Thursday 19th January 2017

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Posts tagged ‘quebec’

Diamonds—2016 glitter in review

December 22nd, 2016

by Greg Klein | December 22, 2016

The stones began the year still mired in their 2015 slump, in which rough prices reportedly fell 15%. The two biggest players, representing nearly two-thirds of global production, didn’t exactly agree on strategy. De Beers cut production and lowered prices while Alrosa initially boosted production, held prices stable and stockpiled some output. By April De Beers raised prices and Alrosa lowered production. The following month had De Beers talking about a “fragile recovery.”

Diamonds—2016 glitter in review

Sales records for polished got pulverized, though. In May Sotheby’s raked in $32 million for the 15.38-carat Unique Pink in a jewelry sale that totalled a world record $175.1 million. The next day Christie’s scooped up $58.25 million for the 14.62-carat Oppenheimer Blue, “a new record price for any gemstone and per carat.”

Rough rode roughshod over records, too. The week before Sotheby’s and Christie’s big sales, Lucara Diamond TSX:LUC got $63.11 million for its fresh-from-the-mine 812.77-carat Constellation. High expectations led to disappointment in late June, however, when the company rejected a $61-million offer for its 1,109-carat Lesedi La Rona rough stone, the second-biggest diamond ever found. Lucara wanted at least $70 million.

As for Canadian diamond mining, it thrived.

A 100-million-carat production milestone brought celebrations to Diavik, the Northwest Territories JV of Rio Tinto NYSE:RIO and Dominion Diamond TSX:DDC. In July Dominion finally decided to add the Jay pipe and its 78.6 million carats to the company’s majority-held Ekati mine.

The year brought new mines to Canada too. Gahcho Kué, the world’s largest new diamond producer in 13 years, was officially opened in September by partners De Beers and Mountain Province Diamonds TSX:MPV. October saw Stornoway Diamond TSX:SWY do the same at Renard, Quebec’s first diamond mine. It reached commercial production just days before Christmas.

Looking at potential mines-to-be, Peregrine Diamonds TSX:PGD took its Chidliak project on Baffin Island to PEA in July. In Saskatchewan’s Fort à la Corne region, meanwhile, Shore Gold TSX:SGF continued working on a feasibility update for its majority-held Star-Orion South project. Back in the NWT, Kennady Diamonds TSXV:KDI completed its maiden resource in December.

The company’s Kennady North project sits in the same Lac de Gras region hosting Ekati, Diavik and Gahcho Kué. November marked the 25th anniversary of the Chuck Fipke/Stewart Blusson Ekati discovery that triggered the world’s biggest staking rush, brought diamond mining to Canada and helped transform the diamond industry.

In December the vertically integrated company Almod Diamonds announced plans to broaden the NWT diamond industry, the backbone of the territorial economy, by re-opening a Yellowknife cutting and polishing facility.

A few days after that announcement, the allure of diamonds played out differently in an Atlanta department store. Eighty-six-year-old Doris Payne, a determined, unrepentant and often unsuccessful diamond thief, wracked up another arrest. She’s been stealing stones for over sixty years.

A 2016 retrospect

December 20th, 2016

Was it the comeback year for commodities—or just a tease?

by Greg Klein

Some say optimism was evident early in the year, as the trade shows and investor conferences began. Certainly as 2016 progressed, so did much of the market. Commodities, some of them anyway, picked up. In a lot of cases, so did valuations. The crystal ball of the industry’s predictionariat often seemed to shine a rosier tint. It must have been the first time in years that people actually stopped saying, “I think we’ve hit bottom.”

But it would have been a full-out bull market if every commodity emulated lithium.

By February Benchmark Mineral Intelligence reported the chemical’s greatest-ever price jump as both hydroxide and carbonate surpassed $10,000 a tonne, a 47% increase for the latter’s 2015 average. The Macquarie Group later cautioned that the Big Four of Albermarle NYSE:ALB, FMC Corp NYSE:FMC, SQM NYSE:SQM and Talison Lithium had been mining significantly below capacity and would ramp up production to protect market share.

Was this the comeback year for commodities—or just a tease?

That they did, as new supply was about to come online from sources like Galaxy Resources’ Mount Cattlin mine in Western Australia, which began commissioning in November. The following month Orocobre TSX:ORL announced plans to double output from its Salar de Olaroz project in Argentina. Even Bolivia sent a token 9.3 tonnes to China, suggesting the mining world’s outlaw finally intends to develop its lithium deposits, estimated to be the world’s largest at 22% of global potential.

Disagreeing with naysayers like Macquarie and tracking at least 12 Li-ion megafactories being planned, built or expanded to gigawatt-hour capacity by 2020, Benchmark in December predicted further price increases for 2017.

Obviously there was no keeping the juniors out of this. Whether or not it’s a bubble destined to burst, explorers snapped up prospects, issuing news releases at an almost frantic flow that peaked in mid-summer. Acquisitions and early-stage activity often focused on the western U.S., South America’s Lithium Triangle and several Canadian locations too.

In Quebec’s James Bay region, Whabouchi was subject of a feasibility update released in April. Calling the development project “one of the richest spodumene hard rock lithium deposits in the world, both in volume and grade,” Nemaska Lithium TSX:NMX plans to ship samples from its mine and plant in Q2 2017.

A much more despairing topic was cobalt, considered by some observers to be the energy metal to watch. At press time instability menaced the Democratic Republic of Congo, which produces an estimated 60% of global output. Far overshadowing supply-side concerns, however, was the threat of a humanitarian crisis triggered by president Joseph Kabila’s refusal to step down at the end of his mandate on December 20.

Was this the comeback year for commodities—or just a tease?

But the overall buoyant market mood had a practical basis in base metals, led by zinc. In June prices bounced back from the six-year lows of late last year to become “by far the best-performing LME metal,” according to Reuters. Two months later a UBS spokesperson told the news agency refiners were becoming “panicky.”

Mine closures in the face of increasing demand for galvanized steel and, later in the year, post-U.S. election expectations of massive infrastructure programs, pushed prices 80% above the previous year. They then fell closer to 70%, but remained well within levels unprecedented over the last five years. By mid-December one steelmaker told the Wall Street Journal to expect “a demand explosion.”

Lead lagged, but just for the first half of 2016. Spot prices had sunk to about 74 cents a pound in early June, when the H2 ascension began. Reaching an early December peak of about $1.08, the highest since 2013, the metal then slipped beneath the dollar mark.

Copper lay at or near five-year lows until November, when a Trump-credited surge sent the red metal over 60% higher, to about $2.54 a pound. Some industry observers doubted it would last. But columnist Andy Home dated the rally to October, when the Donald was expected to lose. Home attributed copper’s rise to automated trading: “Think the copper market equivalent of Skynet, the artificial intelligence network that takes over the world in the Terminator films.” While other markets have experienced the same phenomenon, he maintained, it’s probably the first, but not the last time for a base metal.

Was this the comeback year for commodities—or just a tease?

Nickel’s spot price started the year around a piddling $3.70 a pound. But by early December it rose to nearly $5.25. That still compared poorly with 2014 levels well above $9 and almost $10 in 2011. Nickel’s year was characterized by Indonesia’s ban on exports of unprocessed metals and widespread mine suspensions in the Philippines, up to then the world’s biggest supplier of nickel ore.

More controversial for other reasons, Philippine president Rodrigo Duterte began ordering suspensions shortly after his June election. His environmental secretary Regina Lopez then exhorted miners to surpass the world’s highest environmental standards, “better than Canada, better than Australia. We must be better and I know it can be done.”

Uranium continued to present humanity with a dual benefit—a carbon-free fuel for emerging middle classes and a cautionary example for those who would predict the future. Still oblivious to optimistic forecasts, the recalcitrant metal scraped a post-Fukushima low of $18 in December before creeping to $20.25 on the 19th. The stuff fetched around $72 a pound just before the 2011 tsunami and hit $136 in 2007.

Aurvista Gold reinforces EM prior to drilling Abitibi property

December 19th, 2016

by Greg Klein | December 19, 2016

Following up on last summer’s airborne EM, Aurvista Gold TSXV:AVA plans to complete a ground survey on its Douay gold project by next month. The company describes the University of Toronto Electro-Magnetic system as “different from other EM systems in that it can detect good EM conductors in the presence of poorer ones…. UTEM sees both the freely decaying and directly driven part of the magnetic field. It is this second aspect that makes UTEM unique and so important in detecting and characterizing extremely conductive deposits such as massive sulphides.”

Aurvista Gold reinforces EM prior to drilling Abitibi property

Aurvista’s Douay project gained a nearly
$6-million private placement last month.

The survey will target three near-surface conductive bedrock anomalies surrounding the Abitibi project’s South porphyry. Last summer’s EM also found four anomalies proximal to the Casa Berardi deformation zone, northwest of the Adam Creek gold deposit.

Aurvista considers one of the current targets, anomaly E, most promising because of its location near the gold-bearing Main, South and Adam porphyries. “There are chlorite-sulphide bearing feeder pipes nearby as observed in drill holes DO-92-24 and DO-11-34, typically found in association with massive sulphide mineralization, yet to be found at Douay,” the company stated.

The other two targets, anomalies F and G, are larger “but are believed, based on nearby re-logged drill core from the Phase I program, to be related to sulphide mineralization.”

Last week the company announced it had chosen seven drill locations to update resources for four of the project’s zones. Eight zones were included in a 2012 resource estimate that used a 0.3 g/t cutoff and totalled:

  • indicated: 2.69 million tonnes averaging 2.76 g/t for 238,435 gold ounces

  • inferred: 114.65 million tonnes averaging 0.75 g/t for 2.75 million ounces

In November the company closed a private placement of $5.99 million.

Of the 14,520-hectare project, Aurvista holds 100% of 13,310 hectares, 90% of 20 hectares and 75% of 1,190 hectares.

Read more about Aurvista Gold.

Aurvista Gold selects initial drill targets to update Abitibi resources

December 12th, 2016

by Greg Klein | December 12, 2016

Analysis has identified the next seven drill locations for Aurvista Gold’s (TSXV:AVA) Douay project in Abitibi. Totalling about 3,700 metres, this phase of drilling’s intended to update resources for four of the project’s zones, Douay West, Northwest, Porphyry (Adams section) and Central, the company reported December 12. The 14,500-hectare property hosts eight zones with resource estimates along a five-kilometre northwest-southeast trend. That, in turn, sits within a 20-kilometre trend of lower-grade porphyry.

Aurvista Gold selects initial drill targets to update Abitibi resources

In a 2012 resource estimate using a 0.3 g/t cutoff, the eight zones totalled:

  • indicated: 2.69 million tonnes averaging 2.76 g/t for 238,435 gold ounces

  • inferred: 114.65 million tonnes averaging 0.75 g/t for 2.75 million ounces

Meanwhile work continues on geological, geochemical, assay and geophysical data to build a 3D model by Q1 2017. The agenda includes re-logging more than 300 historic holes totalling 98,135 metres. About 4,000 samples of historic core have been sent for gold-copper-zinc assays. The core also underwent analysis with a hand-held XRF device to take magnetic and conductive readings.

In addition, a mapping program focused on the property’s 10-kilometre by three-kilometre Adam Creek area “that encompasses the former Douay-style mineralization sector containing the higher- and lower-grade gold zones associated with the nine individual east-west shear zones and three subparallel structural domains,” Aurvista stated. Fifty-eight grab samples were collected west of the area.

Last month the company closed a private placement of just under $6 million.

Read more about Aurvista Gold.

BonTerra Resources hits 64.3 g/t gold over 2 metres, adds 500 metres to strike in Abitibi

December 9th, 2016

by Greg Klein | December 9, 2016

Two high-grade intercepts in separate holes merge two zones, taking BonTerra Resources’ (TSXV:BTR) Gladiator project to 1.2 kilometres in strike. Once considered a parallel body, the Rivage zone now forms a 500-metre addition to Gladiator, which has been outlined to a depth of 650 metres, the company reported December 8. A previously stated ambition to combine the zones was realized with the first two holes targeting the gap.

The two intercepts show:

Hole BA-16-40

  • 64.3 g/t gold over 2 metres, starting at 152 metres in downhole depth

BA-16-42

  • 8.7 g/t over 3 metres, starting at 507 metres
BonTerra Resources hits 64.3 g/t gold over 2 metres, adds 500 metres to strike in Abitibi

Two rigs will work through the winter
on BonTerra’s 25,000-metre campaign.

True widths weren’t provided.

These assays follow a high-grade batch released last month, featuring one intercept of 70 g/t gold over 5.5 metres. With two rigs now in action, drilling continues on a program of up to 25,000 metres that’s slated to continue through winter.

The 7,563-hectare property has a 2012 resource estimate using a 4 g/t cutoff to show:

  • inferred: 905,000 tonnes averaging 9.37 g/t for 273,000 ounces gold

BonTerra’s Larder Lake project in Ontario’s Cadillac-Larder Lake fault zone hosts two deposits with resources that the company considers historic, non-43-101:

Bear Lake

  • inferred: 3.75 million tonnes averaging 5.7 g/t for 683,000 ounces gold

Cheminis

  • indicated: 335,000 tonnes averaging 4.07 g/t for 43,800 ounces gold

  • inferred: 1.39 million tonnes averaging 5.2 g/t for 233,400 ounces

Another 59 holes totalling over 25,000 metres were drilled since the historic estimate, giving BonTerra data to evaluate for an updated resource.

Read more about BonTerra Resources.

Opportunism knocks

December 5th, 2016

First Mining Finance found bad times beneficial for good deals

by Greg Klein

Struggling junior? Not this company. Since its trading debut in April 2015, First Mining Finance TSXV:FF has compiled 25 projects covering some 300,000 hectares, from early stage to a PEA with 4.4 million gold ounces indicated. Just as aggressively, the company boosted its treasury to a current $35 million. Now First Mining looks forward to a $21-million exploration and development program for 2017 that includes 47,000 metres of drilling.

“We were able to execute on the vision of the company, which last year was to take advantage of the bear market and acquire projects,” VP of investor relations Derek Iwanaka explains. “I don’t know of any other company that was able to acquire as many projects, or projects as good as we got, during that period.”

First Mining Finance found bad times beneficial for good deals

Located in northwestern Ontario’s Birch-Uchi greenstone belt,
First Mining’s 32,448-hectare Springpole flagship has an
updated PEA scheduled for next year.

Certainly there were deals to be had for canny acquisitors. But that was while many other companies faced financing difficulties. First Mining bucked the trend last August by closing a $27-million private placement. How did they pull that off?

“Quite easily,” responds Iwanaka. “We were literally turning down millions of dollars. We had over $70 million in orders but we didn’t want that kind of dilution. So we just took the $27 million. That should carry us for at least the next few years, including all the drilling and overhead.”

First Mining seems to have something that eludes others.

“First of all we have Keith Neumeyer at the helm, who runs a multi-billion-dollar company as it stands,” says Iwanaka. “Keith has been adept at starting companies during very bad times and manoeuvring them so when times are good we can reap the rewards for our shareholders.”

Among companies founded by the First Mining director were First Quantum Minerals TSX:FM and First Majestic Silver TSX:FR, where Neumeyer’s president/CEO. First Majestic acts as a sort of mentor to First Mining, placing some FR directors in FF’s management and board, helping to get the new company started, lending it about $1 million, vending three Mexican properties and even providing office space.

Among considerations behind an acquisition are “size and quality of the project,” Iwanaka points out. “We look at projects with good grade, scalability, exploration upside. The jurisdiction’s quite important to us. We’re basically looking at North America, but not the North. We will look at South America as well. Quebec, Ontario and Newfoundland are our favourite places although we could go to other provinces too. In the U.S. we see Nevada and Arizona as fairly mining-friendly states. We could probably look at New Mexico as well. We do have some early-stage properties in Mexico, where First Majestic has its base, but we certainly focus on Canada.”

As for commodities, “we particularly like gold but silver, platinum and palladium are also attractive, as well as base metals—anything that’s exchange-tradeable.”

Other factors include “the price of the projects, the holding cost, the infrastructure. In many cases the projects we take already have roads and power lines going to them.”

If gold’s the company’s focus, the Springpole flagship explains why. Described as one of Canada’s largest undeveloped gold projects, the northwestern Ontario potential open pit came with the past owner’s 2013 PEA. Using a 0.4 g/t gold cutoff, the 2012 resource showed:

  • indicated: 128.2 million tonnes averaging 1.07 g/t gold and 5.7 g/t silver for 4.41 million ounces gold and 23.8 million ounces silver

  • inferred: 25.7 million tonnes averaging 0.83 g/t gold and 3.2 g/t silver for 690,000 ounces gold and 2.7 million ounces silver

First Mining has work underway to bring the resource and PEA up to date. But looking back at 2013, the report calculated a post-tax NPV of US$388 million using a 5% discount, with a 13.8% post-tax IRR. Initial capex came to US$438 million with payback in 35 months of an 11-year mine life.

First Mining Finance found bad times beneficial for good deals

Visible gold was one attraction of the Goldlund project,
which has another 27,000 metres of drilling planned.

“We expect the updated PEA will be even more robust,” Iwanaka says. “The U.S. dollar has appreciated since 2013, when it was at par. We’re also looking at increasing the recovery and the pit shell. Those three things could substantially improve the economics and we hope to have the new PEA out probably by the first half of next year.”

With assays pending, a four-hole, 1,712-metre fall program provided metallurgical fodder. Next summer’s agenda calls for another 6,000 metres of infill to upgrade the resource. In the meantime, pre-permitting environmental and baseline work will soon begin.

A newer acquisition gets even more rig attention next year. Goldlund, about 60 kilometres north of Dryden and roughly 200 klicks south of Springpole, has 27,000 metres planned to upgrade the resource and work towards an eventual PEA. The former open pit and underground operation came with an estimate that First Mining considers an historic non-43-101. Using a 0.4 g/t gold cutoff, it showed:

  • measured and indicated: 19.1 million tonnes averaging 1.94 g/t for 1.19 million ounces gold

  • inferred: 25.8 million tonnes averaging 2.51 g/t for 2.08 million ounces

Cameron, maybe another 100 kilometres south of Goldlund, gets up to 9,000 metres of infill to pump up the measured and indicated prior to PEA. Using a 0.5 g/t cutoff, a 2015 resource from Chalice Gold Mines TSX:CXN showed:

  • measured: 3.72 million tonnes averaging 2.64 g/t for 316,000 ounces gold

  • indicated: 4.1 million tonnes averaging 1.92 g/t for 253,000 ounces

  • inferred: 14.5 million tonnes averaging 1.92 g/t for 894,000 ounces

Moving to southwestern Newfoundland, Hope Brook will see 5,000 metres of exploration and infill. A high 3 g/t gold cutoff gives the current resource:

  • indicated: 5.5 million tonnes averaging 4.77 g/t for 844,000 ounces gold

  • inferred: 836,000 tonnes averaging 4.11 g/t for 110,000 ounces

Again, a resource upgrade precedes a PEA, this one slated for late 2017.

Back in Ontario and roughly 110 kilometres northeast of the Springpole flagship, autumn drilling has wrapped up at Pickle Crow. Assays from the nine-hole, 1,319-metre campaign are expected in early 2017. The former mine came with a 2011 inferred resource that used a 2.25 g/t gold cutoff for an underground deposit and a 0.35 g/t cutoff for an open pit deposit:

Underground

  • 6.52 million tonnes averaging 5.4 g/t for 1.14 million ounces gold

Open pit

  • 3.63 million tonnes averaging 1.1 g/t for 126,000 ounces

Total

  • 10.15 million tonnes averaging 3.9 g/t for 1.26 million ounces

With assays to come, drilling to do and announcements for other North American projects anticipated, First Mining plans a steady news flow, says Iwanaka.

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.

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.

Stornoway Diamond completes first sale

November 23rd, 2016

by Greg Klein | November 23, 2016

Diamantaires in Antwerp got their first look at Quebecois gems over the last nine days, spending $10.2 million on 38,913 carats from Stornoway Diamond’s (TSX:SWY) Renard mine. The average price came to US$195 per carat.

Stornoway Diamond completes first sale

Renard came in ahead of schedule
for construction, processing and sales.

“Pricing met or was close to our expectations on most items,” president/CEO Matt Manson said. “Recent events in India surrounding demonetization have impacted pricing and demand for certain smaller and lower-quality items and, as a result, a quantity of these were withdrawn from the sale. These will be sold at a later date. Because of this, and because of a higher than expected proportion of small diamonds recovered during the ramp-up period, the result of this first sale cannot be taken as representative of the longer-term pricing profile of the project.”

The sale took place two months earlier than anticipated. Three more sales have been scheduled for Q1 2017.

Having begun ore processing in July, Renard has already surpassed the fiscal year’s guidance of 220,000 carats at an average grade of 97 carats per hundred tonnes. As of November 15 the mine gave up 261,353 carats, averaging 107 cpht. Stornoway credited “a better than expected mix of ore available within the open pit for processing.”

The company expects to reach commercial production, 60% of capacity, by year-end. Stornoway estimates average production will reach 1.8 million carats annually for the mine’s first 10 years, selling at an average $155 per carat in March 2016 terms.

Renard has a 14-year life expectancy.

About 100 kilometres south, Stornoway holds the Adamantin exploration project, where 11 kimberlites drilled so far failed to reveal diamonds.

NRG Metals completes due diligence on Argentinian lithium properties

November 21st, 2016

by Greg Klein | November 21, 2016

Among the companies active in South America’s Lithium Triangle, NRG Metals TSXV:NGZ has finished due diligence on two properties that would comprise the Carachi Pampa project in northwestern Argentina. Totalling 6,387 hectares, the contiguous properties sit in an area hosting geological features common to other lithium-rich salars in the region, the company stated on November 18. “The lithium target is a paleo salar (basin) at depth that has the potential to host lithium-enriched brines.”

NRG Metals completes due diligence on Argentinian lithium properties

NRG sees potential for lithium-enriched brines
in the Lithium Triangle’s Carachi Pampa project.

Located 40 kilometres from the town of Antofagasta de la Sierra at about 3,000 metres in elevation, the properties have winter access, a paved road 10 kilometres away and nearby services.

NRG has retained experienced lithium explorers Rojas and Associates and Sergio Lopez and Associates to review the project, with Rojas to complete a 43-101 technical report.

The properties are subject to different four-year purchase agreements, according to an LOI announced September 21. With all dollar figures in U.S. currency, one property calls for $120,000 on signing a definitive agreement, $200,000 in each of three annual payments and $600,000 at the end of the fourth year. A 1% NSR applies, which NRG may buy back for $1 million.

The other project would cost $160,000 on signing, $100,000 in two annual payments, $250,000 in year three and $625,000 in year four. Again, the company may buy back the 1% NSR for $1 million.

NRG offered a private placement up to C$1 million. Additionally, the company has negotiations underway on other properties.

In October NRG announced a management team for its Argentinian subsidiary, NRG Metals Argentina S.A. Executive director James Duff has written several 43-101 reports for Argentinian projects and served as COO of McEwen Mining TSX:MUX acquisition Minera Andes and president of South American operations for Coeur Mining NYSE:CDE.

Non-executive director José Gustavo de Castro is a chemical engineer with extensive experience in the evaluation and development of Argentinian lithium projects including the continent’s largest lithium producer, FMC Corp’s Hombre Muerto operation.

Manager of business development and corporate relations José Luis Martin’s 35-year career includes senior positions with Galaxy Lithium S.A. and Rio Tinto’s (NYSE:RIO) Argentinian projects.

Director Jorge Vargas specializes in property, mining and business law in Argentina.

Also last month NRG announced plans to spin out other assets to concentrate on lithium. The portfolio currently includes the LAB graphite project in Quebec and the Groete gold-copper resource in Guyana.