Scotgold looks for new targets as it readies to open Scotland’s first commercial gold mine

Scotgold Resources (LON: SGZ), the company aiming to open Scotland’s first commercial gold and silver mine in Cononish, is seeking its next big discovery by stepping up sediment and soil sampling programs across the Grampian project, in the Scottish Highlands.

“Although our prime focus continues to be the development of the Cononish mine, our exploration activities continue to build an exciting portfolio of anomalies which will form the basis for potential future drilling programs in the years to come,” chief executive Richard Gray said in a statement.

The company, which is close to declare commercial production at Cononish, has been working to reopen the abandoned gold mine near Tyndrum for almost 13 years. The hope, Gray told FT.com, is that the project proves the viability of precious metal extraction in Scotland.

Chief executive, Richard Gray, expects to see a “mini gold rush” in the Scottish Highlands in coming years.

“It sounds a bit presumptuous and grandiose, but we do see this as being the start of a gold mining industry in Scotland,” Gray told FT.com. “I think there will be a sort of mini gold rush, potentially, in the years to come.” 

While gold panning has a long history in Scotland, investor worries and opposition from environmentalists have botched attempt to take the activity to an industrial level.

Scotland has survived green activists’ disapproval, mainly focused on the scale of the tailing that will be left behind, scoring a major win in early 2018. At the time, it received initial approval for Cononish, about 80 km (50 miles) north of Glasgow.

The asset produced its first gold in August 2016, following the launch of an ore processing trial. After the local authorities gave the project their blessing, the company began building a large-scale operation.

Now Scotgold is about to start producing at its underground mine with an initial output capacity of 23,500 ounces of gold annually, for up to 17 years.

The company expects to process around 3,000 tonnes of ore per month in the first phase, which it says will double in phase two.

As many as 52 jobs could be created during production, and the firm has offered nearly £500,000 (about $612K) in payments to support the local community of Tyndrum.

The small village is currently a local tourist destination, known mostly for being at a junction of major transport routes.

Joshua Gold acquires King Solomon’s mine

Joshua Gold Resources announced this week that it acquired a 100% interest in the King Solomon’s mine in northern Ontario in return for 8 million of its common shares and a 2% Net Smelter Royalty.

King Solomon’s is located in Davis Township, approximately 45 miles northeast of Sudbury. The property consists of four claims that occupy approximately 180 acres.

Historic work at King Solomon’s mine from 1976 to 1986 consists of geological, geophysical surveys, surface trenching, sampling and 20 short DDHs

According to Joshua Gold, the area is primarily underlain by Precambrian rocks consisting of Huronian sediments and intruded by Nipissing gabbro sills and dykes. 

In a press release, the company said that a prospecting program carried out last August was successful in locating and sampling numerous old trenches. A team on the ground took seven grab samples which, once analyzed, showed gold values that range from .132 grams per tonne to a highly anomalous 209 grams per tonne or 6.50 ounces per ton.

“The KSM property acquisition helps diversify our northern Ontario gold land portfolio,” Ben Fuschino, CEO of the Woodstock-based miner, said in a media statement. “The initial results are promising; our geological team will focus on how JSHG can best explore the mineral potential of KSM.”

Noram encouraged by initial drill results at Nevada lithium project

Noram Ventures (TSXV:NRM) issued a statement this week saying that initial drill results from three of six drill holes completed in November 2019 on the Zeus lithium claystone property are higher than the current inferred resources. 

“Drill hole 47 returned results of 29 metres at 1164 ppm Li, and drill hole 53 showed 54.9 m at 1186 ppm Li immediately below the 2019-02 inferred resource. These values are higher than the current inferred resource of 145 million tonnes at 1145 ppm Li,” the release states. 

Noram’s goal is to outline a viable lithium resource that can support a mining operation that can produce 20,000 tonnes of lithium carbonate per annum for 20+ years

According to Noram’s CEO, Tucker Barrie, the company’s immediate goal is to outline a viable lithium resource that can support a mining operation that can produce 20,000 tonnes lithium carbonate per annum for 20+ years. 

“We are encouraged by these Phase IV drill holes which will significantly increase our current resource. The deposit remains open to the south and east on the property where there are >2 km2 of untested ground,” Barrie said. “As well, we note the success of our neighbour Cypress Development Corp., which has a similar lithium claystone deposit and is making significant advances with extraction technology. This bodes well for the development of our Zeus deposit.”

The Zeus lithium property is located in Clayton Valley, Nevada, immediately adjacent and to the east of Albemarle’s Silver Peak lithium brine operations, currently North America’s only lithium producer.

The lithium deposit is within the non-refractory claystone of the Esmeralda Formation.

IAMGOLD’s 2019 production falls short, CEO to retire

Canada’s IAMGOLD Corp. (TSX IMG), (NYSE: IAG) announced on Thursday that chief executive officer Stephen Letwin will retire at the end of February after a decade at the company, with the post to be assumed by the current president and chief operating officer (COO) Gordon Stothart.

The news comes on the same day the Toronto-based miner posted preliminary operating results for 2019, which show output fell short of IAMGOLD’s target for the year.

Attributable gold production last year reached 726,000 gold ounces, compared to the 765,000 to 810,000 ounces the company expected. Fourth quarter output totalled 192,000 ounces.

Upcoming CEO Stothart warned that 2020 would be a year of transition for the miner, as focuses on the future of Essakane and Rosebel, continues development of Westwood and brings its 70:30 Saramacca joint venture (JV) project with the government of Suriname up to full production.

IAMGOLD halted work at Rosebel, also in Suriname, in August, following an incident involving police that caused the death of an artisanal miner and left some equipment unusable.

Shortly after, it laid off 325 contractors for the South American mine and lowered its production forecast for the year to between 765,000 to 810,000 ounces of gold, to reflect the operation’s halt.

The company, however, ended up re-hiring the dismissed workers after reaching an agreement with the local community, which allowed it to resume operations.

Rosebel, located in the mineral rich Brokopondo district, about 85 km south of the capital city of Paramaribo, has often been a target for illegal miners. This has led the company to allow some artisanal miners to work on the concession.

Looking forward, IAMGOLD expects to produce between 700,000 and 760,000 ounces of gold in 2020, which reflects no output at Sadiola, which is in the process of being acquired by Australia’s Allied Gold Corp.

Market risk, economic growth to drive gold demand this year — WGC

The interplay between market risk and economic growth is expected to drive gold demand in 2020, the World Gold Council (WGC) says in their latest market report. The major driving forces include financial uncertainty and lower interest rates, a weakening in global economic growth, and gold’s price volatility.

Last year, gold had its best performance since 2010, rising by 18.4% in US dollar terms. It also outperformed major global bond and emerging market stock benchmarks in the same period. In addition, gold prices reached record highs in most major currencies except the US dollar and Swiss franc.

The WGC expects this trend to continue in 2020 as many of the global dynamics seeded over the past few years will remain generally supportive for gold. In particular, lingering financial and geopolitical risks combined with impending interest rate cuts are likely to bolster gold investment demand.

“The very low level of interest rates worldwide will likely keep stock prices high and valuations at extreme levels. And although investors may not step away from risk assets, anecdotal evidence suggests they are increasing exposure to safe-haven assets like gold as a means to hedge their portfolios,” the WGC elaborates.

Net gold purchases by central banks are expected to remain robust, the WGC added, even if they are lower than the record highs seen in recent quarters. Momentum and speculative positioning may keep gold price volatility elevated as well.

Volatility and expectations of weaker economic growth may result in softer consumer demand in the near term, while structural economic reforms in India and China will support the long-term demand.

The council doe not anticipate a reduction in gold volatility in the near term, but says that should the economic and political environment deteriorate, it may even rise, especially as “gold volatility historically exhibits a positive skew in such circumstances, tending to increase as stocks pull back.”

The WGC points out that as the gold price significantly rose in 2019, so did volatility, but similarly to other assets, it remains well below its long-term trend.

In regards to the recent tensions in the Middle East, the council says investor positioning related to this specific event will likely influence gold’s performance in the near term, but over the medium term, broader financial and geopolitical uncertainty and developments in monetary policy will play a more important role.

Yamana beats production guidance

Yamana Gold has released 2019 production results with 1.02 million of gold-equivalent oz. slightly exceeding the company’s guidance for 1.01 gold-equivalent oz. Three underground mines in South America: Jacobina, El Penon and Minera Florida appear as outperformers last year.

The company’s biggest production contribution is from its 50% stake in the Canadian Malarctic open pit in Quebec which produced 334,596 oz. last year, in line with expectations.

For Minera Florida in Chile, December, in particular, was a standout month with over 50% more ounces produced than its monthly average. The mine produced a total of 73,617 oz. in 2019; Yamana believes that the mine may be able to support higher production this year.

The company will provide costs with its full financial results and guidance release in mid-February; latest all-in sustaining costs guidance was for $920 to $960 for the year.

(This article first appeared in the Canadian Mining Journal)

Wesdome sets production guidance for 2020

Gold miner Wesdome (TSE: WDO) has issued production guidance of 90,000 oz. to 100,000 oz. for this year; last year’s production of 91,688 oz. was in line with prior guidance for 88,000 oz. to 93,000 oz.

The bulk of the company’s current production is from its Eagle River underground mine near Wawa. Output from this asset has been steadily increasing, with 88,617 oz. produced last year, compared to 67,315 oz. and 50,996 oz. contributed in 2018 and 2017 respectively. This year, Wesdome is forecasting 87,000 oz. to 96,000 oz. from the mine.

Upon positive results, it will start a pre-feasibility study of the operation

The company plans to continue with underground exploration and development at Eagle River to generate higher-grade feed for the mill. The most recent all-in sustaining cost guidance for 2019 was at $985 to $1,040 per oz. with no changes to these figures expected this year.

The Eagle River complex also includes the Mishi open pit which is currently Wesdome’s only other gold contributor.

Wesdome also holds the Kiena past-producing underground mine in Quebec. Work is ongoing on a preliminary economic assessment for this asset with results expected in the first half of the year. Drilling, drifting and ramp development are ongoing as the company prepares for a potential restart of the mine. Upon positive results, it will start a pre-feasibility study of the operation.

This year’s capital budget for Kiena stands at C$44.8 million which includes both exploration and mine development, based on a go-forward scenario. A further C$14 million to C$17 million is allocated for capital development at Eagle River and C$9.8 million is planned for exploration. Wesdome started this year with C$35.7 million in cash and equivalents and C$41.5 million available in a credit facility.

(This article first appeared in the Canadian Mining Journal)

Titan wins bid for Core Gold, takes majority stake

Australia’s Titan Minerals (ASX: TTM) announced on Wednesday that the company has been successful in its offer to purchase all issued and outstanding common shares of Vancouver-based Core Gold (TSXV: CGLD) to create an emerging Latin America-focused gold miner.

Last year, Titan launched a takeover bid for Core Gold, offering its shareholders 2.5 fully paid Titan shares for each Core Gold share held, valuing the Canadian takeover target’s shares at C$0.42 each. The Australian company later increased its offer to 3.1 shares, valuing Core Gold at C$0.52 per share.

At the end of its takeover offer period on January 14, approximately 85.52 million Core Gold shares (excluding those owned or controlled by Titan) — representing 54.2% of those issued and outstanding — were tendered to Titan under the terms of the offer. This would bring Titan’s total shareholding in Core Gold to 56.7%.

All of the conditions of the offer have now been satisfied or waived by Titan. The company says it will immediately take up the Core Gold shares that have been tendered to date and pay for the shares taken up as soon as possible.

Titan has also extended the deadline shareholders of Core Gold have to tender their shares under the offer to January 27.

Meanwhile, both companies have confirmed that the British Columbia Securities Commission had dismissed a compliant filed by two Core Gold shareholders alleging a number of misrepresentations in the materials filed by Titan as part of its takeover bid.