Unico Silver (ASX:USL) Surges on La Negra SE Drill Results: Is It Still a Buy After 400% Rally?

Unico Silver (ASX: USL) has delivered one of the most impressive rallies on the ASX this year, with shares climbing more than 400 per cent over the past 12 months to record highs above A$0.95, pushing the market cap beyond A$570 million. The latest catalyst came yesterday as the company released assay results from 31 drill holes at its La Negra SE prospect within the 100 per cent-owned Joaquin Project in Argentina.

The results confirm a broad, shallow zone of oxide silver-gold mineralisation extending over 850 metres of strike length and 175 metres vertically. For investors watching the junior silver space, the key question now is whether there is still upside after such an extraordinary run, or whether the smart money should be locking in gains.

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La Negra SE Confirms Open-Pit-Scale Mineralisation

What makes these drill results significant is the combination of width, grade, and shallow depth. The mineralisation starts near the surface and remains open in multiple directions, suggesting the company has only scratched the surface of what could be a much larger system. For a junior explorer, this is exactly the kind of discovery that can transform a speculative play into a serious development story.

Standout intercepts include 107 metres at 165 grams per tonne silver equivalent from 18 metres, along with 81 metres at 107 grams per tonne from just 2 metres depth. This style of mineralisation is exactly what mining companies look for when planning open-pit operations. Shallow oxide material is typically cheaper and simpler to process than deeper sulphide ore, meaning lower capital costs and faster time to production.

The continuity across the full 850-metre strike length is particularly encouraging. It indicates this is not a series of isolated pockets but rather a coherent orebody that could support a substantial mining operation.

Unico Silver Skips Scoping Study and Moves Directly to PFS

Perhaps the most telling signal of management confidence is the decision to bypass a scoping study entirely and proceed straight to a pre-feasibility study. This unusual move suggests the team sees enough confidence in the resource to justify accelerating the development timeline.

The company is fully funded following an A$40 million placement and A$10 million share purchase plan, providing a comfortable runway to complete the PFS and continue drilling without needing additional capital. This removes a key uncertainty that often weighs on junior explorers.

Adding to the upside potential, Unico Silver has identified a new exploration target at La Rubia, a 650-metre by 150-metre silver anomaly where similar geological signatures remain untested. If drilling delivers comparable results, it could materially expand the project footprint.

The Investor’s Takeaway for Unico Silver

With shares trading near record highs and Canaccord Genuity’s A$1.30 price target suggesting some remaining upside, much of the near-term good news appears priced in. The 400 per cent rally reflects genuine fundamental progress, not just speculation, which is encouraging. However, investors considering new positions at these levels should recognise they are buying after an exceptional run rather than ahead of it.

The risks are worth acknowledging. Unico Silver remains a pre-revenue explorer with no operating cash flow. Argentina, while home to world-class mineral deposits, carries political and currency risks. And silver prices, while currently supportive, can be volatile.

In our view, the fundamentals justify the rally, and the accelerated PFS timeline could provide further catalysts. But for risk-conscious investors, chasing a stock after gains of this magnitude requires a clear thesis on what the next re-rating event will be. Those with existing positions may consider taking some profits while retaining exposure to the upside.