Sunshine Silver Mining & Refining (SSMR) is expected to pursue an upsized 2 ktpd concentrator, considering the presence of significant under-explored areas within the existing complex that have yielded "promising" drill results, Morgan Stanley said in a note Monday.

The investment firm said the company's existing resource base has about 104 million ounces of measured and indicated silver and roughly 160 million ounces of inferred silver, which underpin a 24-year life-of-mine in its preliminary economic assessment under a 1 ktpd concentrator scenario.

Morgan Stanley said that it expects mine life of 12 years and 18 years in its base case and bull case scenarios, respectively, at the up-sized 2 ktpd levels.

Unsuccessful drilling campaigns or poor resource-to-reserves conversion would shorten the life-of-mine or result in the company not pursuing an upsized concentrator, according to the note.

Morgan Stanley initiated coverage on the stock with an overweight rating and a $23 price target.

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