Value Microcaps Junior Miners

[Lone Clone]

TUO, SSL, BTO, KRR, NRN, MAI, CEE, IAU, MIRL


TUO, SSL

Teuton Resources aka TUO and its JV partners on the Treaty Creek gold/silver project in BC's Golden Triangle announced the assay results from the first five holes of this year's resource expansion drill programme, and once again it was a complete failure.

For several years now they have been looking for the limits of the Goldstorm deposit, and once again they have failed to find them, instead defining new areas of mineralization outside the existing resource envelope. Not only that, they have defined a new zone they are calling Route 66. Next up, a set of 200-300m step-out holes, and let us hope they are also failures in that they fail to find the limits of mineralization. This monster deposit continues to grow, with eight drills working to make it even more monstrous.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33919208

Sandstorm Gold Royalties aka SSL announced they have completed the purchase of the BaseCore Metals portfolio of royalties, which along with the buyout of Nomad Royalties, the conversion of Hot Maden into a royalty, and the creation of Sandbox Royalties, marks a major transformation of Sandstorm. Will it be a better company after all these changes? Time will tell.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33919262

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BTO, KRR, NRN

B2Gold aka BTO released their Q2 results, which were pretty well in line with predictions, totaling 224k oz Au, with both Fekola in Mali and Masbate in the Philippines delivering strong quarters. There was no information on costs, but with the sanctions on Mali having been removed, that should help with supply lines and hence costs. We'll hear about costs when they release their financial quarterlies early next month. Meanwhile, BTO has maintained their 2022 guidance of 950k-1000k oz Au with cash costs of $620-600/oz.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33920630

In response BMO issued a new analyst report which called the impact as Neutral and maintained BTO at Buy with a target of $9.50.

Karora Resources aka KRR also released their Q2 results from the gold and nickel mining complex in Australia. In terms of ounces produced, this was a strong quarter, with gold production at 30652 oz. They also announced that, thanks to a recently completed PP, their cash stash has grown to $114M in spite of the costs of building the second decline at Beta Hunt.

But what we really need to know are their costs of production, which were too high last quarter thanks to Covid and supply chain disruptions. We'll have to wait till they release their Q2 financial results to see how they did. Last year they appeared near the end of August.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33921028

The headline above Northern Shield Resources aka NRN's latest PR says that they have discovered a new gold zone at their Root & Cellar property in Newfoundland. But if you read the PR itself, you will find much more careful wording, merely saying they have discovered indications of a new gold zone. Given that in the years I have been following this company they have been very good at finding 'indications' but not good at finding actual viable minerlaization, I am not holding my breath.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33921047

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KRR, MAI, BTO, Chinese metal demand

We had two announcements for Karora Resources aka KRR.

First, they signed a new Credit agreement with Macquarie, which includes a $40M term loan and a $40M revolving facility. Part of the proceeds will be used to replace a previous $30M loan at a higher rate of interest.

https://ca.finance.yahoo.com/news/karora-resources-closes-previously-announced-162800852.html

And KRR also announced they are renewing their normal course issuer bid to buy KRR shares on the open market and cancel them. They are allowed to purchase 8,492,971 shares over the next year, but keep in mind they purchased and cancelled fewer than 10% of the allowable limit over the past year under the NCIB that just expired.

https://ca.finance.yahoo.com/news/karora-resources-renews-normal-course-152000594.html

Meanwhile, Minera Alamos aka MAI announced they have closed the $4.37M brokered PP at 55 cents a share that will be used to help finance the development of Cerro de Oro, the second of three Mexico gold mines they are bringing into production.

https://ca.finance.yahoo.com/news/minera-alamos-announces-closing-4-110000130.html

FWIW, in the wake of last week's Q2 results release from B2Gold aka BTO, BMO kept them at Outperform with a target of $7.

As well, I read an interesting analysts report from BMO about Chinese metal demand. Their conclusion is that comparing how much H1 metal demand dropped compared to last year, it is surprising that metal prices have stayed as strong as they have. The Chinese government is dropping interest rates amid other measures to revive their economy, but the issue of Covid lockdowns looms over everything.

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KRR, TUO, CEE

Karora Resources aka KRR released some skookum drill results from the Larkin zone of their Beta Hunt gold/nickel mine in Australia. There is already a substantial gold resource at Larkin, so perhaps the best news is a number of high grade intersections outside the resource envelope, the best being 29.8 g/t Au over 7.8M. That intercept was located 120 metres below the ultramafic/basalt contact, which opens the possibility of more high grade ore at depth, similar to what was found in the adjacent Western Flanks and A Zone deposits. The Larkin zone remains open to the south and down-dip.

These and other results from 2021 drilling to date will be incorporated into a new Resource Report expected before year end.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33927338

Speaking of skookum drill results, Teuton Resources aka TUO and its JV partners released eight more hole from drilling at their Treaty Creek gold/silver project in BC's Golden Triangle.

Four of the holes were at the newly discovered Calm Before the Storm zone, further establishing near surface mineralization which will be followed up on next year as for now they are concentrating on expanding the already giant Goldstorm deposit, where step-out drilling continued to significantly expand the deposit by finding long intervals of minerlaization. But we also get something new, a high grade zone of 20.86 g/t AuEq over 4.5M within a 25.5M zone of 9.96 AuEq.

If they can continue to find similar high grade 'pulses', this could have a significant effect on the economics of mining even a huge deposit like Goldstorm. The company makes no such claims, but given the quality of this team of geologists, it would not be a surprise if they worked out why this pulse exists and hence where to look for others.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33928969

African gold producer Centamin aka CEE released its Q2 results, and they were mixed. On the production side, the changes instituted by new management continue to bear fruit, and they are on track to achieve 2022 guidance. Especially notably is the increase in both grade and tonnage after underground mining at Sukari in Egypt was brought back in house. (The actual numbers were 110778 oz Au at a cash cost of $868/oz.)

But as with everyone else, cost has become an issue due to inflationary pressures, and management expects that to continue into H2 and beyond, though the commissioning of the solar plant at Sukari this quarter could help with that. It is noticeable that their cash balance declined further to $US176M at the end of Q2, but they remain debt free and there will be less capital spending at Sukari in H2.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33928918

In response BMO issued a new analyst report which called the results mixed and kept CEE at Outperform with a target of $C2.01.

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IAU, gold underperformance

I-80 Gold aka IAU brought us an update on their McCoy-Cove gold/silver development project in Nevada. The property already has one of the highest grade resources in North America, over 10 g/t Au, and will become one of the sources for refractory ore to be processed at IAU's Lone Tree autoclave once it is refurbished. To date, IAU has created a new portal at the Cove Mine and about 300M of the decline has been driven. Once the decline is complete, a 40KM drilling programme will begin in Q4, followed by a Feasibility Study to be completed next year.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33930296

Savile raises an interesting point re the underperformance of gold stocks so far this year. Normally during the bust phase of the economic cycle, gold outperforms all other commodities and drives the stocks higher, but what is different time is that due to various circumstances, energy is outperforming gold, thereby raising costs and undermining gold's fundamental drivers.

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MIRL, IAU

Minera IRL aka MIRL released the Q2 production results from their Corihuarmi gold mine in Peru. Mined material was up, ore placed on the pads was up, and production was up, and they are maintaining 2022 guidance of 23k oz Au.

But we don't hear a word about the three important issues affecting the company: getting rid of a larcenous CEO who uses the company to benefit friends and relatives while collecting an outrageously high salary; how they are dealing with the debt; and whether they are either going to sell the Ollachea gold project, also in Peru, or somehow find the money to develop it.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33935022

Meanwhile, The INK folks, who report on insider buying, featured Evan Downie, CEO of Nevada gold producer i-80 Gold aka IAU, spending almost a million bucks increasing his holdings during the recent decline in share price, which pretty well mirrored the entire gold sector.

I joined him by buying a few more shares myself. I am looking for a double to triple, maybe more, over the next three years as they brings four mines into production.

And Saville continues to see no confirmation that the bottom in gold and stocks is in, but remains convinced that both will be higher at year end.