Weekend Show – Sat 12 Oct, 2019

Hour 2 – A Full Hour For Resource Investors!

The full second hour is dedicated to all of you resource investors! I chat gold, silver, copper, battery metals, and oil. Please update me with any companies that cross your radar. My email is Fleck@kereport.com.

Click here to listen to the first hour that focuses on major markets and the near term recession fears.

I hope everyone in Canada has a happy Thanksgiving and you all enjoy this weekend’s show!

  • Segment 1 & 2 – Joe Mazumdar, Editor of Exploration Insights joins me for a discussion on the environment in Peru for exploration companies and what he thinks is the best investment strategy. We also dive into the copper market.
  • Segment 3 – Brien Leni, Editor at the Junior Stock Review website chats about investor interest in precious metals compared to the base and battery metals.
  • Segment 4 – Josef Schachter, Editor of the Schachter Energy Report updates us on the oil . We discuss the recent price moves and the stocks he thinks will be the best investments this winter.

Joe Mazumdar
Brien Leni
Josef Schachter

Company Updates From Management – Wed 2 Oct, 2019

Auryn Resources – Updates on community access agreements and permitting in Peru and Committee Bay drill results

Over the past week I received a number of requests for an update from Auryn Resources. A lot of questions came in regarding the progress of the community access agreements and drill permits for the projects in Peru. Also the potential of an asset sale is still on a lot of investors minds. 

Ivan Bebek, Executive Chairman at Auryn joined me to provide a full update on Peru and explain the difference between community access agreements and drill results. We also discuss the upcoming drill results at Committee Bay and the potential of an asset sale or a Company split.

Click here to visit the Auryn website and read over the full Corporate presentation.

Company Updates From Management – Wed 25 Sep, 2019

Palamina Corp – Updates on Permitting in Peru, the Property Sale To Helio, and upcoming exploration

Andrew Thompson, President and CEO of Palamina Corp. (TSX.V:PA & OTC:PLMNF) joins me for a comprehensive update on the Company. We start with the permitting environment in Peru and when we can expect the permits for the Coasa Property. We also get an update on the sale of non-core projects to Helio Resource Corp..

Click here to visit the Palamina website and review the Company presentation.

Company Updates From Management – Fri 6 Sep, 2019

Auryn Resources – Recapping The Bridge Loan and Looking Ahead To the Company Drivers In Q4

This morning Auryn Resources (TSX:AUG, NYSE:AUG) released news regarding a bridge loan for $6million to help fund the Company through next year. Auryn’s Executive Chairman Ivan Bebek joins me to provide some more information on where the funds from the bridge loan will be used and where the Company stands in terms of an asset sale. We also look ahead to Q4 and the catalysts which include permitting in Peru, drill results from Committee Bay and Homestake, and some other factors.

Please email me with any questions or comments you have for Ivan and his team. I can be reached at Fleck@kereport.com.

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

Company Updates From Management – Fri 14 Jun, 2019

Miramont Resources – More Information On The Phase 2 Drill Program and Updated Permits

I received a few emails over the past week asking for an update on Miramont Resources (CSE: MONT) on the back of the phase 2 drilling update. The Chairman Quinton Hennigh joined me for a quick update on the recent drilling and importance of hole 13 – which they are still waiting for the assays. We also discuss the updated permits that are needed.

Click here to visit the Miramont website for more information on the Company.And please email me with any followup questions for Quinton – Fleck@kereport.com.

Camino Minerals allowed to expand drilling in southern Peru

The Peruvian Ministry of Energy and Mines approved a permit related to Camino Minerals' (TSXV: COR) environmental impact assessment for the Chapitos copper-gold project.

The permit allows for the expansion of drilling activities along the Diva Trend at Chapitos. Drilling is expected to commence during the latter half of 2019.

Camino's 2019 exploration program is ongoing and includes geological mapping and structural analysis, chip/channel and trench sampling, and road building, all in preparation for geophysics and drilling

In a press release, Camino explained that the 200-drill pad permit allows for a maximum of 908 drill holes or 445,200 metres of drilling over a 3.6-year period.

According to the miner, the drilling will further define and potentially expand on the copper mineralized zones at the Adriana, Katty, and Vicky targets, but also includes drilling designed to evaluate the potential for additional zones of copper mineralization along the Diva Trend.

"Camino is excited to have received the EIA permit to continue drilling the Diva Trend copper mineralization along strike and down dip allowing for potential expansion of the mineralized footprint," the firm's CEO, John Williamson, said in the media brief. "The permit will allow the company to better locate drill collars in optimum locations to both test the Diva structure and other structural and stratigraphic copper opportunities while potentially minimizing drill costs."

Camino informed that the exploration program will also include follow-up work on the Atajo Trend where exploratory drilling intersected 0.83 % copper over 16.3 metres, including 2.09 % copper over 5.0 metres.

The Chapitos project is a 22,000-hectare land pack near Chala in southern Peru.

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Sweden eyes Peruvian lithium

Sweden’s Deputy Minister of Foreign Trade and Promotion Niklas Johansson said this week that his country is interested in helping Peru develop its lithium mining industry.

According to Johansson, Sweden has become lithium-thirsty due to an increase in demand for electric cars, bolstered by government efforts to reduce carbon emissions and promote clean energy solutions.

EVs’ batteries have an intercalated lithium compound as one electrode material.

Experts predict that the mining industry will need to invest $12 billion within five years to meet the global demand for lithium

Even though Peru is not part of the so-called ‘Lithium Triangle’ formed by Bolivia, Chile and Argentina, just a year ago Macusani Yellowcake, the Peruvian subsidiary of Canada’s Plateau Energy Metals (TSX-V: PLU), found 2.5 million tonnes of high-grade lithium resources at its Falchani hard rock deposit in the southern Puno region.

According to Reuters, companies such as US-based Albemarle, the world’s No. 1 producer of the metal, and China’s Tianqi Lithium, the No. 3, may be waiting for Plateau to confirm the size of its reserves before showing their interest in Peru.

Sweden doesn’t seem to be waiting, though. Speaking in Lima at a conference called “Mining for the future: The Swedish experience,” which was organized by the embassy of the European country and the mining division of the Engineers College of Peru, Johansson said that the lithium demand from companies such as Volvo and Scania is in an upward trend and that Swedish miners are eager to develop responsible and sustainable lithium projects.

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Peru’s Buenaventura threatened with general strike

Community leaders from the district of Chilcaymarca in the southwestern Castilla province are threatening Peru’s Compañía de Minas Buenaventura (NYSE: BVN) with a general strike due to the company’s decision to fire 40 workers from its Orcopampa gold-silver operation.

The activists say the workers’ dismissal constitutes a breach of an agreement that Buenaventura and the community signed back in 2004. According to the deal, the company should prioritize people in Chilcaymarca when it comes to jobs as long as the mine is operative, given that it is located in the town’s area of influence and that the community gave the miner 1,000 hectares of terrain.

People in Chilcaymarca are asking the company to participate in a roundtable where the issue can be discussed and resolved.

However, Buenaventura told local media that it was forced to fire some workers because gold and silver reserves at Orcopampa have gone down and so has production. In fact, during the first quarter of 2019, the company reported an 85% YoY decrease in the mine’s gold output and a 96% decline in its silver output. Overall, the miner suffered a sharp 22.2% YoY plunge in gold production in Q1-2019.

Buenaventura also said that it is planning on keeping only essential personnel at Orcopampa, that it will dismiss external contractors, and that the focus for the rest of the year will be on an exploration campaign in the area.

Peru’s largest publicly-traded precious metals company started operating the underground Orcopampa mine back in 1967. Mine reserves in 2018 were estimated in 306,000 ounces of gold, while resources were estimated in 187,000 ounces of the yellow metal.

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Zambia’s just deepened worries of sinking global copper output

Zambia’s Chamber of Mines delivered Thursdays further signs of a major global undersupply of copper about to hit the market by announcing that the country’s output of the metal could be as much as 100,000 tonnes lower than last year.

The industry lobby group attributed the expected drop in production to changes to mining taxes introduced in January, which is driving companies to cut output.

“The new tax regime forced miners to do the unthinkable – cut production – because many cannot afford to continue producing as before,” it said in a statement.

Zambia, Africa’s second largest copper producer, churned out 861,946 tonnes of the metal last year. In the first three months of this year, the nation’s copper output fell by 11.3% to 195,244 tonnes, compared to the previous quarter, the Bank of Zambia said earlier this week.

Copper output in Africa’s second largest producer could decline by as much as 100,000 tonnes this year, adding to recent, sharp declines at the world’s main producing nations.

The world’s main copper producing nations have been showing output declines this year, according to the latest monthly bulletin from the International Copper Study Group (ICSG).

Global production declined 2.4% in February 2019, when compared to the same month last year, with 1,515kt (19,749ktpa) of contained copper produced globally.

Chile, the world’s No.1 producer of the metal, led the pack with output down 7.1 % y/y to 415.9kt (5,412ktpa) while Peru, the second main global producer, saw its output fell by 5.1% y/y to 176.1kt (2,296ktpa).

Despite weaker copper production so far this year, ICSG data indicates a small surplus in February of 74kt with refined usage down 14% y/y, totalling 1,758kt (22,917ktpa).

Industry analysts at CRU believe that is undeniable that global demand for copper will soon surpass supply, the world may not need as many new mines as originally forecast.

Over the past year there has been board approval for several high-profile expansions and new projects that are due on-stream over the next five years.

CRU says the coming online of major projects, including Anglo American’s Quellaveco (2022), Teck Resources’ Quebrada Blanca expansion (2021) and First Quantum’s Cobre Panama (already in production) should momentarily eliminate the gap between supply and demand.

The research group now expects 900,000 tonnes a year more mine copper supply by the early 2020s than at this time in 2018. 

The EV effect

While the effect on copper demand from the electric vehicles (EVs) sector is expected to be important, the consensus is that it will not meaningfully impact on demand until the second half of the 2020s, CRU says.

The red metal is a key component in the lithium-ion batteries used in EVs, as well as power inverters and in the charging infrastructure needed to keep them running.

Data released by the International Copper Association (ICA), an industry-funded body, shows more than 40 million charging ports will be needed over the next decade, consuming an extra 100,000 tonnes of copper a year by 2027.

Zambia just deepened worries of sinking global copper output

All types of EVs require copper. It is used in batteries, windings, rotors, wiring, busbars and charging infrastructure. (Source Research commissioned by the International Copper Association (ICA).)

From those stations, at least 3 million will be built in China by 2030, according to the study.

Consumption from the car industry will also weigh on demand, but later. An average gasoline-powered car uses about 20 kg of copper, mainly as wiring. A hybrid needs about 40 kg and a fully electric car has roughly 80 kg of copper (176 pounds).

Zambia just deepened worries of sinking global copper output

Copper demand will be substantially impacted by the growing market for electric vehicles (EVs) over the next decade. (Source Research commissioned by the International Copper Association (ICA).)

It means that, in the next decade, global copper demand will increase between 3 and 5 million tonnes, experts predict. Once electric vehicles become popular, they estimate demand to reach 11,000,000 tonnes of new copper for EV’s alone.

Copper is also a key element in green technologies and renewables, which despite being adopted at a fast pace, they still represent only a minor percentage of the world’s total energy production.

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Copper Snapshot: Eight companies hunting for the red metal

Compelling supply and demand projections for copper in the years ahead makes the red metal one of the favourites of industry observers, who see flat-lining mine supply running into increased demand as the world continues to achieve greater electrification. Here’s a look at eight active juniors with substantial copper assets in their property portfolios.

AURYN RESOURCES

While Vancouver-based junior Auryn Resources (TSX: AUG; NYSE-AM: AUG) is primarily a gold explorer with its flagship Committee Bay gold project in Nunavut, it does have a large copper-gold porphyry project in its portfolio in the form of the 1,200 sq. km Sombrero copper-gold property, located 340 km southeast of Lima in southern Peru at a 3,900-metre elevation, with road and power access.

The property is located in the Andahuaylas-Yauri geological belt, and Auryn interprets it to be on the northwestern margin of the Eocene–Oligocene-aged copper-gold porphyry and skarn belt that hosts the Las Bambas, Haquira, Los Chancas, Cotambambas, Constancia, Antapaccay and Tintaya deposits.

Auryn’s principal target at Sombrero is copper-gold skarn mineralization, which the company says has “geological similarities to the Tintaya and Las Bambas mines,” though it says samples being collected at Sombrero are copper-gold, rather than molybdenum-gold. In addition, Auryn notes a layer of volcanic cover that is between 5 to 25 metres thick at Sombrero, which is not seen farther east where the Los Chancas, Las Bambas and Tintaya mines are located.

The first trench of Auryn’s 2019 program at Sombrero was Trench 20 in the Fierrazo concession, and it has delivered 232 metres of 0.55% copper equivalent (0.47% copper and 0.13 gram gold per tonne), including 40 metres of 1.26% copper equivalent (1.23% copper and 0.05 gram gold).

Auryn acquired the rights to the Sombrero property through an option agreement with Alturas Minerals, whereby to exercise the option and acquire a participating interest for 80% of the Sombrero concessions, Auryn must incur up to US$2.1 million in work expenses within five years, and make cash payments of $200,000.

CAMINO MINERALS

A drill site on Camino Minerals’ Los Chapitos copper project in Peru. Photo by Camino Minerals.

Edmonton-based explorer Camino Minerals (TSXV: COR; US-OTC: CAMZF) was spun out of Canplats Resources in 2010 after its $300-million acquisition by Goldcorp, which wanted Canplats’ 4 million oz. gold Camino Rojo gold-silver discovery in Mexico.

Today, Camino is led by president and CEO John Williamson and is focused on copper and gold projects in Peru, though it also has assets in Mexico, the U.S. and Canada.

In Peru, its flagship asset is its Los Chapitos copper-gold project, which covers 200 sq. km near Chala in the country’s southern region.

In March, Camino reported its newest discovery at Los Chapitos named the Lidia Zone, which spans 3 by 4 km, and is located 5 km northwest of the main Adriana copper zone.

Camino says Lidia “adds an entirely new type of exploration target to the property comprising a large area of copper and gold anomalism, which is extremely interesting.”

Camino has collected 238 rock samples in the Lidia area, and comments that “although somewhat selective in nature, [they] collectively average 0.20 gram gold per tonne and 0.75% copper, with individual samples returning values of up to 11.1 grams gold and 23.4% copper.” This mineralization is hosted within stockwork quartz veins, some of which are associated with zones of shearing and brecciation within the host monzonite.

This year’s exploration program at Los Chapitos will further examine the Lidia zone and identify possible drill targets for a drill program. The work will include geological mapping, channel and or trench sampling, and geophysical surveying.

CARUBE COPPER

Personnel in the field at Carube Copper’s Main Ridge gold project in Jamaica.Photo by Carube Copper.

Led by president and CEO Stephen Hughes, Toronto-based Carube Copper (TSXV: CUC) is focused on exploring and developing copper and gold projects in Jamaica and Canada.

In Jamaica, Carube holds full interest in 11 licenses totalling 535 sq. km, while in Canada, it holds full interest in three porphyry copper-gold-molybdenum properties totalling 492 sq. km, within the Tertiary-aged Cascade magmatic arc of southwestern British Columbia.

In mid-March, Carube reported that it had received 500,000 shares of newly listed, Calgary-based Tocvan Ventures (CSE: TOC) and been paid $25,000, pursuant to an option agreement struck in May 2018, whereby Tocvan has an option to acquire up to an 80% interest in Carube’s Rogers Creek Property, which covers 212 sq. km in the Lillooet mining district in the Cascade magmatic arc, 90 km northeast of Vancouver.

In January, Carube reported from its ongoing surface exploration program at its Main Ridge project in Jamaica, with assay results from recent soil and rock sampling over the eastern area of the property. Carube says mapping and prospecting in conjunction with a grid-based soil sampling program and follow-up rock channel sampling has found high-grade, copper-silver mineralization along the Rio Minho Valley, located northeast of and parallel to the Bennett gold zone.

Channel sampling highlights include: the Cobre Verde prospect, returning 16 metres of 1.22% copper and 7.8 grams silver per tonne; the Lime Valley prospect, returning 2 metres of 6.07% copper and 19.4 grams silver; and the Trout Hall prospect, returning 6 metres of 2% copper.

COPPER FOX METALS

Drill roads on Mt. Lacasse at the Schaft Creek copper property in B.C. in 2011-12. Photo by Copper Fox Metals.

Calgary-based Copper Fox Metals (TSXV: CUU; US-OTC: CPFXF) is focused on exploring and developing copper projects in Canada and the U.S. — most notably its 25% interest in the Schaft Creek joint venture with Teck Resources (TSX: TECK.B; NYSE: TECK) on the Schaft Creek copper-gold-molybdenum-silver project in northwestern B.C., and full ownership of the Van Dyke in-situ-leach, oxide copper project in Miami, Arizona.

In March, the company announced a $1.5-million, non-brokered private placement consisting of up to 13.6 million units at 11¢ per unit. Each unit consists of a share and half a warrant, with each whole warrant entitling the holder to buy another share for 13¢ during the first 12 months, or 15¢ during the second 12-month period.

In its first-quarter results, Copper Fox said that the multi-disciplinary team established by the Schaft Creek joint venture in 2018 to describe and characterize several development scenarios for the Schaft Creek deposit will continue its work in 2019. The joint venture plans to strengthen the project management team to complete more scoping-level engineering and design work based on the 2018 program to assess opportunities associated with a range of development scenarios, the focus of which is to improve financial returns over those outlined in a 2013 feasibility study.

The company adds that “positive exploration results from the Mineral Mountain and Van Dyke projects strongly suggest that additional exploration work is warranted on both projects.”

COPPER MOUNTAIN MINING

The crusher circuit in operation at Copper Mountain Mining’s namesake copper mine in British Columbia. Photo by Copper Mountain Mining.

Copper Mountain Mining (TSX: CMMC; US-OTC: CPPMF) is a single-asset copper producer, with its Copper Mountain mine in southern B.C., which produces 90 million lb. copper equivalent per year.

The Vancouver-based company says that with a 5,000-tonne mill expansion to 45,000 tonnes per day and integration of the New Ingerbelle pit, the Copper Mountain mine is expected to have a 26-year mine life and produce an average of 116 million lb. copper equivalent per year.

The rosier numbers come from a new integrated mine plan unveiled February 2019, which was highlighted by a 102% increase in reserves; a 27% increase in anticipated average annual copper equivalent production to 116 million lb.; a 12-year mine-life extension; and a decrease in C1 cash costs to US$1.87 per lb. produced, compared to numbers filed in November 2018.

The new mine plan is a phased approach, with the first phase being the plant expansion, which would require installing a third ball mill and could be completed as early as 2020 and would cost US$25 million. The second phase would be developing New Ingerbelle, which requires capital of US$23 million.

The after-tax net present value of the new plan is US$619 million at an 8% discount rate.

Meanwhile, Copper Mountain Mining says it has a “robust development organic growth pipeline” that includes the permitted, development-ready Eva copper project in Queensland, Australia, which could contribute another 100 million lb. copper equivalent per year, when in production.

GT GOLD

The camp at GT Gold’s Saddle gold property in northwest British Columbia. Photo by GT Gold.

Led by president and CEO Steve Burleton and vice-president of exploration Charles J. Greig, junior explorer GT Gold (TSXV: GTT; US-OTC: GTGDF) says it is “advancing the most important new gold-copper discoveries in the northern part of British Columbia’s rich Golden Triangle since the discovery of the nearby Red Chris deposit,” with GT Gold’s discoveries collectively held within the wholly owned, 432 sq. km Tatogga gold property.

The Vancouver-based firm describes the Saddle discovery area, located up a valley just 10 km off Highway 37, as a combination of shallow, bulk-tonnage-style gold at surface, and, just below, deep, high-grade underground-style gold at Saddle South, with a massive new copper-gold-silver porphyry system “right next door that is reminiscent of Red Chris.”

GT Gold has been developing the various grassroots Saddle gold-silver-copper prospects since 2011, and in March said it was still planning its 2019 drilling campaign at Tatogga.

In tabling its final results from 2018, GT Gold said that the program “was successful in extending the high-grade epithermal system discovered in 2017 along strike by several hundred metres, and to a similar depth beneath largely covered and untested areas east and west of Saddle Ridge. High-grade intercepts within numerous broadly mineralized intervals continue to increase the extent of the Saddle South mineralized system.”

PERUVIAN METALS

Toronto-based junior Peruvian Metals (TSXV: PER; US-OTC: DUVNF) changed its name from Duran Ventures in September 2018 to better reflect its focus on completing the final stages of commissioning its mineral processing plant in northern Peru and developing its exploration property portfolio in the country.

Directors and officers of the company include: Jeffrey J. Reeder, chairman and CEO; John P. Thompson, director; Steve Brunelle, director; William R. (Rick) Brown, director; Oscar Franciso Pezo Camacho, director; and Daniel Hamilton, chief financial officer.

Peruvian Metals owns an 80% interest in the Aguila Norte process plant, located just off the Pan American highway near the large city of Trujillo in northern Peru.

The company says “abundant small-scale mining activity occurs in northern Peru, but there are very few independent processing facilities available. The Aguila Norte mineral processing plant hosts crushing, milling, gravity separation and flotation circuits, with an initial throughput capacity of 100 tonnes per day. Peruvian Metals anticipates feeding high-grade polymetallic and precious-metal sulphide minerals through the process plant to deliver high-value concentrates available for sale to the Peruvian metal trading market.”

Peruvian Metals then expects to fund plant expansion via internal cash flow from the plant.

The junior’s exploration properties in the country include the Mamanina porphyry copper project; the Panteria copper-molybdenum-gold project; and the Minasnioc epithermal gold-silver project.

SEABRIDGE GOLD

Drilling at Seabridge Gold’s KSM gold-copper project in B.C. in 2017. Photo by Seabridge Gold.

Seabridge Gold (TSX: SEA; NYSE: SA) continues its work advancing some of North America’s largest gold-copper deposits, most notably the KSM and Iskut properties near Stewart, B.C.., and the Courageous Lake gold project in the Northwest Territories.

In March, Seabridge substantially boosted the resource estimate for the Iron Cap deposit, which is one of four large gold-copper porphyry deposits within its wholly owned KSM project. The new resource figure incorporates all previous drilling, plus 20,341 metres of diamond core drilling completed in 18 holes during 2018.

Iron Cap’s indicated resources now stand at 423 million tonnes grading 0.41 gram gold per tonne, 0.22% copper, 4.6 grams silver per tonne and 41 parts per million molybdenum, while inferred resources have swelled to 1.9 billion tonnes at 0.45 gram gold, 0.30% copper, 2.6 grams silver and 30 parts per million molybdenum.

Seabridge says the new resource estimate has “achieved the targeted size and grade, which are likely to warrant moving the Iron Cap deposit ahead of the Kerr and Sulphurets deposits in the project’s mine plan.

Chairman and CEO Rudi Fronk said that Seabridge’s “exploration success at Iron Cap over the past two years gives us greater flexibility to optimize project economics. Iron Cap is closer to infrastructure than Kerr and Sulphurets, and its development could be faster and less costly. Within the 1.9 billion tonnes of inferred resource, there exist significantly higher-grade underground cave opportunities with substantial tonnage. Iron Cap clearly has the size and grade to justify early inclusion in the mining sequence. From our point of view, this is mission accomplished.”

Fronk also said these resource additions once again have met the junior’s annual corporate objective of increasing gold ownership on a per-share basis, noting that Seabridge added 460,000 oz. indicated gold resources and 7.5 million oz. inferred gold resources from our 2018 program.

This story first appeared in The Northern Miner on April 6, 2019.

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