Site Visit Shows Mining Company Now in Development Phase

Source: Streetwise Reports 05/23/2019 Project highlights gleaned during the trip are recounted in a BMO Capital Markets report. In a May 21 research note, BMO Capital Markets analyst Andrew Mikitchook reported that during a recent multisite tour, Ivanhoe Mines Ltd.’s (IVN:TSX; IVPAF:OTCQX) “world-class assets and technical management showed very well.” Mikitchook’s overall impression was that “the CITIC financing has transitioned Ivanhoe to preconstruction with the company now considered a financed copper development company that will see positive market reactions to incremental construction milestones,” he indicated. The analyst provided the current status of each of Ivanhoe’s projects in Africa and the Democratic Republic of the Congo, noting the “takeaway from the site visit was the notable progress towards preparing for construction, particularly at Kakula and Kamoa.” The company has advanced both to the preconstruction phase while continuing its successful exploration efforts, specifically discovering recently the new bonanza high-grade Kamoa North and Kamoa Far North zones. Ivanhoe intends to begin drilling these zones’ extensions after the rainy season, thereby providing further exploration leverage. At Platreef, the company has made significant progress on sinking shaft 1 and making collar preparations for shaft 2. BMO expects management to discuss possibly rescheduling the production ramp-up to “accelerate production at a lower capacity by converting shaft 1 from ventilation to production,” Mikitchook pointed out. Regarding Kipushi, Ivanhoe made notable progress there also, with developing the shaft and underground infrastructure. Next for Kipushi is a feasibility study, anticipated in Q2/19, after which the company will officially start … Continue reading

Viva Gold Improves Gold Resource in Nevada

Source: Bob Moriarty for Streetwise Reports 05/22/2019 Bob Moriarty of 321 Gold discusses the project this small-cap miner has acquired out of Midway’s bankruptcy. I first wrote about Viva Gold Corp. (VAU:TSX.V; VAUCF:OTCBB) exactly a year ago. The price of gold was about $1300 and the price of a share of Viva was about $0.32. Now gold is $1280 and Viva is still at $0.32. The company has an interesting story and while the price of the shares and gold hasn’t done much lately, the company has. Go back and reread what I wrote a year ago. Basically the Tonopah gold project was owned by Midway and had a half million-ounce resource drilled off in over 600 drill holes. Midway broke their pick and went into bankruptcy. While the project was attractive and would have had a swarm of bidders in the bankruptcy court it carried a 7% NSR. That is a deal killer in 99.9% of the known universe. Viva handed the court a check for $25,000 for the project. (Making a price of $0.05 per ounce of gold resource) There was this slight problem of having an overhang of the 7% NSR which pretty much meant they needed a price of gold of somewhere around $50,000 an ounce to break even. Viva went to the underlying holder of the NSR and pointed out that they could wait patiently for gold to go to $50,000 an ounce or they could both make money by coming up with a number … Continue reading

Seasonal Dysfunction: Why Generations of Investors Are Having Such Difficulty

Source: Michael Ballanger for Streetwise Reports 05/22/2019 Sector expert Michael Ballanger discusses the demotivating effects of current market trends. With great apology, I am late with this week’s missive largely due to the arrival of boating season and the fierce need to secure a new vehicle, which should have taken (only) two days but didn’t. Having arrived at the marina on Friday evening, I expected a rather smooth transition as it was the first year in four that I asked our local service fellow to do all of the end-of-year maintenance, instead of me draining the lines and winterizing the water tank and changing the engine oil and all of those things I loved to do in my 40s but that have become a royal pain in the ass twenty years later. Call it “geezer-itus” or “baby-boomer angst,” I agreed to let the local marina service group do all those debilitating tasks and simply threw them the keys while shouting “See ya next spring!” I fully expecting a boat functioning this past weekend in exactly the condition in which it was functioning last October. Well, with great deference to Mr. Murphy and that obnoxious law named after him, my lovely little Freshwater Pearl was a mess of the highest and most irritating order, floors most foul, upholstery seams ripped, and obvious dings and dots from the reentry-to-the-water exercise. However, what really set me off was that my most-excellent winch-powered dinghy caddy was nonfunctional, and after five hours with limited workspace, … Continue reading

Delrey Metals Goes Definitive on a Blockbuster Vanadium/Iron/Titanium Property

Source: Peter Epstein for Streetwise Reports 05/21/2019 Peter Epstein of Epstein Research discusses the company’s latest option to acquire 80% of a large vanadium project in Newfoundland and Labrador. Delrey Metals Corp. (DLRY:CSE; DLRYF:OTCPK; 1OZ:FSE) owns 100% of five promising properties in Canada. Four are prospective for vanadium, totaling 10,856 hectares, one is a cobalt–copper-zinc opportunity that Cobalt 27 Capital Corp. acquired a 2% NSR on. In addition, on May 21st, management signed a definitive agreement on an option to acquire an 80% interest in select mineral licenses in the Four Corners project in Newfoundland and Labrador, and establish a JV with the seller. This is a giant, bulk-tonnage deposit that could contain 10 billion tonnes of rock, much of it mineralized, with lower-grade vanadium, plus iron and titanium. Drilling this year will seek to validate the large scale of the deposit and identify additional mineralized zones. Four Corners is a 7,655 hectare [recently upsized by 51%] property in Newfoundland and Labrador that has had significant historical work done on it. The project hosts titanium-vanadium enriched magnetite with evidence of significant and consistent metal accumulations. This is a massive, (potential mineralized strike length >16 km) deposit, in a great jurisdiction. Selective grab samples assayed >40% Fe, 5% Ti and 0.30% V205 and as high as 56.9% Fe, 15.1% Ti and 0.39% V205. In 2012, SRK Consulting completed promising preliminary metallurgical work that showed concentrate samples of 0.643% V205 and recoveries of vanadium of >90%. Importantly, there are at least five … Continue reading

Gold in the Desert: High-Grade Project Nearing Fruition in Arizona

Source: Streetwise Reports 05/21/2019 Under the leadership of a new CEO, this miner expects to start producing gold in 2020. Located in the fault- and gold-riddled desert lands between Phoenix and Death Valley, Kerr Mines Inc.’s (KER:TSX; KERMF:OTC; 7AZ1:FRA) Copperstone Mine is gearing up to recommence production in 2020, stated newly appointed CEO Giulio T. Bonifacio. Because it is blessed with existing infrastructure—a mill, water, power, labs, repair shop, warehouses, offices, tailings pond and extensive underground development—reinvigorating Copperstone is a low capex project. Copperstone’s historically productive high-grade gold deposit was profitably mined as an open pit in 1987 by Cyprus Minerals Corporation. Within six remarkable years, Copperstone delivered more than 500,000 ounces gold from 5.6 million tons of ore grading at 0.089 ounces per ton (oz/t) gold (3.05 grams/tonne). Copperstone’s next owner, American Bonanza, further developed Copperstone with drilling, underground development at the base of the open pit, while also permitting the project. This was followed by the construction of a 600-ton-per-day flotation mill. The company extracted 16,900 ounces of riches from ore grading at 0.104 oz/t gold (3.57 grams/tonne) during 2012 before terminating operations in early 2013 as the gold market turned and Copperstone went temporarily fallow. Copperstone and its adjacent property was subsequently acquired by Kerr Mines in 2014 at a discounted price that did not reflect the significant historical costs that approximated US$100 million, Bonifacio noted. Kerr Mine’s wholly owned Copperstone project straddles 19.2 square miles (50 square kilometers) of surface area and mineral rights in La … Continue reading

Silver Looking Weaker than Gold

Source: Clive Maund for Streetwise Reports 05/20/2019 Technical analyst Clive Maund charts silver and finds that it looks “considerably weaker than gold.” Silver looks considerably weaker than gold, although that is normal at this stage in the cycle. It is still considered likely that it is forming a Double Bottom with its lows of late 2015, and if so then the support at those lows should hold. On silver’s 1-year chart it still looks like it is moving to complete a Cup & Handle base, because the pattern roughly parallels the pattern completing in gold, although the downwardly skewed Handle is driving the price back down towards the vicinity of the lows of the Cup. A breakout from the Handle downtrend will be bullish although this doesn’t look likely short-term because of adverse seasonal factors. In contrast to gold, silver’s latest COT chart is already starting to look positive, although there is room for further improvement which may occur, meaning still lower prices for silver in coming weeks, due to June being the most negative month seasonally for silver, although this will clearly not be the case if Iran is attacked. Silver’s seasonal chart does not bode well for coming weeks, although it should be emphasized that this is a background factor and silver has already dropped quite a lot and is approaching support, so we are not expected to see much more downside. The key bullish development to look out for is a breakout from the Handle downtrend shown … Continue reading

Technical Analyst: Gold's Weakness Should Be Short Term

Source: Clive Maund for Streetwise Reports 05/20/2019 Technical analyst Clive Maund charts gold and explains why he believes gold will turn higher later in the summer. Gold and silver dropping back again late last week had investors in the precious metals sector feeling despondent, especially as their fears were magnified by at least one analyst calling for gold to drop to the low $900s or even lower, which is normal when prices sink, but our charts are instead suggesting that gold and silver are close to completing giant bottoming patterns that started to form (in the case of gold) as far back as 2013. We can best see gold’s potential giant base pattern on a 10-year chart. It can be described as a complex Head-and-Shoulders bottom or as a Saucer, and is best considered to be both, or perhaps as a hybrid having the characteristics of both patterns. In any event, as we can see on this chart, it appears to be drawing close to breaking out of it, which will be a very big deal if it happens, because a base pattern of this magnitude can support a massive bull market. As for timing it could take several months and it is most likely to happen during gold’s seasonally strong period from July through September. To maintain the bullish case it must stay above the Saucer boundary. Embedded within the giant H&S or Saucer base pattern, a fine Cup & Handle base has formed over the past year which … Continue reading

Precious Metals Miner Reevaluates Nevada Operations After Q1/19 Miss

Source: Streetwise Reports 05/17/2019 The reasons for the miss and possible paths forward were outlined in a ROTH Capital Partners report. In a May 9 research note, analyst Jake Sekelsky reported that ROTH Capital Partners reduced its target price on Hecla Mining Co. (HL:NYSE) to $3 per share from $4 after the company suspended operations at its Nevada operations. The stock was trading at around $1.51 per share on May 16. Management made this decision after issues at the Fire Creek mine resulted in Q1/19 results that came in below expectations. The primarily problems were “the presence of water that limited access to certain areas of Fire Creek as well as poor conversion of resources to reserves,” explained Sekelsky. He indicated that Hecla intends to “re-evaluate operations and outline a viable longer-term operating plan.” Until then, it will hold off on providing production and cost guidance for those assets. For Q1/19, Hecla reported a net loss of $0.05 per share and revenue of $152.6 million. These numbers came in below ROTH’s forecasts of a $0.01 per share loss and $173.8 million in revenue. That said, Hecla’s Greens Creek outperformed during the quarter, producing about 2.2 million ounces at an all-in sustaining cost of $3.24 per ounce, somewhat offsetting the problems in Nevada. “We expect Greens Creek and Casa Berardi to continue to serve as the company’s cornerstone assets and primary cash flow generators as the company re-evaluates operations in Nevada,” Sekelsky highlighted. The analyst wrote that an update from management … Continue reading

St. Barbara's Acquisition Offer for Atlantic Gold Highlights 'Valuation Gap'

Source: Streetwise Reports 05/16/2019 The valuation gap between Australian and Canadian producers, highlighted by a recent takeover offer, is reviewed in a BMO Capital Markets report. In a May 15 research note, BMO Capital Markets analysts Brian Quast and Andrew Kaip wrote that St. Barbara Ltd.’s (SBM:ASX) recent offer to acquire Atlantic Gold Corp. (AGB:TSX.V) exemplifies that “the valuation gap between Australian and Canadian producers creates an environment ripe for consolidation.” He added that “we view the consolidation of Australian and Canadian midtier miners as being inevitable.” The analysts pointed out that today’s valuations favor Australian gold producers, which are trading at a premium to Canadian producers on a price to net present value basis and a price to cash flow per share basis. As such, the Australian companies are nicely positioned to make accretive acquisitions of Canadian assets. Conversely, Canadian producers have been struggling recently. A perfect example of this theme playing out, the analysts indicated, is St. Barbara’s bid on May 14 for Atlantic Gold at a 41% premium to that day’s closing price. “The deal values Atlantic Gold at 1.3x net present value 5% at spot, above peer valuations at 0.7x,” Quast wrote. The premium is higher than that in recent takeover transactions of junior gold producers, he added, due to Atlantic Gold’s Touquoy being a low cost, high margin gold mine with growth potential. The BMO analysts gave a shortlist of companies that could seize on the current market opportunity. The Australian companies, Evolution Mining, Northern … Continue reading

BHP Joins Forces with Prospect Generator to Explore Mexican Copper Project

Source: Maurice Jackson for Streetwise Reports 05/16/2019 Dr. John-Mark Staude, president and CEO of Riverside Resources, sits down with Maurice Jackson of Proven and Probable to discuss his company’s just-announced exploration funding agreement with BHP. Maurice Jackson: Joining us for a conversation is Dr. John-Mark Staude, the president and CEO of Riverside Resources, Where Knowledge is Golden. Riverside Resources Inc. (RRI:TSX.V; RVSDF:OTCQB has some breaking news coming from its corporate offices in Vancouver that shareholders should note. In the last interview, Dr. Staude, you addressed the five C’s that will be catalysts in 2019 for Riverside, and one of them was copper, which will be germane for today’s discussion. Dr. Staude, you have some groundbreaking news. What would you like to tell shareholders? Dr. Staude: Riverside is so excited! We’ve now completed an exploration funding agreement with BHP. This agreement is at least two years long, with funding of at least a million dollars a year, for grassroots exploration, with additional funding by BHP to develop porphyry copper in Sonora, Mexico. It’s exactly the type of business that we like to do, getting majors to fund the work, having the prospect generator model in action, and into a great commodity like copper. Fabulous news for Riverside. We’re right on track. 2019–2020, a great year ahead. Maurice Jackson: This is fantastic news! Today’s press release is a true testament on the business and geological acumen of Riverside. I’m confident shareholders, as well as myself, are celebrating on the company’s monumental accomplishment. … Continue reading