Tuesday 6th December 2016

Resource Clips


Posts tagged ‘silver’

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.

Diamond explorer Dunnedin Ventures to create gold-copper spinco

November 23rd, 2016

by Greg Klein | November 23, 2016

With a gold-copper asset in British Columbia and a diamond project with gold prospects in Nunavut, Dunnedin Ventures TSXV:DVI proposes to distribute its portfolio between two companies. On November 23 Dunnedin announced plans to spin out the non-diamond assets into a new listing.

Diamond explorer Dunnedin Ventures to create gold-copper spinco

The company currently holds the 60,000-hectare Kahuna diamond project in Nunavut, where an inferred resource for two kimberlites totals 4.02 million carats, using a +0.85 mm cutoff. Till samples collected last year also showed anomalous gold of 50 ppb or more in 84 of 129 samples.

Meanwhile previous drill results from Dunnedin’s 4,000-hectare Trapper porphyry project in northwestern B.C. showed strong gold intercepts, with silver, lead and zinc showings as well.

“We believe that separate corporate vehicles for diamond and metal assets will yield the best long-term value to shareholders,” said CEO Chris Taylor.

Subject to approvals, Trapper and rights to gold at Kahuna would go to a newly created subsidiary with working capital for exploration. The new company’s shares would be distributed to Dunnedin shareholders on a pro rata basis. The new company would apply for a TSXV listing.

Dunnedin shareholders will vote on the proposed spinout early next year.

Dunnedin also plans to accelerate expiration of over six million warrants to December 23. Should all warrants be exercised, proceeds would come to about $632,708.

Read more about Dunnedin Ventures.

See Chris Berry’s report on long-term diamond demand.

Drilling confirms 3D model at Far Resources’ Manitoba lithium project

November 17th, 2016

by Greg Klein | November 17, 2016

With Phase I now complete, Far Resources CSE:FAT says all seven holes of the 1,142-metre campaign intersected spodumene-bearing pegmatite on the Zoro property in central Manitoba. Assays are pending but the program confirms a 3D model of dyke #1 compiled from historic drilling data and more recent field work, the company reported November 17.

Drilling confirms 3D model at Far Resources’ Manitoba lithium project

Chip samples taken last summer from historic
trenches assayed between 1.46% and 6.35% Li2O.

“We are pleased that the first drill program on the property for 60 years has confirmed our geological model and interpretation,” said president/CEO Keith Anderson. “This will allow us to plan and optimize further drilling with confidence as we expand on the Phase I program.”

The 3,000-hectare property hosts seven known spodumene-bearing dykes. In July the company released assays from chip samples collected that summer from three historic trenches, with results ranging from 1.46% to 6.35% Li2O.

The Snow Lake-region property can be accessed via highway and helicopter, or by boat, road and ATV. Local infrastructure also includes hydro lines five kilometres south and rail another 25 kilometres.

Far Resources also holds an option on the Winston property in New Mexico, which hosts two past-producing gold-silver mines. In October the company offered a private placement of up to $200,000.

Infographic: Countries of origin for raw materials

November 16th, 2016

Graphic by BullionVault | text by Jeff Desjardins | posted with permission of Visual Capitalist | November 16, 2016

Every “thing” comes from somewhere.

Whether we are talking about an iPhone or a battery, even the most complex technological device is made up of raw materials that originate in a mine, farm, well or forest somewhere in the world.

This infographic from BullionVault shows the top three producing countries of various commodities such as oil, gold, coffee and iron.

Infographic Countries of origin for raw materials

 

The many and the few

The origins of the world’s most important raw materials are interesting to examine because the production of certain commodities is much more concentrated than others.

Oil, for example, is extracted by many countries throughout the world because it forms in fairly universal circumstances. Oil is also a giant market and a strategic resource, so some countries are even willing to produce it at a loss. The largest three crude oil-producing countries are the United States, Saudi Arabia and Russia—but that only makes up 38% of the total market.

Contrast this with the market for some base metals such as iron or lead and the difference is clear. China consumes mind-boggling amounts of raw materials to feed its factories, so it tries to get them domestically. That’s why China alone produces 45% of the world’s iron and 52% of all lead. Nearby Australia also finds a way to take advantage of this: It is the second-largest producer for each of those commodities and ships much of its output to Chinese trading partners. A total of two-thirds of the world’s iron and lead comes from these two countries, making production extremely concentrated.

But even that pales in comparison with the market for platinum, which is so heavily concentrated that only a few countries are significant producers. South Africa extracts 71% of all platinum, while Russia and Zimbabwe combine for another 19% of global production. That means only one in every 10 ounces of platinum comes from a country other than those three sources.

Graphic by BullionVault | posted with permission of Visual Capitalist.

First Mining Finance drilling two Ontario gold projects

November 16th, 2016

by Greg Klein | November 16, 2016

A well-financed company with an opportunistic approach to low valuations, First Mining Finance TSV:FF has begun another Ontario drill program. Announced November 15, the Pickle Crow gold project gets up to eight holes totalling 1,100 metres. The company began drilling its Springpole gold project last month.

First Mining Finance drilling two Ontario gold projects

Infrastructure remains from over
30 years of mining at Pickle Lake.

The first such program on Pickle Crow since First Mining took over PC Gold a year ago, the rig will target the western extension of the project’s Core mine trend in hopes of finding high-grade, vein-type gold.

Pickle Crow produced 1.45 million ounces of gold and 168,757 ounces of silver between 1935 and 1966.

A 2011 inferred resource 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

The property lies about seven kilometres from a provincial highway, about 400 kilometres north of Thunder Bay.

“With drilling at our Springpole gold project well underway, and with drill programs planned for our other mineral properties in the coming months, this is an exciting time for First Mining as we take the initial steps toward enhancing the value of the assets we have accumulated over the past year and a half,” said president Patrick Donnelly.

Roughly 110 kilometres southwest, the company began Springpole’s 1,500-metre program last month for metallurgical tests. First Mining plans an updated PEA for H1 2017. Springpole comes with a 2012 resource that used a 0.4 g/t gold cutoff for an open pit deposit:

  • 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’s portfolio holds 25 North American assets. Five projects in Ontario, Quebec and Newfoundland have resource estimates. The company closed a $27-million private placement in August, raising its treasury to $37.3 million at the time.

Charles Desjardins outlines his company’s plans on becoming the largest claimholder in Ontario’s Confederation Lake greenstone belt

November 14th, 2016

…Read more

Yukon Liberals break Yukon Party’s 14-year grip on Yukon power

November 8th, 2016

by Greg Klein | November 7, 2016

Press time results:

  • Yukon Liberals 11 seats, 39% of popular vote
  • Yukon Party 6, 33%
  • New Democratic Party 2, 26%

The territory’s riding names evoke mining history but repeated enticements to the sector failed to keep the Yukon Party in power. On November 7 the YP’s 14 years of majority rule came to an end as the Yukon Liberals moved from third to first place, returning to government for the first time since 2002. The red surge claimed YP leader Darrell Pasloski’s Mountainview constituency.

Liberals end Yukon Party’s 14-year grip on power

Yukon’s legislative chamber gets a new seating arrangement
as the Liberals return to power. (Photo: Yukon Legislative Assembly)

The first MLA declared elected was Klondike incumbent and Liberal leader Sandy Silver. NDP leader Liz Hanson also won re-election in Whitehorse Centre.

On mining-related issues, the month-long campaign saw the YP supporting regulatory streamlining, an exploration tax credit, funding for industry groups and support for road and power infrastructure. The party also called for “Yukon-specific curriculum for geology and earth sciences, and an experiential trades program.”

The YP castigated opposition support for the federal carbon tax, “the most significant commitment that the Liberals made with respect to the mining sector.” The incumbents said it would boost residents’ costs overall, hitting the average placer mine with more than $230,000 in additional expenses.

Liberals countered that the territory fell significantly in Fraser Institute rankings of mining jurisdictions. The most recent FI Investment Attractiveness Index places Yukon 12th of 109 jurisdictions worldwide, but last in Canada. The previous year Yukon ranked sixth worldwide. In 2012 to 2013, and 2011 to 2012, the territory scored #1 globally.

Liberals end Yukon Party’s 14-year grip on power

Former teacher and placer miner
Sandy Silver becomes Yukon’s new premier. (Photo: Yukon Liberals)

Additionally, the Liberals said the YP “botched” the S-6 amendments to the Yukon Environmental and Socio-Economic Assessment Act and created regulatory uncertainty while “legal battles with First Nation governments have resulted in huge tracts of land being off limits to mining.”

Silver argued his was the only party with “a plan to work with First Nation governments to rejuvenate the mining sector.”

A former teacher who’s worked on a placer mine, Silver joined the Yukon legislature in 2011 and became Liberal leader in 2014.

The territory hosts development, exploration, prospecting and placer mining activity, not to mention reality TV shows. But commodity prices have reduced major mines to just one operation, Capstone Mining’s (TSX:CS) Minto copper-gold-silver open pit in central Yukon.

Among the more celebrated development projects is Coffee, nabbed by Goldcorp TSX:G last May in its $520-million takeout of Kaminak Gold. Goldcorp plans to revise the project’s feasibility study, conduct further community consultations and begin initial permitting studies. The company foresees initial gold production by the end of 2020.

Victoria Gold TSXV:VIT says its Eagle gold project at the Dublin Gulch property is “expected to be Yukon’s next operating gold mine.” The two-open pit proposal reached feasibility in September and has all major permits in place, the company says.

Western Copper and Gold’s (TSX:WRN) Casino project has been sent for review to the highest level of the Yukon Environmental and Socio-Economic Assessment Board. The company intends to optimize the project design to address concerns including the height of the proposed tailings dam.

Yukon’s home to about 37,500 residents.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

October 28th, 2016

by Greg Klein | October 28, 2016

An intriguing chance find has King’s Bay Gold TSXV:KBG hoping the Trans-Labrador Highway will be a road to discovery. That’s the story behind the company’s October 27 announcement of a definitive agreement to acquire the Lynx Lake copper-cobalt property in south-central Labrador.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

Powerlines and the Trans-Labrador Highway
run adjacent to the Lynx Lake copper-cobalt property.

As Newfoundland was building the highway in 2008, a provincial contractor with prospecting experience noticed evidence of disseminated and massive sulphides, King’s Bay geologist/director Nick Rodway explains. Some geological sleuthing eventually drew the contractor to the property’s east side, where a quarry had been blasted for aggregate.

Grab samples assayed the following year showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Regional low-res magnetic surveys undertaken by the province and preliminary work in 2014 with a hand-held EM-16 device suggest strong conductors underlying the area.

Grab samples taken on the property’s west side in 2015 brought non-43-101 results up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

With a team returning to Lynx Lake next week, King’s Bay intends to conduct a sampling program to bring 43-101 results, along with further EM-16 surveys. Should all go to plan, airborne geophysics could follow this winter.

Open to year-round work, highway-accessible and with adjacent powerlines, the 20-square-kilometre property sits about 100 kilometres southeast of the town of Happy Valley-Goose Bay.

Subject to approvals, the acquisition costs King’s Bay $100,000 over three years and 900,000 shares over two years. On October 27 the company also announced a private placement of up to $1 million.

The news comes amid growing concerns over future cobalt supply. Nearly 60% of global production comes from the Democratic Republic of Congo, a country rife with political instability and conflict mining.

At the same time increased demand comes from “the energy storage revolution,” reports Benchmark Mineral Intelligence. Its data shows “2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.

“With a lithium-ion battery production surge well underway—and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from three- to 35-GWh capacity—lithium-ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

Diamond explorer Dunnedin Ventures ponders its B.C. gold-copper porphyry project

October 26th, 2016

by Greg Klein | October 26, 2016

Diamond explorer Dunnedin Ventures ponders its B.C. gold-copper porphyry project

Primarily focused on Nunavut diamond exploration, Dunnedin Ventures TSXV:DVI has launched a technical and strategic review of its Trapper gold project in northwestern British Columbia.

The 40-square-kilometre property lies adjacent to Brixton Metals’ (TSXV:BBB) Thorn project and hosts the Ring zone “with over 10 kilometres of strike surrounding a porphyry centre, with gold-rich polymetallic mineralization drilled across 2.2 kilometres and associated surface copper porphyry showings,” Dunnedin stated.

Over $4 million of exploration included a 42-hole, 8,580-metre program completed in 2011. Some highlights showed:

Hole TG-11-011

  • 1.71 g/t gold, 5.6 g/t silver, 1.01% lead and 0.25% zinc over 34.11 metres, starting at 106.89 metres in downhole depth
  • (including 92.8 g/t gold, 18.8 g/t silver, 0.13% lead and 0.12% zinc over 0.41 metres)
  • (and including 3.9 g/t gold, 27 g/t silver, 9.11% lead and 0.91% zinc over 3.39 metres)

Hole TG-11-038

  • 1.68 g/t gold, 1.8 g/t silver, 0.02% lead and 0.07% zinc over 15 metres, starting at 122.5 metres
  • (including 5.08 g/t gold, 4.4 g/t silver, 0.05% lead and 0.13% zinc over 4.23 metres)
  • (which includes 21.8 g/t gold, 11.9 g/t silver, 0.15% lead and 0.36% zinc over 0.62 metres)

Hole TG-11-039

  • 1.01 g/t gold, 2.3 g/t silver, 0.02% lead and 0.13% zinc over 30 metres, starting at 67.5 metres
  • (including 2.19 g/t gold, 2.7 g/t silver, 0.06% lead and 0.3% zinc over 2.5 metres)
  • (and including 2.98 g/t gold, 4 g/t silver, 0.04% lead and 0.09% zinc over 2.5 metres)
  • (and including 2.64 g/t gold, 2.5 g/t silver and 0.35% zinc over 2.34 metres)

Hole TG-11-040

  • 1.19 g/t gold, 1.8 g/t silver, 0.01% lead and 0.07% zinc over 27.5 metres, starting at 132.5 metres
  • (including 11.15 g/t gold, 5.7 g/t silver, 0.03% lead and 0.17% zinc over 2.5 metres)

True widths weren’t available.

“The property overlies an unusually gold-rich porphyry copper complex including drill-ready copper porphyry and gold-rich semi-massive sulphide stockwork,” commented CEO Chris Taylor. “Dunnedin is conducting a comprehensive review of this 100%-owned project to determine how best to unlock its value for shareholders.”

The company has also been finding gold on its flagship Kahuna diamond project, with evidence from 2015 till sampling—just recently evaluated for gold—and from historic rock samples.

This year’s program collected 10 times as many till samples as 2015, gathering 1,111 samples to be analyzed for diamond indicator minerals and gold. The company also staked another 25,000 hectares, increasing Kahuna to about 60,000 hectares.

Read more about Dunnedin Ventures.

See Chris Berry’s report on long-term diamond demand.

Pistol Bay Mining plans November drilling on Dixie zinc projects in Ontario

October 26th, 2016

by Greg Klein | October 26, 2016

It’s neither the land of cotton nor of traditional jazz, but of zinc with additional metals. And that’s why Pistol Bay Mining TSXV:PST has a November drill program planned for three of its western Ontario Dixie properties. Totalling about 1,900 hectares, Dixies 17, 18 and 19 host lenses of volcanogenic massive sulphides with zinc, copper, silver and minor gold in the Confederation Lake greenstone belt southeast of Red Lake.

Pistol Bay Mining plans November drilling on Dixie zinc projects in Ontario

All three have historic zinc-copper assays.

A review of previous geophysics will help determine drill targets for the three zones. Additionally, Pistol Bay proposes confirmation holes for Dixie 17 and 18.

Also on October 25, the company announced a private placement of up to $820,000. Pistol Bay closed a $563,450 placement in August.

Earlier this month the company announced a letter of intent to acquire regional properties from AurCrest Gold TSXV:AGO, which would make Pistol Bay the greenstone belt’s largest claimholder. The 5,136-hectare package includes a zinc-copper-silver resource and an historic, non-43-101 estimate.

In Saskatchewan’s Athabasca Basin, the company has a joint venture with a Rio Tinto NYSE:RIO subsidiary on the C-5 uranium property. Having earned 75% of its option so far, Rio intends to acquire the full 100%.

See an infographic: Eleven things every metal investor should know about zinc.