Fresnillo expects lower FY output as Q3 production drops

Precious metals miner Fresnillo said on Wednesday annual silver and gold production would be at the lower end of an already reduced target range, after reporting a fall in output for the third quarter due to lower ore grades. Fresnillo's silver production slumped 14.5% to 13.28-million ounces for the three months ended September 30, while gold production fell nearly 7% to 209 800 oz.

McEwen on track to meet yearly guidance, hits promising gold mineralisation

TSX- and NYSE-listed McEwen Mining in the third quarter this year produced 35 043 oz of gold and 947 146 oz of silver from its four gold mines in the US, Canada, Argentina and Mexico. Further, chairperson Rob McEwen said this week that exploration results its Black Fox and Stock properties continued returning multi-ounce gold intersections at relatively shallow depths during the three months under review.

Vizsla soars 78% on Copala-Panuco option news

By Peter Kennedy

Vizsla Resources Corp.’s [VZLA-TSXV] shares were up by almost 80% Wednesday October 9 following a resumption of trading that came after the company said it had received conditional approval from the TSX Venture Exchange to acquire Canam Alpine Ventures Ltd., a company that holds underlying options on the Copala-Panuco silver district in Sinaloa, Mexico.

The October 8, 2019, announcement comes almost one month after Vizsla said it had entered into a definitive share purchase agreement to acquire an option over the consolidated mineral rights, infrastructure and processing facilities comprising the large-scale Copala-Panuco precious metals camp.

“Panuco is one of the best opportunities I’ve ever seen in my career,” said Vizsla Chairman Craig Parry. “We have option over one of the largest, most important historic mining districts in Mexico – consolidated for the first time ever in history.”

Vizsla is a company that was formed to acquire metal projects in Canada and Mexico. Its portfolio includes the 20,265-hectare Blueberry Project, which lie on a copper-porphyry trend southwest of Houston, British Columbia.

Following the resumption of trading on Wednesday, Vizsla jumped 78% or 21 cents to 48 cents on volume of almost 1.96 million. The shares were previously trading in a 52-week range of 13 cents and 33 cents.

Under a definitive share purchase agreement dated September 13, 2019, Vizsla has pledged to acquire all of the outstanding shares of Canam Alpine Ventures Ltd., which holds options to acquire a 100% interest in the Panuco mining concessions and related infrastructure and processing facilities.

“Upon closing of the transaction, we are very excited to investigate the high-grade potential of the prolific Copala-Panuco silver district,” said Vizsla President and CEO Michael Konnert.

The Panuco district has been producing since the 1500s, but has never seen systematic modern exploration due to fragmentation of ownership. Vizsla has the option to explore the 10,500-hectare district and may elect to purchase the existing production infrastructure onsite, including a mill, tailings, power, road and over 35 kilometres of workings.

In a September 17, 2019 press release, Vizsla said active and historical surface mapping implies that there is more than 75 kilometres of cumulative vein strike on the property and more than 31 active historic mines within the veins. Historic production from these mines has not been recorded.

However, reportable historic drilling includes a diamond-drill intercept from one of these veins containing 2,235 g/t silver and 9.5 g/t gold over a 4.23-metre true width.

“We see significant exploration potential that, if confirmed, will lead us to exercise our option to acquire the mining and milling operations of the Panuco camp,” Konnert said.

The company said exploration work will commence immediately with a view to be drilling within three months. Vizsla hopes to complete a maiden resource later in 2020.

The company went on to say that several high-grade silver and gold zones have been uncovered and it looks forward to drilling these zones in the coming months.

As previously stated, Vizsla said it will acquire Canam for a total consideration of 18 million common shares. The first 6.0 million will be issued on closing of the acquisition. Another 6.5 million will be issued upon definition of a resource greater than 200,000 ounces of gold equivalent ounces. The final 5.5 million shares will be issued once the options are exercised.

For its part, Canam can exercise the option by completing US$3.4 million in work commitments and making payments of US$43 million over a 72-month period. Once the option is exercised, Canam can then have the rights to the previously mentioned mining infrastructure.

Having completed an oversubscribed private placement June 2019 that raised $1.9 million, Vizsla said it is fully funded to make the first option payment and continue the initial work commitment at Panuco.

Subject to the approval of the TSX Venture Exchange, Vizsla said it will pay a finder’s fee of 750,000 shares to Doug Seaton of Nakusp, B.C. The shares will be paid out in a series of increments. The first 250,000 is payable on signing, a second batch of 200,000 will be paid upon definition of a resource greater than 250,000 gold equivalent ounces, and the final 250,000 shares will be paid once the options are exercised.

Implats to acquire N.A. Palladium for $1B in cash

North American Palladium Ltd. [PDL-TSX; PALDF-OTC] said Monday October 7 that it has agreed to be acquired by South African giant Impala Platinum Holdings Ltd. [IMP-JSE] in an all-cash transaction worth $1.0 billion.

North American Palladium has described itself as the world’s only pure play producer of palladium, a key ingredient in the production of catalytic converters, which are used to limit harmful emissions from car exhaust system.

Due to strong demand and constrained supply, palladium prices recently hit a record high of US$1,665.50 an ounce.

North American Palladium’s flagship asset is the Lac des Iles mine, which has been in production for 25 years and is located northwest of Thunder Bay, Ontario.

With over 600 employees, Lac des Iles boasts a unique ore body, and modern infrastructure, including both an underground and open pit mine.

A 5% net smelter return royalty is paid to Sheridan Platinum Group Ltd. of Toronto as a result of a 1994 settlement that saw North American Palladium buy Sheridan’s interest in the mine in exchange for cash, stock, and a reserved NSR interest of 3%, which rose to 5% after the year 2000.

Under the terms of an agreement with Implats, shareholders of North American Palladium, other than Brookfields Business Partners L.P. will receive $19.74 per common share. Brookfields, as the majority shareholder, will receive $16 a share.

The minority shareholder consideration represents a premium of 15% to North American Palladium’s 30-day volume-weighted average price and 23% to the company’s 60-day volume weighted average price on the Toronto Stock Exchange as of October 4, 2019.

The transaction has been unanimously approved by both the directors of North American Palladium and Implats.

“This transaction delivers attractive value for shareholders and reflects five years of hard work we have devoted to realize the potential of our assets,” said North American Palladium President and CEO Jim Gallagher.

“We have successfully established Lac des Iles Mine as one of Canada’s largest, lowest cost and safest underground mines, producing metal that contributes to a cleaner global environment,” Gallagher said.

North American Palladium said the transaction will require the approval of at least 66 2/3% of the votes cast by shareholders of the company at a special meeting of shareholders.

A termination fee of $24.5 million becomes payable to Implats if North American Palladium accepts a superior proposal during a 30-day “go shop period,” during which the company and its representatives have the right to respond to bonafide expressions of interest in respect of an acquisition proposal.

The termination fee rises to $37.7 million if North American Palladium accepts a superior proposal after the 30-day go-shop period has ended.

News of the deal comes after North American Palladium recently reported record revenue of $135.6 million in the second quarter of 2019, up from $94.1 million in the year earlier period.

Net income in the second quarter was $36.6 million or $0.62 a share, compared to net income of $14.2 million or 24 cents a share in the second quarter of 2018.

Underground production averaged just over 7,000 tonnes per day in the quarter, the highest in the company’s history, and a significant increase from 5,856 tonnes per day in the second quarter of 2018.

Gallagher said the company benefitted in the second quarter from strong palladium prices and the highest-ever underground production.

The company said its mine expansion project is ahead of schedule in terms of both development metres and rate of underground production as Lac des Iles is well on its way to achieving 12,000 tonnes per day by 2021.

In the first half of 2019, the company said it generated free cash flow of $91 million.

On Monday, North American Palladium shares eased 0.25% or $0.05 to $19.69 on volume of 847,511. The shares are trading in a 52-week range of $26.30 and $9.12.

Sibanye Gold starts restructuring process, new holding company created

To effect an internal restructuring and create a more efficient group structure, JSE- and NYSE-listed Sibanye-Stillwater on Friday announced a firm intention to acquire 100% of the share capital of Sibanye Gold. This will be done by way of a scheme arrangement, which the miner said would require a new holding company to be listed with the same shareholders and exactly the same shares in the new holding company to be issued to existing shareholders.

Silver Bull says its Mexico Sierra Mojada project ‘illegally’ blockaded

Canadian mining firm Silver Bull Resources said in a statement on Monday that it has temporarily suspended work at its Sierra Mojada project in northern Mexico due to a blockade by a cooperative of local miners. Silver Bull said it is in an ongoing legal battle with the cooperative, called Sociedad Cooperativa de Exploracion Minera Mineros Nortenos, which "illegally blocked" access to the project before a final court ruling is issued on the conflict.

Barrian takes option on early-stage Nevada project

TSX-V-listed exploration company Barrian Mining has signed an option agreement to acquire the Troy Canyon gold/silver project, in Nevada, from private firm Brocade Metals. The Troy Canyon project has returned historical underground stope rock grab samples assaying 576 g/t gold and 229 g/t silver. The project is located about 70 km east of Barrian's flagship Bolo project.

Get Gold and Silver Before Middle East Devolves into Civil War

News out of Saudi Arabia today and tensions in the strait of Hormuz for months has been signaling to astute investors be careful of a geopolitical black swan coming from the Middle East.  This could be a game changing event in the Middle East today as oil and precious metals soar on today's news that there was a "Drone Attack on Saudi Oil Field".

For weeks now I have been noticing with lots of small cap oil stocks despite hitting new lows there was a big pickup in insider buying.  Now many of these junior oil stocks could run higher.  I'm also thinking the entire energy complex including our beaten down battery metals stocks could start bouncing higher too as oil prices spike higher.  Notice the recent move of this little cobalt stock above the 200 DMA last Friday.

The fighting between the Shiites and Sunnis is centuries old and won't be solved in the next few weeks, months or years and probably not in our lifetimes.  The USA economy has already been under pressure and rising oil prices could be another big blow to a US manufacturing industry staggering into a possible economic recession.

The Fed meets this week and will probably lower rates again to keep the real estate and stock market propped up despite a declining yield curve.  Remember the Fed has put possibly billions into pushing up markets to a historic overbought condition through manipulating rates to record low levels yet these low rates haven't stimulated factory and wage growth stats show anemic growth.

Mortgage rates are at all time lows and Americans are once again leveraging themselves again into 401k's and real estate.  I am concerned that younger investors who haven't gone through the financial crisis are repeating the same mistakes of the past which is buy houses all on credit with no savings reserve.  Once the house of cards comes crumbling down and foreclosures start again we could see another housing crisis.  Most urban areas are unaffordable at the moment to the middle class.  But those of us who have been around knows that with time those imbalances get corrected through real estate crashes.

Negative rates and soaring US debt has placed the country on an unsustainable path where either they cut government spending and entitlements or devalue the currency completely.  Our politicians in DC are doing whatever they can to keep the US dollar down but everyone else in the world is doing something similar in this race to debase.  China, South Americans and the Europeans are winning that race now.

However, even China is suffering with an economic slowdown despite their crashing Yuan.  There are growing concerns of the Pro West supporters in Hong Kong.  Protests have gotten violent showing us there is still a side of China that the West doesn't fully get.

That is why its more important to own gold and silver now more than ever.  For years the major miners have made poor decisions overpaying in risky jurisdictions.  Shareholders have gotten poor with little dividend growth while the management got very rich through options, salary and change of control payments.

Even the gold price moving higher past $1500 USD and into record highs in other fiat currencies has not caused a gold rush into the producers, developers and explorers.  This takes time and confidence that this recent move in gold is here to stay and not just a short term blip.  So far very little money other than Eric Sprott has moved into the juniors and even good exploration results are met with relentless selling.

The money for exploration has dried up over the past generation.  The majors cut their exploration teams back in the last cycle.  Many of the old timers who knew how to mine the gold are gone now into the next world or way past retirement.  The TSX Venture is hitting all time lows while the big banks and Big Board stocks hit all time highs through Government supported share buybacks.  The only answer and turnaround could be a major discovery similar to Hemlo, Eskay Creek or Voisey's Bay to get exploration turned around.

I closely monitor and invest in the junior miners raising money to drill for new discoveries because that is why we are in this sector to make money.  The big money in mining is made in getting in before a discovery hypothesis is confirmed through drilling.  In some cases sentiment in the markets and sector can be so bad that the market doesn't recognize yet the opportunity.  This is where we dig around the press releases and news filing for undiscovered stories not really known yet but could be if they hit on drilling.

1)One of my favorite explorers recently has had some of the best drill results in Canada but for some reason has been hit hard by short sighted sellers despite adding a 3rd drill rig and announcing a winter camp up in Central BC on its 100% owned property.  This exciting explorer is accelerating exploration with this 3rd drill rig.  In my opinion, the adding of this rig and setting up winter camp are the clues in the press release indicating management believes that this system is going to get thicker and higher grade building tonnage.  According to the Chairman, "The continued discovery of very impressive size and grade intervals in the 421 zone in the 2019 campaign are exceeding our expectations."

2)I hear at the Metals Investors Forum in Vancouver conference this little junior drilling right now in the #goldentriangle is run by the Geo who helped build Lumina Copper for billionaire Ross Beaty was a big hit.  They have a target that looks very similar to GT Gold early days and are just starting to drill.  The stock has gotten some recent traction as they made a new discovery sampling over 4 g/t Gold over 100 meters.  This company is going full speed ahead and should start drilling any day now up in the Golden Triangle.

3)Another big turnout at the Metals Investor Forum conference was for this junior that has gotten a lot of interest recently when they announced the start of drilling in Nevada.  This is a new company that is starting to drill within four months of being a public company.   They also just announced DTC eligibility which will allow more US investors to participate.  The property was drilled last by previous operator in 2017 and hit 1.3 g/t over 133 meters.  Recent technical work shows that there could be much more upside.  Let's see what truth machine says in several weeks.  

4) We will be having a new interview with an explorer in the Yukon backed by Newmont Goldcorp hitting exceptional high grade porphyry results right on the road leading up to the Coffee project.  This could be another top takeout target in by 2020.  They intersected 400 m of 1.2 g/t gold in first area tested for a deep porphyry.  New interview with management being published shortly!

Jeb Handwerger is not a registered investment advisor!  Junior Mining Stocks are very risky! Buyer Beware!

Assume Author (Jeb Handwerger) owns shares in featured companies and that I want to sell them for a profit.  Sponsors are website advertisers so that means I have been compensated and have a conflict of interest to help boost awareness of this story. The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Jeb Handwerger about any company, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. Author is not responsible under any circumstances for investment actions taken by the reader. Author has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. Author is not directly employed by any company, group, organization, party or person. The shares of these companies are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed / registered financial advisors before making investment decisions. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. Author is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. Author is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. Author is not an expert in any company, industry sector or investment topic. 

 

 

 

 

 

 

 

 

Integra delivers DeLamar PEA

Idaho-focused Integra Resources has published a preliminary economic assessment (PEA) for its DeLamar gold/silver project that outlines average yearly production of 124 000 oz of gold-equivalent at an all-in sustaining cost of $742/oz on a gold-equivalent basis. Over its ten-year life, the mine will deliver 1.03-million ounces of gold and 16.60-million ounces of silver.