Peru's Silver Sector: Carlton Precious and Silver Crown Lead the Charge Amid Regulatory and Capital Gains

Peru's silver sector is undergoing a renaissance, driven by strategic investments, regulatory progress, and capital raises. Two companies, Carlton Precious Inc. and Silver Crown Royalties, are at the forefront of this momentum, each leveraging distinct approaches to capitalize on Peru's mineral-rich terrain. Their recent developments—from community agreements to private placements—highlight the region's growing appeal for silver-focused investors. Let's dissect their growth trajectories and assess the risks and rewards.

Carlton Precious Inc.: Unlocking Value at the Esquilache Silver Project

Carlton Precious is advancing its 100%-owned Esquilache Silver Project in Peru's Puno Department, a region with a legacy of silver production. Recent progress includes a Community Agreement with the local San Antonio de Esquilache community, a critical step to secure drilling permits and advance exploration. This agreement, finalized in Q2 2025, not only de-risks the project but also aligns with Peru's regulatory emphasis on community engagement.

The company's drilling program, set to begin in fall 2025, aims to expand known silver-lead-zinc mineralization across 40 drill holes. Historical drilling by Vena Resources at Esquilache identified high-grade intervals, such as 977 g/t Ag over 3.2 meters in the Ivet Vein, suggesting the project's potential to host substantial resources.

Capital Raise Success:
Carlton's June 2025 non-brokered private placement raised $1.6 million, with insiders subscribing for 2.5 million units. Funds are directed toward drilling at Esquilache, exploration at Australia's Matthina Gold Project, and working capital.

Why It Matters:
Esquilache's location near major Peruvian deposits and mines—such as those operated by Southern Copper—positions it to benefit from existing infrastructure and expertise. However, Carlton's success hinges on drilling results and permitting timelines, which remain key execution risks.

Silver Crown Royalties: Scaling Up via Strategic Royalties in Peru

Silver Crown Royalties (SCRI) is taking a different but equally compelling path: acquiring silver royalties on proven or near-production assets. Its Q2 2025 private placements—finalized in mid-July—raised over $1.5 million, funding two critical Peruvian projects:

1. Igor 4 Project (PPX Mining): A royalty on up to 15% of silver production from PPX's high-grade gold-silver zone in southern Peru.
2. Bethania Silver Mine (Kuya Silver): A 4.5% royalty on the newly operational mine in Huancavelica, which began production in May 2024.

The Bethania deal, finalized via a June 2025 Letter of Intent, is particularly notable. The mine's year-round accessibility and Kuya Silver's track record reduce operational uncertainty, while the tiered royalty structure (rising from 4,500 to 12,375 oz/quarter) offers predictable cash flows.

Why It Works:
Silver Crown's model minimizes direct operational risk, as it relies on third-party miners to handle exploration and production. This de-risks its balance sheet while capitalizing on Peru's booming silver demand.

Risks and Considerations

While both companies are strategically positioned, risks persist:
- Regulatory and Community Risks: Even with agreements, delays or disputes in Peru's complex regulatory environment could stall Carlton's drilling or Silver Crown's partners' operations.
- Commodity Price Volatility: Silver prices averaged $25/oz in 2024 but remain sensitive to macroeconomic factors like inflation and interest rates.
- Execution Risk: Carlton's success depends on drilling outcomes, while Silver Crown's royalties hinge on partners' ability to deliver production.

Investment Implications

• Carlton Precious (CTPRF): A high-risk, high-reward bet for investors willing to tolerate exploration uncertainty. A successful drill program could unlock significant upside, but patience is required.
• Silver Crown Royalties (SCRI): A safer, income-focused play with immediate cash flow from existing royalties (e.g., Brazil's Tucano Gold Mine). Its Peru-focused expansion aligns with rising silver demand from solar energy and industrial sectors.

Conclusion

Peru's silver sector is a microcosm of the global shift toward precious metals as inflation hedges and industrial catalysts. Carlton Precious and Silver Crown Royalties exemplify two viable strategies:
- Carlton's exploration-led growth targets undervalued assets with high-grade potential.
- Silver Crown's royalty-based model offers steady returns with minimal operational exposure.

Investors should weigh their appetite for risk and time horizon. For the aggressive investor, Carlton's Esquilache project could deliver outsized gains. For the conservative, Silver Crown's diversified royalties offer a safer path to silver exposure in one of the world's top mining jurisdictions.

Final Note: Monitor both companies' Q3 updates—Carlton's drilling results and Silver Crown's royalty revenue—closely. These milestones will shape their trajectories in Peru's silver boom.