Banyan stock soars on initial AurMac resource estimates

Banyan Gold (TSXV: BYN) on Monday reported an initial mineral resource estimate of 903,945 ‎ounces in the inferred category for its Aurex ‎and McQuesten properties, located in the Mayo Mining ‎district of Yukon, approximately 56 km northeast from the village of Mayo and 356 km north of Whitehorse.

The properties, together referred to as the AurMac property, are held by the company under earn-in option agreements with StrataGold, a 100% owned subsidiary of Victoria Gold (TSXV: VIT) and Alexco Resource (TSX: AXR).

The AurMac property is located 40 km from Victoria Gold’s open-pit, heap-leach mine and 10 km from Alexco’s mill facility in the Keno Hills District.

The Airstrip and Powerline deposits contained within the AurMac property are both on and near-surface deposits and potentially open-pit mineable, with expected low strip ratios.

“We are excited with the value this initial mineral resource estimate generates for our shareholders, particularly given the modest exploration expenditures by Banyan, generating ounces at less than $2 per ounce,” president and CEO Tara Christie stated in a press release.

“Further, examination of the Airstrip mineral resource model highlights its robust nature; when the cut-off grade is increased by 50%, to 0.3 g/t, less than 15% of the ounces are reduced; while, the grade increases by more than 20% to an average of 0.65 g/t.”

She added that the deposit model exercise has identified a series of drill targets, which will “meaningfully build upon this initial mineral resource.”

Shares of Banyan Gold jumped 43.7% on Monday to a two-year high on the initial resource estimate released. The Canadian mining junior has a market capitalization of approximately C$15 million.

Northern Dynasty welcomes all-road transport plan for Pebble

Northern Dynasty Minerals (TSX: NDM) has welcomed a change of plan for its Pebble project in Alaska’s Bristol Bay region, which would now include an all land-based transportation route to connect the proposed copper-gold-molybdenum-silver mine in southwest Alaska.

Last Friday, the US Army Corps of Engineers (USACE) — lead federal regulator for the Environmental Impact Statement (EIS) permitting process — recommended a preferred development alternative for the proposed mine site: a two-lane, 85-mile access road along the northern shore of Lake Iliamna.

During a media availability session, USACE Alaska district regulatory division chief David Hobbie confirmed this was the “least environmentally damaging practicable alternative” (LEDPA) for the proposed Pebble mine as it would avoid the need for ferry transport across the lake.

If permitted, Pebble would be North America’s largest mine, with an estimate resource of 6.5 billion tonnes in the measured and indicated category.

Northern Dynasty had previously included the road as a possible alternative in earlier filings with the government. President and CEO Ron Thiessen said the ‘northern transportation corridor’ — otherwise known as ‘Alternative 3′ in the Pebble EIS — has been extensively studied by the company’s US subsidiary (the Pebble Partnership) and presents several benefits over the lake ferry options.

Notwithstanding the recent change, Pebble had studied the ‘northern transportation corridor’ for more than a dozen years

“From a cost perspective, the various transportation alternatives evaluated as part of the Pebble EIS over the past several years are similar,” he said.

“We had thought the slightly smaller wetlands footprint associated with the lake ferry alternatives might make them preferable to the USACE and other regulatory agencies, but they clearly have judged an all land-based route to be superior from an environmental perspective.”

Thiessen added that the Pebble Partnership will work with each of the landowners along the northern corridor, and believes it will secure the authorizations needed to build and operate the transportation system.

Pebble Partnership CEO Tom Collier confirmed that the USACE contacted the company several weeks ago to request that it formally modify its project description to reflect the ‘northern transportation corridor.’

Northern Dynasty welcomes all-road transport plan for Pebble
Iliamna Lake. Credit: Wikimedia Commons

He explained that the driving force behind the USACE’s route change was likely concerns about lake ferry operations expressed by cooperating agencies (including the US Environmental Protection Agency and US Fish & Wildlife Service) and members of the public.

Notwithstanding the recent change, Collier said Pebble had studied the ‘northern transportation corridor’ for more than a dozen years, and expects no planning or permitting delays associated with its selection as the LEDPA.

The northern corridor has the added benefit of including a pipeline to transport copper-gold and molybdenum concentrates from the mine site to the port site, thereby reducing truck traffic in the region by about half, he said.

The announcement of a preferred development alternative for Pebble means a final permitting decision is one step closer, Collier added.

Environmentalist concerns

For decades, the proposed Pebble mine has been the subject of controversy in Alaska over its potential environmental impact on the world’s most productive wild salmon fishery.

Commenting on new transportation plan, opponents of the mine said they were not made aware of the changes, and thus did not have time to respond. Bristol Bay Native Corp., which represents the native shareholders in the region, told Bloomberg that “this could also lead to legal challenge under the National Environmental Policy Act.”

Some also questioned whether the USACE had thoroughly reviewed the plan, while others called this a ‘huge bait and switch’ as Pebble has spent years trying to convince people of the viability of its southern route.

However, Collier responded that the plan “was on the table from the get-go” and said the reason it was selected “is because of the vicious criticisms aimed at the ferry route” by project opponents.

Kaminak Gold founders back in business in Alaska

After its $520 million exit in 2016, the core team that found, developed and sold the Coffee Gold project in Yukon to Goldcorp Inc. (TSX:G) took a breather, and then regrouped.

Eira Thomas, one of Kaminak Gold Corp.’s executives, took on the CEO job at one of the other companies she co-founded, Lucara Diamond (TSX:LUC) – a role she still holds.

But she and two other Kaminak executives, Robert Carpenter and Tony Reda, knew they wanted to keep working together, even though they had no particular project in mind.

“We knew we wanted to work together, so we looked at a bunch of different endeavours collectively,” said Reda, who was Kaminak’s vice-president of corporate development and is now CEO of their new company, Tectonic Metals (TSX-V:TECT).

Reda became convinced that their next project should be just across the border from Yukon, where they had developed the Coffee project.

“That political border is not a geological border. The rocks carry over. It’s completely untapped, elephant-sized deposits, seven producing mines. The Yukon at that time had zero”

Tony Reda

“The three of us got together and I said, ‘We’ve got to get into Alaska,’” Reda said, “because the Yukon was becoming a crowded place, especially with the Goldcorp-Kaminak transaction.

“That political border is not a geological border. The rocks carry over. It’s completely untapped, elephant-sized deposits, seven producing mines. The Yukon at that time had zero.”

The real clincher was the regional corporations that welcome mining and own vast tracts of land as a result of the Native Claims Settlement Act in the early 1970s, which awarded 44 million acres to Alaska’s Indigenous people, known as Alaskan Natives.

“On Native-owned land, it’s fee simple land,” Reda said. “There’s limited regulatory involvement. If I want to build a road, I work directly with them.”

Typically, a new exploration company starts with a potential deposit, raises some risk capital and forms a management team. Tectonic’s founders formed the team first, and then went prospecting.

“If the team is the ultimate driver for value, why don’t we start there?” Reda reasoned.

In addition to the three core Kaminak founders, the company has brought along other former key players who worked on the Coffee project.

“We built a company around a team, around a business model,” Reda said.

Tectonic didn’t go looking just for potential gold deposits; it also went looking for partners in Alaska’s Native American-owned corporations and developed a partnership with Doyon Ltd.

With more than 12.5 million acres, Doyon is Alaska’s largest private landholder, and about two-thirds of its land is for mineral exploration. There are some 40 Alaskan tribes within the territory controlled by Doyon.

In 2018, the founders gained exclusive rights to explore and develop two projects on Doyon land – Northway and Seventymile – and one on state land. Tectonic also has rights to a third project: Tibbs, which is on state land.

“It’s a lease agreement,” Reda said. “They own the land. They’ve given us the entire rights to explore, develop and produce, and they, in exchange, get a royalty.”

Initially, the founders put about $1 million of their own money into Tectonic and then raised $11.3 million through private placements between 2018 and 2019.

They formed Tectonic Metals through a direct listing in 2019 and began listing on the TSX Venture Exchange in November.

Last month, Doyon took a $2 million, 23% stake in Tectonic, making it the company’s biggest shareholder. Doyon CEO Aaron Schutt said the Tectonic team’s successful track record in the Yukon gave Doyon confidence to take an equity position in the company.

“Their team has had success and are very highly regarded in the Canadian exploration community,” Schutt said.

“Really, what was the tipping point for us was their demonstrated work with the communities and First Nation communities in the Yukon and then their two seasons of work with our two communities in Alaska, where they interacted very well with the communities and the local tribes on the work they were doing.

“And that’s communication about what’s going on, taking input and making sure they did a good job of hiring local when they could.”

Early on, Tectonic met with villagers to determine what benefits they wanted. The company committed to local hiring and provided funding for scholarships. It also committed to developing an oral history encyclopedia to preserve the local Native language and stories.

Typically, when a project gets to the stage where a feasibility study is published, it will included a number of risks and variables, including impact benefit agreements with First Nations. Tectonic wanted to address some of those uncertainties up front, so it negotiated a production agreement early on with Doyon Ltd.

“I wanted a legally binding agreement that could not be swayed or renegotiated,” Reda said.

He added that the company planned to conduct two drill programs this year.

“We have our sights on some new acquisitions as well.”

(This article first appeared in Business in Vancouver)

Gold price up as US-China tension builds

Gold rebounded on Friday as ongoing concerns with the economic fallout of the covid-19 pandemic were compounded by fears of rising political tensions between China and the US.

Spot gold rose 0.4% to $1,733.55 per ounce by 12:20 pm EST Friday, after falling 1.4% in the previous trading day. Gold futures rose 0.8% to $1,736.20.

On Thursday, the Chinese government announced its intention to impose a national security law that criminalizes political dissent on the city of Hong Kong, which could fuel further protests and escalate the ongoing US-China spat over the source of the coronavirus.

US senators later responded by introducing a bipartisan bill that would sanction Chinese officials and organizations who enforce the new security measures on Hong Kong. The bill came just one day after the Senate passed a bill that would make it more difficult for Chinese-based companies to list on US stock exchanges.

Amid the growing political and economic uncertainties, bullion — often considered an insurance under such circumstances — surged to a fresh seven-year high earlier this week.

“China’s aggressive stance on Hong Kong security could exacerbate already tense relations (with US) and a possible confrontation between US warships and Iranian freighters headed for Venezuela are key concerns heading into the long weekend, prompting investor buying,” Tai Wong, head of base and precious metals derivatives trading at BMO, told CNBC.

Gold has held its ground above the key $1,700 per ounce level, building impetus to reach its 2011 peak in the coming quarters, Fitch Solutions said in a note.

“Lower-for-longer interest rates with quantitative easing in full swing, macro and geopolitical uncertainty and strong investor flows should continue to support gold prices on a 6-12 month horizon,” Fitch added.

Meanwhile, physical gold demand picked in top Asian hubs this week as economies eased lockdown measures and investors continued to buy gold as a hedge against a deteriorating economic backdrop.

Gold price loses momentum on stronger dollar

Gold price is drifting away from a near seven-year high, heading for its first loss in three sessions on Thursday, as the US dollar strengthened and hopes of a quick economic recovery put more selling pressure on the metal.

Spot gold fell 1.5% to $1,722.98 an ounce at noon New York time. Earlier, gold price slipped to $1,717.69 an ounce, its lowest over a seven-day period.

Gold futures for June delivery on the Comex also declined 1.7% to $1,722.60, which is lower than the spot price.

“Gold seems to have lost a little momentum since breaking above $1,750 and the rise in the dollar today doesn’t seem to be helping,” OANDA analyst Craig Erlam said in an interview with CNBC.

“However, the enormous amount of monetary stimulus in the system, the need for that to continue for some time and the inflation risk are all bullish for gold in the longer term,” Erlam added.

On Wednesday, minutes from the US Federal Reserve’s April meeting were released, which highlighted key risks emerging throughout the economy as lockdowns pushed forward. The Fed also acknowledged the possibility of further support measures if the economic downturn persists.

However, concurrent with concerns of a second wave of coronavirus outbreak later this year, policymakers noted there could a renewed downward pressure on inflation, which would not bode well for gold as it thrives during periods of inflation.

Meanwhile in other precious metals, palladium dropped 3.4% to $2,029.50 an ounce after reaching a one-month high earlier this week. Platinum dropped 1.8% to $830.25, while silver dipped 2.9% to $17.06.

Gold price loses momentum on stronger dollar

Gold price is drifting away from a near seven-year high, heading for its first loss in three sessions on Thursday, as the US dollar strengthened and hopes of a quick economic recovery put more selling pressure on the metal.

Spot gold fell 1.5% to $1,722.98 an ounce at noon New York time. Earlier, gold price slipped to $1,717.69 an ounce, its lowest over a seven-day period.

Gold futures for June delivery on the Comex also declined 1.7% to $1,722.60, which is lower than the spot price.

“Gold seems to have lost a little momentum since breaking above $1,750 and the rise in the dollar today doesn’t seem to be helping,” OANDA analyst Craig Erlam said in an interview with CNBC.

“However, the enormous amount of monetary stimulus in the system, the need for that to continue for some time and the inflation risk are all bullish for gold in the longer term,” Erlam added.

On Wednesday, minutes from the US Federal Reserve’s April meeting were released, which highlighted key risks emerging throughout the economy as lockdowns pushed forward. The Fed also acknowledged the possibility of further support measures if the economic downturn persists.

However, concurrent with concerns of a second wave of coronavirus outbreak later this year, policymakers noted there could a renewed downward pressure on inflation, which would not bode well for gold as it thrives during periods of inflation.

Meanwhile in other precious metals, palladium dropped 3.4% to $2,029.50 an ounce after reaching a one-month high earlier this week. Platinum dropped 1.8% to $830.25, while silver dipped 2.9% to $17.06.

Sprott backs Pure Gold with $10.7 million investment

Pure Gold Mining (TSXV:PGM, LSE:PUR) announced on Wednesday it has arranged a private placement with Canadian mining investor Eric Sprott, who will purchase 9.87 million common shares of the company at C$1.52 per share for gross proceeds of C$15 million.

“Pure Gold has all the attributes I look for in a company – location, grade, size and growth,” commented Sprott on his latest investment. 

“Pure Gold’s mine in Red Lake has over 7 km of strike with known high grade shoots that have only been defined down to 1,200 metres compared to 2,500 metres in the neighbouring Red Lake mine complex,” he added. 

Sprott also compared the ultra-high grade hits in the 8 zone with the HG Zone that built Goldcorp, as well as SMC at Macassa and the Swan Zone at Fosterville, stating “these are the types of discoveries that have the potential to be company makers and tend to lead to a much higher production profile than originally given credit.”

The Madsen mine in Red Lake, Ontario, is currently the only gold project under construction in Canada. Last week, the company reassured that the mine is on track for its first gold pour by the end of 2020.

Pure Gold CEO Darin Labrenz said the new investment in exploration enables the company to “concurrently ramp up its focus on aggressive resource growth without impacting on its capital budget for final mine completion and first gold pour.”

Meanwhile, the company saw a significant jump in its stock earlier this week. At Tuesday’s close, shares of Pure Gold Mining were up over 14%.

K92 reports 180% increase in Kora resource estimate

K92 Mining (TSXV: KNT) on Tuesday reported a significant resource increase at the high-grade Kora deposit of its Kainantu gold mine in Papua New Guinea. The updated resource estimate is based on surface and underground exploration diamond drilling and underground face sampling (grade control).

Measured and indicated resource now total 1.1 million ounces at 10.45 g/t gold equivalent (AuEq), representing a 180% increase over the previous estimate of 390,000 ounces AuEq in October 2018. Inferred resource also increased 50% to 3.7 million ounces at 9.01 g/t AuEq.

The company says a significant component of the updated resource is high grade, with only moderate reductions in overall ounces as cut-off grade increases.

The Kora North, Kora and Eutompi deposits have also been combined as they are shown to be one continuous deposit, open at depth and open along strike to the south. The property was previously mined by Highlands Pacific and Barrick Gold from 2006-2009.

“In eighteen months of underground and surface drilling, K92 has significantly increased our resource at Kora and at a very low discovery cost of less than $5 per oz,” K92 CEO John Lewins stated in a press release, adding that there remains “tremendous potential” to increase resources at Kainantu going forward.

“At Kora, approximately 75% of the originally planned 1,000m by 1,000m target area was drilled for this resource. The remaining drill target area is highly prospective and continuing exploration drilling from underground has already shown continuity of mineralization into this area. In addition, there are also multiple high priority near-mine targets that are planned to be drilled this year.”

With the resource estimate updated, the company is now working on a preliminary economic assessment for a potential expansion at Kainantu.

K92 Mining’s stock traded 4.1% higher at Tuesday’s market close, bringing the company’s market capitalization to C$858.5 million.

McEwen posts $99m Q1 loss on Gold Bar write-down

McEwen Mining (NYSE, TSX: MUX) posted a net loss of $99.2 million or $0.25 per share for the quarter ended March 31, 2020, primarily due to a $83.8 million impairment charge for its Gold Bar mine in Nevada.

The company says the write-down was necessary because a change in the geological interpretation resulted in a substantial reduction in the expected gold production over the life of mine. Before the impairment adjustment, net loss totalled $15.4 million.

The miner explains that it started experiencing poor reconciliation with the 2018 reserve estimate when the mine transitioned from the Cabin Creek to the upper benches of the Gold Pick West orebody at the end of 2019.

Preliminary plans indicate a likely 25% to 35% reduction in contained ounces at the Gold Pick deposit

“Our mining returned lower ore tons, gold grade and contained ounces compared to the block model. This is interpreted to occur because of greater structural control and less bedding control of the mineralisation than was previously modelled by our external consultant SRK Consulting in the 2018 feasibility study and 2018 reserve estimate,” McEwen says.

Re-evaluation of the resource estimate is currently underway, with a drilling program initiated in late March and extending into the second quarter of 2020. The company says preliminary plans indicate a likely 25% to 35% reduction in contained ounces at the Gold Pick deposit relative to the 2018 reserve estimate.

Mining operations at Gold Bar were suspended on April 1 due to concerns related to covid-19, but activities have recently ramped up with limited mining and stockpile processing. The company is evaluating next stages to resume normal operating capacity.

During Q1, the Gold Bar mine produced 9,100 gold-equivalent ounces (GEO), surpassing the Black Fox mine in Ontario, which produced 8,300 GEOs. Meanwhile, the San José mine in Argentina, jointly owned with Hochschild Mining, had 14,900 GEOs of attributed production.

Shares of McEwen Mining dropped 6.7% at Tuesday’s market open. The Toronto-based mining firm has a $356.3 million market capitalization.

NuLegacy stock rises on private placement

NuLegacy Gold (TSXV: NUG) has arranged a non-brokered private placement of up to 75 million units at a price of C$0.075 per unit to raise gross proceeds of C$5.62 million.

Each unit consists of one common share of the company and one-half of one common share purchase warrant, with each whole warrant exercisable for one common share at a price of C$0.125 for a period of 24 months.

Net proceeds of the financing will be used for an expanded exploration program on the Rift Anticline including drilling 14 to 16 planned core holes at the company’s Red Hill property in Nevada.

“Our recent winter 2019 drill program and subsequent analysis and geological remodeling strongly support our analysis that the Rift Anticline target bears significant structural and stratigraphic similarities and connectors to Barrick Gold’s Goldrush Carlin-style gold systems approximately 8 kilometers to the northwest,” CEO Albert Matter commented.

“We are utilizing the improved gold market conditions to strengthen our treasury. This will enable us to expand our CSAMT and additional gravity surveys over the Rift Anticline this summer to further advance our interpretation and site targeting for a larger and deeper drill program on the Rift this fall pending approval of our $500,000 expanded plan of operations over the Red Hill property.”

Shares of NuLegacy Gold were 5.5% higher on the TSXV at Monday’s market close. The Vancouver-based mining junior has a market capitalization of C$38.7 million.