HudBay CEO provides exploration update

HudBay Minerals Inc.  [HBM-TSX, NYSE] has announced a substantial increase in Proven and Probable Reserves at its Lalor gold zone, which is part of the company’s Snow Lake operations in Manitoba.

The company said Proven and Probable Reserves at the Lalor Zone have increased to 6.0 million tonnes grading 6.35 g/t gold and 26 g/t silver. That’s up from the previous year’s estimate of 3.0 million tonnes grading 6.72 g/t gold and 23 g/t silver. Total contained gold ounces have increased to 1.2 million ounces, up 90% on a year over year basis. As a result, total gold reserves in the Snow Lake camp now stand at 2.2 million ounces.

HudBay shares advanced on the news, rising 7.1% or 18 cents to $2.71 on volume of 1.6 million. The shares are trading in a 52-week range of $1.66 and $10.42.

HudBay is an integrated mining company, primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. The company owns four polymetallic mines, four ore concentrators and a zinc production facility.

The operations are located in northern Manitoba and Saskatchewan, Peru and Arizona.

HudBay has said its operational focus in Canada is shifting to Manitoba’s Snow Lake region as its reserves, processing capacity and exploration activities expand in the region, setting the stage for a new phase of growth.

The company said its Lalor Mine (gold, zinc, copper, silver) in Snow Lake is fast becoming a meaningful low-cost gold producer that will benefit substantially from the refurbishment of the New Britannia mill. The refurbishment is expected to be completed in 2022.

Lalor is a gold and zinc mine located in the Flin Flon Greenstone Belt. The 100%-owned mine is spread across an area of 916 hectares, approximately 3.0 km from HudBay’s Chisnel North Mine.

Meanwhile, the updated reserves support an extended 18-year mine plan that utilizes the existing 4,500 tonne-per-day Stall mill and the refurbished 1,500 tonne-per-day New Britannia mill, with ore sourced from the Lalor, WIM and 3 Zone deposits.

Annual gold production is now anticipated to be greater than 150,000 ounces annually over the first eight years after the start-up of New Britannia. That compares to the previous target of 140,000 ounces annually over the first five years.

However, the increase in production is offset by expected life-of-mine average mining costs at Lalor, which have increased to $110 per tonne from $92 per tonne, a 20% increase. Life-of-mine sustaining capital has also increased, the company said.

Separately, HudBay said its 777 Mine in Flin Flon, Man., is approaching the end of its life after 15 years of operations. Final production is anticipated in 2022.

Peter Kukielski, President and CEO of HudBay said he is pleased with the company’s exploration success over the past 12 months in Manitoba and at HudBay’s flagship Constancia mine in Peru.

“In addition to replacing ore that was mined at Constancia last year, we are also encouraged by recent drilling results north of the Constancia pit where high-grade skarn mineralization has been intersected,” he said.

Constancia is primarily a copper mine, situated in southern Peru and consists of the Constancia and Pampacancha deposits. The secondary metals are molybdenum and silver. Commercial production was achieved in April, 2015.

David Erfle – Gold Market Commentary – Tue 31 Mar, 2020

Gold vs gold stocks and silver – It’s all about inflation expectations when this virus is behind us

Dave Erfle joins me to balance the recent moves in gold against gold stocks and silver. Gold clearly has a much better chart pattern than gold stocks or silver but recently the stocks and silver have been holding up slightly better. This brings us into a discussion about inflation and expectations when this virus is behind us and we finally get back to some form of daily life.

Click here to visit Dave’s site and learn more about his newsletter.


March 28, 2020
Chris Vermeulen

"...Today, we are writing about a pattern our research team is seeing in the Gold/Silver ratio which is correlated to the price movement of Gold.  What does this mean and how can we profit from this setup?  Let’s get started trying to explain this chart pattern/setup...."

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my

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Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research, recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

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B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News

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.

Jordan Roy-Byrne – Technical Commentary on the Metals – Fri 27 Mar, 2020

This month gold had a false breakout and a false breakdown

Jordan Roy-Byrne joins me to recap this month for gold, silver, and gold stocks. Looking at the monthly charts we have huge candlesticks which correlate to a failed breakout and a failed breakdown. Here’s where we stand now.

Click here to visit Jordan’s site.

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

Fortuna Silver says Mexico blockade has ended

Fortuna Silver Mines Inc. [FVI-TSX, Lima; FSM-NYSE; F4S-FSE] says the illegal road blockage that was preventing access to its San Jose Mine in Oaxaca, southern Mexico, has been lifted.

Operations at the mine are scheduled to resume today, starting with the nightshift, the company said in a press release that came after the close of trading on March 25, 2019.

Fortuna had previously stated that a group of individuals led by the former mayor of San Jose de Progreso had illegally blockaded Federal Highway 175 and roads in the municipality of San Jose Progreso, including access to the San Jose Mine. It said the aim was to protest action taken by the Electoral Tribunal of the state of Oaxaca in revoking his appointment as mayor.

As a result of the illegal blockade, the company decided to temporarily halt mining and processing operations at the San Jose Mine.

Despite news of the resumption, Fortuna shares eased 4.6% or 18 cents to $3.74. The shares are currently trading in a 52-week range of $2.05 and $6.12.

Fortuna Silver is a fast-growing precious metals producer, operating two low-cost mines in Peru and Mexico. The San Jose Mine 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.

In its recently released 2020 guidance highlights, Fortuna said the San Jose Mine plans to process 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.

Fortuna recently 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 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.

Alexco raising $7.5 million for Keno Hill silver mine

Alexco Resources Corp. [AXR-TSX; AXU-NYSE] said Monday March 24 that it is raising $7.5 million from an offering of 4.05 million shares priced at $1.85 per share. The company said it has struck a deal with an underwriting syndicate co-led by Cormark Securities Inc., Cantor Fitzgerald Canada Corp. and including Canaccord Genuity Corp.

Alexco has granted the underwriters a green shoe option to purchase up to an additional 608,175 shares at the offering price, potentially increasing the proceeds to $8.6 million. The green shoe option will remain open for 30 days after the date of closing.

The company said it intends to use the net proceeds of the offering for preservation and measured advancement of mine development activity at its flagship Keno Hill silver project in the Canadian Yukon. Part of the proceeds is also earmarked for exploration and general working capital.

Alexco advanced on the news, rising 1.9% or $0.04 to $2.10. The shares are currently trading in a 52-week range of $1.00 and $3.74.

The 100%-owned United Keno Hill Mine ranks as Canada’s second largest producer of silver, behind Cobalt, Ontario.

During an illustrious history, it produced 217 million ounces of the precious metal. On March 28, 2019, Alexco released the results of an independent pre-feasibility study (PFS), which puts the Keno Hill Project “on a clear path to production,” the company said.

The PFS contemplated production of approximately 1.2 million tonnes at an average grade of approximately 805 g/t silver, 2.98% lead, and 1.13% zinc from four deposits (Bellekeno, Flame & Moth, Bermingham and Lucky Queen).

The average processing rate during the proposed 8-year mine life was estimated at 430 tonnes per day and Keno Hill was expected to produce approximately 4.0 million ounces of silver annually, contained in lead and zinc concentrates.

In 2020, the company has said it plans to conduct a $3.5 million exploration campaign to complete 11,500 metres of surface drilling to target Bermingham Deep, the Inca Vein and other targets in the district. In addition, the company plans to conduct an airborne survey across the district and a 3,500-metre RAB generative drilling campaign at multiple targets in the district.

The pre-feasibility study was based on total Probable Reserves of 30.4 million ounces of silver, of which roughly half is hosted by Flame & Moth. Bermingham is estimated to host 11.3 million ounces. Of the balance, Lucky Queen has 2.8 million ounces and Bellekeno has approximately one million ounces.

The pre-feasibility study estimated initial capital costs at $23.2 million, consisting of $17.9 million on surface and underground development costs to reach mill commissioning, plus an additional $5.3million of net working capital for two months of mill operations ramp-up prior to positive cash flow.

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.

Dudley Comments On The Market Collapse

By Dudley Pierce Baker
Founder - Editor

The last week to 10 days has been devasting for many investors and particularly those of us in the precious metals sector. Many would have believed that gold, silver and miners would have performed well but we have been subjected to massive selling and no one is happy, unless you have lots of cash.

Cash has been king and the selling of stocks, gold, silver, etc. has been a flight to safety and that has lead to the rise in the U.S. Dollar at the expense of virtually everything else with the exception of bonds.

I want to share with you my weekly audio which I send out to my paid subscribers on March 14, 2020. I share some personal stories as well as frank market comments and encourage you to listen and if not a current subsciber, consider a subscription to my services.

Dudley's Weekly Audio - March 14, 2020

Other Great Articles For Your Reading:
Frank Holmes - Should You Buy The Panic?
Sprott Money - Global Monetary And Fiscal Authorities Are About To Open The Floodgates Of Liquidity
Peter Schiff - Fed Stimulus Will Light 'Fire Under Hard Assets'
Rick Rule - Sprott Media - Gold Stocks Are Stocks; In A Panic, All Stocks Sell Off

We will all get through this turmoil, so make sound decisions and not panic out of quality positions is my advice.