First Majestic’s takes 19.9% GR Silver stake

First Majestic Silver Corp. [FR-TSX; AG-NYSE; FMV-FSE] has acquired a 19.9% stake in GR Silver Mining Ltd. [GRSL-TSXV; GLYXF-OTCQB; GPE-FSE] by picking up 17.1 million shares in the company.

The shares were issued as partial consideration for the purchase by GR Silver of a 100% interest in a First Majestic subsidiary which owns the Plomosas Project in Sinaloa, Mexico. First Majestic said it has no present intention of acquiring additional securities in GR Silver.

The Plomosas Project is located within 5 km of GR Silver’s San Marcial Project in the Rosario Mining District of Sinaloa, near the historic mining town of La Rastra. Quartz-sulphide silver-gold-lead-zinc mineralization was discovered in the vicinity of the La Rastra village in the 16th century.

Limited mining activity was conducted intermittently from 1950 to 1989 when a 600 ton-per-day underground mining operation began following the development of a flotation process concentrating lead, zinc, silver and gold ores.

Aside from the underground workings, Plomosas Project also comes with four targets at drilling/resource stage, 16 exploration targets, plus 30 km of under-explored mineralized veins/structures, and an extensive drill and exploration database, including in excess of 500 recent and historical drill holes.

Plomosas consists of 8,515 hectares of mining concessions, which are in good standing and valid up to 2058. It includes key facilities and infrastructure such as the Pomosas underground mine with 8 km of underground development, a 60-km fully operational 33 KV power line, fully operational offices, shops and a 120-person camp.

Previous operations spent US$18 million on the project to fund exploration between 2007 and 2019.

GR Silver was unchanged at 17 cents on Friday, and trades in a 52-week range of 10 cents and 27 cents.

First Majestic eased 7.8% or 79 cents to $9.39 on volume of 624,997. The shares are trading in a 52-week range of $5.31 and $16.50.

“The signing of the definitive share purchase agreement, and the ultimate acquisition of the Plomosas Project, together with associated infrastructure and exploration database, will allow the company to advance the hunt for additional high-grade silver and gold resources in 2020,” said GR Silver President and CEO Mario Fonseca.

First Majestic is a Mexico-focused mining company. It owns and operates six producing silver mines. They include the Parrilla, San Martin, La Encantada, Del Toro and Santa Elena.

Its asset portfolio also includes the San Dimas Mine following the acquisition of the site’s former owner Primero Mining Corp. in May 2018 for $187 million in common shares of First Majestic. Under a new streaming agreement, Wheaton Precious Metals Corp. [WPM-TSX, NYSE] is entitled to receive 25% of the gold equivalent production from San Dimas.

First Majestic achieved total production of 25.6 million silver equivalent ounces last year, a 15% increase over 2018, and reaching the top end of the company’s 2019 guidance range of 24.4 million to 26.0 million ounces.

The company’s silver production reached 13.2 million ounces, a 13% increase over 2018. That number was in line with the company’s guidance range of 12.8 to 13.5 million ounces.

Revenue of US$363.9 million in 2019 was a record, and marked a 21% increase from 2018.

Company Updates From Management – Fri 27 Mar, 2020

Riverside Resources – A 90 day work plan, updates on cash and the BHP alliance

John-Mark Staude, President and CEO of Riverside Resources (TSX.V:RRI & OTCQB:RVSDF) joins me to update us all at the work plans moving forward during this uncertain time. The Company has a 90 day plan to continue to move projects forward and will be continuing with the BHP exploration alliance.

Click here to visit the Riverside website and read over the recent news releases.

I will be sending out more emails going forward recapping the recent interviews and company updates. Be sure to sign up by clicking here.

Company Updates From Management – Wed 25 Mar, 2020

Vizsla Resources – Updating the status of the drill program, recent drill results, and cash position

I’m trying to stay up to date with all the companies you all are sending me. Please keep the suggestions coming. This is an uncertain time for all everything but the most important think to do is stay up to date on the companies you are invested/interested in.

Today I get an update from Vizsla Resources and the President and CEO Mike Konnert. We discuss the status of the current drill that is still underway in Mexico. We also recap the recent results from the maiden drill program and the cash in the bank.

If you have any other questions please email me at Fleck@kereport.com.

Click here to visit the Vizsla website and read over the full Company presentation.

SilverCrest talks legal action over bought deal financing

SilverCrest Metals Inc. [SIL-TSXV; SVCMF-OTCQX] said Wednesday March 18 that it has received notice from National Bank Financial Inc. that the bank is purporting to terminate its obligations pursuant to a $75 million bought deal financing announced on March 11, 2020.

In its March 11 announcement, SilverCrest said the underwriting syndicate led by National Bank Financial had agreed to purchase 9.1 million common shares of SilverCrest for $8.25 per share. The underwriters were granted a green shoe option to purchase an additional 15% of the shares offered under the bought deal.

Proceeds from the financing were earmarked for the continued exploration and development of SilverCrest’s Las Chispas Project in Sonora, Mexico.

However, since terms of the financing was announced, the value of SilverCrest shares plunged from $8.29 on March 11, 2020, to a low of $4.71 on March 16, 2020. After clawing back some of that lost ground, the shares were down 1.2% or $0.08 to $6.54, Wednesday, on volume of 1.7 million.

The shares are currently trading in a 52-week range of $3.99 and $10.98.

In a press release on Wednesday, SilverCrest said it was advised by National Bank Financial that the reason for the purported termination was based on the “disaster out” clause of the agreement.

SilverCrest also issued the following statement:

“The agreement between SilverCrest and National Bank Financial created a binding legal obligation on the part of National Bank Financial to complete the transaction as is customary in Canada for bought-deal financings.”

SilverCrest is of the view that National Bank Financial is not entitled to terminate the agreement. In SilverCrest’s opinion, the novel coronavirus pandemic considered by National Bank Financial as a basis for terminating this agreement was fully evident when the bought deal financing was agreed upon with expectations that the precious metals market would respond positively to this known risk.

Accordingly, SilverCrest intends to pursue its legal remedies against National Bank Financial for National Bank Financial’s obligations under the agreement.”

Las Chispas is the third highest grade primary silver deposit in the world. According to a preliminary economic assessment announced in May, 2019, it is expected to produce an average of 13.7 million ounces of silver equivalent annually during the first four years of operations at an all-in-sustaining cost of US$4.89 an ounce. The initial capital expenditure is forecast at US$100.5 million.

Those estimates assume a silver price of US$16.68 an ounce and a gold price of US$1,269 an ounce.

The Las Chispas property is located approximately 180 km northeast of Hermosillo. It consists of 28 concessions totalling 1,400 hectares.

Between 1880 and 1930, several mines on the property are thought to have yielded approximately 100 million ounces of silver and 200,000 ounces of gold.

Mineralization occurs in 0.5 to five-metre wide veins with adjacent stockwork and breccias trending northwest-southeast for one to 1.5 km. The company says 14 epithermal veins have previously been defined on the property, of which three have had notable production. The producing veins include Las Chispas, William Tell and Babicanora.

SilverCrest is the first company to successfully drill-test the historic Las Chispas Project, a move that resulted in numerous discoveries that are being evaluated for economic viability and potential production in the future.

Fortuna wins stay of execution in Mexico

Fortuna Silver Mines Inc. [FVI-TSX, Lima; FSM-NYSE; F4S-FSE] has released an update on the status of legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose Mine in Oaxaca, Mexico.

In early February, 2020, the company initiated legal proceedings against the Direccion General de Minas (DGM) to contest the procedure taken by DGM to cancel one of its mining concessions if the disputed royalty (in the Mexican equivalent of US$30 million), plus VAT (being the amount of the claimed royalty from 2011 to 2019) is not paid by March 15, 2020.

Fortuna said the District Court in Mexico City admitted the company’s legal proceedings and on March 2, 2020, and also granted a permanent stay of execution, which protects the company from the cancellation of concessions until a resolution by the court is reached on the legality of the cancellation procedure.

The timing of a decision by the Court at first instance in this action against DGM is uncertain and may take several months, the company said. In the event that the company is unsuccessful in these proceedings, it may appeal.

If ultimately the company does not prevail, it may be required to pay the disputed royalty in order to preserve the mining concession.

Fortuna Silver is a fast-growing precious metals producer, operating two low-cost mines in Peru and Mexico. The San Jose Mine in Mexico is located in Oaxaca, which produced 8.0 million ounces of silver and 53,517 ounces of gold in 2018. In 2019, the company was forecasting consolidated production of up to 9.0 million ounces of silver, up to 54,000 ounces of gold, up to 29 million bounds of lead, and up to 44 million pounds of zinc.

On Friday, the company said the administrative and legal proceedings initiated by the company against the DGM in 2018 to remove reference to the royalty on the title register, are progressing in accordance with the procedures of the Mexican Administrative Court.

The company has previously said the Mexican Geological Service (SGM) advised the company that a previous owner of one of its San Jose mineral concessions had granted SGM a royalty of 3% of the billing value of the minerals on the concession. Fortuna has steadfastly maintained that no such royalty is payable.

In its recently released 2020 guidance highlights, Fortuna said the San Jose Mine plans call for processing 1.06 million tonnes this year at an average grade of 223 g/t silver and 1.39 g/t gold. Capital investment is estimated at US$17.1 million, including US$12.2 million for sustaining capital expenditures and US$4.9 million for brownfield exploration programs.

This year, the company has said it plans to produce between 7.5 and 8.3 million ounces of silver and between 101,000 and 125,000 ounces of gold.

On Friday, Fortuna shares eased 3.9% or 18 cents to $4.37 on volume of 427,545.  The shares trade in a 52-week range of $3.23 and $6.12.

Alio sells Mexico mine to Magna Gold

Alio Gold Inc. [ALO-TSX, NYSE] said Friday March 6 that it has agreed to sell its San Francisco gold-silver mine in Mexico to Magna Gold Corp. [MGR-TSXV; MGLQF-OTCQB] for cash and shares of Magna.

The move will allow Alio to focus its energy on the Florida Canyon Mine in Nevada.

The San Francisco Mine is held through Molimentales del Noroeste S.A. de C.V., a wholly-owned subsidiary of Alio Gold, which owns a 100% interest in the mine and surrounding mineral concessions.

Under the terms of the deal, Alio will receive 9.74 million shares of Magna upon closing, representing a 19.9% stake in Magna, plus an additional $5 million in cash within 12 months of the transaction completion date.

Alio shares were unchanged at 90 cents on Friday and trade in a 52-week range of 69 cents and $1.24.

The San Francisco Mine has produced over 820,000 ounces of gold since commercial production was achieved in April, 2010. Active mining ceased in early 2019.

During the third quarter of 2019, Alio said the focus was on processing low-grade stock piles, resulting in the placement of 12,809 ounces on the leach pad. The company said it anticipated that the low-grade stock will be exhausted during the fourth quarter of 2019, after which crushing will cease and operations will solely focus on recovery of residual inventory ounces.

Aside from San Francisco, Alio holds a 100% interest in the Florda Canyon Mine in Nevada, an asset which it acquired through the purchase of all of the outstanding shares of Rye Patch Gold Corp. under a plan of arrangement deal worth $128 million in March, 2018. The company also owns the development stage Ana Paula Project in Guerrero, Mexico.

“The sale of the San Francisco Mine is a win-win for Alio Gold and Magna,” said Alio President and CEO Mark Backens. “Arturo Bonillas and his team at Magna have a lengthy history and extensive knowledge of the mine, and under his stewardship we are confident this transaction will be very beneficial to employees, contractors, suppliers and local communities that support the mine as plans are implemented to unlock value from the property.”

“The transaction transfers all current assets and liabilities associated with the property and allows Alio Gold to focus time and resources on more value enhancing opportunities at the Florida Canyon Mine, our core asset.”

The Florida Canyon Mine, located between Lovelock and Winnemucca, has been in production since the spring of 2017. Florida Canyon produced 9,620 ounces of gold and 6,793 ounces of silver in the third quarter of 2019, Alio said.

It said production for the quarter was negatively impacted by the very low mining equipment availability. This was attributed to the aged condition of the equipment where multiple pieces have over racked up 90,000 operating hours.

The company said the unsustainable condition of the mine fleet has been addressed by procurement of new loading and hauling equipment. It said the new equipment was scheduled to be phased into production in the fourth quarter of 2019 and will remove the principal cause of the low production in the previous quarters.

On Friday, Magna shares were unchanged at 40 cents and trade in a 52-week range of 19 cents and 56 cents.

MAG Silver advances on Mexico drilling news

MAG Silver Corp. [MAG-TSX; MVG-NYSE MKT] on Tuesday announced the results from a 2019 drilling program on the Juanicipio gold joint venture in Mexico.

The program, which consisted of 33,864 metres of diamond drilling in 28 holes, expanded and upgraded the wide, high-grade Deep Zone and confirmed additional north-east trending veins, the company said in a press release.

MAG Silver shares advanced on the news, rising 2.4% or 30 cents to $12.57 on volume of 400,321. The shares are currently trading in a 52-week range of $11.20 and $18.61.

MAG Silver is focused on the acquisition, exploration and development of mineral properties, primarily silver, within the Americas. Its flagship asset is a 44% interest the Juanicipio property, where underground infrastructure is being developed to support a mining operation.  The high-grade gold project is located in the Fresnillo District, Zacatecas State.

MAG and joint venture partner Fresnillo Plc. aim to start initial production in June 2020, with ore to be processed at the Fresnillo plant until the 4,000 tonnes-per-day Juanicipio plant is commissioned in mid-2021.

MAG also has a 100% of the mineral concessions on the Cinco de Mayo property, also in Mexico, which consists of four major mineralized zones.

The Juanicipio property consists of high-grade silver-gold-lead-zinc epithermal vein deposits.  The primary vein, the Valdecanas Vein, is an echelon system comprised of overlapping East and West veins and several smaller vein splays.

Fresnillo is the operator at Juanicipio and holds a 56% majority stake in the joint venture. Total annual anticipated production is expected to be 11.7 million ounces of silver and 43,500 ounces of gold, with an initial life of mine (based on indicated resources) of 12 years.

Over 25 kilometres of underground development has been completed so far on the project. Based on detailed engineering, actual equipment purchases and construction contracts, pre-operative capital expenditures, from January 1, 2018, has increased by 11.4% from US$395 million to US$440 million. The increase also reflects spending on underground development, supportive infrastructure, and the bringing forward of sustaining capital to facilitate the early underground start.

On Tuesday, MAG said continued in-fill and exploration on other targets is ongoing in 2020, with four surface rigs running concurrently with mine development and construction. It said the discovery of more northeast-trending veins close to the planned production areas, coupled with the expanding high-grade Anticipada and Pre-Anticipada veins, should add significantly to the growing mineral endowment of the project and, importantly, provide considerable mining flexibility throughout an extended mine life.

The search for additional mineralizing fluid upwelling zones within the Juanicipio Joint Venture property is ongoing as each could be a centre of additional high-grade mineralization, the company said.

Company Updates From Management – Mon 2 Mar, 2020

SilverCrest Metals – More Information on the New Area 200 Discovery – The Highest Grades Drilled To Date

The last news release out of SilverCrest Metals (TSX:SIL & NYSE:SILV) outlined a new discovery called Area 200. The drill results were the highest grade results to date at the Las Chispas Project.

Chris Richey, SilverCrest’s President joins me to detail the importance of this recent discovery. We discuss how Area 200 could factor into the upcoming Feasibility Study and overall economics. I also have Chris outline the overall strategy moving forward between continued exploration balanced with de-risking towards production.

If you have any follow up questions for Chris and the team over at SilverCrest please email me at Fleck@kereport.com. Just a note this interview was recorded late in the day on Friday.

Click here to read over the full news release at the SilverCrest website.

Company Updates From Management – Fri 28 Feb, 2020

Silver Viper Minerals – Recent High-Grade Drill Results Continue to Expand This New Discovery In Mexico

Silver Viper Minerals (TSX.V:VIPR) released a batch of drill results this week from the El Rubi target at the La Virgina Project in Senora Mexico. It was another round of high grade holes that expand the mineralized footprint of the target.

Steve Cope, President and CEO of Silver Viper joins me to share some more details on the current drill program and results. He outlines how the program is being expanded and another rig is heading to site. I also get him to compare the drill results to surrounding deposits and mines.

If you have any follow up questions or comments for Steve or I please email me at Fleck@kereport.com.

Click here to read over the full news release that we discuss.