After a 22% fall, is now the time to buy Silver Mines shares?

Silver Mines Ltd (ASX: SVL) shares were hit hard on Tuesday, sliding 22% to 18 cents. This came after the silver exploration company released a disappointing update on its Bowdens Silver Project.

The timing really surprised investors, with silver near record highs and Silver Mines shares coming off a strong run over the past year.

So, what changed, and does this pullback create an opportunity?

Why Silver Mines shares sold off

The weakness followed an update outlining the next steps required to progress the Bowdens project in New South Wales. After the NSW Court of Appeal voided the project's previous development consent in 2024, Silver Mines has been working through the redetermination process.

Management confirmed it will need to refresh ecological surveys and prepare an updated biodiversity assessment in line with the Biodiversity Conservation Act. While this work is aimed at strengthening the application, it also extends the overall timeline.

That extension appears to be what the market is reacting to. With no near-term catalyst and further regulatory work required, some investors have chosen to step back, at least for now.

The silver price backdrop remains supportive

The sell off comes despite a very strong backdrop for silver itself. Prices have surged over the past year and recently pushed to fresh all-time highs, supported by a mix of industrial demand, investment flows, and tighter inventories.

For developers like Silver Mines, higher silver prices materially improve long term project economics. If Bowdens ultimately reaches production, the commodity environment looks far more supportive today than it did just a few years ago.

That said, commodity strength alone is rarely enough to offset regulatory uncertainty in the short term.

Bowdens remains a large, long-life asset

Bowdens is still considered one of the largest undeveloped silver projects in Australia. The resource hosts significant silver alongside gold and base metals, and recent drilling has continued to deliver high quality intersections.

While the quality of the resource has not materially changed, the timeline has. Until approvals are resolved, Bowdens remains a pre-production asset with no revenue and ongoing funding requirements.

That keeps Silver Mines among the higher risk mining stocks on the ASX.

Is this a buying opportunity?

For long term investors with a high-risk tolerance, the pullback may be worth watching. Silver Mines offers leveraged exposure to silver prices and a large-scale project in Australia.

However, this is not a stock for investors seeking certainty or income. Regulatory timelines, funding requirements, and execution risk all remain key factors.

For now, this looks less like a clear buy signal and more like a reminder of why development stage miners can be volatile. If progress on Bowdens becomes clearer, investor sentiment could shift quickly. Until then, patience may be required.

The post After a 22% fall, is now the time to buy Silver Mines shares? appeared first on The Motley Fool Australia.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2025