Wednesday 26th October 2016

Resource Clips

June, 2012

Guest Columnist

June 25th, 2012

Market Bottom Only in Hindsight

By John Lee

Read here for a feature story on Prophecy Platinum and its Wellgreen copper-nickel-PGE project.

The last 18 months have been gut-wrenching for mining equity investors.

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As the above chart demonstrates, the TSX Venture Composite Index, a fair representation of the junior mining sector, has come back down to levels seen in 2002, when gold first broke out of $300 an ounce.

While the TSX Venture Composite Index is still well above its 2008 low, the pain is just as pronounced now as it was then, as the TSX Composite Index, relative to the Dow, is now trading below 2009 levels. The following chart indicates a flight out of Canadian markets into the US markets.

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With emerging markets, such as China, struggling and the Eurozone in outright crisis mode, global investors not only have been pouring money into US stocks but have also driven US bonds into an all-time high, ignoring the fact that the bonds are sporting negative real interest.

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While this represents an extreme flight to perceived “safety,” the US dollar index has failed to break out of its 2009 high, indicating the fundamental weakness of the US dollar.

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Focusing back on the gold sector, the severe correction is not just felt by the juniors but senior producers as well. Kinross, for example, is now back to its 2008 low, when gold was below $1,000 an ounce.

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Overall, gold producers, relative to the price of gold, have indeed reverted back to the 2009 level as the following chart indicates.

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Despite the financial crisis worldwide, gold has held up very well in the last 23 months, currently ($1,600 an ounce) trading comfortably above the 2008 crisis level ($900). This clearly shows that gold is gaining momentum as the safe haven and reserve currency in the time of crisis.

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Also notice, post 2008 crisis, that gold doubled from the $800-an-ounce level to peak at more than $1,900 an ounce in less than three years. In 2008, the US Federal Reserve embarked on unprecedented quantitative easing, creating trillions of dollars to revive the banks and the equity and housing markets. Such inflationary measures had a direct positive impact on gold.

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As we seemingly come out of the Euro crisis and with world governments eager to again embark on unlimited monetary easing, there are reasons to be again bullish on gold as it completes the current 18 months’ consolidation.

My conclusion is that the degree of flight to safety today and risk aversion is no less than the case in 2008. The dollar and US bonds were the main beneficiary during the 2008 crisis, and they are in the current crisis.

Post 2008 crisis, gold and gold equities were the big winner, registering triple digit gains. There are preliminary signs of gold and gold equity market bottoms, if one considers the bottoming ratios of TSX to Dow and gold equity to gold and the blowoff of US bonds.

I am reminded of two old famous adages: never catch the falling knife, and a market bottom is only known in hindsight. For me, successful investing means buying 20% from the bottom and selling 20% from the top. If we are not currently 20% from the bottom, I’d say we are darn near.

John Lee, CFA, is Chairman and Interim CEO of Prophecy Platinum Corp TSXV:NKL and Chairman and CEO of Prophecy Coal Corp TSX:PCY. He holds degrees in economics and engineering from Rice University in Houston, Texas. The views expressed above are those of the author and may not reflect those of Prophecy Platinum Corp or Prophecy Coal Corp. Read here for a feature story on Prophecy Platinum and its Wellgreen copper-nickel-PGE project. Prophecy Platinum is a client of OnPage Media.

Rainy River CEO Ray Threlkeld on TPK and RRGP

June 22nd, 2012

…Read More

Rainy River completes 2012 TPK Program, advances Option with Northern Superior

June 22nd, 2012

Resource Clips - essential news on junior gold mining and junior silver miningRainy River Resources Ltd TSX:RR and Northern Superior Resources Inc TSXV:SUP announced completion of their 2012 drill program at the Ti-Pa-Haa-Kaa-Ning (TPK) Project in Ontario. Highlights of the program included

59.6 grams per tonne gold, 92.3 g/t silver, 3.19% copper over 0.5 metres
16.15 g/t gold over 1.5 metres
8.85 g/t over 1 metre
7.85 g/t gold over 0.8 metres

Rainy River is the operator of the TPK Joint Venture, located 470 kilometres northeast of Thunder Bay and 190 kilometres northeast of Pickle Lake in northwest Ontario. Rainy River has spent $6 million to date as part of its $9.4-million commitment to earn a 51% interest in the project. On June 21, Rainy River announced that a third and final $500,000 private placement to maintain its option. Rainy River will subscribe for 2.63 million common shares of Northern Superior at $0.19 per share.

[Rainy River is] a very continuous gold deposit. It isn’t spotty; it’s not low grade, when we consider other sub-1-gram deposits in Canada that are being developed today. Rainy River is much more than a gram, and I think the upcoming PEA will demonstrate that the first four or five years of mining there will have significant grade and cashflow
—Raymond Threlkeld

President/CEO Raymond Threlkeld tells, “What the drill results tell us is that this was a very large gold grain anomaly out there that we’ve explained a portion of. There is still one target under what we call Crying Boy Lake that hasn’t been adequately tested. We believe there is a very high grade target there. What we’re doing now is evaluating how we can best get to that target. We won’t do anything this summer because the target requires drilling from ice. We’ll be working on planning as to what we might do come February or March of next year.

“We need to make a discovery; that’s the first thing. I think if we choose to drill that target in February or March and make a discovery we think had grade and thickness enough, then we would move forward. If it doesn’t, then we’d probably have earned into the project and have to review our options at that time.”

On May 29, Rainy River reported assays from its Rainy River Gold Project in Ontario as high as 4.5 g/t over 55.5 metres and 3.3 g/t over 349 metres. Threlkeld comments, “Those holes were designed to convert some of the inferred mineralization we had into measured and indicated and just tie together some lose ends in the deposit. Last year we added over a million ounces in gold to that pitshell, and I think some of this drilling is adding some more ounces. It’s certainly adding ounces in terms of grade because the average grade of all these drill holes we put in was much higher than the average resource grade. So we’re pretty excited about seeing that. One of the other things it did was it really established what we’ve been saying all along for Rainy River, and that it’s a very continuous gold deposit. It isn’t spotty; it’s not low grade, when we consider other sub-1-gram deposits in Canada that are being developed today. Rainy River is much more than a gram, and I think the upcoming PEA will demonstrate that the first four or five years of mining there will have significant grade and cashflow.

“After the PEA in August, probably towards the end of August or early September, we will put out the final resource estimate, which will serve as the resources for the feasibility study. The feasibility study we’re hoping to have completed by the end of 1Q 2013. With that in place, we will look to going into final permitting. On the permitting side, we’ve already submitted the terms of reference to the province and the draft of the project description to the federal government. We’re waiting to hear back now if the provincial and federal environmental permits can be combined under the new federal guidelines. If that’s the case, I think it will be very good for us and it will shorten the permitting time. So we expect that we will be in the EA process for the next 24 months and something probably before early 2014 to have permits in hand. We would anticipate and are hoping to get almost a full year of production in 2016.

“We will continue to drill Rainy River. We’ve pretty much finished the infill. Frankly, we have four to five years of production without drilling another hole. We are completely drilled out on the open pit portion of the ore body. We sent away most of the rigs, and we have three rigs working, and they’re looking at some underground extensions right now and some really high-quality targets. We felt it’s worthwhile to continue doing some of this exploration to really demonstrate some of the blue sky out there that we have.”

Asked about Rainy River relations with local First Nations, Threlkeld responds, “The relationship has been pretty good. I just came back from Fort Francis last night and held a meeting with one of the groups, the Fort Francis Chief Secretariat in which there are seven communities. We had an advisory committee meeting where we give them all an update of the progress of our permitting and what we’re doing. We’re now initiating a study with the elders of all the communities to kind of discuss the past of the Rainy River area so that we have all that input into the consultation. We have signed a participation agreement with that group, the Fort Francis Chief Secretariat, so they will sit down with us and discuss the project and especially the environmental assessment.
“We are in consultation and will be all the way through. In fact, it will be an operating group that will last through the mine life here and through closure essentially. We signed an MOU with one other community, and we anticipate speaking with several others in the area. So we’ve gone a long way.”

On June 5, CIBC cut its Rainy River price target from $11 to $8, “reflecting revised estimates for project development and financing of the Rainy River Gold Project.” Threlkeld responds, “I really don’t comment on the analysts’ reports. I think everybody in the business has received a bit of a haircut, especially the developers, and probably the biggest factor is capital and the risk of capital increasing. I think it’s a bit unfair that the analysts sometimes look at a project and say that it’s going to cost more than you say. Yeah, I think Rainy River is going to cost more than the $680 million for 32,000 tons a day, but we’re doing some things. We’re going to start out a little bit smaller, so we’re going to keep the capital lower, and we’ll fund expansion out of cash flow. But back to the analysts, I think painting projects that are less than a billion dollars of initial capital with a big cost escalator… I don’t think that’s correct. I think we’ll demonstrate when we put out the next PEA how these costs are calculated. They’re based upon some pretty solid engineering, and I think that we’ll use about a 30% contingency, and so we’re covered on a lot of things. It’s less than a billion dollars, way less, and so that’s a big deal.”

After falling below $3.50 in May, Rainy River’s share price has rebounded. Threlkeld says, “I think a lot of it is really investor confidence in the project. Of all the analysts that cover us, about 85% of them have a buy on us, so that’s very positive. And the morning blurbs that you hear from a lot of the people who cover us, they’ve all been very positive. In the marketing I’ve done, I’ve received a lot of good comments.”

Threlkeld concludes, “Rainy River is a little bit higher grade than the 1-gram ore bodies. It’s in a great safe jurisdiction and has very low infrastructure costs. We have good relations with the First Nations, and we have a team that can build it. I think those are the confidence builders that have come out. We have about $96 million in the bank today, so I think that eases people’s minds a little bit. We can go a long way and get the feasibility done, move this thing along and derisk it without having to go back to the marketplace right away.”

View Company Profile

Rainy River Resources Ltd
Indi Gopinathan
IR Director

Northern Superior Resources Inc
Thomas F Morris

Read a feature story about Rainy River Resources

by Kevin Michael Grace

Confederation, Redstar report Ontario Gold Assays up to 5.51 g/t over 13m

June 22nd, 2012

Resource Clips - essential news on junior gold mining and junior silver miningConfederation Minerals Ltd TSXV:CFM and Redstar Gold Corp TSXV:RGC announced assays from the Newman Todd property in the Red Lake Gold District, Ontario. Highlights include

2.2 grams per tonne gold over 1 metre
1.1 g/t gold over 10 metres
2.23 g/t gold over 5 metres
1.21 g/t gold over 45 metres
(including 4.72 g/t over 4 metres)
5.71 g/t gold over 13 metres
(including 17.9 g/t over 3 metre)

Confederation President/CEO Lawrence Dick commented, “Drilling on section 1700, which is one of our more detailed sections, clearly shows continuity of the gold mineralization between drill holes. It is our belief that with additional drilling this continuity of gold mineralization exists on every cross-section throughout the Newman Todd Structure. The zone has been traced to a vertical depth of 600 metres, and there is regional geological evidence that suggests it may be several kilometres deep. It is management’s belief that this Red Lake-type system will extend to significant depth. Deeper drilling is planned.”

Confederation can earn a 50% interest in the project by spending $5 million in exploration by November 2013, and an additional 20% by producing a preliminary economic assessment by November 2016. To date Confederation has spent in excess of $5.0 million dollars on exploration, paid Redstar $100,000 and issued 200,000 shares. During the earn-in period, Confederation is the operator of the project.

View Company Profile

Confederation Minerals Ltd
Lawrence Dick

Redstar Gold Corp
Tim Mikula
Business Development

Read a feature story about Confederation Minerals

by Jay Currie

Gold Canyon reports Ontario Gold Assays up to 1.5 g/t over 343m, 0.97 g/t over 323.5m

June 22nd, 2012

Resource Clips - essential news on junior gold mining and junior silver miningGold Canyon Resources Inc TSXV:GCU announced the first assay results from its barge drilling program at its 100%-controlled Springpole Gold Project located 110 kilometers northeast of the Red Lake Mining Camp in Ontario. Highlights include:

1.5 grams per tonne gold over 343 metres
(including 3.44 g/t gold over 108 metres)
(including 5.27 g/t gold over 30 metres)
0.63 g/t gold over 210 meters
(including 1.24 g/t gold over 32 metres)
0.8 g/t over 116.9 metres
0.97 g/t gold over 323.5 metres
(including 2.41 g/t gold over 36 metres)
0.53 g/t gold over 213 metres
9.88 g/t gold over 8 metres

Director and technical advisor Quinton Hennigh commented, “Our first results from stepout barge drilling are very encouraging. Recent results clearly indicate the Portage Zone extends to the 0 to 250 meter section. In addition, hole SP12-146 is the first hole to demonstrate higher grades persist into this area. Over the remainder of this year, we plan to pursue stepout and infill drilling to expand the southeastern extension of the Portage Zone.”

View Company Profile

Leo Karabelas
Investor Relations

by Jay Currie

Gran Colombia reports Resource Estimate: 11.8M oz Gold, 80.3M oz Silver M&I

June 22nd, 2012

Resource Clips - essential news on junior gold mining and junior silver miningGran Colombia Gold Corp TSX:GCM reports a new mineral resource estimate for its Marmato project in Colombia. The project hosts 11.8 million ounces gold and 80.3 million ounces silver measured and indicated and 2.6 million ounces gold and 9.4 million ounces silver inferred.

CEO Maria Consuelo Araujo commented, “Our exploration activities continue to show upside to this flagship project at Marmato, which currently ranks in the top 2% of projects by gold resources globally. We expect further upside from our recently reported deep-zone mineralization, as this current estimate shows the potential increase in resource and grades at depth, but further drilling will be required to further define the deep-zone mineral resource.”

View Company Profile

Investor Relations

Read an interview with COO Donald East

by Jay Currie

Spanish Mountain reports BC Gold Assays up to 4.12 g/t over 37.3m, 2.88 g/t over 51m

June 20th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningSpanish Mountain Gold Ltd TSXV:SPA announced the remaining results from its in-fill drilling program recently completed within the Main Zone of its Spanish Mountain Gold Project located in central British Columbia, Canada. Highlights include:

1.31 grams per tonne gold over 130.43 metres
(including 2.4 g/t gold over 59.93 metres)
1.09 g/t gold over 31 metres
1.44 g/t gold over 25.95 metres
(including 3.27 g/t gold over 10.5 metres)
2.88 g/t gold over 51 metres
(including 11.76 g/t gold over 11.08 metres)
(including 36.6 g/t gold over 3.48 metres)
4.12 g/t gold over 37.25 metres
(including 6.95 g/t over 19.75 metres)
0.64 g/t gold over 131.95 metres
(including 1.22 g/t gold over 40.5 metres)
0.64 g/t gold over 121 metres
(including 1.01 g/t gold over 40.29 metres)
0.64 g/t gold over 67.5 metres
(including 1.67 g/t gold over 17 metres)
0.71 g/t gold over 100.5 metres
(including 1.03 g/t gold over 61 metres)
0.92 g/t gold over 131.36 metres
(including 1.17 g/t gold over 91.36 metres)

According to a November 2011 resource estimate, Spanish Mountain hosts measured and indicated resources of 138 million tonnes grading 0.49 g/t gold and 0.64 g/t silver (at a 0.2 g/t gold cutoff) and inferred resources of 339.6 million tonnes grading 0.37 g/t gold and 0.65 g/t silver. This translates to 2.17 million ounces gold and 2.84 million ounces silver measured and indicated and 4.04 million ounces gold and 7.1 million ounces silver inferred. Compared to the November 2010 preliminary economic assessment, these figures constitute a 59% increase in gold measured and indicated and a 561% increase in inferred.

View Company Profile

Colin Clancy
Investor Relations

Read a feature story about Spanish Mountain

by Jay Currie

Temex President Ian Campbell on Juby Gold Project, new Directors

June 19th, 2012

…Read More

Prophecy reports YT Assays: 0.47 g/t PGM, 0.24% Nickel, 0.13% Copper over 242.6m

June 19th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningProphecy Platinum Corp TSXV:NKL reported results from its 100%-owned Wellgreen Platinum Group Metals-Nickel-Copper Project, located in the Yukon Territory. Highlights include

0.13% copper, 0.24% nickel, 0.22 grams per tonne platinum, 0.21 g/t palladium, 0.04 g/t gold over 242.62 metres
(including 0.23% copper, 0.24% nickel, 0.31 g/t platinum, 0.4 g/t palladium, 0.04 g/t gold over 50.9 metres)
(including 0.27% copper, 0.5% nickel, 0.42 g/t platinum, 0.59 g/t palladium, 0.04 g/t gold over 18.14 metres)

Chairman John Lee commented, “These infill drill results of significant widths and grades continue to define and enhance Wellgreen’s resource model. Production has been great, and additional rigs have arrived on site. We have started to drill several exciting surface soil-anomalies to expand Wellgreen’s strike.”

Prophecy also announced today that its takeover of URSA Major Minerals Inc TSX:UMJ will close July 16. On closing, Prophecy Platinum will issue one common share for each 25 common shares of URSA Major.

View Company Profile

David Brook
Manager, Investor Relations

Read a feature story about Prophecy Platinum

by Kevin Michael Grace

Seafield reports Colombia Gold Assays up to 1.89 g/t over 114.7m

June 19th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningSeafield Resources Ltd TSXV:SFF reported infill gold assays from its Miraflores Deposit in Quinchía District, Colombia. Highlights include

1.89 grams per tonne gold over 114.7 metres
(including 11.97 g/t gold over 10.6 metres)
0.64 g/t gold over 73.6 metres
0.74 g/t gold over 23 metres
1.4 g/t gold over 31.6 metres
0.56 g/t gold over 18.1 metres
0.38 g/t gold over 7.4 metres

President/CEO Cesar Lopez commented, “We are pleased that our ongoing infill drilling program continues to confirm the continuity of high-grade vein structures within Miraflores. Seafield will be completing its current phase of drilling over the next quarter and begin our preparation to commence our underground drill program at the deposit.”

View Company Profile

David MacMillan
Investor Relations
416.361.3434 x 202

by Jay Currie