by Greg Klein
The timing may well prove fortuitous. Crown Mining’s (TSXV:CWM) Lights Creek copper project really came together in February with a 100% option on Moonlight, making it the largest of three deposits on the company’s northeastern California property. President/CEO Stephen Dunn says it took him a year and a half to persuade Canyon Copper TSXV:CNC to part with the asset. Now Dunn believes his company’s well-positioned to benefit from the upturn that’s forecast for copper in the coming years.
The 18,000-hectare property comes with a lot of history—not to mention a lot of copper. Mining began in the 1890s, with the Engels and Superior deposits churning out around 161.5 million pounds of copper, 23,000 ounces of gold and 1.9 million ounces of silver during the peak years from 1914 to 1930. The Depression-era copper crash shut down both mines.
Fast-forward to the ’60s, when a Placer Dome predecessor explored the property and discovered Moonlight. But copper “was struggling at 60 cents,” Dunn recalls. “At the same time Placer was working on getting Gibraltar into production. They put Moonlight on the back burner and ended up dropping the entire project when they became a gold company.
“Some former Placer guys picked up the project, which went through a few public companies.” Dunn says he picked up Engels and Superior after one company went bankrupt. Negotiations delivered Moonlight in February.
Engels sits a little over four kilometres east of Moonlight, with Superior in the middle. “The deposits are all part of the same system, the Lights Creek stock, one great big intrusion,” Dunn says. Resource estimates were calculated in 2007 for Moonlight and 2013 for Superior and Engels. Using a 0.2% cutoff, the three deposits total 1.044 billion pounds indicated and an almost equal 1.043 billion pounds inferred. The breakdown for each deposit shows:
Crown has Moonlight and Superior under focus, seeing open pit potential in both. Local infrastructure includes a paved road linking Lights Creek with a highway less than 12 kilometres away, about the same distance as a railway. Power lines are about three kilometres away. Dirt roads connect the three deposits.
There’s community support too, Dunn adds. “Every time I’m there people ask, ‘When are you going to open that mine?’ They want it. They want the jobs.”
The company now has to determine how much work will be necessary to take the project to PEA. To answer that, Crown has an outside firm reviewing all data to decide how much, if any, additional drilling and metallurgy would be necessary. That review, expected to finish by September, would help Crown advance Lights Creek as economically as possible.
But for the time being the company’s well-financed, having raised almost $458,000 between April and June. That followed a $120,000 private placement the previous February. Management and insiders hold about 30%.
Looking into the future, Dunn sees Crown as likely bait for a joint venture or takeover.
Copper’s downturn dragged the metal’s spot price from nearly $4.50 a pound five years ago to less than $2 in January, a seven-year low. Since then, peaks and valleys have suggested an upward trend to some observers. The Thomson Reuters GFMS Copper Survey 2016 predicts the surplus continuing through 2018. “Even so, there is no doubting that the current low price environment is sowing the seeds for the next boom as projects are shelved, delayed, sold or abandoned completely,” according to the study.
In March Reuters stated miners and investors were looking at copper projects in anticipation of a deficit by the end of the decade. Bloomberg reaffirmed those sentiments in April, reporting that big miners were hanging onto copper assets while unloading other projects. The conductive commodity proves vital to many uses, not the least of which is electrical expansion in developing countries.
“At $2.50, people will still wonder if the upturn’s real,” Dunn says. “But if copper crosses $3, the takeovers will occur. There aren’t a lot of big copper deposits that aren’t already controlled by a big miner or a JV. If we attract a partner, that will be great. If we can hang around until the takeovers happen, then all the better. Either way, the shareholder benefits.”
He describes Crown as “a cheap option on copper” when comparing market cap with pounds in the ground. “My personal view is that copper’s going to have a hell of a run after this five-year downturn. If you do believe copper’s the place to be, there aren’t a lot of cheap options. We’re one of them. We need copper to move past $2.50 but when it does, Crown is one company that’s going to do well.”
by Greg Klein
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“There’s excitement in the air,” said Cambridge House International founder Joe Martin. That’s the mood he senses as junior explorers emerge from the downturn. And certainly optimism was evident on June 14 as more than 450 people converged on the Vancouver Commodity Forum for an afternoon of expert talks amid a showcase of two dozen companies. Keynote speakers included Martin, Chris Berry of the Disruptive Discoveries Journal, Jon Hykawy of Stormcrow Capital, John Kaiser of Kaiser Research Online and Stephan Bogner of Rockstone Research.
Lithium, not surprisingly, stood out as a commodity of interest. While cautioning against over-enthusiasm for the exploration rush, Berry and Hykawy each affirmed the need for juniors to find new sources of the metal. Cobalt and scandium featured prominently too, as did other commodities including what Kaiser called “the weird metals”—lesser known stuff that’s vital to our lives but threatened with security of supply.
Kaiser also noted he was addressing a crowd larger than his last PDAC audience, another indication that “we’ve turned the corner.”
Attendees also met and mingled with company reps. Potential investors learned about a wide gamut of projects aspiring to meet a growing demand for necessities, conveniences and luxuries.
Presented by Zimtu Capital TSXV:ZC, the forum’s success will make it an annual event, said company president Dave Hodge. Berry emceed the conference, holding the unenviable task of “making sure Dave stays well-behaved.”
Read interviews with keynote speakers:
Meet the companies
Most companies were core holdings of Zimtu, a prospect generator that connects explorers with properties and also shares management, technical and financing expertise. Zimtu offers investors participation in a range of commodities and companies, including some at the pre-IPO stage.
After sampling high-grade lithium on its Hidden Lake project in the Northwest Territories earlier this month, 92 Resources TSXV:NTY plans to return in mid-July for a program of mapping, exposing spodumene-bearing pegmatite dykes, and channel sampling. The company closed the final tranche of a private placement totalling $318,836 in April. Hidden Lake’s located near Highway 4, about 40 kilometres from Yellowknife and within the Yellowknife Pegmatite Belt.
With one of the Athabasca Basin’s largest and most prospective exploration portfolios, ALX Uranium TSXV:AL has a number of projects competing for flagship status. Among them is Hook-Carter, which covers extensions of three known conductive trends, one of them hosting the sensational discoveries of Fission Uranium TSX:FCU and NexGen Energy TSXV:NXE. ALX’s strategic partnership with Holystone Energy allows that company to invest up to $750,000 in ALX and retain the right to maintain its ownership level for three years. ALX closed a private placement first tranche of $255,000 last month, amid this year’s busy news flow from a number of the company’s active projects.
Arctic Star Exploration TSXV:ADD boasts one of northern Canada’s largest 100%-held diamond exploration portfolios. Among the properties are the drill-ready Stein project in Nunavut and others in the Lac de Gras region that’s the world’s third-largest diamond producer by value. North Arrow Minerals TSXV:NAR holds an option to earn up to 55% of Arctic Star’s Redemption property.
Aurvista Gold TSXV:AVA considers its Douay property one of Quebec’s largest and last undeveloped gold projects. The Abitibi property has resources totalling 238,400 ounces of gold indicated and 2.75 million ounces inferred. Now, with $1.1 million raised last month, the company hopes to increase those numbers through a summer program including 4,000 metres of drilling. Douay’s 2014 PEA used a 5% discount rate to forecast a post-tax NPV of $16.6 million and a post-tax IRR of 40%.
Looking for lithium in Nevada, Belmont Resources TSXV:BEA now has a geophysics crew en route to its Kibby Basin property, which the company believes could potentially host lithium-bearing brines in a similar geological setting to the Clayton Valley, about 65 kilometres south. Results from the gravity survey will help identify targets for direct push drilling and sampling.
A mineral perhaps overlooked in the effort to supply green technologies, zeolite has several environmental applications. Canadian Zeolite TSXV:CNZ holds two projects in southern British Columbia, Sun Group and Bromley Creek, the latter an active quarrying operation.
With a high-grade, near-surface rare earths deposit hosted in minerals that have proven processing, Commerce Resources TSXV:CCE takes its Ashram project in Quebec towards pre-feasibility. The relatively straightforward mineralogy contributes to steady progress in metallurgical studies. Commerce also holds southeastern B.C.’s Blue River tantalum-niobium deposit, which reached PEA in 2011 and a resource update in 2013.
Permitted for construction following a 2014 PEA, Copper North Mining’s (TSXV:COL) Carmacks copper-gold-silver project now undergoes revised PEA studies. The agenda calls for improved economics by creating a new leach and development plan for the south-central Yukon property. In central B.C. the company holds the Thor exploration property, 20 kilometres south of the historic Kemess mine.
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