Sprott takes 11.3% stake in Generation Mining

Generation Mining Ltd. [GENM-CSE; GENMF-OTC] said financier Eric Sprott has taken an 11.30% stake in the company (on a partially diluted basis) after participating in Generation’s $10.7 million bought deal offering.

The bought deal offering and concurrent non brokered private placement consisted of 20.6 million units priced at 52 cents per unit. Each unit consists of one common share and one-half of a common share purchase warrant. Each warrant can be used to acquire one common share at a price per warrant share of 75 cents for a period of 24 months from the date of closing.

Under the bought deal offering, the company issued 91.2 million units at the issue price, a move that raised just over $10 million. Under the non-brokered offering, the company issued 1.35 million units at the issue price, raising another $700,000.

Generation said Eric Sprott, via an Ontario numbered company, acquired 9.6 million bought deal offering units. As a result, Sprott beneficially owns or controls 9.6 million common shares and 4.8 million warrants, representing 7.83% of the issued and outstanding shares of Generation on a non-diluted basis, and 11.3% on a partially-diluted basis, assuming that the warrants are exercised.

Prior to the offering, Sprott did not own any Generation Mining shares. On Friday, the shares fell 3.5% or $0.02 to 55 cents. The shares trade in a 52-week range of 75 cents and 12 cents.

The company said proceeds will be used for exploration and development of the company’s Marathon Palladium Project, which hosts the largest platinum group metal mineral resources in North America, as well as for working capital and general corporate purposes.

More than 85% of palladium production is used in catalytic converters in gasoline-burning automobiles. Palladium is also used in electronics, medicine and jewelry. It is a key component in the production of fuel cells.

Generation acquired a 51% stake in the Marathon Property from Sibanye Stillwater [SBGL-NYSE ADRs] in July, 2019. It can increase its interest to 80% by spending $10 million over a period of four years. More than $3 million of this amount has already been spent.

However, Stillwater has certain back-in rights that can bring its interest in the property back to 51% after Generation Mining has earned an 80% stake.

Located about 215 km east of Thunder Bay and 8 KM north of Marathon, northwestern Ontario, the Marathon property was developed by a number of companies between 1985 and 2010. That was before it was acquired by Sibanye-Stillwater in 2017.

More than 200,000 metres of drilling in over 1,000 holes have been completed to date.

Results of a Preliminary Economic Assessment announced in January, 2020, indicate that the property can produce an average of 194,000 palladium-equivalent ounces per year over a lifespan of 14 years. The estimate includes credits for copper, platinum, gold and silver.

Preproduction capital is estimated at $431 million, plus $277 million for sustaining capital.

The PEA estimates that actual palladium production will average 107,000 ounces annually over the mine life, at an all-in-sustaining cost of US$586/oz, net of by-product credits.

The PEA is based on Measured and Indicated Resources in the Marathon deposit, and did not include the Geordie and Sally deposits, which are located on the same property.

In a December 2, 2019 press release, the company said total Measured and Indicated R

esources on the property stand at 8.7 million palladium equivalent ounces. That includes 7.1 million ounces in the marathon Deposit.

The Marathon Property covers 22,000 hectares or 220 km2.

New Gold reposition for long term success

New Gold Inc. [NGD-TSX, NYSE American] on Thursday February 13 released operational outlook for 2020, which includes a 34% reduction to $642 million in the life-of-mine capital requirement for its Rainy River Mine in Ontario, where the projected lifespan has been reduced to eight years from 13.

The company also posted a slightly higher than expected adjusted net loss from continuing operations in the 2019 fourth quarter of $28 million ($0.04 per share) and $47 million ($0.08) for the year.

On Thursday, New Gold shares fell 12.4% or 14 cents to 99 cents on volume of 2.34 million. The shares are currently trading in a 52-week range of 82 cents and $2.03

New Gold is a Canada-focused intermediate gold mining company which produced 486,141 gold equivalent ounces in 2019 (comprised of 322,557 ounces of gold, 596,452 ounces of silver, and 79.4 million pounds of copper).  Its key operating assets are the Rainy River Mine located northwest of Fort Frances, Ontario and the New Afton Mine west of Kamloops, British Columbia.

Of the gold equivalent ounces produced in 2019, 257,051 ounces came from Rainy River, while New Afton delivered 229,091 ounces.

New Gold’s portfolio also includes the Blackwater development project southwest of Prince George, B.C., which hosts 8.2 million ounces of gold and 60.8 million ounces of silver reserves.

“In 2019 we began a journey to reposition the company for long-term success and sustainable shareholder value creation and we are encouraged by the progress we made as we have delivered on all our key commitments that position the company for the future,” said New Gold CEO Renaud Adams.

“With the release of our updated life-of-mine plans, we now begin a new phase for the company as we position Rainy River for profitable operations that drive free cash flow generation by the end of 2020 that will sustain over the life of the mine,” he said.

“We will also focus on advancing development of the New Afton C-Zone and expand our exploration program at both operations.’’

This year, the company expects to produce between 465,000 and 515,000 ounces of gold equivalent at an all-in-sustaining cost of US$1,260 to US$1,340 an ounce.

“In future years, there remains the potential to extend the underground mine life [at Rainy River] beyond 2028 should the prevailing gold price support the development of additional mining areas during that period and or exploration efforts increase the resource inventory,” Adams said.

Meanwhile, New Gold also tabled results from underground exploration drilling at New Afton.

The company said a drilling program completed in 2019 has identified gold and copper mineralization within the newly defined East Zone directly beneath the sublevel cave (SLC) and to the east of the planned C-Zone block cave. The company said results to date confirm the East Extension as 300 by 40 metres in plan and a 700-metre down-dip target area.

Highlights from drilling include 108 metres of 1.82 g/t gold and 2.43% copper.

The zone has been subdivided based upon different styles of alteration and mineralization in two distinct zones defined as upper and lower East Extension, which appears to represent the down-plunge extension of the Afton pit, East cave and SLC Zone.

Upper East Extension encompasses the higher 250 metres of the area with the lower East Extension representing the down-plunge continuity of it. Both zones are open to the east.

The New Afton Mine occupies the site of the historic Afton Mine and includes an open pit, underground workings, historic support facilities, a new concentrator and recently constructed tailings facility. The New Afton deposit extends to the southwest from immediately beneath the Afton Mine open pit.

The New Afton delineation and exploration programs completed in 2019 include three key initiatives:

  • Underground drilling to delineate and expand mineral resources within and beneath the SLC Zone, located to the east of the planned B3 block cave;
  • Underground exploration drilling of the D-Zone target to test the potential for additional mineral resources down plunge of the C-Zone block cave mineral reserve;
  • Surface geophysical and geochemical surveys along the prospective Cherry Creek trend located within 3 km of the New Afton mill.

From June, 2019, the company completed 13 holes totalling 7,160 metres in the East Extension zone.  A follow-up drilling program has been designed for 2020 to define the extension of the mineralization in this area and to delineate a mineral resource that may be incorporated into the company’s 2020 year-end mineral reserve and mineral resource update.

Irving raising US$4 million for Japan gold exploration

Irving Resources Inc. [IRV-CSE; IRVRF-OTC] said Thursday February 13 that it has arranged to raise US$4 million via a private placement with Newmont Goldcorp Corp. [NGT-TSX; NEM-NYSE].

Of that amount, US$3.6 million will be allocated towards exploration at the company’s Omu Project in Hokkaido, Japan. The remaining US$400,000 will be allocated towards an alliance between Irving and a Newmont affiliate which has been established to identify and exploit mineral exploration opportunities in Japan, a country that in recent years has not been renowned for its gold mining operations.

This is largely because the Japanese government ordered almost all of the country’s gold mines to close during World War II so that mining engineers could be redirected to base metal mines in support of the war effort. After the war, very few of the mines resumed production, resulting in a hiatus in exploration.

However, a combination of the global economic crisis and the Fukushima nuclear power plant disaster in March 2011, created the need for economic stimulus.

Changes to the mining law in 2012 subsequently opened the door for foreign companies like Irving, which could not previously operate independently in Japan.

In May 2016, Irving incorporated a wholly-owned Japanese subsidiary company called Irving Resources Japan Godo Kaisha (GK), a move that enabled the company to acquire and hold exploration and mining rights in Japan.

Three months later, the Irving subsidiary secured the 2.98 km2 Omui mining license on the island of Hokkaido. To augment its land position, Irving has filed 55 prospecting licenses covering an additional 170.56 km2 of prospective ground encompassing the entirety of the northeast-trending Omu volcanic graben, host to multiple high-grade epithermal gold-silver veins exploited at the historic Omui and Hokuryu mines prior to World War II.

On November 5, 2019, Irving said it has encountered significant gold-silver mineralization while drilling on its Omu Gold Project.

In an update, the company said all eight widely-spaced drill holes in the Omu Sinter area of the project encountered significant gold-silver mineralization, including notable vein intercepts in seven of eight holes.

Irving has said it believes the Omu volcanic graben has the potential to host significant undiscovered high-grade veins. In April 2019, Newmont Goldcorp signalled that it shared that view by acquiring 3.7 million Irving shares for $2.16 a share, marking a total investment of US$6 million.

On Thursday, Irving said Newmont has given notice of its intent to exercise its rights to proceed with a US$4 million private placement. It said the private placement funds will be raised via the issuance of Irving common shares at a price equal to the volume-weighted average trading price for 30 trading days immediately prior to the date of Newmont giving its exercise notice.

Irving advanced on the news, rising 1.6% or $0.06 to $3.88. The shares are currently trading in a range of $1.50 and $4.60.

Klondike drills 83 metres of 0.6 g/t gold

Klondike Gold Corp. [KG-TSXV; KDKGF-OTC; LBGF-FSE] on Thursday February 13 released more assay results from 2019 drilling at the company’s Klondike District property near Dawson City, Yukon.

The latest assays are from 36 drill holes, plus one area of channel sampling, testing the Lone Star zone along the Bonanza fault on the Klondike property. Highlights include 0.6 g/t gold over 83 metres and 1.45 g/ gold over 20.2 metres at the Lone Star Zone. All channel samples contained gold, with highlight assays including 28.2 g/t gold over 4.0 metres.

Klondike Gold shares were unchanged at 28 cents on Thursday and now trade in a 52-week range of 45 cents and 19 cents.

Ever since the original Klondike discoveries triggered a massive gold rush in 1898, prospectors have been baffled by their inability to find the bedrock source of all the placer gold which has been extracted from the streams and tributaries around Dawson City in the Yukon.

It has been estimated that the Klondike gold fields may have produced as much as 20 million ounces of gold from placer mines.

Yet that same area has yielded only 1,200 ounces of hard rock gold, most of it produced from the Lone Star Mine prior to the start of the First World War in 1914.

Klondike Gold has been working to solve the mystery by assembling a large property position in the Klondike fields south of Dawson City. The company is backed by Vancouver financier Frank Giustra, who holds a 14.6% stake in the company.

Klondike’s exploration efforts are being led by President and CEO Peter Tallman, a geologist with 35 years of experience in the mining industry. Having worked in Canada, Chile, Mexico, and Australia, Tallman is a director of another Giustra company, Fiore Gold Ltd. [F-TSXV, FIOGF-OTCQB], which has assets in Chile.

Klondike Gold is focused on exploration and development of the Lone Star gold target at the confluence of Bonanza Creek and Eldorado Creek, within a district scale property that is accessible by government-maintained roads and located on the outskirts of Dawson City.

The junior holds a 100% stake in the Klondike District property, which covers 586 km2.

On Thursday, Klondike said the 2019 drill program was designed to test the Bonanza fault for Lone Star style mineralization over an additional 750 metres of strike length to the southeast of the Lone Star Zone, in an area of high gold-in-soil values up to 0.8 g/t gold. It said the program was successful in intersecting broad zones of gold mineralization containing local intervals of high-grade gold.

The company’s latest interpretation, however, suggests the main Lone Star mineralized horizon has been fault offset slightly south and was untested in 2019. It remains a high priority target for 2020 drilling.

Klondike also said mineralization in drill holes reported Thursday extends the known envelope of the Lone Star zone mineralization along the Bonanza Fault for up to 400 metres to the east and provides information for drill targeting further potential expansion in 2020.

Pretium releases 2020 forecasts, searches for CEO

Pretium Resources Inc. [PVG-TSX, NYSE] on Wednesday February 12 released it production guidance for 2020, and said it is looking for a President and CEO to replace Joseph Ovsenek who has agreed to continue in the role until a successor is found.

On Wednesday, Pretium shares were down 22% after the company also released its 2019 fourth quarter and year end results.

Pretium’s flagship asset is the Brucejack gold mine. Brucejack is a high-grade gold underground mine located in the Golden Triangle region of northwestern British Columbia, approximately 65 km north of Stewart. The mine produced 354,405 ounces in 2019 at an all-in-sustaining cost of US$888 an ounce. That was down from 376,012 ounces of gold at an all-in-sustaining cost of US$764 an ounce in 2018.

The operation is expected to produce 325,000 to 365,000 ounces of gold in 2020 at an AISC of US$901 to US$1,060 an ounce, according to Pretium’s latest forecasts.

“In 2019, we beat the upper end of our revised gold production guidance and the lower end of our AISC guidance of 350,000 ounces and US$900/oz of gold sold,” said Ovsenek. “In addition, we substantially exceeded our debt reduction target. Brucejack continues to be consistently profitable and a strong cash generator.”

However, 2020 production forecasts are lower than expected and Pretium’s share price declined on the news, falling from the above noted 22% or $2.76 to $9.96 on volume of 2.8 million. The shares are currently trading in a 52-week range of $9.03 and $18.30.

Scotiabank was expecting to see 2020 production guidance of 405,000 ounces.

Pretium said its cost estimates for 2020 include costs associated with continued lateral development at a rate of approximately 1,000 metres per month through 2020. Lateral development will focus on opening the mine on the 1080 level and Brucejack Fault Zone in the first half and stope development in the second half of 2020.

“The increased development should provide sufficient access to build the stope inventory required to allow mining operations to optimize stope blending and provide alternative stopes for mining if required,” the company said.

This year’s cost forecasts also include drilling that the company said is needed to increase the volume of grade information that is necessary to enhance mine planning and optimize gold production.

Pretium is seeking a new President and CEO after former Newmont Mining Corp. President and CEO Richard O’Brien took over as the role of board chair following the retirement of Robert Quartermain at the end of 2019.

Pretium’s chief geologist Warwick Board has also departed from the company.

Pretium said it is planning to release an updated life-of-mine plan and updated mineral resource and mineral reserve estimate for the Brucejack Mine by the end of March 2020, as previously announced.

Premier Gold upsizes share offering to $38 million

Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] said Wednesday February 12 that it is raising $38 million from a share offering, marking an increase of $5 million compared to the previous target.

Due to strong demand, the size of the previously announced offering has been raised to 25.3 million common shares at $1.50 a share, generating gross proceeds of $38 million, the company said in a press release. The proceeds could be higher if the underwriting syndicate exercises a green shoe option to purchase an additional 3.8 million shares to cover over-allotments.

Premier Gold shares were down 5% or $0.08 to $1.51 on volume of 1.2 million on Wednesday. The shares are trading in a 52-week range of $1.41 and $2.55.

Premier Gold is a gold producer as well as an exploration and development company with a focus on properties in Canada, the United States and Mexico. Premier is aiming to emerge as a low-cost, mid-tier gold producer via its two Mexican gold mines, South Arturo and Mercedes, and through future mine development opportunities at Hardrock and McCoy-Cove in Nevada.

On Wednesday, the company said net proceeds of the offering are expected to be used for development, expansion and working capital requirements of the Mercedes and South Arturo mines and the McCoy-Cove Project. Part of the proceeds are also earmarked for general corporate purposes and may be used to reduce the company’s debt under Premier’s revolving term credit facility. The offering is expected to close on February 28, 2020.

Premier recently said a challenging year at its Mercedes Mine in Sonora, Mexico, prevented the company from achieving its production targets in 2019.

After producing 67,427 ounces of gold and 192,829 ounces of silver in 2019, which was below guidance of between 75,000 and 85,000 gold ounces, the company is currently working on initiatives to ensure increased and more reliable production for 2020 and beyond.

Mercedes is a 2,000 tonne-per-day underground gold-silver mine located in Sonora State in northern Mexico, about 250 km northeast of Hermosillo. As of December 31, 2019, proven and probable gold reserves stood at 395,000 ounces at a grade of 3.63 g/t.

The project also hosts proven and probable silver reserves of 2.72 million ounces grading 25.05 g/t.

In 2019, Mercedes produced 59,901 ounces of gold and 191,306 ounces of silver.

At Mercedes, excessive dilution led to lower than planned grades and therefore fewer than planned gold ounces produced during the year.  However, the company said it identified several factors contributing to the lower than planned grades and is working on initiatives to ensure increased and more reliable production for 2020 and beyond.

“We believe our continued exploration successes at Mercedes and the resumption of mining at South Arturo will contribute to production for years to come and provide a platform four our company’s growth,’’ said Premier Gold President and CEO Ewan Downie.

Premier is completing a 42,000-metre exploration and delineation core drilling program at Mercedes. The aim is to delineate new mineral resources in the Lupita Extension area as well as confirming potentially important discoveries at the San Martin and Neo areas.

The company has said commercial production was declared more than three months ahead of schedule at South Arturo’s El Nino Mine. Ore tonnes mined during the fourth quarter were considerably above plan the company said.

Blue Star Completes Acquisition of the Ulu Gold Property

Blue Star Gold Corp. [BAU-TSXV] is pleased to report the Company has completed the acquisition of the Ulu Gold Property (the “Ulu”) from Mandalay Resources Corp. (“Mandalay”). Supplementing its high-grade gold resources, the Ulu includes a substantial inventory of capital equipment, a Weatherhaven camp with shop and a 1,200 m long airstrip. The mineral rights in the form of a Crown mining lease were transferred on January 7, 2020 to Blue Star. The Kitikmeot Inuit Association (the “KitIA”) agreed on October 1, 2019 to transfer surface access in the form of a land use licence, and on September 10, 2019 the Nunavut Water Board (“NWB”) authorized the assignment of the Ulu Water Licence 2BM-ULU1520 to Blue Star.

Through the final steps in the Ulu acquisition process, Blue Star has:

  • Paid to Mandalay the final payment of $450,000 in cash upon transmittal of the Ulu mining lease to Blue Star Gold;
  • Arranged for an arm’s length third party to purchase Mandalay’s 5,000,000 Blue Star shares;
  • Posted remediation security required by the KitIA and the NWB in the amounts of $750,000 and $1,685,542 respectively;
  • Assumed future reclamation and monitoring obligations associated with Ulu in a manner satisfactory to the KitIA and the NWB; and,
  • Received from Mandalay the transfer of $1,685,542 that was released by the Crown Indigenous Relations and Northern Affairs Canada respecting Mandalay’s remediation account for the Ulu in relation to the water licence.

The Ulu Gold Property is located approximately 50 km north of the Arctic Circle in the Kitikmeot region of western Nunavut. The site of the future deep-water port at Grays Bay is 100 km to the north of the lease and the proposed route corridor for the all-weather Grays Bay road passes in close proximity to Ulu. The Property consists of the renewable 21-year Mining Lease No: 3563 with an expiry date of Nov 18, 2038 and covers an area of approximately 947 ha. The lease hosts an advanced gold project that between 1989 and 2012 saw significant exploration and development. The past work includes approximately 1.7 km of underground development and approximately 405 diamond drill holes that produced 97,820 m of core. Supplementing the exploration data, metallurgical testing by Blue Star on the Flood Zone gold mineralization has shown that gold is recoverable in amounts greater than 90% by gravity, flotation and cyanidation.

Cannot view this image? Visit: https://i1.wp.com/orders.newsfilecorp.com/files/2421/52277_6a0d232f44a9a9b5_002.jpg?w=1280&ssl=1
Figure 1: Blue Star’s gold occurrences and resource zones located within the Ulu Gold Property and the Hood River Concessions.

To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/2421/52277_6a0d232f44a9a9b5_002full.jpg

The Company filed on SEDAR its Ulu mineral resource in July 2015 (see Table One). Using a gold cut-off grade of 4 grams per tonne (“g/t”), the overall resources were reported as 2.50 million (“M”) tonnes grading 7.53 g/t Au for 605,000 gold ounces in the Measured and Indicated Categories and 1.26M tonnes at a grade of 5.57 g/t Au for 226,000 gold ounces in the Inferred Category. The Flood Zone contains the bulk of the Ulu gold resource and is open on-strike and at depth. The deepest intersection of mineable width is 14.9 g/t Au over 7.7 m in BHP’s drill hole, 90VD-75, at 610 m below surface.

Cannot view this image? Visit: https://i1.wp.com/orders.newsfilecorp.com/files/2421/52277_capture.jpg?w=1280&ssl=1

Figure 2: Blue Star’s detailed plan of the +5 km-long Robb Trend gold occurrences within the Ulu Gold Property and the north-western part of the Hood River concessions.

To view an enhanced version of this Figure 2 , please visit:
https://orders.newsfilecorp.com/files/2421/52277_6a0d232f44a9a9b5_004full.jpg

Stephen Wilkinson, the Company’s CEO and President commented, “With the Ulu transaction complete, Blue Star has advanced beyond junior explorer status. The entire Blue Star team is reinvigorated by this event, seeing the path forward to our targeted gold operations. Our Company now possesses assets with tangible value in the form of its measured and indicated gold resources supplemented by the infrastructure, capital equipment and Ulu’s significant database. We intend to be working as soon as practical to begin our 2020 programs of remediation at Ulu and exploration on both Ulu as well as Hood River where we believe there should be another gold trend similar to the Robb Trend.”

Table One: The Company filed its technical report, titled “Technical Report on the Ulu Gold Property, Nunavut, Canada” dated July 10, 2015 from which the table of resources was taken. Gary Giroux, P.Eng. of Giroux Consulting Inc., Bob Singh, P.Geo. of North Face Software Ltd. and Paul Cowley, P.Geo. of Buena Tierra Developments Ltd., are Qualified Persons as defined in NI 43-101 and were responsible for the preparation of the Technical Report.

Classification Gold Tonnage Gold Grade Gold Contained
  Cut-off (g/t) Tonnes g/t Oz
 Flood Zone  
Measured > 4.0 1,000,000 8.48 272,000
Indicated > 4.0 1,500,000 6.90 333,000
Measured & Indicated > 4.0 2,500,000 7.53 605,000
 
Inferred > 4.0 891,000 5.57 160,000
 Gnu Zone  
Inferred > 4.0 370,000 5.57 66,000
Total Flood and Gnu Zones  
Measured & Indicated > 4.0 2,500,000 7.53 605,000
Inferred > 4.0 1,261,000 5.57 226,000

Notes to the Resource Estimate

  1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
  2. Confidence in the estimate of Inferred Mineral Resources is insufficient to allow the meaningful application of technical and economic parameters. There is no guarantee that all or any part of a mineral resource can or will be converted into a mineral reserve.
  3. The mineral resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
  4. The reliability and accuracy of downhole surveys in 188 of 313 drill holes in the resource area are in question due to their lack of proper measurements. For these holes, the QPs have imposed an average demonstrated predictability of drill hole deflection that are present in holes on the property that do have proper downhole measurements. In the opinion of the QPs, this is a more reasonable assumption than assuming straight line drill holes.
  5. The following parameters were used to derive the cut-off: CA$100/t mining costs, CA$25/t processing costs and CA$10/t G&A; transporting gravity and flotation concentrate to the Lupin to produce dore with a CA$25/t transport cost; CA$1500/oz gold price; process recoveries of 90%, smelter payables of Au at 96% and refining charges of Au CA$12/oz.

Qualified Person

Warren Robb P.Geo. a Qualified Person under National Instrument 43-101 (“NI 43-101”), has reviewed and approved the geological information contained in this news release.

About Blue Star Gold Corp.

Blue Star is a Vancouver-based gold and silver company focused on exploration and development within Nunavut, Canada. The Company through its subsidiary, Inukshuk Exploration Inc., owns the highly prospective 8,015 ha Hood River gold concessions located contiguous with the Ulu mining lease. Inukshuk acquired its interest in the Hood River property through a renewable, 20-year Mineral Exploration Agreement with Nunavut Tunngavik Incorporated (“NTI”) which holds subsurface title to Inuit Owned Lands (“IOL”). The Hood River property located within the CO-20 IOL parcel is administered by the NTI through the HOODRIVER-001 MEA signed between Inukshuk and NTI dated June 01, 2013. Blue Star has recently acquired the Ulu Gold Property, an advanced gold and silver project and with regulatory approvals has completed the transmittal of the mining lease and assignment of the permits and licenses. Together with the Hood River concessions, Blue Star controls nearly 10,000 ha of perspective mineral claims within which the Company has identified more than 40 gold occurrences.

Blue Star has 129.6 million shares outstanding and is listed on the TSX Venture Exchange with the symbol: BAU and on the Frankfurt Exchange with the symbol: 5WP. For information on the Company and its projects, please visit our website: www.bluestargold.ca.

For further information, please contact:
Stephen Wilkinson, President and CEO
Telephone: +1 778-379-1433
Email: info@bluestargold.ca

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the TSX-Venture Exchange) accepts responsibility for the adequacy or accuracy of this Release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

This press release contains “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding prospective income and revenues, anticipated levels of capital expenditures for fiscal year, expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings, and estimates of mineral resources and reserves on our properties.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets, strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses/our success in integrating the Ulu Gold Property into our operations, developments and changes in laws and regulations, including increased regulation of the mining industry through legislative action and revised rules and standards applied by the regulatory bodies in Nunavut, changes in the price of fuel and other key materials and disruptions in supply chains for these materials, closures or slowdowns and changes in labour costs and labour difficulties, including stoppages affecting either our operations or our suppliers’ abilities to deliver goods and services to us, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our equipment, and inaccuracies in estimates of mineral resources and/or reserves on our mineral properties.

Agnico-Eagle takes strategic stake in Rupert Resources

Agnico-Eagle Mines Ltd. [AEM-TSX, NYSE] is making a strategic investment in Rupert Resources Ltd. [RUP-TSXV; R05-FSE], spending $13.1 million to acquire a 9.9% stake in the junior.

Rupert’s key asset is a 100% interest in a gold mine and related properties which are adjacent to Agnico’s Kittila gold mining operation in northern Finland. Rupert’s Pahtavaara gold mine and mill sits on 297 km2 of exploration permits and concessions in the Central Lapland Greenstone Belt.

Pahtavaara previously operated between 1996 and 2014, producing almost 450,000 ounces of gold.

Rupert also owns a 100% interest in the Gold Centre property, which consists of mineral claims near Red Lake, Ontario.

In an agreement announced after the close of trading on February 10, 2020, Agnico said it has agreed to subscribe for 15.4 million units of Rupert in a non-brokered private placement priced at 85 cents per unit. The total consideration is $13.1 million.

Each unit is comprised of one common share of Rupert and 0.75 of one common share purchase warrant. Each warrant entitles the holder to acquire one common share for $1 for three years following the date of closing, which is expected to be on February 12, 2020.

Once the private placement closes, Agnico-Eagle will own 15.4 million common shares and 11.5 million warrants representing approximately 9.9% of the issued and outstanding common shares of Rupert on a non-diluted basis and 16.1% on a partially diluted basis.

Subject to closing, Agnico Eagle and Rupert will enter into a shareholders rights agreement that gives Agnico certain rights so long as the major maintains prescribed ownership thresholds in Rupert. They include:

  • The right to participate in equity financings in order to maintain its pro rata ownership in Rupert at the time of any such financing or acquire up to 9.9% or 16.1% of Rupert (depending on whether Agnico Eagle has exercised the warrants at such time);
  • The right to nominate at least one person to the Rupert board of directors.

Agnico said the shares and warrants are being acquired for investment purposes and it may buy more or sell down part of its interest depending on market conditions.

Rupert shares advanced on the news, rising 9% or $0.07 to 85 cents on volume of 463,000. The shares now trade in a 52-week range of 65 cents and $1.

Since acquiring the Pahtavaara Mine 2016, Rupert says it has undertaken extensive new exploration and geological modelling utilizing the significant amount of historical drill data and 35 km of underground tunneling that exists for the deposit.

Rupert says this new approach demonstrated that the mineralized system at Pahtavaara is significantly larger than previously thought and typical of many other greenstone hosted belts.

A detailed ground gravity survey over 200 km2 of the licence, new interpretation of existing geophysical data and new drilling culminated in the discovery of new incidences of gold mineralization at Area 1, 25 km from the Pahtavaara mill in May 2019.

Agnico-Eagle is a senior Canadian gold mining company with operations in Canada, Finland and Mexico. It is also conducting exploration activity in each of those countries as well as in the United States and Sweden. The company is led by Sean Boyd, who was appointed CEO in 1998 after having served as chief financial officer from 1990 to 1998.

Falco snaps up cash-rich Golden Queen

Falco Resources Ltd. [FPC-TSXV; FPRGF-OTC] said Tuesday it has agreed to acquire Golden Queen Mining Consolidated Ltd. [GQM.H-NEX; GQMND-OTCQB] in a share exchange deal worth 36 cents per Golden Queen share.

Under the terms of the arrangement deal, Golden Queen shareholders are entitled to receive 1.18 Falco shares in exchange for each of their Golden Queen shares.

Falco said its offer amounts to a 44% premium based on the closing price of Golden Queen and Falco shares on February 10, 2020.

By acquiring Golden Queen, Falco said it will secure $4.2 million in cash resources, money that can be invested in Falco’s Horne 5 Project which contains 6.0 million ounces of Proven and Probable gold equivalent reserves and is located near Rouyn-Noranda, Quebec.

With a 100% interest in 74,000 hectares of land in the historic Rouyn-Noranda camp, Falco controls 70% of the entire camp, including the Horne Mine and 13 other gold and base metal mines. The Horne Project area includes the former Horne and Quemont mines as well as the Horne 5 deposit. Located 600 metres north of Horne, the Quemont Mine produced approximately two million ounces of gold and 400 million pounds of copper from 1949 to 1971.

The Horne 5 deposit is located immediately below the former Horne Mine, which was operated by the company previously known as Noranda from 1926 to 1976. Those operations produced approximately 2.5 billion pounds of copper and 11.6 million ounces of gold.

Results of a feasibility study announced in October, 2017 envisages a 15-year mine life for Horne 5, producing an average of 219,000 ounces of gold annually at an all-in-sustaining cost of US$399/oz, net of by-product credits, including royalties over the life of the mine. Pre-production construction costs have been estimated at $801.7 million. The feasibility study foresees full mine production by the first half of 2022.

“We are pleased to reach this agreement with Golden Queen as it will provide Falco with a stronger balance sheet and a broader shareholder base which will benefit from the development of the Horne 5 Project,” said Falco President and CEO Luc Lessard. “In addition, we believe that Falco has acquired cash at a reasonable price, in the context of the challenging equity market,’’ he said. “With this transaction, Falco will secure approximately $4.2 million in cash resources, which can be invested in the Horne 5 Project.”

Golden Queen rallied on the news, rising 18% or $0.045 to 29.5 cents on volume of 451,021. The shares are currently trading in a 52-week range of 17 cents and 35 cents.

Falco eased 6.45% or $0.02 to 29 cents and trade in a 52-week range of 19 cents and 37 cents.

“The board of directors mandated that we focus the search for an advanced gold project within North America while balancing potential risks and return on behalf of the Golden Queen shareholders,” said Guy Le Bel, Golden Queen’s CEO and chief financial officer.

“We are confident in this project’s execution ability with the Falco Resources team,” he said. “Further our shareholders receive an immediate premium to the cash and value of the company in providing this project, creating a positive transaction for both sides.”

OceanaGold releases 2020 guidance

OceanaGold Corp. [OGC-TSX, ASX, NZ; OGDCF-OTC] on Monday February 10 released its production guidance for 2020, saying it expects to produce between 360,000 and 380,000 ounces of gold this year at an estimated all-in-sustaining cost (AISC) of US$1,075-US$1,125/oz.

The forecast is better than expected since it does not include any production estimates from a suspended operation in the Philippines, which would have been expected to produce 55,000 ounces of gold in 2020.

OceanaGold is a multinational gold and copper producer with operating assets that include the Didipio Mine on Luzon Island in the Philippines, the Macraes Operations in the South Island of New Zealand, the Waihi Gold Mine on New Zealand’s North Island and the Haile Gold Mine in South Carolina, U.S.A.

It is also a key shareholder of Canadian companies Nulegacy Gold Corp. [NUG-TSXV] and Gold Standard Ventures Corp. [GSV-TSX; GSV-NYSE], which both have gold projects in Nevada.

OceanaGold produced 470,601 ounces of gold as well as 10,255 tonnes of copper in 2019. The copper output was from the Didipio Mine in the Philippines where mining was recently suspended.

“OceanaGold is highly committed to regaining its status as one of the best gold mining companies by focusing on what we do well and controlling what we can,” said OceanaGold President and CEO Mike Wilkes.

The share price advanced on the news, rising 0.2% or $0.005 to $2.47 on volume of 2.47 million. The shares are currently trading in a 52-week range of $2.12 and $4.60.

The company’s 2020 forecasts include 180,000 to 190,000 ounces of gold from the Haile Mine at a cash cost of $650-700/oz at an AISC of US$1,080-US$1,130/oz sold. This represents a 25% increase over the previous year, mainly as a result of expected higher throughput rates and better recoveries.

As previously forecast, approximately two-thirds of Haile’s 2020 production is expected in the second half of the year as production progressively increases each quarter.

At Waihi, production for the full year in 2020 is expected to range between 18,000 and 20,000 ounces with AISC ranging from US$715 to US$765/oz. The Waihi operation will transition from the current mining at Correnso to the Martha Underground which is expected to start producing in the second quarter of 2021.

Macraes is expected to produce between 160,000 and 170,000 ounces of gold in 2020 at AISC of US$1,000 and US$1,050/oz. Production in 2020 is slightly lower than in 2019 due to lower grades from the Coronation stage 5 area and Gay Tan Phase 1.

In the Philippines, the Didipio Mine produced 83,913 ounces of gold and 10,255 tonnes of copper in 2019 before processing was suspended in October. The company says it continues to work constructively with regulatory stakeholders related to the renewal of Didipio’s FTAA, which is currently under review with the Office of the President with no specific timeline on when a decision will be made.

An FTAA, or Financial and Technical Assistance Agreement, is one of two key forms of tenure for mining projects in the Philippines. They are a form of state agreement (entered into by the President of the Philippines on behalf of the Philippines government) for the large-scale exploration and development of gold and other metals.

The company is currently spending US$8 million to US$10 million a quarter on holding costs associated with maintaining the workforce in a state of operational readiness and the underground mine and process plant on care and maintenance.