Tuesday 12th December 2017

Resource Clips


January, 2016

The Venture gets an earful

January 29th, 2016

Anger, frustration ring out as the TSXV town hall hits Vancouver

by Greg Klein

Anger, frustration ring out as the TSXV town hall hits Vancouver

A sometimes raucous group of well over 300 people sounded off about the market malaise.

 

The interruptions began during John McCoach’s introduction and continued throughout his presentation. The president of the TSX Venture Exchange said he wanted dialogue and that’s what he got on January 28, when his travelling town hall meeting came to the world’s capital of struggling juniors. Facing him were well over 300 people representing the small cap “ecosystem” of management, brokers, investors, advisers, accountants, lawyers, regulators and others. It was the biggest, most boisterous event of the tour so far, McCoach said.

What it accomplished remains to be seen. McCoach tried to outline last December’s white paper, with its three-part plan to revitalize the Venture. That entails a program to cut issuers’ costs, build the Venture’s investor base and expand the exchange with non-resource stocks. Unimpressed audience members stuck to their grievances, sometimes shouting over each other. Fees and over-regulation were the sorest points, while short-selling, management compensation and high-frequency trading also came up.

Anger, frustration ring out as the TSXV town hall hits Vancouver

TSXV president John McCoach faced a tough
crowd at the Vancouver town hall meeting.

As McCoach went through his seven-step cost-cutting program, one audience member complained that “when things really became tougher was when the TSX became a for-profit organization.”

“Exactly!” piped up another voice.

Saying he used to serve on the board of a mutual, McCoach responded, “We are all far better off with an exchange operating as an efficient business.”

As a number of people vied for attention, one especially loud voice called out: “You tell us you are reducing costs yet you’re not reducing your fee schedule. So it appears to me that you’re trying to reduce external costs but you’re trying to maintain your bureaucracy and your job by not reducing the fees that go to the TMX.”

“We’re trying to reduce overall costs,” McCoach replied.

“If so, why not reduce your own fees?”

“… if we’re going to reduce our revenue by half, we have to look at other ways to get that same revenue…”

The tumult exploded again, drowning him out.

Not just fees, but procedures came under fire. “You’ve made it so difficult for the public to participate,” one audience member charged. “You can buy a $10-million house on two signatures and you can’t buy five grand worth of stock…”

Among other concerns was short-trading, but audience members disagreed on the issue. McCoach said only a minority of people interviewed during pre-white paper consultations complained about shorting.

Zombies were another audience-introduced topic. The Venture’s new plan would encourage NEX board lurkers to reactivate, while creating more stringent requirements for those that would remain on NEX. But over shouted denials, McCoach insisted the Venture enforces its existing continued listing requirements. “That’s a bald-face lie!” came one retort.

“One hundred and fourteen companies went from TSX Venture to NEX last year,” McCoach replied.

But, according to some critics, the number should have been 600. That’s the figure provided by Tony Simon of the Venture Capital Markets Association in his list of TSXV companies with negative working capital. McCoach countered that a NEX designation depends on additional factors.

Having deflected several criticisms by saying they’re matters for IIROC or the securities commissions, McCoach said, “The regulators are listening very carefully. Some of them are here today.” He added that the Venture has been lobbying them for additional prospectus exemptions and a revamped rights offering program.

It appears to me that you’re trying to reduce external costs but you’re trying to maintain your bureaucracy and your job by not reducing the fees that go to the TMX.

Not everyone saw the Venture as the root of all evil. “Your hands are tied in a lot of ways by securities law,” said one attendee. As for the regulators, “they should be up here too.”

“I don’t blame you for ISIS … I don’t blame you for the Montreal Canadiens power play,” commented a visitor from Val-d’Or. But he did hold the TSXV accountable for failing to curtail costs and listen to its issuers.

A white paper focus that got little attention, however, was the plan to aggressively attract more high-tech, clean energy and life sciences stocks. “It was a judgement call on the stage to interact with the crowd as opposed to continuing to discuss that topic,” McCoach told ResourceClips.com following the event.

The initiative comes as the TMX Group’s (TSX:X) own stock fairs poorly, especially when compared with that of the LSE, whose proposed merger with Toronto was defeated in 2011 by a group of Canadian banks and pension funds. There’s also speculation that Nasdaq might invade Canada after acquiring the Chi-X Canada alternative trading system, a deal that’s expected to close early this year. The CSE reported a record year for listings and trading volume while last year’s newcomer, Aequitas Neo, announced its first listing application the day of the Vancouver meeting.

But the Venture’s white paper was motivated “simply by what we’ve heard today, what we can do to help our clients,” insists McCoach.

Past changes in policies and procedures were “never packaged together and rolled out as something we’re doing all at once,” he explained. “It’s important that the market be aware that we’re doing this. So we’ve decided to pull all these initiatives together, even though they’ll have different timelines, and use that as an opportunity to gather this kind of feedback.”

“It didn’t surprise me that people were anxious to see change,” McCoach added. He plans to “digest” the day’s comments and compare them with feedback from the other meetings. Vancouver was the fourth stop on the tour, with several other cities planned into February.

Read more about plans to revitalize the TSX Venture.

January 29th, 2016

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SWOT analysis: Canadian-based gold companies are faring well GoldSeek
Chinese firms are deep in an overseas shopping frenzy NAI 500
How to profit from the demands of a growing world population Streetwise Reports
How short-sellers are killing companies—and the market Stockhouse
Has the Canadian small-cap market become a victim of over-regulation? Equities Canada

January 28th, 2016

SWOT analysis: Canadian-based gold companies are faring well GoldSeek
Chinese firms are deep in an overseas shopping frenzy NAI 500
How to profit from the demands of a growing world population Streetwise Reports
Better batteries to drive Chinese EV demand, says Barclays Industrial Minerals
How short-sellers are killing companies—and the market Stockhouse
Has the Canadian small-cap market become a victim of over-regulation? Equities Canada

Copper North expands Carmacks copper-gold-silver resource

January 27th, 2016

by Greg Klein | January 27, 2016

A substantially increased resource adds a southern extension to Copper North Mining’s (TSXV:COL) Carmacks deposit in the Yukon. Released January 25, the estimate provides a maiden resource for zones 12, 13 and 2000S, which were added to a 2007 resource for zones 1, 4 and 7 to the north.

Carmacks holds oxide resources at shallow depths, while sulphide mineralization in the three new zones extends to as little as 50 metres, a much shallower depth than zone 1’s sulphide resource.

The new estimate shows oxide and transition mineral resources as follows:

  • measured: 6.48 million tonnes averaging 0.86% total copper (0.69% acid-soluble copper and 0.17% sulphide copper), 0.414 g/t gold and 4.235 g/t silver

  • indicated: 9.2 million tonnes averaging 0.97% total copper (0.77% acid-soluble copper and 0.2% sulphide copper), 0.357 g/t gold and 3.796 g/t silver

  • inferred: 912,614 tonnes averaging 0.45% total copper (0.3% acid-soluble copper and 0.15% sulphide copper), 0.119 g/t gold and 1.9 g/t silver

The sulphide mineral resources show:

  • measured: 1.38 million tonnes averaging 0.64% total copper (0.05% acid-soluble copper and 0.59% sulphide copper), 0.185 g/t gold and 2.166 g/t silver

  • indicated: 6.69 million tonnes averaging 0.69% total copper (0.4% acid-soluble copper and 0.65% sulphide copper), 0.172 g/t gold and 2.344 g/t silver

  • inferred: 8.4 million tonnes averaging 0.63% total copper (0.03% acid-soluble copper and 0.61% sulphide copper), 0.15 g/t gold and 1.994 g/t silver
Copper North expands Carmacks copper-gold-silver resource

Carmacks’ updated PEA will consider new
advancements in leaching sulphides and oxides.

Zones 1, 4 and 7 used a cutoff of 0.25% total copper for oxide, transition and sulphide mineralization. Zones 2000S, 12 and 13 used a 0.15% acid-soluble copper cutoff for oxide and transition mineralization, and a 0.25% total copper cutoff for sulphide mineralization.

Having drilled only about 60% of the mineralized trend’s length, the company stated all zones remain open along strike and at depth.

“The expansion of the near-surface sulphide mineral resources warrants evaluation for leaching of sulphide mineralization, taking advantage of new advancements in leaching of copper sulphides, such that the copper may be extracted using the same SX-EW technology proposed for oxide mineralization,” stated president/CEO Harlan Meade.

With that in mind, Copper North has a new preliminary economic assessment underway for zones 1, 4 and 7 to replace the 2014 PEA.

The company also holds a 100% option on the Thor porphyry copper property adjacent to the former Kemess mine in north-central British Columbia and an historic resource at its Redstone copper-silver project in the Northwest Territories’ Nahanni mining district.

January 27th, 2016

SWOT analysis: Canadian-based gold companies are faring well GoldSeek
Chinese firms are deep in an overseas shopping frenzy NAI 500
How to profit from the demands of a growing world population Streetwise Reports
Better batteries to drive Chinese EV demand, says Barclays Industrial Minerals
How short-sellers are killing companies—and the market Stockhouse
Has the Canadian small-cap market become a victim of over-regulation? Equities Canada

David S. Abraham explains how long, complex supply lines hide troubling information about the commodities we use

January 26th, 2016

…Read more

Non-profit puts British Columbia geological data into the public domain

January 26th, 2016

by Greg Klein | January 26, 2016

A deeper understanding—literally—of some 6,700 square kilometres of northwestern British Columbia has come available not only to professionals but also to the public. Land use planners and local communities, as well as geologists and geophysicists, can benefit from a newly released Geoscience B.C. airborne magnetic survey, the non-profit announced January 26 at Mineral Exploration Roundup. The data’s on display via the organization’s proprietary online viewer.

The website combines new data with previously compiled info concerning geology, geochemistry, tenure and known mineral occurrences.

Once completed this survey will contribute to a mosaic of geophysics, geochemistry and geology with few equals in the world in terms of scale and free public accessibility.—Bruce Madu, VP of minerals and mining for Geoscience B.C.

The first survey of its type since the 1960s, the mag was flown last autumn at 250-metre line spacing for a total of 30,000 line kilometres, the equivalent of about three-quarters of the earth’s circumference. By comparison, the 1960s effort used two-kilometre spacing.

The mag comprises part of a $2.41-million project that will complement a 2014 survey and include a planned 2016 survey that will be potentially the largest in the organization’s 10-year history.

“Once completed this survey will contribute to a mosaic of geophysics, geochemistry and geology with few equals in the world in terms of scale and free public accessibility,” said Bruce Madu, Geoscience B.C.’s VP of minerals and mining.

But the info provides more of a path than a destination. “Many interpretations of this data are possible and will be made for many, many years to come,” he added. “This is a contribution that’s multi-generational.”

In an accompanying statement, Nanwakolas Council president Dallas Smith said, “It is very important for First Nations communities to include reliable geoscience data when considering investment and land use decisions in their territories. This survey data will contribute to the decision-making process in a meaningful way.”

Funded by the province and industry, Geoscience B.C. gathers earth science info in partnership with natives, other communities, the resource sector, universities and governments.

January 26th, 2016

SWOT analysis: Canadian-based gold companies are faring well GoldSeek
Chinese firms are deep in an overseas shopping frenzy NAI 500
How to profit from the demands of a growing world population Streetwise Reports
Better batteries to drive Chinese EV demand, says Barclays Industrial Minerals
How short-sellers are killing companies—and the market Stockhouse
Has the Canadian small-cap market become a victim of over-regulation? Equities Canada

Rick Rule at VRIC 2016: When begins the end of the bear market?

January 25th, 2016

by Greg Klein | January 25, 2016

Rick’s best-known rule maintains that bear markets beget bulls. But the stockbroker guru who says “I’m party to numerous conflicts of interest and actively soliciting more” offered a Vancouver Resource Investment Conference audience his prediction on when the horned beast might return. Emphasizing his forecast is based not on hard data but on anecdotal evidence, he suggested late 2017 or early 2018. That indication, again anecdotal, comes from issuer capitulation.

Rule defines issuer capitulation as the time when equity issuers realize they can no longer defer financings while waiting for more favourable circumstances.

At such a time they lose the high expectations caused by the previous bull. “From a cheque-writer’s point of view, bear market capitulation is what performance is made of,” Rule said.

Rick Rule at VRIC 2016 When begins the end of the bear market?

The ever-popular Rick Rule held court
on and off the stage at VRIC 2016.

His observations span the last three market declines. For example in July 2000, after about 30 very bearish months, people like the Lundin family, Robert Friedland, Bob Quartermain and Ross Beaty decided the only way they could find and develop deposits was “to acquire capital on whatever terms are necessary.”

Expensive the capital might have been, but it allowed their companies to generate news during a news vacuum, Rule argued. He said those companies “doubled in 12 months” and doubled again the following year.

“I would argue that it was the performance exhibited by those companies in conjunction with the rolling over of the U.S. dollar that gave us that wonderful lift-off market that we enjoyed in the second part of 2002…. I believe we’re starting to see that today.”

Such issuers “understand they need to move forward, and to move forward they need to price equity at a level that attracts equity. They get to go back to work, they get to drill, they get to explore, they get to stake.”

He believes recovery takes place about 18 to 24 months after the first quarter of issuer capitulation. If that holds true, he said, late 2017 or early 2018 “should begin to show the market we enjoyed in 2002 and 2003.”

Rule acknowledged a longer timeframe might be necessary for the juniors. But any improvement in larger companies could benefit active small-caps, he pointed out.

North Arrow deal to fund drilling on Arctic Star diamond project

January 25th, 2016

by Greg Klein | January 25, 2016

Arctic Star Exploration’s (TSXV:ADD) Redemption diamond project stands to gain from a royalty sale by North Arrow Minerals TSXV:NAR. With an option to earn 55% of the project, North Arrow has signed a deal with Umgeni Holdings International to sell part of its share of royalties on the property for $800,000. The money would help fund drill programs at North Arrow’s Pikoo diamond project in Saskatchewan as well as the Redemption project in the Northwest Territories’ diamondiferous Lac de Gras region.

Pikoo has drilling scheduled to begin in mid-February, with Redemption following in about a month.

This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all.—Patrick Power, president/CEO of Arctic Star Exploration

North Arrow’s Redemption option requires the company to fund $800,000 in exploration by August. The full 55% calls for North Arrow to spend $5 million by July 2017.

Subject to approvals, the $800,000 sale gives Umgeni a 1.5% gross overriding royalty on diamonds and a 1.5% NSR on base and precious metals for three claims held 100% by North Arrow, as well as a 1.25% GOR and 1.25% NSR on 12 claims and five mining leases now under option from Arctic Star. North Arrow holds sole responsibility for paying the royalties.

Umgeni is a private company in which North Arrow director Christopher Jennings is a beneficiary of the sole shareholder. The agreement would also give Umgeni the right to acquire North Arrow’s Redemption interest. But should the option terminate, Umgeni would lose any right to royalties on claims in which North Arrow no longer held an interest.

“This agreement will allow the team to immediately move ahead with exploration drilling programs at the Redemption diamond property without impacting Arctic Star’s treasury at all,” commented president/CEO Patrick Power.

Previous work has found kimberlite indicator mineral trains including diamonds. Last summer North Arrow, which funds all work on Redemption, reported ground gravity surveys over 25 targets. The property also benefits from 52 overburden RC drill holes by the NWT Geoscience Office in and around Redemption to build a database on indicator minerals and till geochemistry.

T-Rex, another Arctic Star property in Lac de Gras, has 12 known kimberlites. Two have shown diamonds and two others feature kimberlite indicator minerals down-ice. The company also holds the Stein diamond project in Nunavut.