Monday 5th December 2016

Resource Clips


All posts by Greg Klein - Resource Clips

Cash ban hits India’s diamond capital, threatens lower-priced trade

December 2nd, 2016

by Greg Klein | December 2, 2016

India’s sudden ban on 500- and 1,000-rupee notes early last month has suspended at least some operations in the northwestern city of Surat, the world capital of diamond cutting and polishing. Various sources credit the city with transforming approximately 80% of the globe’s rough into jewelry. India is also the world’s third-largest consumer of diamond-ensconced bling.

Cash ban hits India’s diamond capital, threatens lower-priced trade

NDTV reports businesses closing as the lack of cash prevents them from buying rough and paying employees. The government ordered citizens to deposit the notes, worth about $9.77 and $19.54 Canadian, and conduct transactions electronically.

Governments that have limited the use of cash have cited the need to combat terrorism, money laundering, corruption, counterfeiting, tax evasion and the underground economy. Rapaport News stated India’s underground economy constituted 23.2% of GDP, according to 2007 data in the latest World Bank survey.

Only about 30% of Surat’s diamond cutters have bank accounts, NDTV added.

“This industry has been working on an illegal mode of payment in cash until now and to shift to a cashless system will take at least four to six months,” one business owner told the news outlet. But he stated the government decree will eventually benefit merchants and workers. Another source said he expects the suspension to last at least one and a half months.

The two denominations reportedly accounted for 85% or 86% of Indian money in circulation. “The liquidity freeze could influence a global slowdown in demand for lower colour and clarity polished, and in very small melee stones,” Rapaport stated.

Following the first tender of Quebec diamonds in Antwerp last month, Stornoway Diamond TSX:SWY president/CEO Matt Manson attributed India’s demonetization to reduced prices and demand for smaller and lower-quality stones. He said some were removed from the event, to be sold later.

India’s government plans to issue new denominations of 500 and 2,000 rupees. But, NDTV reported December 2, an enormous hoard of contraband seized from a group of low-paid government employees included 57 million rupees (in Canuck terms, over $1.11 million) in so-far uncirculated 2,000-rupee notes.

December 2nd, 2016

A tale of two economies: Singapore and Cuba Stockhouse
Heavily polluted China expected to shut down more refractory minerals production Industrial Minerals
Central banks and their role in financial turmoil Streetwise Reports
The currency war Part 23: Europe will devalue or dissolve GoldSeek
Unicorns versus dinosaurs—Who wins the debate over growth versus profitability? The Disruptive Discoveries Journal
Molybdenum: Commodity overview Geology for Investors
Here’s why there are so many ETFs now Equities.com
Do DRC politics spell further price rises for cobalt? Benchmark Mineral Intelligence
Three reasons why we’re in a silver bull market: David Morgan SmallCapPower

December 1st, 2016

Central banks and their role in financial turmoil Streetwise Reports
The currency war Part 23: Europe will devalue or dissolve GoldSeek
China does away with magnesia quotas Industrial Minerals
Unicorns versus dinosaurs—Who wins the debate over growth versus profitability? The Disruptive Discoveries Journal
Robots demand $2 an hour Stockhouse
Molybdenum: Commodity overview Geology for Investors
Here’s why there are so many ETFs now Equities.com
Do DRC politics spell further price rises for cobalt? Benchmark Mineral Intelligence
Three reasons why we’re in a silver bull market: David Morgan SmallCapPower

Most banks are screwing up on their stock picks

November 30th, 2016

Graphs by InterTrader | text by Jeff Desjardins | posted with permission of Visual Capitalist | November 30, 2016

Let’s say that a bank such as Goldman Sachs publishes a recommendation to “Buy Stock X.”

It’s hard to ignore a bet by a powerful investment bank such as Goldman. We are mere mortals in the pecking order and they are supposed to be the all-knowing smart money from Wall Street.

Do we buy the stock or is it simply wiser to pass?

Bank performance overall

The folks at InterTrader have done considerable legwork to dive deep into the data on investment bank recommendations made in 2015. They looked at every bet made by the 16 top banks throughout the year to assess both potential returns and accuracy.

The results are pretty underwhelming.

If you bought every stock recommended and held until the end of the year, here’s what your performance would look like:

Most banks are screwing up on their stock picks

Overall, when holding the stock picks for the year, banks were only 43% accurate with their predictions.

That’s right—flipping a coin would have been potentially more effective than buying bank stock picks, which ended up down 4.79% on the year. The S&P 500 finished down only 0.69%, but simply just making any interest in a savings account would have been more effective.

A closer look at individual banks

While banks as a whole struggled with picks in 2015, it’s also important to look at banks on a more micro level to see how they performed.

Here’s a look at the recommendations by Deutsche Bank, and how it did:

Most banks are screwing up on their stock picks

Deutsche Bank nailed 41% of their predictions and had a -8.93% return if picks were held throughout the year.

As you can see, some of their picks such as Microsoft and Wix.com gained double digits. On the other hand, recommendations such as Whiting Petroleum got absolutely crushed throughout the year, dropping 70.1%.

Overall, Deutsche Bank’s performance here definitely didn’t do much to help the struggling company get out of its rut.

Which banks were most accurate?

Here are the banks, from best to worst, based on accuracy of their calls:

Most banks are screwing up on their stock picks

Nomura, Credit Suisse, BAML and Barclays all batted above .500 if stocks were held throughout the year, while 10 banks all did worse than a coin flip.

Citigroup had an off year, only nailing 14% of its picks.

Which banks had the best returns?

Here are the banks, from best to worst, based on the performance of these recommendations:

Most banks are screwing up on their stock picks

Just two banks, Credit Suisse and Nomura, had positive returns if stocks were held through the year. Meanwhile, Canaccord Genuity’s picks were knocked down 16% over the course of 2015.

An important caveat

Throughout the above article, we show the results if stock picks were held from when they were made until the end of the year.

However, it is worth noting that the investment banks actually did slightly better if picks were held for shorter durations of time:

Time Accuracy Gains %
30 Days 55% 0.80%
90 Days 49% -1.48%
180 Days 42% -3.66%
End of Year 43% -4.79%

In other words, if you sold all stock recommendations exactly 30 days after buying, you would have actually made a 0.8% return throughout the year. This is still a lower return than a savings account, but it is an improvement on losing 4.79%!

For a more in-depth dive into the data, we highly recommend checking out InterTrader’s interactive version of the results.

Posted with permission of Visual Capitalist.

Tom Hoefer of the NWT and Nunavut Chamber of Mines recalls the rumours that preceded Canada’s first significant diamond discovery

November 30th, 2016

…Read more

November 30th, 2016

Central banks and their role in financial turmoil Streetwise Reports
The currency war Part 23: Europe will devalue or dissolve GoldSeek
China does away with magnesia quotas Industrial Minerals
Unicorns versus dinosaurs—Who wins the debate over growth versus profitability? The Disruptive Discoveries Journal
Robots demand $2 an hour Stockhouse
Molybdenum: Commodity overview Geology for Investors
Here’s why there are so many ETFs now Equities.com
Do DRC politics spell further price rises for cobalt? Benchmark Mineral Intelligence
Three reasons why we’re in a silver bull market: David Morgan SmallCapPower

Lithium: from brine to market

November 29th, 2016

Voltaic Minerals aims to simplify extraction and commercialize the process

by Greg Klein

Cost of production and timeline to market—those are critical issues for any project in the increasingly crowded lithium space. And that’s what attracted Thomas Currin to Voltaic Minerals TSXV:VLT. The newly appointed director/project manager sees the company’s Green Energy project in Utah’s Paradox Basin as highly prospective for creating a selective extraction process that would address both challenges. With Currin on board, Voltaic hopes not only to develop a successful project but to market the process to other companies.

“Some people like to classify lithium as a commodity, but it’s a specialty chemical,” Currin explains. “In the specialty chemical business you don’t separate R&D and process development from manufacturing. A good specialty chemical company is one that’s been able to integrate all those applications.

Voltaic Minerals wants to simplify extraction and commercialize the process

“I’m a chemical engineer who’s been in the manufacturing process in the lithium field for 35 years,” he adds. “With a manufacturing process background everything is about opex and capex, and how to optimize both.”

Having managed lithium extraction projects in Chile, Peru, Mexico, Canada and the U.S., he’s worked for FMC Lithium, Li3 Energy, his own company Limtech Technologies and currently Enertrex Corp, which signed an MOU with Voltaic late last month.

As technical consultant for Enertrex he’s been working with two PhDs on selective removal of specific minerals from wastewater streams and geothermal brines. “We’ve come up with a technology that can extract lithium selectively, so we were looking for a project that could commercialize our technology. I’ve seen pretty much every lithium project in the world over the last 10 to 15 years, and what attracted me to Voltaic and the Paradox Basin are the oil and gas wells in a Basin that also has lithium salts and potassium salts.”

Located about 965 kilometres from the Tesla Motors Gigafactory and close to road, rail, power and the Intrepid Potash NYSE:IPI Cane Creek solution mine, the 1,683-hectare Green Energy property underwent oil and gas drilling during the 1960s. Historic analysis of regional drilling showed lithium in saturated brines grading 81 mg to 174 mg per litre.

“Here’s a project with historic wells, historic data, a few kilometres from a facility producing potash which is a very similar salt to lithium, and a company that realizes that time to market is critical.

“It seemed like a perfect match, the place to do process development work in parallel with resource development and demonstrate Enertrex’s lithium-specific process. If we could remove the lithium economically, we could market it to other lithium projects. The technology would be a paradigm-shifter.”

After evaluating historic data, Voltaic plans to re-perforate some of the wells and draw samples. While the company evaluates Green Energy’s resource potential, Currin will study the concentrations of lithium and impurities like magnesium, calcium and boron to develop the processing chemistry.

That’s what we’re taking advantage of—existing technologies, proven systems that we can re-configure to extract the lithium from a saturated impurity stream. With all the other technologies, you have to remove all the impurities before you extract the lithium. That’s a tremendous cost.—Thomas Currin,
director/project manager
for Voltaic Minerals

“Sampling traditionally takes 20-litre amounts, but our first sample will be 20,000 litres so we can start processing it,” he explains. “Our money will be invested in developing not only a 43-101 resource but also a process by which we can be competitive.”

Call it optimistic or aggressive, Voltaic believes a property of merit could potentially offer customers a 100-kilogram sample of lithium carbonite within 14 months. Plans call for three 90-day testing phases into H2 of next year, when work would overlap with pilot-scale processing.

“This isn’t my first rodeo,” Currin notes.

With Limtech he developed a selective process to extract and concentrate silica from geothermal brines, which won the company a 2016 Outstanding Partnership Regional Award from the U.S. Federal Laboratory Consortium for Technology Transfer.

He’s also worked on selective lithium-ion exchange resins with FMC and, in his client project work, evaluated the use of several lithium-selective solvent exchange systems.

“The membrane technology for de-salinization has become much more economical, that technology has blossomed in the last 10 years, and that’s what we’re taking advantage of—existing technologies, proven systems that we can re-configure to extract the lithium from a saturated impurity stream. With all the other technologies, you have to remove all the impurities before you extract the lithium. That’s a tremendous cost.”

In addition to replacing the lengthy solar evaporation stage, the process would feature a modular design that could speed progress from pilot plant to production. With Green Energy’s existing wells, the project’s fast-track potential looks good, he maintains.

Should success be achieved there, the process could be applied to deposits with different metallurgy, making the technique marketable to other companies.

“Chilean brines are the most cost-effective sources of lithium in the world,” he says. “But there’s growing demand for sources outside South America. Our selective extraction process could help other projects compete with the Lithium Triangle.”

Equitas Resources highlights third Brazilian project with 92.19 g/t gold over 2 metres

November 29th, 2016

by Greg Klein | November 29, 2016

Another high-grade assay brings another project to prominence among Equitas Resources’ (TSXV:EQT) 12-property Brazilian holdings. Announced November 29, a channel sample on the Nova Canaa property revealed 92.19 grams per tonne gold over two metres. The news comes two weeks after the company released grab samples as high as 1,022.98 g/t gold at the Crepori project.

Equitas Resources highlights third Brazilian project

Garimpeiro production at the 9,694-hectare Nova Canaa property in the Juruena gold belt extracted an estimated 225,000 ounces from 1975 to 1992. The channel sample comes from approximately 20 metres’ depth in an adit at the Galopeira zone, where the Bodao vein has so far been traced for about 200 metres, averaging one to two metres in width. Previous drilling at Galopeira sunk 18 holes for 2,993 metres, with three intervals showing gold results of 7.2 g/t over 2 metres, 14.2 g/t over 2.9 metres and 17.2 g/t over 1.5 metres.

At the property’s Medeiro zone, 20 out of 95 grab samples previously collected within a one-kilometre radius assayed between 1.38 g/t and 69.5 g/t gold.

Plans for Nova Canaa include mapping and sampling, induced polarization and magnetics prior to drilling.

The announcement brings to light a third priority in Equitas’ 202,000-hectare Brazilian portfolio. Along with Crepori, the company holds the Cajueiro project, where an April resource update recalculated 2013 data for four zones of sulphides and saprolite oxides. Using a 0.25 g/t cutoff, the project’s sulphides total:

  • indicated: 8.64 million tonnes averaging 0.771 g/t for 214,100 ounces gold

  • inferred: 9.53 million tonnes averaging 0.664 g/t for 203,500 ounces

Using the same cutoff, four zones of oxides come to:

  • inferred: 1.37 million tonnes averaging 1.775 g/t for 78,400 ounces

Equitas intends to return the 39,053-hectare Cajueiro flagship to production, beginning with a 600-tonne-per-day carbon-in-leach plant, then building the operation incrementally. A resource update and PEA are planned by mid-2017, following last summer’s 37-hole, 1,756-metre program at the project’s Baldo zone, which showed 33 near-surface mineralized intercepts. Additionally, two infill holes at the Crente zone brought near-surface gold results of 1.12 g/t over 31 metres and 1.03 g/t over 29 metres.

The company foresees a 12- to 24-month timeline to production. A trial mining licence has been granted, while environmental permits are pending.

Earlier this month Equitas offered a private placement of up to $500,000.

November 29th, 2016

Central banks and their role in financial turmoil Streetwise Reports
The currency war Part 23: Europe will devalue or dissolve GoldSeek
China does away with magnesia quotas Industrial Minerals
Unicorns versus dinosaurs—Who wins the debate over growth versus profitability? The Disruptive Discoveries Journal
Robots demand $2 an hour Stockhouse
Molybdenum: Commodity overview Geology for Investors
Here’s why there are so many ETFs now Equities.com
Do DRC politics spell further price rises for cobalt? Benchmark Mineral Intelligence
Three reasons why we’re in a silver bull market: David Morgan SmallCapPower

92 Resources reports NWT lithium of 1.58% Li2O over 8.78 metres with 31 ppm Ta2O5

November 28th, 2016

by Greg Klein | November 28, 2016

92 Resources reports NWT lithium

Six known pegmatites with impressive strike lengths
offer considerable potential, the company states.

A second and final batch of lithium assays from Hidden Lake’s summer program once again “exceeded our expectations,” 92 Resources TSXV:NTY stated November 28. The company now reports that 101 out of 223 channel samples from three pegmatites on the Northwest Territories project graded over 1% Li2O, with 59 surpassing 1.5%. Tantalum was found too, with some highlights from this batch showing:

HL3 pegmatite

  • 1.58% Li2O and 31 ppm Ta2O5 over 8.78 metres
  • (including 1.78% Li2O and 31 ppm Ta2O5 over 6.93 metres)

HL1

  • 1.26% Li2O and 27 ppm Ta2O5 over 8.72 metres

HL4

  • 1.71% Li2O and 33 ppm Ta2O5 over 5.78 metres

Of 10 grab samples taken during regional prospecting, one graded 1.86% Li2O. As reported earlier this month, two more pegmatites have been found on the property, bringing the total to six so far. “With exposed strike lengths of 350 to 800 metres, the potential for significant concentrations of spodumene pegmatites remains very high,” said president/CEO Adrian Lamoureux.

Located along Highway 4, 40 kilometres east of Yellowknife, the 1,567-hectare property lies within the Yellowknife lithium pegmatite belt.

In September the company closed its acquisition of the Pontax lithium property in northern Quebec, where historic satellite imagery and government mapping have shown pegmatite outcrops.