Gold Seeker Issue #72 ~ This Week in Mining: Gold, Silver and Mining Stocks Awaiting a Catalyst

The precious metals continued to trade in a relatively tight range, but they should either break out or break down in the near future. While the metals had a decent week, we wanted to see gold breakthrough and close the week around $1,820/oz. on good volume. Every time gold tried to breakout (and it did try several times), it failed, peaking early-mid morning and selling-off into the close. Both metals are nearing a reversal in the short-term trend but failing to do so could mean a sell-off in the coming week(s).

Near-term potential catalysts that could send the metals soaring is the June CPI number, although this would likely have to be the highest year/year print this year, exceeding last month’s 5.0% increase. If we see June inflation increase >6.50% +/- year/year, the metals should start moving much higher quickly, but that remains to be seen as the metals actually sold off rather heavily following last month's print. The longer the headline CPI number remains elevated, the market will buy into the fact that inflation isn't transitory. However, as discussed in the Goldseeker.com July issue, inflation can fluctuate considerably month to month and/or be elevated for a while, then fall back quite a bit, only to ticker higher after that.

$AR, $AYA, $BRC, $CXB, $DPM, $ELE, $EXK, $GATO, $GCM, $KL, $LIO, $MUX, $NVO, $ORV, $ODV, $SAND, $TXG

Argonaut Gold: Announced further high-grade drill results in and around Magino, its flagship asset. Highlights from this release include:

• 7m @ 13.3 g/t Au (1.5 km west from the border between the Magino property and the Island Gold mine).
• 8m @ 5.1 g/t Au (south zone)
• 8m @ 7.7 g/t Au (elbow zone)
• 3m @ 6.7 g/t Au (elbow zone)
• 19m @ 3.7 g/t Au (elbow zone)
• 3.5m @ 8 g/t Au (elbow zone)
• 6m @ 6.5 g/t Au (elbow zone)

Aya Gold & Silver: Announced continued high-grade silver results from its ongoing 2021 drill program at its Zgounder project that has extended mineralization along strike and at depth. Highlights include:

• 5.5m @ 2,887 g/t Ag (extension of mineralization at depth to the granite contact).
• 5m @ 1,010 g/t Ag (continuation of mineralized system and definition of new eastern zone).
• 6m @ 1,879 g/t Ag (continuation of high-grade mineralization below current mine workings).
• 4.8m @ 1,931 g/t Ag (extension of on-strike mineralization).
• 1.2m @ 2,553 g/t Ag (extension of on-strike mineralization).

Aya Is defining what is becoming a sizeable high-grade silver resource at Zgounder in Morocco. Its target for its next MRE is to define 100m oz. of silver resources, and it's well on its way to achieving this objective. Production growth will follow as the company plans to significantly expand Zgounder, putting the company well into the ranks of a mid-tier silver producer.

Blackrock Silver: Announced new high-grade intercepts from its core and RC drilling program at the Tonopah West project in Nevada. Highlights from the announced drill results include:

• 3.50m @ 7.2 g/t Au and 510 g/t Ag
  • Including 0.9m @ 21.86 g/t Au and 1,355 g/t Ag
• 4.6m @ 5.37 g/t Au and 22.9 g/t Ag

These drill results illustrate the continuity of high-grade mineralization at both the DPB and Victor targets; initial infill drill results validate the company's understanding of the structural orientation of the vein system at DPB, highlighting world-class potential for this deposit as the company works towards delivering a maiden MRE in Q4, 2021.

Calibre Mining: The Company continues to rapidly advance its next major "spoke" in Eastern Borosi (EB) ahead of schedule. Calibre is advancing the high-grade open pit and underground resource zones at EB to provide mill feed to the Libertad mill, which currently has 50-55% surplus capacity.  Recent infill drilling highlights:

• 6.5m @ 9.07 g/t Au (Guapinol)
• 1.9m @ 25.90 g/t Au (Guapinol)
• 1.8m @ 22.70 g/t Au (Guapinol)
• 7.1m @ 6.42 g/t Au (Vancouver)
• 4.8m @ 4.46 g/t Au (Vancouver)
• 2.2m @ 26.5 g/t Au & 99 g/t Ag (Riscos De Oro Underground)
• 2.9m @ 7.76 g/t Au & 186 g/t Ag (Riscos De Oro Underground)
• 8.2m @ 3.18 g/t Au and 262 g/t Ag (Riscos De Oro Underground)

Furthermore, over 20 new gold targets have been identified across the large land package. Resource expansion drilling will begin this quarter (Q3). Previously drilled vein systems that do not currently host resources include the Cadillac Zone, which returned drill results including 2.6m @ 8.93 g/t Au & 57 g/t Ag, 5.7m @ 10.92 g/t Au & 859 g/t Ag (San Cristobal Zone) and 5.4m @ 10.15 g/t Au (Veta Loca Zone). EB could enter the mine plan as early as 2023, though 2024 is more likely. EB can vastly increase production due to the high-grade nature of the near-surface and underground mineralization. Calibre remains one of our favorite junior producers. Sign up for a risk-free 30-day trial at Goldseeker.com. Our premium service includes a weekly summary of what has transpired in the market and updates regarding our portfolio companies, an actively managed portfolio, look over my shoulder service (we put our money where our mouths are), a monthly newsletter, and detailed analysis and valuations of those companies in the Gold Seeker portfolio.

Dundee Precious Metals: Announced robust production results, achieving record quarterly production in Q2, 2021. Consolidated payable gold production was 70.4k oz. Au, 9.5m lbs. Cu and 59.6Kt of smelted complex concentrate, bringing the 1H 2021 payable production to 139k oz. Au, 16.7m lbs. Cu and 82.6Kt of smelted complex concentrate. Full-year guidance is maintained at total payable production of 243-285k oz. Au, 31-36m lbs. Cu, and 200-220Kt of smelted complex concentrate. The company also announced its Q2 quarterly dividend payment of $0.03/share. 

Elemental Royalties: This small junior royalty company announced the first gold pour at the company's flagship asset, a 2% NSR royalty on the Karlawinda mine in Western Australia. This small gold mine has an initial mine of 10+ years. Once fully ramped up, Karlawinda will produce 110-125k oz. Au annually or 2.20-2.50k oz. (attributable to Elemental).

Endeavour Silver: Reported Q2 2021 production results. Endeavour Silver produced 1.073m oz. Ag and 11.16k oz. Au in Q2. Production is on track to meet or achieve guidance with production at all three operations were on or ahead of plan. Endeavour Silver held back 460k oz. Ag and 1.89k oz. Au during the last two weeks of June in anticipation of a rebound in prices later in 2021. The company continues to advance the Terronera FS, which is expected to be published in Q3, and a construction decision to follow.

Gatos Silver: The Company reported excellent preliminary Q2 production results. Gatos exceeded guidance in several areas, including tonnage, grade, and recovery rates for all four metals and, in turn, production. The Cerro Los Gatos mine (70% owned by Gatos) achieved record throughput and slightly exceeded capacity at 2,535tpd, a material increase over Q1 (2,261tpd) and full-year 2020 @ 1,829tpd. Silver, gold, lead, and zinc grade all saw a notable increase relative to Q1. In particular, silver grades increased to 322 g/t from 261 g/t in Q1 and 229 g/t in 2020. The Cerro Los Gatos mine (100% basis) produced 2.1m oz. Ag, 1.5k oz. Au, 11.2m lbs. Pb, and 14.5m lbs. Zn. Recovery rates for all four metals were above design capacity and saw a significant gain over Q1 2021:

Metal	Q2, 2021 Recovery Rates	Q1, 2021 Recovery Rates
Silver	89% (+4%)	85%
Gold	63% (+3%)	60%
Lead	90% (+3%)	87%
Zinc	75% (+4%)	71%

Gran Colombia: Announced results from the 2021 drill program at its recently acquired Toroparu development project in Guyana. Drilling confirms the 4km strike length of structurally controlled high-grade gold mineralized structures. Gran Colombia is currently preparing an updated MRE and PEA, incorporating the high-grade results from the last drilling program. The high-grade mineralized pipes, ranging in grade from approximately 5 g/t Au to greater than 20 g/t Au over potentially mineable widths, are often surrounded by a lower grade (0.5 - 5.0 g/t Au) halo of mineralized material.  The high-grade gold grades intersected in structures range from 2.42 g/t Au to 101.7 g/t Au and have a length-weighted average grade of 6.7 g/t Au over 113 m and 76 intervals. Select Phase 2 drill highlights include:

• 9m @ 4.51 g/t Au
• 0.98m @ 35.80 g/t Au
• 6.94m @ 3.02 g/t Au
• 1m @ 8.12 g/t Au
• 9.50m @ 2.02 g/t Au
• 2m @ 27 g/t Au
• 58.8m @ 1.77 g/t Au
• 6m @ 5.64 g/t Au
• 4.5m @ 13.22 g/t Au
• 5.49m @ 10.57 g/t Au
• 3m @ 5.17 g/t Au
• 6m @ 2.70 g/t Au

Kirkland Lake Gold: The premier senior gold producer focused solely on Tier-I mining jurisdictions reported excellent drill results at Detour Lake and Macassa. These happen to also be two of the largest gold operations in Canada, having significant exploration upside and expansion potential. At Detour Lake, Kirkland demonstrated how massive the project is and will be through exploration drilling near-surface and below the open-pits. Drill highlights from Detour include:

• 80.4m @ 1.72 g/t Au (east saddle zone potential to extend the main pit to the west).
• 45m @ 2.15 g/t Au (east saddle zone potential to extend main pit to the west).
• 17m @ 7.19 g/t Au (central saddle zone drilling demonstrating continuity of mineralized corridor connecting main pit and the planned west pit).
• 2m @ 18.47 g/t (central saddle zone drilling demonstrating continuity of mineralized corridor connecting main pit and the planned west pit).
• 27m @ 2.74 g/t (central saddle zone drilling demonstrating continuity of mineralized corridor connecting main pit and the planned west pit).
• 57m @ 1.48 g/t Au (drilling in the western portion of the saddle zone confirms continuity of mineralization to the west and below the main pit reserve pit shell).
• 25.3m @ 3.31 g/t Au (drilling in the western portion of the saddle zone confirms continuity of mineralization to the west and below the main pit reserve pit shell).
• 23.9m @ 2.70 g/t Au (drilling in the western portion of the saddle zone confirms continuity of mineralization to the west and below the main pit reserve pit shell).
• 77.8m @ 1.62 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 16m @ 4.85 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 14m @ 6.0 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 16.8m @ 4.94 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 9.20 @ 8.60 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 2m @ 16.88 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).
• 40m @ 1.81 g/t Au (drilling below west pit reserve intersects broad mineralization extending to depth).

Note: Average reserve grade at Detour is 0.82 g/t Au and highest at West Detour Pit and North Pit at 0.95 g/t Au. Drill results over the last nine months have averaged well above the reserve grade. The Detour Zone 58N has an average grade of 5.8 g/t for 534k oz.

Kirkland Lake Gold also reported new high-grade intercepts at Macassa, extending mineralization along strike and up and down drip of the SMC. Highlights include:

• 2m @ 589 g/t Au (up to 180m east of reserves at SMC).
• 2m @ 25.1 g/t Au (up to 180m east of reserves at SMC).
• 2m @ 258 g/t Au (drilling to test north of resources intersects high-grade mineralization up to 100m up-dip and in the footwall of current resource at SMC).
• 2m @ 131 g/t Au (drilling to test north of resources intersects high-grade mineralization up to 100m up-dip and in the footwall of current resource at SMC).
• 2m @ 28.3 g/t Au (drilling to test north of resources intersects high-grade mineralization up to 100m up-dip and in the footwall of current resource at SMC).
• 2m @ 22.6 g/t Au (drilling to test north of resources intersects high-grade mineralization up to 100m up-dip and in the footwall of current resource at SMC).
• 2m @ 101.7 g/t Au (drilling along the south margin of current SMC reserves, extending mineralization down-dip of resources, and identified new mineralized lenses to the southeast of SMC).
• 2m @ 69.3 g/t Au (drilling along the south margin of current SMC reserves, extending mineralization down-dip of resources, and identified new mineralized lenses to the southeast of SMC).
• 2m 2 38.9 g/t Au (drilling along the south margin of current SMC reserves, extending mineralization down-dip of resources, and identified new mineralized lenses to the southeast of SMC).

Lion One Metals: Announced high-grade intercepts including deep step-out intercepts from its Tuvatu alkaline gold project. Highlights include:

• 6m @ 9.11 g/t Au (step-out intercepts)
• 2.15m @ 17.70 g/t Au (step-out intercepts)
• 6.47m @ 17.90 g/t Au (shallower part of the Tuvatu gold system)
• 1.27m @ 11.58 g/t Au
• 2.10m @ 10.41 g/t Au
• 1.20m @ 10.45 g/t Au

McEwen Mining: Has finally announced it will be spinning off its most valuable project, Los Azules, into McEwen Copper Inc. McEwen Copper announced an 8m share offering at $10/share ($80m in gross proceeds). It currently has 17.5m shares outstanding. Rob McEwen has committed a lead order to purchase 50% of the offering ($40m) through his investment corporation, Evanchan Ltd. 4m shares remain available and subject to a $2m minimum investment. McEwen Mining will be the controlling shareholder following the close of the offering, owning 68.6% of the Company and Rob McEwen and new investors owning 31.40% of McEwen Copper. McEwen Mining's operational performance over the last several years has been abysmal, with a good deal of value destroyed along the way. McEwen Mining's interest in Los Azules will become its most valuable asset by a wide margin, and perhaps the share price won't continue to underperform.

Novo Resources: The Company provided a quarterly operational update after achieving production earlier in the year. The company posted record gold production in June of 5.9k oz. Au, a 16.50% increase over May and 14.89k oz. Au during Q2. Mining and processing rates continue to increase, and recovery rates are reaching optimal levels at 96.40% in June, up from 94.40% in May. The company ended the quarter with C$46.3m in cash in addition to approx. $200m worth of investments. The company is currently trading with a market capitalization of C$515m. Still, the enterprise value (which one pays for the operational part of the business, market cap + debt – cash) is much lower at approx. C$310m.

Orvana Minerals: Announced an updated MRE at its Taguas project. The MRE increased to 2.6m AuEq oz. (947k oz. are low-cost oxides prioritized for development and 1.65m oz. are sulfides). Later this year, an updated PEA focused on oxides is expected.

Osisko Development: Announced additional drill results from its ongoing 200,000m exploration and category conversion drill program at its Cariboo project. Ten diamond drill rigs are active on the project. Thus-far, 41,000m in 134 holes have been drilled at Island Mountain. Recent drill highlights include:

• 11m @ 35.25 g/t Au
• 9.40m @ 11.14 g/t Au

• 6.35m @ 21.69 g/t Au
• 1.20m @ 24.60 g/t Au
• 6.20m @ 18.80 g/t Au
• 2.80m @ 21.11 g/t Au

Sandstorm Gold Royalties: Announced record quarterly attributable production of approx. 18k AuEq oz., generating record revenue of $32.4m. This was expected as the recently announced acquisition of Iron ore royalties from Vale is accrued as of January 1^st, 2021. Sandstorm Gold should continue to set production records in Q3, if not Q4 of 2021, as deliveries from the Vatukoula gold stream are expected to begin in August. Furthermore, although Relief Canyon has had several setbacks ramping up production, attributable production is expected to increase as the year progresses. While it is encouraging to see Sandstorm finally investing in growth, its near-term growth pipeline beyond the recently acquired assets and Relief Canyon is lacking, with no material growth expected in 2022 and most of 2023. Sandstorm will likely begin receiving pre-production cash flow from Hot Maden in the 2H 2023/1H 2024.

Sandstorm, along with Osisko Gold Royalties, has one of the more compelling portfolios of development stage royalties and streams over the medium (2-4yrs) and long-term (>4+ years). For Sandstorm, these include:

• Hot Maden (2024): +80-85k AuEq oz. (60k oz. Au + 20-25 AuEq oz.).
• Aurizona underground expansion (2025 +/- 1yr) and sliding scale royalty (NSR increases to 5% at or above $2,000/oz. Au). +2.2-4.5k oz. Au.
• Vatukoula (Q3 2021): +4.3k oz. Au for 6yrs; 2.90% gold stream after that.
• Bonterra Royalties (Bachelor, Moroy, Barry, Gladiator), [2023/2024]: +2-4k oz. Au.
• Hugo North (2030-2032E): +7-11k AuEq oz.
• Agua Rica (2030-2032E): Option to purchase 20% gold stream for $225m: +20-40k oz. Au. There is still a lot of risk with this asset but it does provide material optionality. 

*While it seems attributable production for Sandstorm could grow to 180-220k oz. Au p.a., numerous assets will see a step down in the size of a gold, copper, or silver stream, including but not confined to Cerro Moro (drop-down, tail stream), Chapada (drop-down, tail stream), Karma (potentially depleted), Santa Elena (beginning in 2022, between 40-60% of mill feed from Santa Elena will be displaced by Ermitano, Relief Canyon (tail stream after 5yrs of fixed deliveries). Net of the drop-down to tail streams, attributable production will fall off rather significantly, but many other small royalties will negate (some of) the lost production. We can only hope that Sandstorm can complete one or two more sizeable gold or silver streams before gold breaks $2,000/oz. and silver breaks $32/oz. +/-.

Torex Gold: Reported Q2 2021 production results as the company remains on track to achieve full-year production guidance of 430-470k oz. Au. During Q2, Torex produced 188k oz. Au and sold 111k oz. at an average realized gold price of $1,815/oz. Through the first half of the year, 247.5k oz. Au was produced. Underground mining exceeded expectations will an average daily mining rate of more than 1,400tpd for the first time.