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Sandstorm Gold Announces Completion of Luna Gold/JDL Gold Combination, Files Early Warning Report
NEWS PROVIDED BY
Sandstorm Gold Ltd.
Apr 05, 2017, 17:22 ET
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VANCOUVER, April 5, 2017 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) is pleased to announce that Luna Gold Corp. ("Luna Gold") and JDL Gold Corp. ("JDL Gold") have combined their businesses to create Trek Mining Inc. ("Trek"). As part of the business combination, a non-brokered private placement financing was completed for gross proceeds of C$83,419,172.
Trek is well-funded with approximately C$113 million in cash and no cash debt, and is advancing the Aurizona gold project ("Aurizona" or the "Aurizona Project") to production. A feasibility study is nearing completion and the first gold pour at Aurizona is targeted for year-end 2018. Near-mine and district-scale exploration is also underway with a focus on the drill-ready targets directly along strike of the existing reserves and resources at Aurizona's past producing Piaba open pit. The greenfields exploration ground adjacent to the Aurizona Project is under option to AngloGold Ashanti Holdings plc ("AngloGold").
Sandstorm holds a 3% to 5% sliding scale net smelter returns ("NSR") royalty on Aurizona and at gold prices less than or equal to $1,500 per ounce, the royalty is a 3% NSR. In addition to the sliding scale royalty on Aurizona, Sandstorm holds a 2% NSR royalty on the greenfields property optioned to AngloGold.
EARLY WARNING REPORT
Pursuant to National Instrument 62-103 - The Early Warning System and Related Take Over Bid and Insider Reporting Issues, the Company is announcing the acquisition of an aggregate of 27,660,694 common shares ("Trek Shares") and 11,739,332 warrants (the "Trek Warrants") of Trek. Sandstorm acquired the Trek Shares and Trek Warrants upon the completion of the aforementioned business combination of Luna Gold and JDL Gold, and pursuant to the terms of a debt settlement agreement.
With the acquired Trek Shares and Trek Warrants, Sandstorm now holds an aggregate of 28,035,693 Trek Shares, representing 15.77% of the issued and outstanding Trek Shares. If you assume the exercise in the future of all of the Trek Warrants currently held by the Company into Trek Shares, Sandstorm would then hold 37,095,940 Trek Shares, representing approximately 19.86% of the then issued and outstanding Trek Shares, on a partially diluted basis.
The early warning report, as required under National Instrument 62-103, contains additional information with respect to the foregoing matters and will be filed by the Company on Trek's SEDAR profile at www.sedar.com.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming and royalty company. Sandstorm provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. Sandstorm has acquired a portfolio of 155 streams and royalties, of which 20 of the underlying mines are producing. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams and royalties.
For more information visit: www.sandstormgold.com
http://www.prnewswire.com/news-releases/sandstorm-gold-announces-completion-of-luna-goldjdl-gold-combination-files-early-warning-report-618429503.html
Luna Gold Shareholders (LGCUF) should receive their shares of Trek Mining (LWLCF) within two weeks per Trek Investor Relations today.
New IH board started for Trek Mining
http://investorshub.advfn.com/boards/board.aspx?board_id=31963
$LWLCF
TREK MINING AT OTCMARKETS
https://www.otcmarkets.com/stock/LWLCF/news
$LGCUF NEWS
March 31, 2017 15:45 ET
Pacific Road Resources Funds Announce Holdings of Trek Mining Following Completion of Business Combination of Luna Gold and JDL Gold
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 31, 2017) - The Pacific Road Resources Funds ("PRRF") announce that, upon completion of the business combination between Luna Gold Corp. and JDL Gold Corp. to form Trek Mining Inc. (the "Corporation"), PRRF has acquired an aggregate of 23,824,969 common shares in the capital of the Corporation (each a "Common Share") and warrants to purchase an additional 23,724,350 Common Shares. PRRF's warrants are comprised of 6,470,000 Class A Warrants to purchase an aggregate of 7,149,350 Common Shares, with each Class A warrant being exercisable at an exercise price of C$1.25, and 15,000,000 Class B Warrants to purchase an aggregate of 16,575,000 Common Shares, with each Class B Warrant being exercisable at an exercise price of C$1.00.
The 23,824,969 Common Shares represent approximately 13.4% of the outstanding Common Shares. Assuming full exercise of PRRF's warrants to purchase 23,724,350 Common Shares, PRRF would hold 47,549,319 Common Shares, representing approximately 23.6% of the then issued and outstanding Common Shares.
PRRF has purchased the securities for investment purposes and may or may not purchase or sell securities of the Corporation, or exercise its warrants to purchase Common Shares, in the future on the open market or in private transactions, depending on market conditions and other factors. PRRF currently has no other plans or intentions that relate to its investment in the Corporation. Depending on market conditions, general economic and industry conditions, the Corporation's business and financial condition and/or other relevant factors, PRRF may develop other plans or intentions in the future.
A copy of the early warning report filed in connection with the investment will be available on the Corporation's profile on SEDAR at www.sedar.com or may be obtained by contacting Greg Dick at +61 2 9241 1000.
About Pacific Road Resources Funds and Pacific Road Capital Management Pty Limited
The Pacific Road Resources Funds are private equity funds investing in the global mining industry. They provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource-rich regions of the world. The Pacific Road Resources Funds are managed and advised by Pacific Road Capital Management Pty Ltd ("PRCM"). The PRCM team, located in Sydney, Australia, San Francisco, USA, and Vancouver, Canada, is comprised of experienced mining investment professionals that have extensive knowledge and experience in the mining and infrastructure sectors, including considerable operating, project development, transactional and investment banking experience. For further information on the Pacific Road Resources Funds and PRCM, please go to their website at www.pacroad.com.au.
LGCUF: The Plan of Arrangement. Each Luna Gold shareholder will be entitled to receive 1.105 JDL common shares for each Luna Gold share held.
FINRA deleted symbol:
http://otce.finra.org/DLDeletions
"Corporate Action"
"Your recent order(s) for trading symbol LGCUD has been canceled because that company has reported a corporate action. Corporate actions can include splits, dividend payments, symbol changes, and other events that may affect shares of the security. In many cases orders are simply adjusted to reflect a corporate action; but depending on the nature of the action or the type of order, it is sometimes necessary to cancel orders.*
$LGCUF Anyone know why we don't seem to be trading right now?
LGCUF one for 10 reverse split:
http://otce.finra.org/DLSymbolNameChanges
LGCUF has moved some off the bottom now. Seems to be taking on some debt though. Hopefully, it will be spent wisely.
The recent "announcement" by the company proved to be a disaster. But I'm not sure why.
Follow @LunaGoldCorp on Twitter for the latest and up-to-date Phase I expansion photos.
LUNA GOLD ANNOUNCES CLOSING OF STRATEGIC INVESTMENT BY SANDSTORM GOLD LTD.
Vancouver, August 11, 2014 – Luna Gold Corp. (TSX-LGC, LMA-LGC, OTCQX-LGCUF, “Luna” or the “Company”) is pleased to announce that it has closed the first tranche of its previously announced non-brokered private placement financing (the “Placement”) of up to 30,000,000 common shares (the “Placement Shares”) of the Company at a price of $1.02 per Placement Share for aggregate gross proceeds of up to $30,600,000. Pursuant to the closing of the first tranche of the Placement, Sandstorm Gold Ltd. (“Sandstorm”) purchased 19,500,000 Placement Shares at $1.02 per Placement Share for aggregate gross proceeds of $19,890,000. As a result of the closing of the first tranche of the Placement, Sandstorm now holds 28,000,000 common shares of the Company representing approximately 19.8% of the issued and outstanding shares of the Company.
Pursuant to the Placement, Sandstorm was also granted the right (for so long as Sandstorm owns greater than 15% of Luna) to maintain its ownership percentage through future private placements or public offerings by Luna. Sandstorm was also granted the right to appoint one member to Luna’s Board of Directors (the “Board”) and, accordingly, has appointed David Awram, Senior Executive Vice President of Sandstorm, to the Board. In addition, Mr. Luis Baertl has stepped down as Chairman of Luna’s Board and has been succeeded as Chairman by Luna’s current lead independent director, Mr. Steven Krause.
The Placement Shares purchased by Sandstorm will be subject to a four month plus one day hold period. The proceeds from the Placement will be used by the Company for expenditures related to the Aurizona mine, ongoing brownfields and greenfields exploration at and around the Aurizona mine, and for general working capital purposes.
About Luna Gold Corp.
Luna is a gold production and exploration company engaged in the operation, discovery, and development of gold projects in Brazil.
On behalf of the Board of Directors
LUNA GOLD CORP.
Geoff Chater – President and CEO
Website: www.lunagold.com
For further information contact Patrick Balit, Investor Relations Manager, at +1 (604) 568-7993.
Forward-Looking Statements
This release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements include, but are not limited to, statements with respect to future gold production and/or the results of analysis on gold production and statements with respect to the outcome of the negotiation relating to the potential modification of the existing gold stream agreement with Sandstorm. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in Luna Gold Corp.'s periodic filings with Canadian Securities Regulators. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, the potential for delays in exploration or development activities, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties with or interruptions in production and operations, fluctuating metal prices, unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, regulatory restrictions, including environmental regulatory restrictions and liability, competition, loss of key employees, and other related risks and uncertainties. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
Sandstorm Gold announces strategic investment in Luna Gold
Date : 08/05/2014 @ 5:10PM
Source : PR Newswire (Canada)
Stock : Sandstorm Gold Ltd. Ordinary Shares (Canada) (SAND)
Quote : 6.03 0.04 (0.67%) @ 9:45AM
Sandstorm Gold announces strategic investment in Luna Gold
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VANCOUVER, Aug. 5, 2014 /CNW/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) has agreed to enter into a strategic investment agreement (the "Investment Agreement") with Luna Gold Corp. ("Luna"), as part of which, Sandstorm will participate in a Luna non-brokered private placement (the "Placement").
Strategic Investment Agreement
The Placement involves Luna issuing up to 30 million common shares (the "Placement Shares") at a price of $1.02 per share, for gross proceeds of up to $30,600,000. Pursuant to the Investment Agreement, Sandstorm will purchase a minimum of 19.5 million of the Placement Shares, which when combined with the 8.5 million shares of Luna already owned by the Company, will result in Sandstorm becoming the largest shareholder of Luna, owning approximately 19.8% of Luna's issued and outstanding shares. Sandstorm will have the right to maintain its ownership percentage of Luna through future private placements or public offerings so long as the Company owns greater than 15% of Luna's issued and outstanding shares.
The Placement is necessary due to a combination of lower than estimated cash flow and cost overruns at Aurizona, also requiring Luna to delay the completion of the Phase One Expansion at the mine. Luna has revised its 2014 production guidance to a range of 75,000 to 80,000 ounces of gold.
The Investment Agreement will allow Sandstorm to appoint one member to Luna's Board of Directors. David Awram, Senior Executive Vice President of Sandstorm, will assume the Luna directorship role. The Chairman of Luna's Board of Directors, Luis Baertl, has resigned and will be succeeded by the current Lead Independent Director, Steven Krause. Mr. Baertl will remain a Director of Luna.
Gold Stream Discussions
Sandstorm and Luna have commenced discussions related to the potential modification of the Aurizona gold stream. The focus of the discussions is to explore opportunities that will increase value for both Sandstorm and Luna shareholders with the goal of improving Luna's access to capital, accelerating production and cash flow to both Sandstorm and Luna and leveraging the highly prospective brownfields and greenfields exploration targets. Sandstorm currently holds a gold stream agreement to purchase 17% of the life of mine gold produced from the open-pit operations at Aurizona at a per ounce price of US$404 (increasing 1% annually).
Sandstorm's President and CEO Nolan Watson commented, "The interests of Sandstorm and Luna are very much aligned and we are committed to working together in order to unlock as much value as possible for our respective shareholders."
Prior to completion of the Placement, Sandstorm owned 8.5 million shares of Luna (approximately 7%) and upon completion of the Placement, Sandstorm will have ownership of 28 million shares of Luna (approximately 19.8%). The Placement Shares will be acquired for investment purposes. Sandstorm does not have any present intention to acquire ownership of, or control over, additional securities of Luna. It is the intention of Sandstorm to evaluate its investment in Luna on a continuing basis and such holdings may be increased or decreased in the future. The common shares of Luna are listed on the TSX, and the Placement Shares will be issued from treasury. The Placement and the issuance of the Placement Shares are conditional upon receipt of approval of the Toronto Stock Exchange. Sandstorm relied on Section 2.10 of National Instrument 45-106 - Prospectus and Registration Exemptions in the acquisition of the Placement Shares. The address of Sandstorm for the purposes of National Instrument 62-103 – Take-over Bids and Special Transactions is 400 Burrard Street, Suite 1400, Vancouver, British Columbia V6C 3A6. A copy of Sandstorm's Early Warning Report will be available on Luna's profile on SEDAR at www.sedar.com or by contacting Sandstorm at the numbers shown below.
Sandstorm Gold Announces US$10 Million Loan to Luna Gold
VANCOUVER, Sept. 27, 2013 /CNW/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT:SAND, TSX:SSL) has remitted a US$10 million loan (the "Loan") to Luna Gold Corp. ("Luna") (TSX: LGC) in accordance with its previously announced commitment to issue a non-revolving loan facility to Luna (see press release dated September 10, 2012). The Loan is subject to interest at a rate of 12% per annum, subject to certain conditions, and will mature on June 30, 2017. The proceeds from the Loan will be used towards the Phase I expansion and exploration activities at Luna's Aurizona project in Brazil.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm provides upfront financing for gold mining companies that are looking for capital and in return receives a gold streaming agreement. This agreement gives Sandstorm the right to purchase a percentage of the life of mine gold produced, at a fixed price. Sandstorm is a non-operating gold mining company with a portfolio of nine gold streams, six of which are producing gold, and six net smelter return royalties. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams.
Sandstorm is focused on low cost operations with excellent exploration potential and strong management teams. Sandstorm has completed gold purchase or royalty agreements with Brigus Gold Corp., Canadian Zinc Corp., Colossus Minerals Inc., Columbus Gold Corp., Entrée Gold Inc., Glencore Xstrata plc, Luna Gold Corp., Magellan Minerals Ltd., Metanor Resources Inc., Mutiny Gold Ltd., Santa Fe Gold Corp., SilverCrest Mines Inc., Rambler Metals and Mining plc and Solitario Exploration & Royalty Corp.
For more information visit: www.sandstormgold.com.
http://online.wsj.com/article/PR-CO-20130927-909866.html
Luna Sets An Example For Other Gold Miners
Aug 15 2013, 15:22
Steve Nicastro
Disclosure: I am long LGCUF.PK. (More...)
Smart gold mining companies like Luna Gold (LGCUF.PK) have begun to initiate aggressive cost reduction programs in the face of lower gold prices. Instead of focusing on producing as many ounces as possible, companies are getting smarter and focusing on improving operating margins, which leads to more cash flow and a stronger balance sheet.
If you are not familiar with Luna, I previously wrote an article titled "2 Brazilian Gold Miners With Enormous Upside" which makes the case that Luna is a compelling risk vs. reward gold play.
Here is a brief description of the company: Luna Gold owns and operates the Aurizona gold mine in Brazil. Luna's goal is to maximize shareholder return to producing gold at a low cost and in a sustainable and safe manner. The company is currently undergoing an extensive expansion at Aurizona which should bring them from 90K ounces a year production to over 135K a year (and potentially much, much more). The Aurizona mine hosts 4,667,000 million ounces of Measured, Indicated and Inferred resources.
Luna has a market cap of $147 million with a share price of $1.41. Their P/E is currently just 7.8 and management owns roughly 14 percent of the company.
(click to enlarge)Credit: StockCharts.com
Luna has started to break out above the 50-day moving average and I believe they could head higher in the short term.
Q2 2013 Results - Low Costs, High Margins
Luna Gold's cost reduction efforts appear to have already paid off, as we've seen in the recently announced Q2 2013 results:
- Luna produced 18,853 ounces at an average unit cash cost of production of $681 per ounce and an average all-in operating cash cost of $938 per ounce. This is among the lowest costs in the industry.
- Revenues of $45.4 million at an average realized gold price of $1,525 per ounce for first half 2013
- Gross profit of $16.4 million for first half 2013
- Net income of $8.7 million ($0.08 per share) for the quarter.
-Operating Cash flow of $9.3 million in the quarter.
- Gold production guidance for the year was revised downwards, from 100K ounces to 80-90K ounces, as the company focuses on producing less gold at higher operating margins.
More Cost Reduction Plans Announced
With the Company's focus on positive cash flow and increasing margins, they have implemented further initiatives with the target to increase shareholder returns in the near term, while focusing on future growth at the Aurizona Gold Mine:
- "Salary reductions: The Board of Directors and Executive Management of the Company have initiated a 20% reduction in cash based remuneration for the following 12 month period.
- The Company has placed all Greenfield exploration programs on care and maintenance in order to preserve cash and to focus on completion of the Phase I Expansion program. As a result, a number of exploration employees have been released from the Company.
- All non-essential corporate expenditures and operating programs have been eliminated. All areas of the business have been reviewed and cost reduction programs are now in effect."
I applaud Luna Gold for making these cost reduction efforts and can only hope that other mining companies I own follow their lead.
As for Luna Gold's expansion, this is where the real opportunity lies for shareholders. If the company can successfully complete their expansion on time and budget, it could lead to enormous gains for shareholders:
- "The Aurizona process plant expansion ("Phase I Expansion") is progressing and remains on budget. The company's priority is to complete this expansion with the original budget of $50 million."
- The Company's priority remains to complete the Phase I Expansion within the original budget of $50 million.
- The expansion remains on track and on budget for completion by the end of Q4 2013.
- The Company intends to draw down the Sandstorm Subordinated Debt Facility in Q3 2013, to provide assistance in funding the completion of the Phase I Expansion.
As you'll see below the phase 1 expansion would take Luna to 135K ounces of production a year. However, the mine really has much more potential than that as the company is targeting annual production of at least 250K ounces:
"A Phase II PFS considers the Aurizona Gold Mine increasing annual gold production to between 200,000 and 300,000 ounces." (June 19 News Release).
Credit: Luna Gold
The future appears extremely bright for Luna Gold, especially now that gold prices have begun to recover. As for gold (GLD)?I personally believe gold has bottomed and will break out higher in September. I believe management is taking all the right steps to create value for shareholders and I will continue to add shares on any dips.
http://seekingalpha.com/article/1638942-luna-sets-an-example-for-other-gold-miners
2 Brazilian Gold Miners With Enormous Upside
Jul 15 2013
Steve Nicastro
Disclosure: I am long SAND, COLUF.PK, LGCUF.PK. (More...)
Previously, I had written an article titled "How Safe is Sandstorm Gold" (SAND) in which I made the case that the company is one of the less risky gold stocks on the market due to their solid business model, expert management and the strength of their partners. Here I'd like to make the case that two of Sandstorm's partners - Luna Gold and Colossus Minerals - perhaps present an even more compelling investment opportunity.
If you own Sandstorm or are looking to build a position, I want to stress again how important it is to follow not just the company, but their partners as well. Even though Sandstorm gets their gold (GLD) at $500 and lower creating healthy profit margins, if their partners are not financially healthy themselves, it doesn't matter as they could shut down operations for an extended period of time or altogether. This is why management has focused on doing business with what they consider excellent management teams and low-cost mines.
In the past 2-3 months, insiders at two of Sandstorm's main partners have been buying up their company's shares at depressed levels, which could mean that they believe their stocks are cheap and that we've reached a near-term bottom.
Both companies are also at a critical stage of development, as Luna works on an expansion plan to potentially double production and Colossus nears initial production.
Here I will further analyze these companies:
Luna Gold Corp. (LGCUF.PK)Credit: Luna Gold
This is by far Sandstorm's largest stream as it currently makes for about 35 percent of Sandstorm's production profile. Sandstorm has the right to purchase 17 percent of life of mine gold at the Aurizona project in Brazil at $400 per ounce, and the mine is expected to produce about 100,000 ounces in 2013 and 125,000 ounces in 2014 as Luna undergoes their expansion plans.
The current share price of Luna Gold is $1.09 with a market cap of $115 million. They have a P/E ratio of just 6.91 based on EPS of .16.
The company has cash of about $15 million with debt of $30 million. The all-in cash costs for Aurizona are low, at $1,250, but as I mentioned in my previous article, these costs are expected to drop to $1,100 an ounce this year, meaning that the mine is profitable even at current gold prices.
Aurizona hosts 4,667,000 ounces of Measured, Indicated and Inferred resources. With their $115 million market cap, this places a value of just $24.64 on each ounce of gold. This is fairly low for a producer. Yamana Gold (AUY) has a value of about $123/oz, Goldcorp (GG) $132/oz, and AuRico Gold (AUQ) $100/oz, according to GoldMinerPulse.com.
The insider ownership of Luna is high at 14.4 percent and this doesn't take into account the recent insider buying as highlighted below:
(click to enlarge)
Credit: Canadian Insider.com
- On July 10, Luis J. Baertl bought 30,000 shares (six different transactions) at $1.10 per share. Baertl is a director.
- On July 2, Keith Robert Hulley bought 5,500 shares at $1.06. Hulley is Chairman and Director.
- On July 2, Geoffrey Chater bought 10,000 shares at $1.08. Chater is a Director.
- On July 2, Mark Halpin bought 5,000 shares at $1.07. Halpin is VP of Corporate Development.
- On July 2, Titus Haggan, VP of Exploration, bought 8,100 shares at $1.09.
- On July 2, Baertl again bought 50,000 shares at $1.08 and $1.09.
Additional buying took place in June:
- On June 28, Baertl bought 40,000 shares at $1.20. He also bought another 40,000 shares on June 25/26 at $1.50.
For the full list of transactions, click here.
What is the Risk with Luna?
If the price of gold were to remain at the $1,250 level or drop lower for an extended period of time, this could definitely affect Luna's Aurizona expansion plans.
According to their most recent presentation, the company requires $43.2 million of capital for the expansion. $15.7 million of this has been spent through March 31, 2013, leaving $27.5 remaining. The company reported earnings of $5.6 million in the first quarter and as I mentioned earlier, they have $14.9 million cash (as of March 31).
Worst case, the company could take on more debt to finish the expansion or issue shares. They don't have too many shares outstanding so an equity raise wouldn't be the worst thing in the world. Their current debt poses no short-term issues, in my opinion. Here is info. on the current long-term debt they have:
"The Corporate Facility matures on June 30, 2016 and carries an interest rate of LIBOR plus 4.25%. The principal amount of the Corporate Facility will be reduced by $3.0 million every quarter beginning on September 30, 2014 until the Maturity Date, when the remaining outstanding amount will be due in full." (from the 1Q report).
Finally, here's a one-year chart of Luna Gold:
(click to enlarge)Credit: Yahoo!Finance
What will it take for Luna's share price to get back to $3 and higher? If gold prices have indeed bottomed and we see gold just get back to $1400 an ounce, Luna could reward shareholders with a 100 percent share price increase from current levels.
But that is just the tip of the iceberg. If the production expansion goes as planned, the company could be producing as much as 200,000+ ounces a year (at all-in cash costs under $1200):"A Phase II PFS considers the Aurizona Gold Mine increasing annual gold production to between 200,000 and 300,000 ounces." (June 19 News Release).
Here is a chart showing the company's production potential:
(click to enlarge)Credit: LunaGold.com
A 200,000 ounce producer at $1400 gold at $1200 all-in cash costs means the company could potentially bring in $40 million cash flow a year. With a higher gold price, adjust accordingly. With higher production, potentially as much as 400,000+ ounces... I think you get the idea.
*With a well-executed expansion and a recovery in the price of gold, I see at least 300+ percent upside in shares of Luna Gold over the next 1-3 years.
Colossus Minerals (COLUF.PK)
Credit: Colossus Minerals
As I stated in my previous article, I believe Colossus is by far the most important developmental asset that Sandstorm has a stream on. They own and are developing the super-high grade Serra Pelada project. Serra Pelada is a joint venture between Colossus (75 percent) and Cooperativa de Mineração dos Garimpeiros de Serra Pelada ("COOMIGASP") located in the State of Pará, Brazil.
Sandstorm has the right to buy 1.5 percent of the gold and 35 percent of the platinum produced from Serra Pelada at a per ounce cost of $400 for gold and $200 for platinum. Sandstorm paid $60 to acquire the stream in September of 2012.
Colossus's share price has jumped since I wrote that article, from $1.20 to $1.62 due mainly to the price of gold rising but also due to positive drilling results from the company's Cutia project.
Colossus has a market cap of about $170 million. They have $32 million cash (as of April) plus they recently completed a $28.75 bought deal financing, giving them enough capital to get to commercial production. The company has a gold-linked note for $86.25 million that matures on Dec. 2016.
Right now is crunch time for Colossus Minerals and they work on getting their Serra Pelada mine into production. Here are their upcoming milestones:
(click to enlarge)Credit: Colossus Minerals.com
As you can see above, the company will first produce gold until their PGM flotation plant is completed in the third quarter of 2014.
Here is a chart of recent insider buying:
(click to enlarge)Credit: Canadian Insider.com
The following chart below is courtesy SA author Markus Aarnio, in his article"2 Basic Material Stocks With Recent Intensive Insider Buying."
Month Insider buying / shares Insider selling / shares
June 2013 7,533,000 0
May 2013 0 0
April 2013 2,138,200 50,000
March 2013 347,900 0
February 2013 12,000 40,600
January 2013 0 0
- On June 14, J. Alberto Arias purchased 7,500,000 shares in the public market at a price of $1.60. Arias is a Director. "Arias has over 20 years of experience in international mining finance including being the Managing Director of Goldman Sachs - Metals & Mining Research from 1998 to 2006, covering the sector globally" (ColossusMinerals.com).
Arias now controls 16.6 percent of the company or just over 20 million shares in total.
- The CFO, another director and the VP of Investor Relations also bought a significant amount of shares in this time period.
For a full list of insider buys at Colossus, visit this link.
What are the Risks With Colossus? What is the Upside?
- The risks associated with Colossus are the risks that every single mining company faces - falling gold prices, failure to produce, for whatever reason. Mine delays, construction failures, etc.
- The other main risk is the fact that they are not yet in production and that they will be a single mine operator until their next developmental project has undergone extensive work.
- Again, Colossus's Serra Pelada project has no defined resource (yet).
However, despite these risks I see huge potential in Colossus for a number of reasons:
- First, the drilling results from Serra Pelada are absolutely tremendous and the deposit is world-class (The deposit is one of the highest grade gold and platinum group deposits in the world based on drilling). *This should result in the company being one of the lowest cost producers in the entire world.
"Serra Pelada hosted the largest ever gold rush in Latin America with up to 80,000 artisanal miners producing 2 million ounces of gold, plus platinum and palladium, from a hand dug open pit." Credit: SandstormGold.com
Take a look at these drill results, some of the highest grade on record:
Credit: ColossusMinerals.com
Here is a news release in 2011 with some of the most impressive drill results I've ever seen. The drilling intersected 74.40 metres at 31.17 g/t gold, 3.02 g/t platinum and 6.78 g/t palladium in the Central Mineralized Zone ("CMZ").
Another release in December highlighted the following results: 74.35 metres grading 15.45 g/t gold, 4.54 g/t platinum and 7.04 g/t palladium.
These are unbelievable drill results, to say the least.
Is Colossus's Management Trustworthy?
I believe the management is first class.
Here is a bio on their CEO and Director, Claudio Mancuso: "Mr. Mancuso has over 10 years experience in the mining industry and capital markets. Prior to joining Colossus, he served as Vice President, Treasurer of Agnico-Eagle Mines Limited (AEM), a position he held since January 2009.
Prior to that appointment, he served Agnico-Eagle in various financial management positions. Prior to joining Agnico-Eagle in 2002, he held positions at the Ontario Securities Commission and BDO Dunwoody LLP, a public accounting firm. Mr. Mancuso was appointed to the Colossus Minerals Board of Directors, effective as of October 15, 2012. Mr. Mancuso is a graduate of the University of Waterloo and is a Chartered Accountant."
Note that Mancuso has experience at a major gold mining company - Agnico-Eagle Mines.
Their Chief Operating Officer and President, David Anthony, has experience at Barrick Gold (ABX):
"Mr. Anthony is a mining engineer with more than 30 years experience in the mining industry and brings strong engineering and mineral processing expertise. In 2010 and 2011, Mr. Anthony was the Vice President & Senior Project Director, Cliffs Natural Resources Inc. and from 2001 to 2010 Mr. Anthony held senior positions at Barrick Gold in Tanzania responsible for the development of the Bulyanhulu, Buzwagi and Tulawaka mines which are three of the four world-class gold and copper operations which form African Barrick Gold ("ABG")."
- Luis Albano Tondo, VP of Operations and Country Manager in Brazil, worked in a variety of capacities for Kinross Gold (KGC), another major mining company.
- Jason Brooks, their VP of Finance: "most recently served as Assistant Controller of NewGold Inc., an intermediate gold producer. Previously, he spent six years with Barrick Gold Corporation in various financial management positions."
These are just a few examples and there are more. This is a first-rate management team that I'm sure Sandstorm is thrilled to do business with.
In conclusion, with initial production expected next quarter, a 1,000 TPD ramp-up the next quarter, and platinum and palladium production coming in 2014, Serra Pelada should be one of the lowest cost precious metals producers in the world and is certainly a company to keep an eye on.
Here is an idea of how much production is possible from Serra Pelada. The chart is courtesy SA author Hyperinflation, from his story "Colossus: The Small Cap Miner Will Soon Be a Cash Cow."
Here are some estimates:
Gold Production: 175,000 + (ounces)
Platinum Production: 37,000
Palladium Production: 60,000
This would result in the company potentially bringing in over $90 million in annual cash flow in 2015. (Please keep in mind these are just rough, educated estimates).
Colossus also has an option to buy back 50 percent of the stream by April 1, 2015, for $48.75 million. I see this as likely if metal prices are significantly higher than current levels at that time and the mine is bringing in substantial cash flow.
If the management can deliver, I see at least 300 percent upside from current levels. Just getting back to 2011 prices would indicate a potential return of over 700 percent!
(click to enlarge)Credit: Yahoo!Finance
What About Brazil? Is it a Mining Friendly Country?
- Brazil was ranked as the 13th best mining jurisdiction in the world in 2011 and in 2013 it was ranked number 9.
- Major producers in Brazil include Kinross Gold, Yamana Gold and AngloGold Ashanti (AU).
- In short, I strongly believe that Brazil poses little to no political risk. If this changes in time, I will certainly update this article and re-access my investment thesis in both companies mentioned.
Where Does Gold Go From Here?
All this talk of Colossus and Luna would be useless if we did not analyze where the price of gold will be in the coming years.
Personally, I believe in the argument that the bottom for gold is the all-in cost of producing an ounce.
In the article "Gold Is Approaching a Bottom" author Prudent Finances lists the calculated all-in production cost for the top 20 gold producers for Q4 2012 to be $1,306 per ounce.
As I pointed out in my previous article, high cost mines have already begun to shut down as they are unprofitable at current prices.
In the short term, I don't think this has a big impact on the price of gold, but in the long term, I absolutely believe that this provides a floor for the price of gold.
I am absolutely in the camp of those who believe that the Federal Reserve will not taper QE at the end of the year. If anything, I believe that they will actually have to increase the size!
One thing it seems nobody is talking about right now is the US National Debt, which is closing in on $17 trillion. If you count unfunded liabilities like Social Security and Medicare, the total is FAR greater.
The USA is also expected to hit the debt limit once again this fall. My point is that the growth in US debt is far outpacing the growth in GDP.
(click to enlarge)Credit: USDebtClock.org
Because of this reason, I believe that the Fed CAN'T let interest rates keep rising and will have to up the size of QE. The US already pays $223 billion just on interest of debt (Credit: USDebtClock.org). So any further increase in interest rates would have an effect on the cost of debt, which means an increase in the budget deficit.
I guess what I'm trying to say is that the primary case to own gold and the miners has not changed. If anything, the case has gotten much stronger. Don't let the Fed's phony talk of tapering scare you out of gold.
This is just a brief analysis of why I feel the Federal Reserve simply can't taper anytime soon. I hope to write another article soon, which goes into more detail.
To Buy Sandstorm or to Buy Their Partners? That is the Question
While I believe Sandstorm makes for a safer investment than their partners, I do feel that Luna and Colossus have a bit more upside in the long term.
Investors willing to take on more risk for more potential reward should keep an eye on these two companies going forward. If you are interested in investing in either company, my advice is to buy in blocks of shares, rather than try to pick a bottom.
If you want exposure to these companies but don't want to take on the added risk, then you can simply buy shares of Sandstorm Gold. Remember that Sandstorm has no more capital requirements to make on either project, meaning that they get all the upside exploration potential and are protected against a potential increase in production costs (making them the ultimate inflation hedge, in my opinion).
Best of luck!
http://seekingalpha.com/article/1549702-2-brazilian-gold-miners-with-enormous-upside
I am an idiot please disregard post 104 and 105. I confused Luna with another company.
b4
$LGCUF - $LGC.V - Luna Gold Increases Proven and Probable Mineral Reserve to 2.36 Million Ounces at Its Piaba Gold Deposit in Brazil
http://www.lunagold.com/en/News/search.aspx
... "Highlights
Piaba deposit Proven and Probable mineral gold Reserve of 2.36 million ounces including 56 million tonnes of ore with life of mine average 1.32 grams of gold per tonne ("g/t", and the "April 2013 Reserve")
New reserve represents a 222% increase in Proven and Probable Reserves when compared to the Piaba July 2010 Reserve statement
Piaba deposit reserves are contained within Aurizona property, which also contains Measured and Indicated gold Resources of 3.63 million ounces with inferred resource of 1 million ounces of gold (as announced on March 14, 2013)
The Piaba deposit remains open along strike and at depth. In addition, brownfields exploration potential at Aurizona is exceptional as demonstrated by the emerging Boa Esperança, Ferradura, Conceição, and Tatajuba deposits
Based on the April 2013 Reserve and the anticipated completion of Phase I Expansion nameplate processing capacity of 10,000 tonnes per day, Piaba's expected mine life has been extended to 2027 (approximately 15 years). Completion of the Phase I expansion is expected in the fourth quarter of 2013
As a result of an increase of Piaba's Proven and Probable Reserves average gold grade combined with the Phase I expansion, the Aurizona average life of mine gold production is now estimated between 125,000 and 140,000 ounces per annum" ...
$LGCUF - $LGC.V - LUNA GOLD INCREASES MEASURED AND INDICATED RESOURCES TO 3.63 MILLION OUNCES AND INFERRED RESOURCES TO 1.04 MILLION OUNCES AT AURIZONA
http://www.lunagold.com/en/News/search.aspx
I talked with Etrade and a company merger is going on. You can trade by phone but not on-line until it is complete.
b4
This is troubling. My Luna shares turned into a cusip number this morning and the shares were valued at ZERO.
I hope it is just a name change or something but there has been no indication one was coming.
I emailed customer service at Etrade and should get a reply in 24 hours.
b4
LUNA GOLD ANNOUNCES RECORD PRODUCTION OF OVER 74,000 OUNCES IN 2012
Vancouver, January 9, 2013 – Luna Gold Corp. (TSX-LGC) (LMA-LGC) (OTCQX-LGCUF) (“Luna” or the “Company”) is pleased to announce its gold production at the Aurizona Gold Mine for both the three month period ended December 31 2012 (the “fourth quarter”) and the full year 2012 (“FY 2012”).
The Aurizona Gold Mine produced 21,547 ounces of gold during the fourth quarter. This quarterly record brings Luna’s gold production for 2012 to a total of 74,269 ounces, above the Company’s guidance of between 68,000 and 70,000 ounces.
John Blake, Luna’s President and CEO, stated, “We are encouraged by both another record gold production quarter and a record full year of production. This strong performance can be attributed to increased mill throughput capacity, consistent gold head grade, and improved recovery rates. This level of performance will continue during the first half of 2013, when we anticipate installing a new carbon reactivation kiln, intense leach reactor, and electro-winning cells. The average mining and production rates for the first quarter of 2013 may intermittently reduce as we enter the wet season in Brazil. As a result, we are issuing market guidance of 21,000 ounces for gold production in the first quarter of 2013. And with continuous improvement at the Aurizona Gold mine, we are confident in our full year 2013 gold production reaching 100,000 ounces, a result that will establish a platform for further improvement in 2014.”
Commissioning of a new carbon reactivation kiln, intense leach reactor, and electro-winning cells is expected to occur during the first quarter of 2013. These equipment upgrades should further increase our gold recovery."
b4
Luna Gold Announces Record Quarterly Gold Production of Over 19,000Ounces in Third Quarter 2012
Oct 11, 2012 06:01:14 (ET)
VANCOUVER, BRITISH COLUMBIA, Oct 11, 2012 (MARKETWIRE via COMTEX) -- Luna Gold Corp. (lma:LGC)(otcqx:LGCUF) ("Luna" or the "Company") is pleased to announce both its gold production update at the Aurizona Gold Mine for the quarter ended September 30, 2012 and its updated gold production guidance for 2012.
The Aurizona Gold Mine produced a quarterly record of 19,391 ounces during the third quarter. Luna's original full year 2012 gold production guidance of 60,000 ounces has been updated to between 68,000 and 70,000 ounces.
John Blake, Luna's President and CEO, stated, "Luna Gold continued to deliver on its planned quarterly production. In light of our strong year to date production results, the Company has updated its 2012 production guidance target from the Aurizona Gold Mine. This performance has been achieved through solid teamwork throughout the Company and a consistent commitment to operational improvements. Commissioning of a new carbon reactivation kiln, intense leach reactor, and electro-winning cells is expected to occur during the first quarter of 2013. These equipment upgrades should further increase our gold recovery."
Geeze! Two people following Luna?
It is a rocket. A 5 bagger at least for the last year and just getting started.
b4
Luna Gold Corp. Announces Positive Drill Results for 2012 Drilling at Aurizona Near Mine Targets
Sep 26, 2012 08:02:28 (ET)
VANCOUVER, BRITISH COLUMBIA, Sep 26, 2012 (MARKETWIRE via COMTEX) -- Luna Gold Corp. (otcqx:LGCUF)(lma:LGC) ("Luna Gold" or the "Company") is pleased to announce positive assay results from its initial drill program at the Boa Esperanca, Ferradura, and Conceicao near mine targets, Aurizona. Program objectives have been met, with consistent gold mineralization characteristic of shear-hosted deposits intersected at all three targets. The completion of this program will enable the completion of NI 43-101 initial resource estimates for each target. These estimates are expected for release to market in December 2012.
An updated drill plan map has been uploaded to the Luna Gold website at www.lunagold.com . A direct link to this map has also been provided at the conclusion of this press release. The top two gold intervals per target are shown below, followed by a full summary of drill results in Table 1.
Luna is one of rare examples of a R/S that actually worked for shareholders. Raising the pps is what allowed us to reach the TSX.
b4
Luna Gold Conditionally Approved to Graduate to the TSX
Sep 20, 2012 08:02:12 (ET)
VANCOUVER, BRITISH COLUMBIA, Sep 20, 2012 (MARKETWIRE via COMTEX) -- Luna Gold Corp. (otcqx:LGCUF)(lma:LGC) ("Luna" or the "Company") is pleased to announce that it has received conditional approval to list the Company's common shares on the Toronto Stock Exchange (the "TSX"). The listing remains subject to certain conditions. These conditions include, without limitation, final approval from the TSX.
The Company anticipates that the graduation will take place in October of 2012, and will provide an update on timing as it finalizes these details.
John Blake, Luna's President and CEO, stated, "We are proud to announce our anticipated graduation to the TSX, the premier stock exchange for mining companies. A listing on the main board will increase our visibility to investors around the globe. I would like to thank both the Luna team and all those involved in our development for their hard work and support. This achievement is a result of their dedication."
Following graduation to the TSX, Luna's common shares will continue to trade under the stock symbol "LGC". The currently listed warrants of the Company will continue to trade on the TSX under the symbol "LGC.WT".
Thanks b4atf, Like the relationship they have with Sandstorm Gold. SAND will be the ETF of Gold Juniors. Similar to slv on the silvers. GL
Welcome to the board moxy. Luna gets little press but has been quietly moving up month after month.
b4
I see a one dollar spread between the bid and ask. That is unthinkable for a producing miner.
b4
Bought some last month. Thank you.
If you have the balls for a junior Luna is a great pick!
b4
The quiet company that keeps getting better and better.
Luna Gold Announces Record Quarter Gold Production of Approximately 16,000 Ounces in First Quarter 2012
Luna Gold Corp. (TSX VENTURE:LGC)(LMA:LGC)(OTCQX:LGCUF) ("Luna" or the
"Company") is pleased to announce its gold production update at the Aurizona
Gold Mine for the quarter ended March 31, 2012.
Aurizona Gold Mine produced a quarterly record in Q1 of approximately 16,000
ounces.
Luna's President & CEO, John Blake, comments, "Luna Gold continued to deliver on
its planned quarterly production and we remain on target to produce 60,000
ounces of gold in 2012 from the Aurizona Gold Mine."
Table of Production for Q1 2012
Luna Gold Announces Trading On OTCQX
Mar 28, 2012 08:32:12 (ET)
VANCOUVER, BRITISH COLUMBIA, Mar 28, 2012 (MARKETWIRE via COMTEX) -- Luna Gold Corp. (otcqx:LGCUF)(lma:LGC) ("Luna Gold" or the "Company") announces it began trading on the OTC market's prestigious tier, OTCQX, under the symbol OTCQX-LGCUF. OTC Markets Group Inc. (otcqx:OTCM) operates an electronic marketplace for OTC-traded equities. Investors can find current financial disclosures and Real-Time Level 2 quotes for the Company on www.otcmarkets.com . Casimir Capital L.P. will serve as Luna Gold's Principal American Liaison ("PAL") on OTCQX, responsible for providing guidance on OTCQX requirements and U.S. securities laws.
About Luna Gold Corp.
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Luna Gold Corp. is in the business of acquiring, exploring, operating and developing gold resource properties in Brazil. Luna's proven management team has extensive experience in all facets of the mining industry, and are focused on achieving optimized production of 60,000 oz Au per year at Aurizona, increasing the resource base, expanding on the maiden NI 43-101 resource estimate at Cachoeira and developing Cachoeira as an organic growth pipeline project.
Total gold resources at Aurizona are currently estimated at 904,300 oz M&I, and 400,000 oz Inferred. Luna has commenced a 20,000m drill program to increase the size of the Aurizona resource base and define new oxide gold deposits within trucking distance of the Aurizona plant. Total gold resources at Cachoeira are currently estimated at 446,000 oz M&I, and 221,300 oz Inferred. Additionally, the Company is actively exploring for new deposits in the Maranhão Greenfields area.
The Maranhão Greenfields project consists of all Company exploration permits located outside of the Aurizona Main area and covers an area of 170,000 ha (Fig. 3). There are over 100 hard rock (primary) gold garimpos located within the Maranhão Greenfields permits (Fig. 3). Luna has inherited a large database covering Maranhão Greenfields from the project vendors which includes airborne geophysical surveys, soil, auger and drill data. These data are being reviewed and targets prioritized. Luna initiated a reconnaissance program of mapping and rock chip sampling in 2008 which returned gold values of up to 9.71 g/t Au in rock grab samples (these samples were neither part of, nor alone do they constitute, a statistically representative sampling program). The Company has also commissioned a high resolution satellite image (Geoeye-01) covering the entire project area.
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