Value Microcaps Junior Miners

[Lone Clone]

BTO, CEE, WM, KTN, EDV, SSL, NSR, IAU, GOT, KRR, costs of gold production

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BTO, CEE, WM, KTN, EDV

B2Gold aka BTO released its Q2 results, The numbers were in line with expectation, producing a little under 224k oz Au at a cash cost of $781/oz., allowing them to maintain their 2022 guidance. They ended the quarter with their cash stash reduced to $567M and debt of $666M.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33949075

FWIW, in response TD issued a new analyst report which cited the impact of the release as Neutral and kept BTO Buy with a target of $9.

Centamin aka CEE released their mid-year financial report. We already knew that production and costs were starting to improve thanks to all the changes made at the Sukari gold mine in Egypt by new management, but now we get to see what financial impact they have had on the company's balalnce sheet. Their cash stash was reduced to $175 at the end of June, but with major expenditures out of the way already and free cash flow generation continuing to improve, the cash stash will get back to growing, particularly once the new solar plant at Sukari begins operating in the next month.

CEE also declared an interim dividend of 2.5 cents a share, with the expectation being at least as large a dividend at year end. 2002 guidance of 430,000-460,000 oz Au with cash costs of US$900-1,000/oz produced was reiterated.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33949115

FWIW, BMO released a new analyst report on CEE stating the impact as Neutral. Citing production and costs as being in line, and expecting that increase in free cash flow generatione, BMO kept CEE at Outperform with a target of $2.03.

Recently Wallbridge Mining aka WM launched a programme to add more ounce to the resource at its Fenelon gold project very cheaply by resampling old core that was thought to be barren or minimally minerlaized when it was extracted. To date they have received resample results from almost 20km of core -- their goal for the year is 30km -- derived from areas adjacent to the existing resource, and it is really starting to pay off. Intervals like 1.36 g/t Au over 34.00M and 2.13 g/t Au over 27.50M indicate this resampled core will make a substantial contribution to the next Resource Report for Fenelon.

Wallbridge also announced an important step in the development of Fenelon by signing a Pre-Development Agreement with the local Cree nations, who are very powerful in that part of Quebec.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33949138

Recently I opined that in the wake of Kootenay Silver aka KTN's announcement of the sale of their remaining interest in the Cervantes JV that had generated most of their news flow this year, we would soon be hearing an update on their 100%-owned Columba silver prospect in Chihuahua, Mexico, and it didn't take long. Today we got an update on the 15km drill programme underway at Columba.

The drilling is designed to test extensions of a number of veins on this past-producing property, but unfortunately KTN has been forced to temporarily halt drilling partway through because of slow turnaround at the labs from the core they have already extracted, results which they need to guide the rest of the planned drilling. Once those results are received from the lab and released, the drill will get back to work..

https://www.siliconinvestor.com/readmsg.aspx?msgid=33949158

Kootenay Silver aka KTN also announced they have staked new ground on the Nechako plateau in BC prospective for Blackwater-style epithermal mineralization. KTN already has a number of properties in the area, to which will be added the 12193-ha Mystery property, prospective for gold, silver, and zinc. Exploration is underway.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33949202

FWIW, In response to yesterday's Q2 financials from Endeavour Mining aka EDV, BMO released a new analyst report which saw the impact as Positive, citing how they beat consensus in terms of both production and cost. Further stating that they think EDV can manage cost pressures better than its peers, they kept EDV at Outperform with a target of $40.

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SSL, NSR, IAU

Shareholders of both Nomad Royalties aka NSR and Sandstorm Gold Royalties aka SSL have approved the takeover of NSR by SSL. The process is expected to complete in about a week. Here's the NRS PR.

https://ca.finance.yahoo.com/news/nomad-royalty-company-shareholders-approve-203000709.html

Now that they are established, new Nevada gold producer i-80 Gold aka IAU released its first proper quarterly report since it was created last year. Residual leaching at Ruby Hill and Lone Tree totaled 3507 oz Au for Q2 at a cash cost of $1122 per ounce sold. Their cash stash at quarter end was $132M, so they are well-funded to bring four mines into production over the next years, especially with the residual leaching still providing new income.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33956466

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GOT, EDV

Goliath Resources aka GOT released another PR concerning the ongoing drill programme on the Surebet zone on its Golddigger gold/silver prospect in BC's Golden Triangle. We are now up to 22 holes, all of which have found extensive zones of minerlaization, but unfortunately still no assays to tell us what's really there. Surebet is now to 5.25 sq km in extent and remains open in multiple directions, so I sure hope the assay numbers are good when they finally arrive.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33957981

FWIW, Edison has a new report out on Endeavour Mining aka EDV in the wake of their recent quarterlies, with the aubheading "Yield hits 4%', and the positivity continues from there. If you can't access the report directly from this link, sign up for the free membership.

https://www.edisongroup.com/wp-content/uploads/2022/08/GB00BL6K5J42EndeavourUpdate080822_new-1.pdf

In Saville's latest, he shows how if you look behind the CPI numbers, a variety of economic inficators signify that inflation in the US has already peaked. Indeed, the bond market thinks the US will start cutting interest rates early next year. He also seems more and more certain that first gold and then gold stocks will do very well over the next six months.

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SSL, KRR, costs of gold production

Sanstorm Gold Royalties aka SSL released their usual bare bones preliminary results last month. Now we get more details, to wit, Au sales of 19276 oz at a cash cost of $275/oz. This resulted in a 'cash operating margin' of $1595/oz, leading to record revenue of $36M and net income of $39.7M, so their business model is performing well in the current environment.

But it will take a while to evaluate all the transformative transactions announced during this quarter, including the conversion of their Hot Maden interest into streams and shares in newly formed Horizon Copper; the takeover of Nomad Royalties; the purchase of the Basecore royalties; and the creation of Sandbox Royalties Meanwhile, they maintained 2002 guidance of 80-85 oz AuEq, rising to 155k oz AuEq in 2025, assuming all the transactions complete.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33959404

Karora Resources aka KRR released two PRs. First up are the Q2 financial results. We already knew Q2 marked a KRR production record of 30652 oz Au from their Australian operations, but now we learn that they also mined record tonnages and decreased costs by 15%. In spite of this, due to the increased costs of labour and materials plus the money they are spending on development, they recorded a small loss in the quarter. In spite of these expenditures, their cash stash increased to $114M thanks to a PP. As the development is completed, particularly the second decline at Beta Hunt, and production increases over the next few quarters, they will return to profit unless the PoG craters.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33959439

The second PR released by KRR concerned the release of a PEA for the ramp up of nickel production at Beta Hunt, which I am mentioning here because they plan to treat the nickel as a byproduct allowing them to lower the costs of the their gold production. The company has recently discovered much more extensive nickel mineralization, and based on this the PEA forecasts 8 years of production starting next year totaling 9435t of Ni, a considerable increase from the 450-550t expected to be produced this year. Capex is projected to be low, less than $20M and the IRR, albeit they only report it pre-tax, is over 100%.

Given that there is a very strong probability that ongoing exploration will find more nickel, and that producing the nickel will be low cost, nickel production promises to make a substantial contribution to the overall economics of Beta Hunt.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33959473

I also read interesting report from BMO arguing that cost concerns are currently overinflated in the gold industry. They cite three main reasons: cost inflation is currently peaking and will ease from here on; $USD strength is ameliorating its effects; and future margin compression from cost increases is already being priced in.

They make a good argument; I sure hope they are right.