Week Ended Could-24, 2020
$AGG.V, $AGGFF, $CGC.V, $ALLXF, $CXB.TO, $CXBMF, $F.V, $FIOGF, $ELY.V, $ELYGF, $EQX, $KNT.V, $KNTNF, $KTN.V, $KOOYF, $MUX, $NEE.V, $NHVCF, $SVM, $GUY.TO, $WM.TO, $WLBMF, $AUY
With most mining operations ramping manufacturing back-up, getting ready to ramp-up, or already working usually, the news-flow has died down significantly within the final week, although given whats occurring the macro-economy, that is unlikely to final for any extended time frame. Whereas a significant theme for over the following 12-18 months, will probably be M&A, it might take breather for some time, primarily as results of mining groups unable to finish its due diligence on potential property or corporations to accumulate due to journey restrictions from CV19. This isn’t to say M&A receivedt proceed within the close to future, simply that it is going to be lower than would in any other case be the case.
African Gold Group: The corporate has put collectively an accelerated development growth timeline. Highlights from growth pipeline embody:
- Quick-Tracked schedule reduces development from 23 months to 19 months
- Detailed design accomplished on nearly all of the method plant
- Preliminary infrastructure accomplished on foremost camp and development camp
The corporate is advancing a feasibility examine as a remaining step earlier than commencing development actions. The FS ought to present a lot improved economics and a bigger manufacturing scale relative to earlier technical stories. This has to 2 with continued high-grade drilling outcomes, discovery of expansive gold shear zone at its Kobada mission. It additionally reported the highest-grade intersection so far as mineralization extends to the North. Past profitable exploration efforts and that which stays, the corporate has been capable of considerably enhance gold restoration charges from 80% to 96%. Additional, earlier technical stories envisioned an operation smaller than 100ok oz. p.a. The contractor for the FS has accomplished the engineering evaluation on an expanded throughput state of affairs at Kobada gold mission in Mali. The expanded state of affairs might exceed the FS goal of 100ok oz. Au p.a.
Caldas Gold: The corporate has entered right into a definitive association whereby Caldas will purchase the entire issued and excellent shares of privately-held South American Assets (SARC). SARC is social gathering to an acquisition settlement pursuant to which SARC will purchase sure minimal exploration property in Northeastern Ontario (Juby Acquisition) held by Lake Shore Gold, a completely owned subsidiary of Pan American Silver Corp. The exploration property comprise a 100% curiosity within the Juby Undertaking.
Calibre Mining: The corporate continues to report wonderful drill outcomes at Libertad. Exploration actions will recommence upon the restart of mining operations, with an elevated scope o 60ok meters, a 30% improve from the initially announce 47ok meters. The variety of drill rigs will go from six to 10 in This autumn, with 4 scheduled at Limon, 4 at Libertad and two at Pavon. Drilling continued on the Panteon and Limon Norte deposits, with the give attention to: Tranca, Jabali Central and Jabali West, and comply with up drilling on the Amalia prospect. Drill highlights are as follows:
Jabali West Underground Deposit:
- 3.3m @ 23.46 g/t Au
- 3.9m 2 10.27 g/t Au
- 2.1m @ 9.78 g/t Au
Tranca Gold Prospect:
- 4.5m @ 3.92 g/t Au
- 4.6m @ 1.62 g/t Au
- 4.7m @ 2.09 g/t Au
Amalia Gold Prospect:
- 1.9m @ 19.99 g/t Au
- 6.7m @ 5.24 g/t Au
- 3.1m @ 3.86 g/t Au
Panteon Gold Deposit:
- 2.1m @ 4.25 g/t Au
- 6m @ 2.08 g/t Au
Fiore Gold: Reported 2m oz. M&I at its Golden Eagle Undertaking, Washington State, USA. Utilizing a barely increased cut-off grade [0.48 g/t Au] vs. [0.34 g/t Au] has resulted in M&I gold sources of two.018m oz. @ 1.38 g/t Au plus 154ok oz. @ 0.896 g/t Au Inferred. That is along with 9.4m oz. of M&I silver sources @ 6.44 g/t Ag plus 765ok oz. @ 4.43 g/t Ag Inferred.
The corporate additionally reported file fiscal yr Q2 gold output and money circulation era. The corporate produced 12ok oz. Au, a 38% improve over the prior interval. The corporate generated $4m in working money circulation. The corporate ended its fiscal yr quarter with $9.1m in money. Mine website AISC of $1,099/oz., whereas consolidated AISC [with corporate G&A] was $1,196/oz.
Ely Gold Royalties: Among the many junior royalty corporations, Ely Gold Royalties has been moderately busy over the past yr, build up its royalty portfolio, lately closing the acquisition of an necessary Nevada royalty portfolio. This portfolio consists of 5 properties that are being leased by the likes of Barrick and SSR Mining. Ely Gold is buying 50% of this portfolio which additionally embody minimal royalty funds and a carry a 3.0% NSR royalty with no buy-downs on 4 of the properties. VEK, which was bought by Ely (or subsidiary thereof) which bought 50% of the leases and royalties. Up to now, VEK bought 50% of its 1.50% NSR royalty on Marigold to Franco-Nevada, leaving Ely with a 0.75% NSR. The entire following leases have superior royalty funds and include a 1.50% NSR royalty to Ely: REN, Marigold (0.75% NSR), Lone Tree, Pinson, Carling Development. The superior royalty funds made in 2019 totaled $695.5k.
Equinox Gold: Reported a comparatively robust Q1 2020 working and monetary outcomes. It’s value noting that the quarter solely included 20-days of the Leagold integration [which closed on March 10th 2021], so this isn’t in any respect consultant of the true earnings and money circulation potential that will probably be illustrated most notably in Q3 [following the temporary shutdowns of Los Filos its largest asset through April and May]. Q2 will probably be a lot better relative to Q1, on the again of upper output and better gold costs partially negated [most likely] by increased prices.
The corporate has $350m of money readily available and its progress initiatives are totally funded. Fortress Mountain Part I is presently 75% full. The Los Filos enlargement and the Santa Lux restarts mission are anticipated to considerably output over the course of 2021 [Castle Mountain Phase I] and 2022 [Full year of Santa Luz], following by Fortress Mountain Part II [2023/2024] and the Aurizona underground enlargement .
Highlights for the quarter ended March 31st, 2020 is the manufacturing of 88.95ok oz. Au [82.63k oz. Au sold] with mine website money prices and AISC of $849/oz. and $968/oz. Working money circulation totaled $23.3m, although this is able to have been 100-125% increased if it has a full quarter from the Leagold property. Full yr steerage has been adjusted downward a bit to 540-600ok oz. Au with AISC of $1,000-$1,060/oz. By Q3, working money circulation needs to be upward of $80-$90m [assuming a $1,700/oz. realized gold price].
Ok92 Mining: Reported a major Useful resource improve at its high-grade Kora Deposit at its Kainantu gold mine. The deposit continues to develop bigger as anticipated. M&I useful resource elevated 180% from 0.39m oz. in October 2018 to 1.1m oz. @ 10.45 AuEq g/t. Inferred Assets elevated 50% from 2.39m oz. in October 2018 to three.7m oz. @ 9.01 AuEq g/t. Kora North, Kora, and Eutompi deposits now mix to be on steady deposit, open at depth and open alongside strike to the south. Kainantu vein has a number of alternatives to develop sources from a near-mine high-priority exploration areas together with Kora strike extension, Kora deeps, and Judd South veins; Judd vein; Karempe vein, and; Arakompa and Maniape. Ok92 stays one of the vital thrilling junior producers due to each the manufacturing upside and the potential for huge useful resource enlargement.
Kootenay Silver: Reported a number of high-grade intercepts at its Columba Undertaking. This mission holds essentially the most promise of all of the property it owns and it has begun delivering [though very preliminary] on such potential. Kootenay has a few different marginal deposits [which become far more lucrative at silver prices of $30/oz.] The corporate has acquired assay outcomes from the primary six of ten holes accomplished as a part of its 2020 drill program. The holes examined the F vein, which is displaying continuity in each veining and grades. Highlights from the assay outcomes thus-far embody:
- 2.5m @ 350 g/t Ag
- 4.3m @ 239 g/t Ag
- 3m @ 974 g/t Ag
- 1.4m @ 911 g/t Ag
- 2.9m @ 689 g/t Ag
- 15.65m @ 166 g/t Ag
- Together with 4.97m @ 400 g/t Ag
McEwen Mining: The corporate reported one other horrid quarter and managed to lose cash regardless of a considerably increased gold worth. Manufacturing for the quarter was 29.2k oz. Au and 553ok oz. Ag or 35.1k AuEq. The corporate took an $83.8m non-cash impairment cost because of geological interpretation, which resulted in a considerable discount in anticipated gold manufacturing at its Gold Bar mine. Black Fox noticed AISC of $1,339/oz., whereas San Jose noticed AISC of $1,592/oz., The Gold Bar mine noticed AISC of $2,177/oz., and El Gallo noticed very low manufacturing because of residual leaching, with complete prices of $1,025/oz. Q2 needs to be a little bit higher, largely because of increased gold costs however a really sub-par quarter nonetheless. Typically talking, corporations report money circulation from operations in press releases however not on this case, and for good cause.
McEwen actually wants to consider making some strategic transfer to enhance the general high quality of its portfolio [which isnt hard given its current portfolio]. It has time to try this, for instance in case you examine the corporate to say Equinox, which obtained began later however already has two cornerstone property and three tier-2 property. Now it does have a pair property that may do a lot better with additional mine growth [Black Fox, Grey Fox, Froome] increased silver costs [Project Fenix/El Gallo II], and a full quarter of operations [San Jose]. The Gold Bar mine will possible see prices come down as soon as optimization measures are applied, however nonetheless a really sub-par asset.
McEwen can both proceed down this path or both JV Los Azules or promote it outright and purchase an asset or firm with one or a number of high-quality gold property. It may well additionally purchase a single asset firm, one thing like Pure Gold, which is small however will probably be its most worthwhile asset. However as a result of the corporate has an especially excessive price of fairness, it must flip towards debt or stream/royalty financing. One acquisition that will make a number of sense could be to accumulate Kirkland Lake Golds Holt Advanced. Kirkland isnt trying to maintain onto these property and these would drastically improve the standard of McEwens portfolio, a minimum of relative to what’s going to possible be the worth tag.
Northern Vertex: Reported $13.1m in income and file earnings type mine operations earlier than depreciation and depletion of $5.2m. The corporate produced 7.38ok oz. Au and 58ok oz. Ag in Q1 2020. Money decreased from December 31st 2019 from $3.33m from $2.47m. The corporate acquired allowing approval for the Moss Mine Part III enlargement, which permits administration to develop the dimensions of the mine which helps the useful resource updates and a mine life extension. Money prices and AISC was $862/oz. and $991/oz. The corporate continues its sluggish ramp-up for what’s a marginal asset, given its lack of scale. The corporate is a little more than 50% from reaching its gold manufacturing clever, with an goal of manufacturing 50ok AuEq oz. p.a.
Silvercorp Metals and Guyana Goldfields Enter into Amending Agreements: The pseudo bidding battle for Guyana Goldfields has lastly come to an finish, with the latter selecting to companion up with Silvercorp versus Gran Colombia and Gold-X mining. That is possible because of Silvercorps extra versatile supply [a cash component] and the very fact Silvercorp is extraordinarily nicely financed with over $140-$160m in web money and about $180-$200m from its curiosity in New Pacific Metals. Silvercorp did up its supply. Every Guyana Goldfield shareholders will obtain C$0.25m in money and 0.1849 Silvercorp shares, for complete consideration of C$1.30/share. Silvercorp presently holdings 16.55m shares of Guyana Goldfields, representing 9.48% of the issued and excellent widespread shares. After accounting for Silvercorps current shares, the money consideration of C$0.25 implies a complete money element of C$39.5m, and the share consideration of C$1.05 implies a complete share element of 29.2m shares. Based mostly on such metrics, this is able to imply into current Guyana Goldfields shareholders proudly owning 14.40% of the brand new firm.
The corporate additionally reported its fiscal yr 2020 monetary and working outcomes [ended March 31st 2020]. Throughout its fiscal yr, the corporate bought 6.3m oz. Au, 3.3k oz. Au, 65.3m lbs. Pb, and 25.4m lbs. Zn. The corporate posted $34.3m in web earnings, however extra importantly, $77.2m in money circulation from operations. Because of barely decrease base metallic credit [due to lower prices], money prices have been unfavorable (-$1.91/oz.) in comparison with unfavorable (-$4.29/oz.) within the prior yr. AISC, in flip, was additionally increased at $6.86/oz. vs. $3.52/oz. within the prior yr. The corporate stays in wonderful monetary form with upwards of $300-$325m in money + equivalents + short-term investments +long-term investments [28.8% ownership in New Pacific Metals]. As soon as it builds out the Aurora underground mine, it would nonetheless proceed to have a strong stability sheet. Within the near-term, money circulation era [absent of silver prices of at least $18/oz.] will lower by a average lower, fully because of low base metallic costs [Pb & Zn]. However base metallic costs will bounce again, to not the place they have been, however increased than these on the finish of March.
Wallbridge Mining (and mixture with Balmoral): The corporate introduced continued profitable exploration drilling, highlighted embody:
- 5.35m @ 70.84 g/t Au
- 7.05m @ 32.36 g/t Au
- 2.10m @ 51.37 g/t Au.
- 1.05m @ 35.30 g/t Au.
- 1.10m @ 29.Three g/t Au
- 3.25m @ 8.25 g/t Au
The Fenelon property is a really promising exploration stage property. The corporate could be very nicely financed with $53.8m in money and no debt as of finish of Q1. The possession can also be very encouraging with administration and administrators holding a 1.80% curiosity [not all that significant given the size of the company], Kirkland Lake Gold holding a 7.90% curiosity, William Day Development holding 7.80%, and Eric Sprott holding a 20.70% curiosity. The corporate is buying and selling forward of the obtainable information at this cut-off date [though not by much, and not surprising given the gold price environment], though it’s clear that there’s important exploration upside each at Balmoral and Martiniere. That is one other thrilling exploration story to maintain monitor of.
Following this announcement, Wallbridge introduced it has expanded the Tabasco-Cayenne Shear Zone gold mineralization at Fenelon. It reported the wide-spaced step out drilling continues to develop the mineralization within the Tabasco-Cayenne shear system alongside strike and down dip. These new intersections with wonderful widths and grade embody:
- 56m @ 4.84 g/t Au
- 19.15m @ 8.41 g/t Au
- 8.50m @ 9.76 g/t Au
- 6m @ 16.93 g/t Au
The shear zone stays open alongside strike and at depth. The wide-spaced step-out drilling to develop this mineralized system will proceed to be the main focus of the 2020 exploration drill program.
Different drill highlights from this zone embody:
- 1m @ 99 g/t Au
- 3.65m @ 41.01 g/t Au
- 8.2m @ 6.9 g/t Au
- 25m @ 3.19 g/t Au
- 2m @ 36.55 g/t Au
Yamana Gold: The corporate reported important exploration outcomes supporting mine life extensions at Jacobina and El Penon, together with new secondary veins and extensions of major vein programs at El Penon. Exploration at Jacobina within the second half of 2019 by way of the primary quarter of 2020 expanded increased grade zones in Canavieiras Sul, each down dip and alongside strike to the north in direction of Canavieiras Central, offering important enlargement of the identified mineralized zone within the highest-grade sector of the mine.
The exploration outcomes, at minimal, assist the prolonged and expanded mine plan highlighted within the Firms latest announcement on the Part 2 enlargement of Jacobina. Below the Part II enlargement, the after-tax NPV could be a staggering $1.23b utilizing a $1,550/oz. gold worth deck. Common annual gold manufacturing is to extend to 230ok oz. Au, a 31% improve vs. Part I @ 175ok oz. Au p.a. Moreover, the associated fee construction improves, with AISC of simply $727/oz., a vert low-cost underground mine. Jacobina will grow to be, if it wasnt already, a cornerstone asset for Yamana. Mine life below this state of affairs is forecast at 14.5 years, nevertheless, Jacobina has a protracted monitor file of accelerating mine life and the newest exploration outcomes underscore the probability that mine life will improve additional.
Relating to El Penon, The exploration outcomes at El Penon [discovery of a secondary vein along extensions and offshoots of primary veins underscore the potential of the vein system at El Penon] assist the Firms view that mine life will exceed present mineral reserves and is a minimum of per the Strategic Lifetime of Mine of a minimum of 10 years. Moreover, as a result of El Peñón has extra plant capability, the invention of extensions of major vein buildings offers flexibility to course of extra tonnage at increased grades, which might improve annual manufacturing.