David Erfle – Gold Market Commentary – Tue 21 May, 2019

Balancing The Contrarian Trade For PMs With The General Downtrend

David Erfle joins me today to share his comments on the argument for a contrarian trade in the metals. This needs to be balanced out with the bearish set up on the charts and the time of year we are in. With stock prices generally lower it is not the first time we are hearing now is a time to build some positions so when the turn happens you are positioned.

Click here for more information on The Junior Miner Junky.

Phil O’Neill – MP1 Captial – Wed 15 May, 2019

Comments on the sale of Atlantic Gold

Phil O’Neill, President of MP1 Capital joins me today to share his thoughts on the news out of Atlantic Gold. The Company has been sold to an Australian miner, St Barbra in an all cash deal for just over C$800million. Outside of simply the sale this deal is very telling of the overall markets in North America vs. Australia for resource companies.

Click here to visit Phil’s site – MP1 Capital.

RANKED: Top 10 lowest cost gold mines on the globe

In 2018, global gold mining companies' average all-in sustaining costs (AISC) fell 6% across the board as miners reacted to a gold price in steady decline for most of the year.

The AISC metric serve as a benchmark of a mine’s operating efficiency. They provide a more comprehensive look at mine economics than the traditional "cash costs" approach that many companies may interpret arbitrarily – and it includes important expenses such as overhead outlays and capital used in ongoing exploration, mine development and production.

Mining Intelligence, a MINING.com sister company, looked at costs at primary gold mines and ranked them based on AISC. Primary gold operations are defined by Mining Intelligence as “mines where gold contributed to 80% or more of revenues from operating activities generated last year.”

The data used by Mining Intelligence represents companies reporting quarterly production and listed on the following stock exchanges: TSX (+TSX-V), ASX, LSE (+LSE-AIM), NYSE, and JSE. The ranking excludes privately-owned mines, tailings, re-processing operations, mines where the precious metal is produced as a by-product, and operations where companies report gold-equivalent output.

Falling out of the top ten list compiled by Mining Intelligence in 2018 are two Barrick mines that were on the Mining Intelligence list compiled in 2018: Lagunas Norte in Peru, where costs have gone up from $483 to $636/oz, and Pueblo Viejo, in the Dominican Republic, where costs rose from $525 to $623/oz. The Barrick mines made way for two recently commissioned mines: B2Gold's Fekola mine in Mali, and Atlantic Gold's Moose River mine in Nova Scotia.

1 Svetloye – $425/oz

Svetloye mine. Image from Polymetals.

Polymetal’s Svetloye mine is an open-pit gold operation that located in the far east region of Russia. Despite the remote location and lack of infrastructure, high-grade ores and heap-leaching technology help this mine to produce gold at the lowest costs possible.

2 Fosterville – $442/oz

Fosterville mine. Image from Kirkland Gold.

Fosterville is the largest gold producer in the state of Victoria, Australia. The underground mine is owned by Toronto-based Kirkland Lake Gold. Production in 2018 totalled 356,230 ounces. Recently the company raised the production guidance to 550,000-610,000 ounces for 2019-2020, up from the previous guidance of 390,000–430,000 ounces.

3 Olimpiada – $468/oz

Olimpiada mine. Image from Polyus.

Located in one of Russia’s most prolific gold mining provinces, Olimpiada is Polyus’ largest operation.To treat Olimpiada’s sulphide ores, Polyus employs BIONORD, the company’s proprietary bio-oxidation technology. Successful exploration activities in the area indicate the potential for substantial extension of the life of this mine.

4 Voro – $477/oz

Voro mine. Image from Polymetal.

Voro is one of Polymetal's very first key gold assets, acquired in 1998. The mine and processing facility is located in the Sverdlovsk region of Russia. The open-pit and heap leach operation started in 2000 and has another nine years of life.

5 South Arturo – $478/oz

South Arturo mine. Image from Premier Gold Mines.

The South Arturo open-pit gold mine in Nevada is a high-grade oxide deposit amenable for highly efficient heap leaching mineral processing and extraction technology. This deposit is of the prominent Carlin-type widely known as being one of the most productive and cost efficient geological formations worldwide. Premier Gold Mines holds a 40% interest in the South Arturo property with Barrick owning the remaining 60%. Barrick processes South Arturo ore at its Goldstrike plant 5 km south of the mine.

6 Long Canyon – $505/oz

Long Canyon mine. Image from Newmont.

Newmont’s Long Canyon open-pit mine is of the same mineralization style as the South Arturo deposit, and the only significant discovery made in Nevada in the last decade. The nature of the deposit, application of a heap leach technology and tapping into existing infrastructure keep costs at Long Canyon at some of the lowest levels in the industry.

7 Fekola – $533/oz

Fekola mine. Image from B2Gold.

B2Gold first acquired the world-class Fekola gold project in Mali through a merger with Papillon Resources back in 2014. First gold pour at the Fekola mine took place three years later. The company recently decided, based on a positive PEA study, to invest $50 million into expanding the mine's capacity.

8 Cerro Negro – $535/oz

Goldcorp’s Cerro Negro mine.

Sitting 600 metres above sea level on the Patagonian plains in southern Argentina, Goldcorp’s Cerro Negro underground mine has 4.86 million ounces in proven and probable gold reserves. Commercial production began on January 1, 2015.

9 Blagodatnoye – $547/oz

Blagodatnoye mine. Image from Polyus.

Polyus commissioned Blagodatnoye in Krasnoyarsk, eastern Siberia in July 2010. Processing capacity at the open pit, located 25 km from the Moscow-based company's flagship Olimpiada mine, is 8.1 million tonnes of ore per year, which makes it one of the largest facilities of its kind in Russia.

10 Moose River – $564/oz

Atlantic Gold's Moose River mine.

Atlantic Gold’s Moose River open-pit mine is located in Nova Scotia that has a long history of gold mining. Commercial production was declared in March 2018, and in the first year production reached 90,500 ounces. Atlantic expects its phase two expansion plans will have gold production ramping up to more than 200,000 ounces per annum.

(Based on research compiled by Vladimir Basov of Mining Intelligence)

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Alamos Gold sells royalty portfolio to Metalla for $8m

Alamos Gold (TSX: AGI; NYSE: AGI) will sell a portfolio of 18 royalties on assets not owned by Alamos to Metalla Royalty and Streaming (TSXV: MTA; MTAFF) for $8 million in Metalla shares.

The portfolio includes a 2% net smelter returns royalty (NSR) on Agnico Eagle Mine’s El Realito gold deposit, adjacent to its La India mine in Sonora, Mexico, plus 1.5% and 1% NSRs on Monarch Gold’s Wasamac gold project and Beaufor gold mine, both in Quebec. Most of the other royalties are on exploration stage projects.

Metalla will pay Alamos 8.23 million shares valued at $1.30 a-piece. Following the transaction, Alamos will own 6.26% of Metalla.

Concurrent with the royalty deal, Metalla secured a C$12 million convertible loan facility with Beedie Capital. Beedie will advance Metalla an initial C$7 million, with the remaining C$5 million available in minimum tranches of C$1.25 million.

In March 2019, Alamos received an operating permit from the Turkish Department of Energy and Natural Resources for the start of earthworks at the open pit area on its Kirazli gold project. The company expects to spend C$75 million in 2019 finishing Kirazli’s water reservoir and ramping up major construction activities. It expects to spend C$60 million continuing construction in 2020 and begin initial production by the end of that year.

Metalla acquired a 1% NSR on Atlantic Gold’s Fifteen Mile Stream gold project in Nova Scotia for C$4 million. Metalla paid the third party seller C$2.2 million in cash and issued it 2.6 million shares. The royalty covers all products recovered from the project.

(This article first appeared in The Northern Miner)

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Atlantic Gold finds more ounces, more life in MRC reserves

Vancouver-based Atlantic Gold Corp. has updated reserves and mine life for its Moose River Consolidated gold project. Contained gold is up 27% and the life of the MRC project has been extended to more than 10 years.

Successful drill campaigns at the Touquoy, Fifteen Mile Stream and Cochrane Hill deposits provided the extra ounces. The reserves include 23.0 million proven tonnes grading 1.16 g/t gold, 26.6 million probable tonnes grading 1.14 g/t gold, and 2.4 million tonnes grading 0.57 g/t gold in existing stockpiles. All told, that is 52.0 million tonnes averaging 1.12 g/t gold for 1.9 million contained oz.

“[This] update marks another milestone in the continuation of growing our reserve base at MRC and represents a work in progress. Testing the extension of the high grade shoots at Cochrane Hill, establishing mineral resources at the 149 deposit, and potentially extending the strike to the east, will be priorities for 2019. We also remain very excited about leveraging the value of the potential discovery of multiple additional deposits from our ongoing Corridor regional exploration program.” said Maryse Bélanger, president and COO.

(This article first appeared in the Canadian Mining Journal)

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Atlantic Gold boosts resource, exceeds 2018 production guidance

Atlantic Gold has added measured and indicated ounces at its Touquoy, FMS and Cochrane Hill gold projects with results from its 2018 drill campaign.

The company added 88,000 oz. gold at Touquoy which, net of mine depleting, represents a 17% increase. The deposit now contains 11.3 million measured and indicated tonnes grading 1.23 grams gold for 445,000 oz. gold.

It boosted its FMS project 47% to 676,000 oz. gold across three deposits: Egerton-MacLean contains 14.6 million measured and indicated tonnes at 1.16 grams gold for 544,000 oz. gold, Hudson contains 1.8 measured and indicated tonnes at 0.78 gram gold for 45,000 oz. gold and Plenty contains 2.7 measured and indicated tonnes at 1.03 grams gold for 88,000 oz. gold.

It also improved Cochrane Hill 50% to 17.4 million measured and indicated tonnes at 1.08 grams gold for 607,000 oz. gold. The company drilled more than 5,000 metres at Touquoy, more than 35,000 metres at FMS and more than 23,000 metres at Cochrane Hill in 2018

The company drilled more than 5,000 metres at Touquoy, more than 35,000 metres at FMS and more than 23,000 metres at Cochrane Hill in 2018. It plans to continue infill drilling inferred resources in 2019 and test for extensions of known deposits. It will also complete a “Corridor Regional Program” that will include drilling at its 149 gold deposit, among other targets along the 45 km corridor.

Earlier in the month, the company announced it had slightly exceeded its 2018 production guidance and met production costs.

The company produced 90,531 oz. gold in 2018, beating the upper end of its 82,000-90,000 oz. gold guidance. The company had an annual all-in sustaining cost of $731 per oz. gold, close to the upper end of its $675-$735 guidance.

The company has $50.3 million in cash and $63.7 million in net debt. It has $44.3 million in working capital and a $35.6 million undrawn debt facility.

This article first appeared in The Northern Miner.

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Atlantic confirms gold extensions at Cochrane Hill

Atlantic Gold (TSXV: AGB; US-OTC: SPVEF) says recently completed diamond drilling at its Cochrane Hill gold deposit in Nova Scotia is confirming mineralization extensions initially defined in its 2018 phase three resource definition drill program.

Highlights from the latest resource extension drill program include 11 metres grading 43.65 grams gold from 227 metres downhole including 1 metre at 466 grams gold and 7 metres at 23.69 grams gold from 285 metres downhole including 1 metre at 153 grams gold. These results come from recent drilling at Cochrane totalling 16,242 metres across 70 holes. The results come from recent drilling at Cochrane totalling 16,242 metres across 70 holes.

The company completed its phase three drill program at Cochrane in January 2018, drilling 6,900 metres across 44 holes. The results from that drill program, however, are not yet included in Cochrane’s resource.

Cochrane contains 10.66 million measured and indicated tonnes grading 1.16 grams gold for 398,000 oz. gold as well as 1.63 million inferred tonnes at 1.32 grams gold for 69,000 oz. gold. It sits 80 km northeast of the company’s central processing facility at its Moose Rive gold mine.

Atlantic produced more than 90,000 oz. gold at Moose River in 2018. It expects to produce between 92,000 and 98,000 oz. gold at Moose River in 2019.

In mid-January 2019 the company invested $9 million in Velocity Minerals (TSXV: VLC; US-OTC: VLCJF) and now holds a 39.2% interest in the company on a partially diluted basis. Velocity intends to spend the money advancing its Rozino gold project in Bulgaria to feasibility and permitting.

Velocity tabled a preliminary economic assessment for Rozino in September 2018 that outlined a $129 million after-tax net present value at a 5% discount rate and a 33% after-tax internal rate of return. The project would produce 65,000 oz. gold per year over six years at $543 per oz. gold all-in sustaining costs.

Shares of Atlantic are currently trading at $1.82 with a 52-week range of $1.40 to $1.99. The company has a $431 million market capitalization.

(This article originally appeared in The Northern Miner.)


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