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A sell off to end the day… Is this a wake-up call to all bills?
Chris Temple wraps up the day with a focus on the end of day selloff across the board. With California starting to shut business down again investors stayed scrambling to cash. Could this be the start of the long awaited pullback?
MAS Gold Corp. [MAS-TSXV] and Southern Empire Resources Corp. [SMP-TSXV; 5RE-FSE] have entered into a binding agreement dated July 11, 2020 whereby Southern Empire has agreed to acquire all of the issued and outstanding common shares of MAS Gold.
Highlights of the Transaction
MAS Gold has two advanced stage gold deposits having NI 43-101 mineral resources located in the La Ronge Gold Belt of Saskatchewan.
The North Lake Gold Deposit contains 417,000 oz gold is comprised of an Inferred Resource of 14,110,000 tonnes grading 0.92 g/t gold.
The Greywacke North Gold Deposit contains 95,600 oz gold is comprised of an Indicated Mineral Resource of 255,500 tonnes of 9.92 g/t gold, plus an Inferred Resource of 59,130 tonnes of 7.42 g/t gold, at a cut-off grade of 5 g/t gold.
There is significant potential for resource expansion exists at both Greywacke North and North Lake. Excellent exploration potential also exists for MAS Gold’s Preview-North Property (which hosts the Point gold deposit), Henry Lake and Elizabeth Lake properties.
The combined entity will have a strong balance sheet, with no debt and a cash position of approximately $5.5 million, which will be used to target expansion of the current NI 43-101 resources as well as exploration and development on all of Southern Empire’s projects.
CEO of Southern Empire, Dale Wallster, stated, “With this transaction, Southern Empire will emerge as a company having NI 43-101 gold resources in Saskatchewan, annually ranked as one of the best mining jurisdictions in the world, which we will target to expand and enhance. Together with our Oro Cruz and Eastgate gold projects in the southwestern U.S.A., we will be a multi-asset, advanced stage gold exploration and development company with holdings in some of the best mining jurisdictions in the world. Southern Empire has a strong treasury, an award-winning technical team and management with strong track records in the capital markets.”
Under the terms of the agreement, each shareholder of MAS Gold will receive 1 common share of Southern Empire for every 8.5 common shares of MAS Gold. Assuming completion, and none of the options or share purchase warrants of MAS Gold being exercised prior to closing of the transaction, Southern Empire will issue a total of 5,828,090 Southern Empire Shares to the shareholders of MAS Gold.
Based on a price of $1.19 per Southern Empire Share, being the closing price of Southern Empire on July 10, 2020, the 8.5 to 1 conversion ratio represents an offer price of $0.145 per MAS Share, being a premium of 21% of MAS Gold’s closing price on July 10, 2020.
Following completion of the transaction, Southern Empire will have 56,734,890 issued and outstanding shares, of which the former shareholders of MAS Gold will hold approximately 10.3%.
All outstanding options and warrants of MAS Gold will remain outstanding (if not exercised prior to closing of the transaction) and will be adjusted to give effect to the transaction.
MAS Gold’s board of directors concluded that the Transaction is in the best interests of MAS Gold and has approved the agreement. Similarly, after taking into consideration, among other things, the terms of the transaction, the Southern Empire board of directors has concluded that the transaction is in the best interests of Southern Empire and has approved the agreement.
The transaction will require the approval by at least 66 2/3% of the votes cast on the special resolution by MAS Gold shareholders and, if required, Southern Empire shareholders present in person or represented by proxy at the shareholder meetings.
Ron Netolitzky is Chairman and director of Southern Empire and CEO, President and a director of MAS Gold and Andrew Davidson is Chief Financial Officer of each of Southern Empire and MAS Gold.
The transaction is subject to due diligence, shareholder and regulatory approvals. The transaction is expected to close in the second half of 2020.
Wallbridge Mining Company Ltd. [WM-TSX; WC7-FSE] has released the first assay results received since the resumption of activities after the suspension of work due to COVID-19, and has provided an update of the continuing, fully financed 80,000-metre to 100,000-metre 2020 drill program at its 100%-owned Fenelon gold property 75 km northwest of Matagami, Quebec.
Main Gabbro in-fill drilling continues to define high-grade shoots near existing mine workings. Hole 20-1100-011 returned 4.88 g/t gold over 18.95 metres, including 96.90 g/t over 0.70 metres in the Serrano Zone. Hole 20-1100-010 returned 5.84 g/t gold over 6.80 metres, including 37.70 g/t over 1.00 metre in the Serrano Zone.
Tabasco-Cayenne step-out drilling extended mineralization over 100 metres down-plunge. Hole FA-20-134 returned 4.06 g/t gold over 51.70 metres. This intercept includes 8.41 g/t gold over 19.15 metres (which further includes 41.01 g/t gold over 3.65 metres) as announced May 20, 2020, and new assay results including 4.44 g/t gold over 9.75 metres received since the resumption of activities after the COVID-19 suspension.
Area 51 in-fill drilling continues to demonstrate near surface, potentially open pittable zones. Hole FA-20-125 returned 15.73 g/t gold over 3.00 metres in the Andromeda Zone. Hole FA-20-136 returned 1.17 g/t gold over 38.50 metres, including 47.40 g/t over 0.50 metres in the Titan Zone.
“We are excited to have ramped up the drilling program to six drill rigs again and thank all the employees, service providers and local communities for working together to safely execute our exploration activities in these challenging times amidst the COVID-19 pandemic,” stated Attila Pentek, Vice President Exploration. “In addition to continuing our expansion and in-fill drilling in the Tabasco-Cayenne-Area 51 gold system, we are pleased with the first results of our near surface in-fill drill program testing the Titan and Andromeda zones in Area 51. With several potentially bulk mineable zones showing good continuities near surface, as seen in figures 3 and 4 of this release, an open pit component to a future resource is starting to become more and more tangible. With approximately 15,000 metres of drilling completed since the resumption of drilling activities, the assay labs are again processing a pipeline of our samples and we are looking forward to a steady flow of assay results.”
Two drill rigs are active on the newly-acquired portion of the Fenelon Gold Property to follow-up on the Reaper and Ripley gold discoveries made in 2019 and 2020 by Balmoral Resources and to test the extensions of the Tabasco-Cayenne-Area 51 gold system onto this adjacent ground. Wallbridge is planning to complete approximately 20,000 metres of drilling in 2020 on the new ground acquired from Balmoral, with over 3,000 metres completed to date.
Wallbridge is establishing a pipeline of projects that will support sustainable 100,000 ounce-plus annual gold production as well as organic growth through exploration and scalability.
Wallbridge completed the Plan of Arrangement to acquire all of the issued and outstanding shares of Balmoral Resources in an all-stock transaction.
Wallbridge is also pursuing additional advanced-stage projects which would add to the company’s near-term project pipeline. Wallbridge is also the operator of, and a 17.8% shareholder in, Loncan Canada Inc., a privately-held company with a large portfolio of nickel, copper, and PGM projects in Ontario’s Sudbury Basin.
Silver is outperforming gold but what is the biggest risk to this precious metals bull market?
John Rubino joins me today for comments on the overall environment that is driving precious metals. Recent news out of China shows a further explosion in debt creation which no doubt is helping to support the financial markets. We also share our thoughts on the near term risks for a pullback.
Rockhaven Resources Ltd. [TSX-V:RK] (“Rockhaven”) is pleased to announce the results of an updated Preliminary Economic Assessment (“PEA”) for its 100%-owned and road-accessible Klaza Deposit, located in the Dawson Range Gold Belt of southern Yukon.
Highlights from the PEA, with a base case gold price of US$1,450/oz and an exchange rate of C$1.00 equal to US$0.72 are as follows (all figures in Canadian Dollars unless otherwise stated):
• Pre-Tax NPV(5%) of $529 million and an IRR of 45%, and a Post-Tax NPV(5%) of $378 million and an IRR of 37%;
• Using a +/- 20% sensitivity analysis for gold price, Post-Tax NPV(5%) of $540 million and 49% IRR at US$1,740/oz gold and a Post-Tax NPV(5%) of $211 million and 24% IRR at US$1,160/oz gold;
• 12-year mine life producing total payable metals of approximately 750,000 ounces gold and 13.8 million ounces silver;
• Initial capital costs of $244 million, which includes $32 million in contingency costs. Life-of-mine (“LOM”) sustaining capital costs total $114 million;
• Average LOM operating cash cost of US$613/oz AuEQ* and total all-in sustaining cost of US$875/oz AuEQ*;
• Annual payable metal production exceeds 100,000 ounces AuEQ in years three through seven; and,
• Only the upper portions of three out of eleven known mineralized zones are included in Mineral Resources evaluated by this PEA, and there is excellent potential for value enhancement through additional exploration.
“This study demonstrates that Rockhaven’s Klaza Deposit could support a mine with a long life and robust economics,” stated Matt Turner, President and CEO of Rockhaven. “Since the last economic study was completed in 2016, closer spaced drilling has better defined the upper portions of the deposit, resulting in higher average grades in a superior resource category. We are very pleased with the results of this PEA and look forward to continuing to add value through additional discoveries while advancing the deposit through Pre-Feasibility. At its current ~C$35 million market capitalization, Rockhaven offers investors one of the most compelling valuations in the sector.”
AMC Mining Consultants (Canada) Ltd. (mineral resource, mining, infrastructure and financial analysis) was contracted to conduct the PEA in cooperation with Blue Coast Metallurgy Ltd. (metallurgy and processing), Knight Piesold Ltd (tailings and waste management). The PEA is based on the updated Mineral Resource estimate from the Klaza Deposit (see Klaza Property Technical Report dated June 5, 2018).
The reader should be cautioned that the PEA is preliminary in nature. It includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the results of the PEA will be realized.
Economic Results and Sensitivities
Tables I and II show economic results with varying metal prices and assumptions, and summarize projected production.
Table I: Klaza Combined Open Pit and Underground Mining – Key Economic Assumptions and Results
The Klaza project has been envisioned as a combined open-pit and underground mining operation. Open-pit mining is anticipated to be completed by a contract mining company while the underground operation will be owner-operator with the equipment owned and personnel employed by Rockhaven.
Grid electrical power will provide the majority of the electrical power to the project over the life of the mine. An on-site camp is envisioned to house mine and mill personnel.
Open-pit mining is anticipated to commence in Year 1 and produce a total of 1,181 kt of mineralized rock over three years. Peak open-pit production will be 598 kt in Year 2. A total of 6,283 kt of mineralized rock is anticipated to be produced from underground operations over the 12-year mine life, beginning in Year 1. Peak underground production will be 688 kt in Years 5 through 7.
Underground mining will be accomplished using mechanized longhole open stoping on 25 m sub-levels. A minimum stope width of 3.0 m was used in this study with dilution of 0.25 m in the hanging wall and 0.1 m in the footwall. Underground access will be achieved via four separate declines for the each of the four main zones. The Central Klaza decline will start from the base of the open-pit.
Waste rock will be used to backfill underground stopes as they are mined and to construct the tailings dams. The remainder will be disposed of in waste dumps on surface.
Processing & Metallurgy
The Klaza process consists of comminution by crushing followed by semi-autogenous grinding and ball milling, with the ground product feeding a conventional sequential flotation circuit producing lead, zinc and arsenopyrite concentrates. The arsenopyrite concentrate is treated by pressure oxidation (POX), followed by cyanide leaching of the POX residue to recover the gold. Precious metals are also leached from the lead concentrate to increase the overall gold recovery to doré and enhance saleability of the concentrate. Final products from this process are precious-metal-rich lead and zinc concentrates as well as gold and silver as doré.
The processing plant will operate year-round at a rate of approximately 1,900 tonnes per calendar day, and will achieve full throughput by Year 2. The average LOM feed grade is projected to be 3.40 g/t Au, 79 g/t Ag, 0.6% lead and 0.7% zinc.
Base metal concentrates will be dewatered and containerized for shipment to smelters. Flotation tailings will be thickened and sent to a conventional tailings impoundment, and the leached pressure oxidation residue will flow through cyanide destruction and be sent to a double-lined hydromet residue storage facility.
Although this study assumes a relatively small 250 tpd onsite POX circuit would be used, an arsenopyrite concentrate could be produced for shipment to a smelter in Nevada or China. This was not considered in this study at this time but will be investigated as the project advances.
Process water will primarily be sourced from underground dewatering and surface run-off, with make-up from the nearby Klaza River as necessary.
Metallurgical testwork to support the PEA has been conducted on several composites from the Western Klaza, Central Klaza and Western BRX zones, as well as a Project-Wide Composite comprising a blend of material from these zones. Testwork included grinding, flotation and pressure oxidation work.
Opportunities to Enhance Value
This updated PEA reaffirms Rockhaven’s commitment to enhancing value at the Klaza project through engineering studies and resource expansion and definition. It has highlighted several key areas that can provide significant opportunities to further enhance the value of the Klaza project. These opportunities include:
Infill drilling to better define areas of high-grade mineralization within the current inferred resource area;
Additional drilling to better define and expand the Central BRX Zone which has seen limited work to date relative to the other zones;
Additional drilling of potential near surface bulk tonnage targets within the Eastern BRX Zone, which has yielded high gold recoveries through cyanidation;
Additional drilling beneath current Mineral Resources, where the deposit remains open at depth;
Detailed drilling of other known mineralized structures in order to model and include these into future mineral resource estimations; and,
Further metallurgical studies and investigation of potential smelter contracts for an arsenopyrite concentrate as an alternative to the on-site POX circuit that is currently envisioned.
The basis for the PEA is the Mineral Resource estimate completed by AMC Mining Consultants (Canada) Ltd. in the NI 43-101 report with an effective date of June 5, 2018 entitled “Technical Report Describing Updated Diamond Drilling, Metallurgical Testing and Mineral Resources on the Klaza Property, Yukon, Canada” which is filed on SEDAR.
A summary of this resource estimate is shown in Table V:
The Klaza property is 100% owned by Rockhaven Resources Ltd. and covers an area of 287 km2. It is favourably located within the southern part of Yukon’s Dawson Range Gold Belt, in an area that hosts an historical gold mine, rich placer gold deposits and key infrastructure such as road access.
The Klaza property is located 50 km west of the village of Carmacks and is road accessible by a two-wheel drive road from the Klondike Highway. Rockhaven’s exploration since it acquired the project in late 2009 has included over 100,000 m of diamond drilling and 24,000 m excavator trenching.
Drilling at the Klaza property has identified eleven main mineralized zones and numerous subsidiary structures which have a cumulative mineralized strike length greater than 10 km. The zones are hosted within a 1.8 km-wide structural corridor consisting of Mid-Cretaceous granitic country rocks. Low to intermediate sulphidation veins host gold, silver, lead and zinc mineralization.
A Technical Report supporting the PEA in accordance with National Instrument 43-101 will be filed on SEDAR (www.sedar.com) within 45 days.
The PEA was prepared under the direction of AMC Mining Consultants (Canada) Ltd. by independent industry consultants, all of whom are Qualified Persons (QP) under terms of NI 43-101 and have reviewed the technical content of this press release and approved its dissemination. QPs contributing to the PEA are listed in the following table.
All other technical information, not pertaining to the PEA, in this news release has been reviewed and approved by Matthew R. Dumala, P.Eng., of Archer, Cathro & Associates (1981) Limited and Rockhaven’s designated QP.
The Qualified Persons under the terms of National Instrument 43-101 have reviewed the technical content of this press release for the Klaza property and have approved its dissemination.
Rockhaven Resources Ltd. is a mineral exploration company focused on growth through the advancement of its Klaza project. For additional information concerning Rockhaven or its Klaza project please visit Rockhaven’s website at www.rockhavenresources.com.
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.
TSX-listed gold miner B2Gold has produced 239 574 ounces of gold in the second quarter, which is an increase of 15% over the same quarter of 2019 and also 3% more than its guidance.
The higher output was driven by the Fekola mine, in Mali, which continued its strong operational performance with gold production of 147 424 oz, above budget by 5% and 29% higher than a year earlier.
Egypt-focused gold miner Centamin reports that increased gold sales and a higher gold price contributed to a 196% year-on-year increase in the company's free cash flow to $56-million for the quarter ended June 30.
During the June quarter, the company, which operates the Sukari mine, sold 130 745 oz of gold, a 16% improvement year-on-year, in line with higher production.
Gold explorer and developer Sarama Resources has launched a private placement to raise up to C$3-million. The proceeds will be used to undertake a variety of work, including a mineral resource update on the South Houndé project, in Burkina Faso, high-value oxide focused exploration drilling and general technical work to support framing up of development options.
Gold miner Saracen Mineral Holdings has suspended operations at its Carosue Dam operations, in Western Australia, following a ‘serious incident’ at the Dervish mine.
The ASX-listed miner reported that an underground worker had fallen from a height.