Endeavour Mining akak EDV released a DFS for the expansion of the Sabodala-Massawa gold mine in Senegal by adding circuits to process the refractory sulphide ore. Based on the numbers, including a post-tax IRR of 72% at $1700/oz gold, they have made the decision to go ahead with the project. Capex is only $290M, self-funded from existing oxide ore production from the mine. The expansion is expected to deliver an average annual production of 373koz per year over the next 5 years at an average AISC of $745/oz Au. Construction will commence shortly with first production expected early 2024.
We can expect a steady stream of such announcements from EDV over the coming years as they bring on line a number of development projects.
FWIW, RBC saw the announcement as positive but kept EDV at Outperform with a target of $44.
Sanstrom Gold Royalties aka SSL released their usual brief first report for Q1 today. Attributable AuEq sales were estimated at 18700 oz, a new record, as were revenues. We'll get more detail and exact numbers in future press releases.
Hemlo Explorers aka HMLO's share price jumped today on news that ABX has signed on to earn up to an 80% interest in part of HMLO's Plc property, located 25km west of ABX's Hemlo mine. In return ABX is committing to a small PP into the HMLO treasury while spending at least $1M per year on the project. This year's focus this year will be the Idaho Zone, which looks like it could be analogue to GENM's Marathon project under construction 3km to the west.
In the wake of yesterday's PR showcasing good Q1 preliminary results, Sandstorm Gold Royalties aka SSL announced that they are renewing their normal course issuer bid, allowing the buyback of almost 20M shares. Last year's buyback was quite active -- 'In the last twelve months, the Company has purchased 4,651,049 Common Shares pursuant to its NCIB at a weighted average price of approximately C$7.95 per common share on the TSX and alternates and approximately US$6.19 per common share on the NYSE and alternates' -- but I don't expect them to buy back as many this year due to the higher share price.
FWIW, BMO put out a new analyst report on SSL. Citing indications that AuEq oz are trending above guidance, they kept SSL at Market Perform but increased their target to $9.50.
BMO also put out a new analyst report on Oceanagold aka OGC in the wake of their recently released Reserve Report. It is ominously titled "2021 Drilling Fails to Replace Depletion, but Only Just', and characterize the report as 'slightly negative'. They are keeping OGC at Outperform but dropping their target 25 cents to $3,25.
And BMO also put out a new report on Endeavour Mining aka EDV in the wake of a PR announcing they are going to add a circuit to process the sulphide ore at the Sabodala-Massawa gold mine in Senegal. They agree with the company that this turns the mine into a top-tier asset (whatever that means), keeping EDV at Outperform with a target of $42. They emphasize that EDV remains their Top Pick.
Riverside Resources aka RRI announced that they have completed an expanded drill programme on the Oakes gold prospect in Oantario. No assays are available yet, but their geologists continue to see analogues with other deposit in the Geraldton Greenstone Belt, including the nearby Greenstone Mine.
i-80 Gold aka IAU released more high grade drill results from beneath the existing workings at their Granite Creek gold mines in Nevada, results promising enough that the drill programme has again been increased. This sulphide mineralization they are finding has been targeted for production later this year depending on permitting. As IAU's autoclave at Lone Creek will not be ready to process the ore for a few years, they have signed an agreement for it to be handled at Nevada Gold Mine's nearby facility.
I wonder when IAU is going to start getting more analyst coverage?
Orestone Mining aka ORS released the results of another hole on their Captain Au/Cu porphyry prospect in north central BC. They were following up on a target generated by geophysics, but only generated 774m of core essentially devoid of mineralization, which they now believe was cut off by a fault. Future drilling will concentrate on a 2000m by 2000m area where multiple instances of mineralization have already been found. Both of these porphyry targets have only been drilled on the edges so far.
Not long ago I opined that, based on everything they have going on, Wallbridge Mining aka WM would have a consistent newsflow this year, and so far I am right. Today we hear about more drilling at their flagship Fenelon gold project on the Detour Greenstone Belt in Quebec. Some of this set of holes was infill drilling, which found new mineralization inside the resource envelope at Fenelon, demonstrating the ability to continue to build the resource from within. WM also reported holes that extend the limits of known mineralization outwards, providing another area for growth. Finally, there were also holes drilled to explore for new deposits and to better define the geology around Fenelon, and again they were successful in both.
This PR contains complete results for 72 holes and partial results for another 6, and drilling in ongoing full blast.
Minera Alamos aka MAI brought us an update from their recently opened Sanatana gold mine in Sinaloa, Mexico. A planned shutdown in January allowed a number of improvements -- better sequencing, bringing blasting in-house, changing cutoff levels, and so on -- to be implemented after a few weeks of down time and the results have been positive, as witnessed by the gold production numbers -- 890 oz in (part of) January, 1130 oz in February, and 1370 oz in March.
It has been nice to see MAI finally get out from the burden of all those shares being sold willy-nilly by Osisko, but I expect the real increase in the share price to get going this quarter, for two reasons: 1) they will be increasing production by starting mining at the Nicho Norte pit; and 2) increasing production both from the earlier improvements and by mining Nicho Norte should allow the declaration of commercial production, which will allow a whole new class of institutional investors to get involved. (And remember that Santana is only the first of three gold mines in Mexico they will be bringing into production over the next few years.)
Karora Resources aka KRR announced a new gold Respurce Report for their Beta Hunt mine in Australia. (This RR does not include the nickel mineralization.) Net of mining depletion, they managed to increase M&I Resources by 7% to 1.12M oz Au, and Inferred Resources by 46% to 786k oz Au, chiefly through the first time inclusion of the higher grade Larkin Zone, discovered in 2020 when they were looking for more nickel. Perhaps most importantly, this Resource Report supports KRR's plans to increase production to 185-205k oz Au by 2024.
We will get an updated nickel Resource Report this quarter. Exploration and development drilling at Beat Hunt and Higginsville continues to deliver good results, so I expect a substantial increases in Resources and Reserves to come. Like MAI, KRR has recently broken upwards from a trading range, and I expect the share price to continue upward.
FWIW, in the wake of yesterday's PR from i-80 Gold aka IAU releasing new underground drill results from their Granite Creek gold property, which will be brought into production, perhaps later this year, when mine studies are permitting are complete, Scotia issued a new analyst report, which saw the results as 'positive' but kept IAU at Sector Outperform with a target of $4.75.
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