Andean Silver (ASX:ASL) flagged high-grade silver and gold drill results from its Trinidad and Delia SE projects, which remain among the highest-grade projects on the Australian bourse with further exploration upside, Euroz Hartleys said in a note on Thursday.
However, the new methodology used to calculate the resource estimate increased the scale by 104% but affected grades, with silver grades falling 44% and gold grades declining 38%, resulting in a material impact on Euroz Hartleys' financial model.
The brokerage believes the outlook for physical silver remains strong, with the metal market still in deficit. Recent global trends are setting the stage for increased electricity demand, which could boost silver demand, and the company is well-positioned to benefit from this, it added.
Euroz Hartleys maintained a buy rating on Andean Silver and lowered its price target to AU$2.88 from AU$3.71, citing lower grades.