meaning nothing about the physical operation changes at closing, only the economics.

Following the acquisition and approximately $3 million in additional near-term capital expenditure covering underground drilling and a new mine ramp, Kuya expects to hold roughly $12–15 million on its balance sheet. With production scaling and costs now more firmly under the company's control, management does not anticipate requiring further equity financing in the near term. That is a meaningful statement for a company of this size.

The growth optionality behind the production story is substantial. Kuya has expanded its land position from the original 45-hectare Bethania mine property to approximately 4,500 hectares. Surface prospecting has already identified six additional silver vein systems within a five-kilometre radius of the mine. Underground drilling is targeting a 50-metre-at-a-time extension of the existing resource, with an estimated one million ounces of silver potentially added per 10 metres drilled. A surface drill rig is expected to be mobilised in Q3 2026, with a second potentially following before year-end. The stated three-year target is 100 million ounces of silver would represent a transformation of the company's resource base and market profile.

Longer term, Kuya's vision is to operate two 350-tonne-per-day processing facilities (Camila and a future permitted plant at Bethania) producing approximately three million ounces of silver per year by 2028. Both facilities are either owned or permitted. The capital to build the Bethania plant is expected to come from operating cash flow rather than equity markets.

The re-rating catalyst is the first profitable quarter, which management expects within one to two reporting periods. At current silver prices, that quarter may land with more force than many investors currently anticipate. Companies of Kuya's profile, once they demonstrate sustained cash generation, have historically attracted a different class of investor and a different valuation framework. That transition appears imminent.

View Kuya Silver's company profile: https://www.cruxinvestor.com/companies/kuya-silver

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