Wednesday 17th October 2018

Resource Clips

June, 2011

Commerce President David Hodge on rare earth assays of 2.1% TREO over 586.9m

June 30th, 2011

“We staked the Eldor about four years ago and had to buy a small piece from Virginia Mines—a very well known Quebec gold explorer. The carbonatite itself is very large. It’s about four kilometres by 10 kilometres at surface, and comes to surface for most of that area. So it’s very well identified. Within that there’s different zones of mineralization. The one that we’re currently drilling and totally excited about is called the Ashram. The Ashram zone is huge and rich. We just put out a hole that’s close to 600 metres of over 2%. That’s 44 pounds of rare earths per ton! These numbers just get silly. We’re very excited about the Eldor. It stands to be the largest, richest, rare earth deposit in the world; second only to Baiyun Obo, which is the Chinese deposit that is currently controlling the world.

“The drill program that we’re currently announcing finished a couple of months ago. There are still two holes in that drill program to be released. It was very focused on a part of the Ashram deposit that is under three or four feet of water. There’s a small pond on top of it, so it makes it quite a bit easier to drill in the winter than in the summer. The hole that we’re most excited to drill will be coming up in the summer drill program, which should start in four to six weeks. It’s a land-based target, and certainly it will be our first choice for the beginning of the summer drill program.

We just put out a hole that’s close to 600 metres of over 2%. That’s 44 pounds of rare earths per ton!—Dave Hodge

“Commerce’s plan is to move straight ahead with our Blue River tantalum-Niobium project in BC. It’s very straightforward. We’re at the scoping-study level at the moment, and I intend on taking that to the tantalum industry this fall to look for a combination of partners that could effectively form a new tantalum supply chain and put Blue River into production. That kind of approach is certainly one we would consider for the Eldor, but we’re still a ways off. We’ve got a lot of drilling to do before that happens.

“We actually are going to move ahead faster at Eldor than we did at Blue River, partly because of the popularity of rare earths at the moment and the demand. It’s just easier to fund. We currently have a $7.5-million program planned for this summer, and the board is considering increasing that. And in fact, we’ve applied for permits to increase the camp size up to an 80-man situation, which would be extremely aggressive.

“I feel very fortunate to be the fellow in charge of what I believe will be the future of the rare earths industry—and that’s the Eldor. It has the Ashram, but there are more deposits hiding in the overall Eldor carbonatite that are going to turn that area into the department store of rare earths deposits.”

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June 29th, 2011

Will gold benefit from European debt?by The Gold Report
A look at future gold productionby GoldSeek
Are gold prices on the brink of another run?by Equedia
Predictions of an imminent day of reckoningby The Grandich Letter
Will gold equity investors strike gold?by VantageWire

Barkerville President/CEO Frank Callaghan on BC assays of 83 g/t gold and 11 g/t silver over 19.9m

June 29th, 2011

“We’ve been up in that camp for 17 years. In the camp we’ve got one mine in production right now called the QR. The second mine going into production is called Bonanza Ledge and the third one, the proposed open pit on Cow Mountain, is called the Cariboo Gold Quartz Open Pit. We’re drilling outside the known area where the proposed open pit is.

“I was told by some people a whole lot smarter than I am that today’s results show probably one of the top 10 drill holes ever reported—anywhere. We’re very happy.

“Our budget for this year is $10 million for exploration. Over the next three years we’ve got a budget of $30 million for exploration in the camp.

“We have one mine in production right now, a 900-tonne-a-day facility, capable of doing 70,000 ounces a year at that location. The second mill that we bought is going to be increased to a 3,000-tonne-a-day facility, and that’s going to be probably less than a kilometre away from that hole we just drilled.

“It’s nice working in your own backyard.”

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Securing The Gold

June 29th, 2011

Torex Protects Its Growing Mexico Deposit

By Ted Niles

When you’re getting grades like 6.6 grams per tonne gold over 50.5 metres, it is probably to be expected that a little bad will come with so much good. Since Torex Gold acquired the Morelos Project in Mexico, the property’s already considerable promise has only increased. However, the company was obliged in March to suspend its operations after the armed robbery of several of its trucks. While no one was hurt, Torex removed its employees from the site. But now the gold is secure, and drilling has resumed at Morelos with three rigs and a fourth and fifth expected to begin soon.

“We’re in a little town that had no police,” explains President and CEO Fred Stanford, “and it had never needed them. I think we injected enough money into the community that we attracted a criminal element.” He reports, “We asked the government to help, and they’ve been extraordinarily helpful. There are now police, and we’re back and moving forward. The government’s been very good; the community wants the mine; and we’re negotiating now for land. No doubt there will be issues, but we’ve got a great partnership with the community.”

Torex Protects Its Growing Mexico Deposit

The project is located in Guerrero State, 200 kilometres southwest of Mexico City, and consists of seven concessions totalling 29,006 hectares. Teck Resources acquired the Morelos project from the Mexican government in 1998 and, in joint venture with Goldcorp, drilled 608 holes of just under 100,000 metres over the next decade. “They shut the project down in the financial crisis and put it up for sale,” Stanford says. “We bought it at the end of 2009 and got a drilling program started in the middle of 2010.” Morelos has a measured and indicated resource estimate of 3 million ounces gold, 900,000 ounces inferred.

The project consists of three deposits—Guajes East, Guajes West and El Limon—and, according to Stanford, “It looks to us like those three deposits are all going to connect.” He continues, “There’s a kind of intrusion, and the deposits ring right around the edge of it, so these three will connect right around the edge of the intrusion north of the river. We’re gradually stepping-out from Guajes East, and we continue to find mineralization in the direction of Guajes West. Very high-grade mineralization.”

Step-out drilling from the Guajes East and Guajes West deposits reported June 27 include 6.6 grams per tonne gold over 50.5 metres (including 11.88 g/t over 18.3 metres), 8.6 g/t over 15 metres (including 27.33 g/t over 4.5 metres), 2.16 g/t over 46.4 metres and 2.74 g/t over 18.4 metres. Stanford comments, “These particular results are just confirming what we have expected all along, which is that Guajes East and Guajes West are indeed one deposit.”

May 30 assays from El Limon include 10.97 g/t gold over 33.2 metres, 2.9 g/t over 118.6 metres, 2.69 g/t over 44.3 metres, 12.33 g/t over 5.7 metres and 5.77 g/t over 47.6 metres.

Running and building mines is what I do —Fred Stanford

The objective of the current drill program is to grow the resource to 5 million ounces gold. “We’re intending to drill 100,000 metres this year,” Stanford says, “basically, moving forward quickly into turning it into a mine.” A revised estimate is anticipated for December 2011, and a “decision on production” is expected within 12 months. He continues, “Then it’ll be a two- to three-year construction period, depending on how long it takes to build roads up to the top of the mountain and start mining.”

“Our strategy has always been to take Morelos to production,” Stanford declares. The former president of Vale Inco’s Sudbury nickel operations explains, “Running and building mines is what I do.”

Torex has 349 million shares outstanding and a market cap of $607 million. At press time, shares traded at $1.74, up $0.11 (6.75%) from the previous days.

Stanford concludes, “This is my first small junior exercise, and I’ve been extraordinarily lucky with the quality of the asset. This has the potential to grow and grow. I suspect all juniors say that, but if you look at the results, and if you look at the ground, you’ll see why I have such confidence.”

June 28th, 2011

A look at future gold productionby GoldSeek
Are gold prices on the brink of another run?by Equedia
Predictions of an imminent day of reckoningby The Grandich Letter
Will gold equity investors strike gold?by VantageWire
Using gold prospectors to cushion volatilityby The Gold Report

Bayfield CEO Jim Pettit on Ontario assays of 60.05 g/t gold and 362.96 g/t silver over 11.2m

June 28th, 2011

“The Burns Block is basically one of our three properties that is tied right on to where Rainy River is going to develop their mine. They’ve got a pit plan that comes right up to the border. They had optioned it from us back in 2006-2007, and we got from it them in 2008 when the markets collapsed—they didn’t complete their option agreement. So we decided last year, in April/May, that we would just raise the money and start drilling it and prove the extension of their ore body as it moves west to east—it comes right across our property—and that’s what we’re doing.

“These assays are spectacular. They’re a follow-up to what we did last September. We came out with a hole then—Hole 18, right down in the southwest corner of our block—the guts of which was about 10 metres of, roughly, one ounce. Then Hole 15 to the northeast of that was in the range of about 9 metres of a half-ounce. Now, this is right on line with those two, but way up to the north part of the property. You could put a ruler right through all three of them. And this one you’ve got that core section of 11 metres of two-ounce. It’s huge. And it’s close to surface. We know that on the whole property the main ore body dips north to south, at about 50 degrees. It comes to surface right along our northern border, so everything as we drill up north is very shallow, everything along the southern border is deeper. On this particular hole we intersected the beginning of the zone at about 15 metres.

We’re doing what we said we would do—prove the overall extension of their deposit. And hitting these high-grade shoots—well, I’ve never seen a hole like that before.—Jim Pettit

“We have enough funding right now to another 50,000 metres. We’re almost up to 50,000 metres that we’ve already done. We’ve got three rigs turning, two of them are step-outs—we’re stepping out to the east gradually, in basically four picket lines of holes. One of them is doing definition drilling and infill drilling behind, because the system that runs through the region has these high-grade shoots throughout it, and they’re dramatically different from the main ore zone. The main ore zone is relatively low grade—I think Rainy River’s average grade is about 1.2 g/t. We hit these shoots, and they are just spectacular.

“We haven’t produced [a resource estimate] yet, and I don’t think we’ll be around long enough. It’s one of those things. This is a potential mergers-and-acquisitions deal and a hell of a good gold story. Everything we’ve done so far is within 200 metres of our western border where Rainy River’s pit would normally end. Their last resource deepened their pit by 50 metres which generally means you extend the walls out. We’ll figure out a resource to determine that, but we’ve also got just about the only outcrop in the whole region—because it’s a swamp. They could easily put their mill on our property because that’s where the infrastructure would probably sit, on the outcrop. I don’t see [Bayfield] taking the Burns Block to production, because [Rainy River] own all the land around us. We’re just going to make it enticing enough. That’s our goal, and we’ve got to create that value so they understand that they’re better with it than without it.

“The project is really going great. The phones are ringing off the hook. We’re doing what we said we would do—prove the overall extension of their deposit. And hitting these high-grade shoots—well, I’ve never seen a hole like that before. It’s pretty spectacular. And that would be in [Rainy River's] pit, because it starts at 15 metres and goes to 95 metres deep. And it comes to surface, probably just north of where we have the rigs.”

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Int’l Millennium President John Versfelt on Nevada assays of 6.19 g/t gold and 112 g/t silver over 4.8m

June 26th, 2011

“This is a mine that was producing in the late 1930s and early 1940s. It was shut down during the war, like all non-essential metals mines, so the miners could be shifted over to the essential mines. It has never been in production since. In the early 1950s, Anaconda Minerals Co came in there, but the price of silver had collapsed so badly they decided not to go ahead with it. Then, in the 1980s, Sunshine Mining Co was mining up the road at a mine called the Sixteen-to-One, and they were looking seriously at putting this into production. But then they collapsed as well. So the net result is that the property has not seen any really significant activity until now.”

“Back in 2007, we acquired three claims that covered the actual outcrop, and we held it for a period of time until we could do a deal with another party that had surrounding ground. That happened last year. We closed the deal, and we did a financing to specifically carry out a drilling program on the property, because we knew fairly well where the system was. It was just a matter of learning a little bit from drilling experience. The first four holes we missed, but we learned from that. Hole 5 we hit, and we’ve been hitting ever since.

We have something that would be fairly inexpensive to put into production.—John Versfelt

“The first objective was to prove that the veining system actually was there and that there was something else to mine. Hole 5 did that, but it also indicated that the resource Sunshine had come up with was based on one higher-grade vein that had been mined in the past and some surrounding widths—so that they could have a mineable width added into it. What we have done now is proven through drilling that there were more veins within the veining system than they were aware of, and that they are wider and higher grade. So that was the first thing that we were doing—basically, showing that Sunshine Mines’ resource is actually on the low side. Since that time, we have now drilled across another high-grace vein that they did not have in their calculations at all, which we call the Hanging Wall vein. We are proving that there’s more tonnage there at higher values then their resource had shown.

“We’ve drilled through to Hole 15, and we’ve announced through to Hole 10. So we’ve got five more yet to announce. We will, from that, start indicating to the appropriate parties that the strike length and the dip of the unmined portion of this thing are fairly large. And we want to do one more round of drilling, which will start at the beginning of July. That will come up to the 400-foot level in the area, and we’ll do a fence of holes across that area. Of course the first hole will tell us if we’re on track with our thinking. If we are, we’ll do a series of holes all on that level from the northeast to the southwest. And we believe from that point we can start pulling together a 43-101 resource.”

Versfelt says that, at this stage, it is the intention of Millennium Mining to take Nivloc to production.

“There are a variety of points here that indicate that, for us, we have something that would be fairly inexpensive to put into production. The first is that we actually have a water permit in that area, which is incredibly important. The water permit is historical; it comes with that particular mine. The second is that there has been electricity through the property to the Sixteen-to-One Mine, and all the poles and lines and everything else are in place. It’s just a matter of refurbishing them, so we’re ready to go with electricity as well. Third, there’s a road—a county road, well-maintained. On top of that, about a mile and a half going to the southeast, there’s a mill that was in place for the Sixteen-to-One Mine. It was shut down in the late 1980s, and all the equipment was taken out, but our understanding is that there’s a new party that is coming in that wishes to do custom milling, and they are going to put all that equipment that was in the mill back in again. And the area is a mining area, so there’s labour there. All of these ingredients are coming together and it makes putting this into production a lot less costly than a lot of other situations.

“[In Nevada] you have to follow the rules. There are guidelines for everything. You need to deal with the various regulatory authorities. But there’s a process there, and they do want to have mines starting up again. They just want you to do it properly.

“I think we’re doing great. We can show with five holes that we’re hitting the veining system and that we’re doing everything right to build towards a resource. I also know from the other five holes that haven’t been announced yet, just by looking at it, that we are hitting the veining system each time. So we’ve gained a lot of knowledge, and I think we’re on track.”

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It’s Better In Mexico

June 22nd, 2011

Soltoro Has 58 Million Ounces Silver and Counting

By Ted Niles

Andrew Thomson believes he has a distinct advantage over rivals elsewhere. “What the majors want,” the President and CEO of Soltoro Ltd declares, “are primary silver plays, and they want them in either Mexico or Peru.” Soltoro has a substantial silver play in Mexico, and it also enjoys the considerable benefits of a more stable jurisdiction.

“Peru had a little bit of a knock of late,” Thomson explains. The knock to which he refers is the June 5 election of Ollanta Humala, former military rebel and leader of the Peruvian Nationalist Party. Humala’s election raises the possibility not only of higher royalties but also of quasi-nationalization. “Mexico, as a result, has become more attractive,” Thomson argues.

Soltoro Has 58 Million Ounces Silver and Counting

Soltoro’s 10,000-hectare El Rayo silver-gold project is located on the Trans-Mexican Volcanic Belt in Jalisco State. Soltoro acquired the property in 2005 and has focused mostly on the Las Bolas structure and the Highway Zone, for which the company released an NI 43-101 in-pit resource estimate June 14 of 58.3 million ounces silver measured and indicated and 300,000 ounces inferred, both at a 20 g/t cut-off. This more than doubles the initial resource, released May 2010, and Thomson expects it to get even bigger.

“We’re continuing with expansion drilling,” he says, referring to the work currently being done on the Soledad structure—an area of the property not included in the new resource estimate. “In the very short term, I’m really trying to reach the 100-million-ounce silver target. The company announced a 15,000-metre drill program, and there’s serious consideration being given to increasing that.”

June 21 Soledad assays include 300 grams per tonne silver over 43.7 metres, 222 g/t over 43.7 metres, 115 g/t over 53.7 metres and 198 g/t over 33.5 metres. May 30 assays included 388 g/t silver over 21.6 metres (including 1,010 g/t over 7 metres) and 527 g/t over 6.9 metres (including 1,070 g/t over 1.6 metres). Thomson comments, “These are just the initial holes going into the structure; we have yet to step back on these holes to really start building tonnage. So we’re pretty excited. We’re getting into high-grade zones. We’re basically now a bulk-tonnage play in addition to a high-grade play, and it’s very consistent mineralization.”

Given the potential, Thomson expects suitors to come calling. He reports, “We’re going to try to grow the resource to something that’s more in the two-million-ounce gold-equivalent range. At that point we’ll have to make a decision. I think there’s going to be a mergers-and-acquisitions period coming up where the majors are finally going to really start looking down the ladder and acquiring juniors, and I suspect if we get to that level, we’ll probably be taken out.”

He adds, “But I’m not ruling out trying to put it into production ourselves. In fact, we have an acquisition that we’ve been looking at that would take us there very quickly. So there is some thought being given to it, but I would feel more comfortable at a slightly higher market cap.”

We’ve got a lot of majors looking at us right now, and we’re becoming more attractive by the day —Andrew Thomson

Between the promise of the deposit, infrastructure which “couldn’t be better,” and its location—with the cities of Puerto Vallarta and Guadalajara on either side of it (“Guadalajara is hosting the Pan Am Games this year, so it’s quite safe”)—Thomson is confident. “It’s one of those good-looking-girl-at-the-dance situations,” he muses, “you can pick and choose who you want to dance with. We’ve got a lot of majors looking at us right now, and we’re becoming more attractive by the day. I think it’s still a really great time to be a silver explorer in Mexico, and we happen to have a project that’s far more advanced than a lot of the projects out there.”

At $43.5 million, Thomson considers Soltoro undervalued. “People are really only valuing us on this one property when there are all sorts of other things going on in the company that are pretty exciting.” Among those is Soltoro’s Chinipas gold project in southwest Chihuahua State, 14 kilometres from Coeur d’Alene’s currently producing Palmarejo Mine, for which a 2,000-metre drill program was announced June 5. “It’s a separate gold property that we’re not seeing too much about,” explains Thomson. “We staked the ground four or five years ago, and there’s been $1.5 billion put into the local infrastructure. So we’re really trying to get our secondary project on stream.”

At press time, Soltoro trades at $0.88 per share with 49.4 million shares outstanding. Thomson concludes, “I think we’re in the middle of a fairly intense bull market, and we’re seeing a lot more interest from the US. The US contingent—whether it’s retail or institutional—is expecting a 20% drop in their currency. There’s a lot of cash looking for homes, and they want to get into hard assets.”

Alamos CFO Jamie Porter on Turkey assays of 1.6 g/t gold over 185.7m

June 20th, 2011

“We acquired two Turkish development-stage projects from Teck Resources back in January 2010. And those two projects are called the Ağı Dağı and Kirazlı projects. They’re the subject of a scoping study [preliminary economic assessment] that we did in March of last year. We’re in the process of doing a prefeasibility study on each of those, submitting an EIA [environmental impact assessment] and hoping to get them permitted into production for 2013.

“One of the more advanced-stage exploration projects in close proximity to Ağı Dağı and Kirazlı was this Camyurt zone. The previous operators had put six drill holes into it. We basically did a program to verify what they had done, and now we’re in the process of a 10,000-metre drill program. We’re about 40% of the way through it. The release today speaks for itself, giving some of the better results we’ve encountered to date. For the rest of the year we’re looking to finish this 10,000-metre drill program that we started in March.

We’ll finalize our prefeasibility in the fourth quarter of this year, and we’re expecting to start production in early 2013. —Jamie Porter

“The expectation for the Ağı Dağı and Kirazlı projects is that we get our EIA approved in the third quarter of this year. We’ll finalize our prefeasibility in the fourth quarter of this year, and we’re expecting to start production in early 2013. The Chamyurt project, we expect, will be a standalone project. The idea is that we will do a resource estimate as part of our 2011 yearend update. So it would be probably March 2012 that we release our preliminary resource estimate at Chamyurt. The results of that would indicate whether we proceed to a scoping study or prefeasibility study. What our press release today is telling us is that there’s the potential for this to be a standalone project. Of course, none of the economic metrics have been run on it yet, because it’s just too early-stage. But the assessment is definitely positive for Chamyurt.

“We’re producing about 150,000 ounces gold annually right now in Mexico. Starting next year, we’re adding production from a high-grade mill, in Mexico as well, that should add at least another 70,000 ounces. So we’ll be in the low to mid 200,000 ounce range. And Turkey is coming on line 2013, and that’s expected to get us up into the 300,000 range. So from a production perspective, there’s a lot of growth in the next two years.”

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Sunridge VP Greg Davis on Eritrea assays of 4.44% zinc and 0.49 g/t gold over 186.8m

June 17th, 2011

“We first started drilling Emba Derho seriously in early 2006. It was a bit of gossan at the outcrop, but we used ground gravity, which is really an effective tool for these VMS systems, and it worked very well. Since then we’ve drilled about 80,000 metres on Emba Derho and defined a 62.5-million-tonne VMS deposit—copper-zinc-gold-silver.

“The drill program was part of our ongoing prefeasibility study. So that drill program had several objectives. A lot of the holes were drilled around where the pit walls would be, so we weren’t even targeting mineralization. It was done for geotechnical reasons, which will come out as part of the study. And some of the holes were drilled for metallurgical testing. Some of the holes were infill, and some were for expansion to depth, and they’ve shown that it continues on to depth. It’s still wide open downward. All these results will be used as part of the prefeasibility study at this stage.

The plan is that the Gupo deposit could be combined with the gold-oxide cap as a low-capital, low-cost gold plant. —Greg Davis

“For Emba Derho, we still have results pending for the gold-oxide cap. We did about 2,500 metres of RC drilling, shallow drilling, for the gold cap, which would be part of the prefeasibility study. And the plan is that the Gupo deposit could be combined with the gold-oxide cap as a low-capital, low-cost gold plant. So that is still to come. But we’re right in the midst of prefeasibility, which is due to be completed in January 2013.

“We’re currently drilling at the nearby Adi Nevas deposit; it’s part of the study, and it’s six kilometres away from Emba Derho. It has extremely high grades—8.4% zinc, 1.4% copper, 2.4 g/t gold and 100 g/t silver. So it will definitely add a sweetener to Emba Derho—the idea is that it can be blended in. That is pending.

“These are amazing projects. [Nevsun Resources'] Bisha Mine has similar geology and has been in production for about two and a half, three months now. These are polymetallic-copper-zinc-gold-silver and very rich deposits. Today’s numbers are great, but it’s somewhat expected in this kind of deposit.”

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