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This Week In Mining: Metals & Miners Want

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DiscoverGold Member Level  Saturday, 05/22/21 02:51:07 PM
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This Week In Mining: Metals & Miners Want to Move Higher
By: Chris Marchese | May 22, 2021

Gold and the mining equities had a good week with gold up nicely since the close last Friday and the mining stocks as seen through the XAU. Silver was relatively flat, but both metals want to move higher. Metal prices are consolidating in a relatively tight trading range. The last two inflation readings measured by the heavily doctored CPI are likely what sparked the move up in gold. It also doesn't hurt that the crypto's sold off heavily. This was a relatively quiet week as far as news flow goes, which isn't atypical immediately following earnings season. Three of our positions in the Goldseeker portfolio achieved all-time highs this week, and we expect many more to follow through the remainder of the year. To sign up for a free 30-day risk-free trial or get on our free email list, visit Goldseeker.com.

$RZZ, $ABRA, $USAS, $BLCK, $CGAU, $F, $GBR, $MKO, $MAI, $ODV, $SAE, $SVM, $ELEF, $VZLA, $WDO

Abitibi Royalties: The company announced it acquired additional royalties on the Malartic South Project. This consists of two transactions, I) Amends a previous royalty in the Malartic South property from a 2% NSR to a 3% NSR on certain claims, and II) expanded its NSR to the south with a new 2.50% NSR. The purchase price paid by Abitibi totaled C$26.5k. Note: These royalties are on lands not controlled and operated by the CM JV, rather a private company but could be acquired by the CM JV group in the future.

AbraSilver: Reported additional drill results at its Diablillos project, demonstrating continuity and growth potential of high-grade mineralization. Highlights include:

• 47m @ 280 g/t Ag and 4.26 g/t Au
• High-grade Tesoro zone is now defined over 200m of strike with a thickness of 50m and vertical extent of 150m.
• 6.5m @ 85.4 g/t Ag and 4.22 g/t Au
• 18.50m @ 61.3 g/t Ag and 1.70 g/t Au
• 1.0m @ 273.5 g/t Ag and 12.10 g/t Au
• 3.0m @ 221 g/t Ag and 0.02 g/t Au

America’s Gold and Silver: Reported Q1 2021 earnings and provided asset updates at Cosala, Galena, and Relief Canyon. The company reported a net loss of $91.8m, which includes a $55.6m impairment charge and inventory write-down of $23m related to Relief Canyon. The company has had significant issues ramping up Relief Canyon, and following a review of operations, the operation will proceed with run-of-mine heap leaching. America's Gold and Silver believe this will improve project economics on a forward basis. At the Galena complex, the company drilled the downdip extension of the silver vein, and all of the first eight holes hit high-grade mineralization. Highlights include:

• 2.7m @ 7,370 g/t Ag and 6.30% Cu
• 0.80m @ 5,320 g/t Ag and 4.10% Cu
• 1.80m @ 3,110 g/t Ag and 2.40% Cu
• 0.40m @ 1,690 g/t Ag and 1.10% Cu

Blackrock Silver: Announced a non-brokered private placement of 2.66m units at $0.75/share for gross proceeds of C$2m to be conducted concurrently on the same terms and conditions as the bought deal financing announced on May 17th, 2021. First Majestic Silver agreed to purchase C$1.25m of the offering. This provides validation on the Tonopah silver-gold project and indicates First Majestic is looking outside Mexico for potential future silver production.

Centerra Gold: announced today that it had initiated binding arbitration against the Government of the Kyrgyz Republic to enforce its rights under longstanding investment agreements with the Government. Centerra seeks to enjoin the Government from taking further steps to implement recently adopted legislation or to pursue recently procured fines and tax claims against the Kumtor Gold Company, all of which violate the Government's investment agreements concerning the Kumtor Mine. Centerra also intends to hold the Government accountable in the arbitration for any losses and damage resulting from its recent actions against KGC and the Kumtor Mine if no resolution is reached. The illegal activities of the Kyrgyz Republic include:

• The passage by the Kyrgyz Republic Parliament in a single day on May 6th of a new law which enables the Government to impose an "external manager" to take control of the Kumtor Mine if the Government deems that KGC's activities pose a risk to human safety and the environment;
• A Government-supported and hastily issued decision of a Kyrgyz Republic court on May 7th to impose a $3 billion fine against KGC based on private civil environmental claims.
• The intimidation of KGC's personnel by the Kyrgyz Republic State Commission and other Kyrgyz Republic state and law enforcement authorities, including police visits to the homes of several senior KGC managers and a raid of KGC's office in Bishkek on May 15th.
• Numerous tax claims brought by the Government in the Kyrgyz courts regarding matters were resolved fully and finally in previous project agreements and Kyrgyz court rulings and expressly precluded by the Government's agreements with KGC and Centerra.

This is a perfect example for investors in understanding political risk and the importance of geopolitical diversification within a natural resource-focused portfolio.

Fiore Gold: Reported its fiscal Q2 operating and financial results. Fiore produced 10.9k oz. Au in the quarter, up 19% over the previous quarter with improved alkaline levels. While the grade was low at 0.45 g/t Au, the low strip ratio of 1.6:1.0 makes this economical. Cash costs and AISC were $979/oz. and $1,020/oz. (with consolidated AISC of $1,186/oz.). The company's operating Pan mine generated operating cash flow of $5.2m. The company ended the quarter with $17.5m in cash, a slight reduction relative to six months prior as the company invests in the expansion of the Pan heap leach pad to accommodate added mine life and ongoing drilling and feasibility study activities at its next project, Gold Rock.

Great Bear Resources: reported results from its ongoing fully funded $45 million 2021 exploration program at its 100% owned flagship Dixie Project. Great Bear is entering the final months of near-surface resources estimation. The company released the results of 28 drill holes, which include the following highlights:

• 13m @ 18.57 g/t Au
• 10.70m @ 4.12 g/t
• 14.25m @ 15.31 g/t
• 11.50m @ 5.26 g/t
• 11.30m @ 11.47 g/t
• 9.8m @ 86.87 g/t
• 9m @ 13.82 g/t
• 5.80m @ 7.80 g/t
• 17.50m @ 6.62 g/t
• 4.80m @ 53.72 g/t
• 7.85m @ 14.72 g/t
• 10.35m @ 4.12 g/t
• 35.60m @ 3.07 g/t (bulk tonnage type intercept)
• 91.60m @ 1.11 g/t (bulk tonnage type intercept)
• 91.4m @ 1.0 g/t (bulk tonnage type intercept)

The LP fault zone remains open to extensions in all directions. Unlike other areas on the Dixie property, the LP fault is highlighted by high-grade mineralization with moderate to lower grade disseminated gold surrounding the high-grade intervals.

Hecla Mining: The company released Q1 2021 exploration results. The company’s exploration focused on its Nevada assets have the potential to create significant value once Hecla delineates high-grade resources and completes the development of Hatter Graben. Highlights from its Q1 2021 exploration program include (in ounces per ton, not grams:

• 1.2ft @ 1.12 oz/t Au and 16.9 oz/t Ag (Midas)
• 3.90ft @ 3.26 oz/t Au and 14.3 oz/t Ag (Midas)
• 13.1ft @ 5.52 oz/t Au and 14.5 oz/t Ag (Midas)
• 1.8ft @ 2.92 oz/t Au and 1.6 oz/t Ag (Midas)
• 28.7ft @ 16.2 oz/t Ag (San Sebastian)
• 17.6ft @ 10.4 oz/t Ag (San Sebastian)
• 11ft @ 15.5 oz/t Ag (San Sebastian)
• 34.3ft @ 20.50 oz/t Ag, 0.19 oz/t Au and 17.80% Zn (Greens Creek)
• 19.9ft @ 28.5 oz/t Ag, 0.33 oz/t Au and 10.50% Zn (Greens Creek)
• 23.1ft @ 34.4 oz/t Ag, 0.12 oz/t Au, 9.50% Zn and 4.4% Pb (Greens Creek)
• 25.8ft @ 37.9 oz/t Ag, 0.13 oz/t Au, 6.2% Zn and 3.1% Pb (Greens Creek)
• 21ft @ 24.5 oz/t Ag, 0.17 oz/t Au, 14.30% Zn and 9.30% Pb (Greens Creek)

Mako Mining: Provided an update regarding its operating San Albino gold project in Nicaragua. All components of the 500tpd gravity and CIL processing plant are fully operational. The plant has been achieving throughputs above 75% of rated capacity, and it has been processing high-grade material with an average grade of 16.5 g/t since May 12th, 2021. While a few more weeks of data are required to provide a precise estimate of metallurgical recoveries, all indications are that gold recoveries are higher than 90%.

On the mining front, an average of 982tpd of diluted vein and historical dump material has been mined since the beginning of April, with a strip ratio of approximately 10:1. The stockpile is now around 105,856 tons and comprises 17,596 tons of diluted vein material at 15.37 g/t gold and 88,260 tons of historical dump material at 2.47 g/t gold for a total of 15,687 ounces of gold. These levels of mine and plant throughputs are the thresholds required by Mako to declare commercial production, and provided that the processing plant continues averaging these levels for the remainder of the quarter, Mako expects to be in a position to announce commercial production on July 1st, 2021. Ultimately, Mako's objective is to increase throughput to 1ktpd.

The company's cash balance, which had decreased due to the delay in the plant's start-up, has now begun to improve as gold is being recovered and sold. Provided that the plant operates at its current throughput, the company expects to generate enough cash flow from operations to continue funding exploration and servicing debt. A comprehensive operating update is expected in July, following a full month of statistics from the processing plant.

Minera Alamos: Announced it successfully executed the first planned production blasts at the Nicho Norte pit at its Santana gold mine in Mexico. Stockpiling material is ongoing in advance of screening and crushing activities. This first material will be used to test the leaching circuit before continuous loading of the heap leach pad as the company slowly ramps up operations through the remainder of 2021. The Company and Osisko Gold Royalties have mutually agreed to extend the option period of the La Fortuna royalty agreement until May 15th, 2022. The extension provides additional time for the company to evaluate project development sequencing following the start-up of operations at the Santana gold mine and maintain financing flexibility for the construction capital required to build a gold operation at the La Fortuna project. Minera Alamos can scale up production rather quickly as its next project is construction-ready, and it is anticipated construction of third mine, La Fortuna, will commence in 2023.

Osisko Development: Announced drilling results from the 200,000m 2021 exploration and category conversion drill program campaign at its Cariboo Gold Project. Two drill rigs are operating on at the Lowhee zone, which is defined along 650m of strike by 350m in the sandstone to a depth of 275m and is open in all directions. Lowhee is the strike extension of Cow Mountain, and based on the Oct 2020 MRE; the zone contained 46k oz. Au (Indicated) and 105k oz. Au (Inferred). While small, this resource is based on just 23 drill holes, but 73 drill holes have since been drilled since the MRE. Drill highlights in this release include:

• 2.60m @ 13.22 g/t Au
• 6.55m @ 6.14 g/t
• 1m @ 70.90 g/t
• 7.60m @ 6.26 g/t
• 4m @ 7.97 g/t
• 1.1m @ 41.39 g/t
• 0.60m @ 70 g/t

Osisko Development is on track to becoming an emerging mid-tier producer with small-scale production slated to commence at Bonanza Ledge beginning mid-year. This will be followed by the San Antonio mine in late 2021/1H 2022 and the main underground deposit at Cariboo in 2024.

Sable Resources: Announced additional results from its active drill program at the El Fierro Project. El Fierro is an 8.5 by 5.5km historical artisanal silver-rich mining district located 250km’s northwest of San Juan city and 120 km north of Sable's Don Julio Project. In early February, Sable started the first drill campaign ever conducted on the project and release results of two drill holes on April 6th and four drill holes on May 3rd. Highlights from another hole and results from the surface trenches include:

• 0.85m @ 263 g/t Ag and 6.32 g/t Au
• 2.85m @ 101 g/t Ag, 2.16 g/t Au, 0.23% Cu, 1.25% Pb and 0.33% Zn.
• 2.2m 2 70 g/t Ag, 7.62 g/t Au, 7.93% Pb and 1.18% Zn (Trench)
• 4m @ 124 g/t Ag, 1.25 g/t Au, 0.57% Cu, 3.96% Pb and 1.54% Zn

Silvercorp Metals: Reported full-year financial results for its fiscal year 2021. The company sold 6.3m oz. Ag, 4.7k oz. Au, 67.1m lbs. Pb and 27.9m lbs. Zn. The company generated $86m in operating cash flow on the back of higher silver and AISC of $7.49/oz. Ag. With a full year of higher silver prices ahead of it, Silvercorp's cash flow generation should top $100m over the next 12-months, provided the company's production levels remain stable, and it maintains a low-cost structure. During the year, the company won an online auction to acquire the exploration rights to the Zhonghe silver project from the Henan provincial government of China, with the mineral rights transfer contract pending the national security clearance by the related authorities. Silvercorp also acquired a 43.8% interest in the La Yesca silver project in Mexico through a new corporate structure, New Infini Silver. Silvercorp is likely still on the hunt for sizeable M&A following its failed bid to acquire Guyana Goldfields. The company's financial position is excellent, with $199m in cash and $212m in equity investments, and no debt.

Silver Elephant: The company announced it had identified a large linear anomaly measuring over 1,400m in length, up to 250m wide, starting at a depth of 250m from surface as its Pulacayo Silver project. The entire length of the anomaly has never been drilled and shows very high and consistent chargeability and low resistivity, and runs parallel to the main 3 km east-west trending Tajo vein system (TVS) that is just 300 meters to the south.

Vizsla Resources: Reported the results from ten new holes at the Tajitos vein at the Panuco silver-gold project. Thirty-two drill holes have an average vein width of 3.08m with a weighted average grade of 329 g/t Ag and 2.10 g/t Au. Mineralization extends over 575m in length, 250m deep, and remains open to the northeast, southwest, and at depth. Drillhole NP-21-29 intersected 7.76m @ 390 g/t Ag and 1.56 g/t Au (from 207m), including 1.22m @ 1,156 g/t Ag and 3.60 g/t Au.

Wesdome Gold Mines: announces underground exploration drilling results from the new high-grade gold discovery in the footwall of the Kiena Deep A Zone at the company's 100% owned Kiena Mine Complex. Following the discovery of a new high-grade gold zone in the footwall of the A zone, this has been the focus with respect to drilling over the past several months. Successful drilling has extended the A zone laterally and down plunge. Footwall zone drilling and Kiena Deep A zone drilling highlights include:

• 51.2m @ 41.2 g/t Au (25.7 g/t capped)
• 12.3m @ 27.7 g/t Au
• 9m @ 16.7 g/t Au (14.9 g/t capped)
• 4.7m @ 26.7 g/t
• 7.1m @ 47.4 g/t
• 7m @ 21.1 g/t

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