Gold Seeker Issue #81 ~ This Week In Mining: Consolidation Continues, M&A On The Way

After closing last week strong, the metals and miners fell back to the trading range both have been in for a while now. M&A looks to be picking up slowly with two relatively small deals announced this week, both of which involved assets in the U.S.

$AXU, $CXB, $DSV, $EQX, $FSM, $GORO, $GROY, $GBR, $IAU, $KNT, $LIO, $MAG, $MGM, $NFG, $PGM, $RSLV, $SLVR, $TSLV

Alexco Resource Corp: The Canadian silver producer reported exploration results from Bermingham northeast deep zone infill and extension drilling program. The ongoing 19,000m drill targets over 50 intercepts along a zone discovered in 2019 and extended over 500m strike length in 2020. Highlights from the 2021 drill program include (all results intercepted either Bermingham main and/or Footwall veins):

• 20.37m @ 1,681 g/t Ag, 0.36 g/t Au, 6.46% Pb and Zn.
• 4.4m @ 2,901 g/t Ag.
• 4.7m @ 1,384 g/t Ag
• 4.64m @ 1,212 g/t Ag
• 4.73m @ 2,567 g/t Ag
• 3.91m @ 1,301 g/t Ag
• 7.35m @ 970 g/t Ag
• 4.31m @ 866 g/t Ag
• 9m @ 778 g/t Ag
• 2.91m @ 986 g/t Ag

Calibre Mining: Provided highlights from its ongoing exploration and resource expansion drilling at its Libertad concessions. Highlights include:

• 11.4m @ 3.11 g/t Au (Tranca vein – Exploration)
• 22.3m @ 1.71 g/t Au (Tranca vein – Exploration)
• 6.6m @ 4.21 g/t Au (Tranca vein – Exploration)
• 7.6m @ 3.34 g/t Au (Tranca vein – Exploration)
• 4.9m @ 5.14 g/t Au (Rosario vein – Infill)
• 7.8m @ 3.13 g/t Au (Rosario vein – Infill)

Discovery Silver: The Company reported excellent recovery rates from metallurgical test work at its flagship Cordero project. The sulfide flotation test work includes the following highlights:

• 80-89% recovery rates for silver, 83-91% for lead, and 81-90% for zinc.
• Test work completed on all major rock types at Cordero.
• Higher recoveries were achieved at coarser grind sizes.
• Saleable concentrate grades confirmed.

The oxide and transition cyanidation test work includes the following highlights:

• Recovery rates for silver and gold of 54-80% and 61-75%.
• Results are the first indication that a heap leach on the oxide and transition material may be economic.
• Follow-up column leach test work is underway.

Equinox Gold: The high-growth mid-tier gold producer announced update MRE's at Mesquite, Fazenda, and its RDM gold mine. Mesquite M&I resources increased 65% to 1.384m oz. of contained gold while Inferred resources increased 30% to 912k oz. Au. Fazenda exploration offset 31 months of mining depletion with reserves more or less unchanged at 315k oz. Au representing a 5+ year mine life. RDM reserves at year-end 2020 are estimated at 556k oz. Au, a 30% decrease from the May 2018 reserve estimate due to mining depletion and little to no exploration in recent years. The Company is planning an exploration program at RDM for 2022 focused on resource growth. While two of these operations are small (annual production <100k oz. Au p.a.), in aggregate, these operations combine for approximately 240-260k oz. of annual gold production.

Fortuna Silver Mines: Picking up where Roxgold left off, Fortuna reported high-grade results from extension and scout drilling at its projects in Cote d’Ivoire (Seguela) and Burkina Faso (Boussoura) in West Africa. Drill highlights from both projects include:

• 30m @ 17.2 g/t Au (Seguela: Sunbird)
• 20m @ 2.9 g/t Au (Seguela: Sunbird)
• 7m @ 28.8 g/t Au (Seguela: Koula)
• 11m @ 19.8 g/t Au (Seguela: Koula)
• 18m @ 6.1 g/t Au (Seguela: Koula)
• 4m @ 23 g/t Au (Seguela: Gabbro North)
• 6m @ 6.5 g/t Au (Boussoura: Fofora scout drilling)
• 5m @ 12.9 g/t Au (Boussoura: Fofora scout drilling)
• 4m @ 6.7 g/t Au (Boussoura: Fofora main drilling)
• 5.4m @ 17.9 g/t Au (Boussoura: Galgouli central)
• 4.8m @ 6.6 g/t Au (Boussoura: Galgouli central)
• 2m @ 22.2 g/t Au (Boussoura: Galgouli regional)

Gold Resource Corp: The Company announced it entered into a binding letter agreement with Aquila Resources setting out the terms of a proposed acquisition by Gold Resource Corp of all the issued/outstanding common shares. This acquisition will transform Gold Resource Corp into a gold and base metal producer with assets in Mexico and Michigan. Additionally, with Back Forty to be owned by a larger company with deeper pockets, Back Forty can be advanced with first production anticipated before the end of 2024.

Gold Royalty Corp: Gold Royalty Corp., not long after the acquisition of Ely Gold Royalties, announced it has entered into an agreement with Abitibi Royalties and Golden Valley Mines and Royalties, under which Gold Royalty Corp will acquire all of the issued and outstanding shares of both Abitibi Royalties and Golden Valley. Per the agreement, each holder of the common shares of Abitibi Royalties will receive 4.6119 shares of Gold Royalty common shares for each Abitibi Royalties share held. This implied consideration of C$25.33/share of Abitibi Royalties and an approximate 22% premium based on the 20-day volume-weighted average price (VWAP). Under the terms of arrangement with Golden Valley, each holder of the common stock of Golden Valley will receive 2.1417 Gold Royalty shares. The exchange ratio implied consideration of C$11.76/share of Golden Valley and a premium of 86% to the 20-day VWAP. The consideration for Golden Valley shares reflects its ownership in Abitibi Royalties and the additional value of its other assets.

While this deal will increase cash flow immediately, the Pro-forma portfolio is primarily focused on projects at various stages of development and exploration. Acquiring Abitibi Royalties will boost cash flow immediately, increasing more substantially in future years. 

Great Bear Resources: The Company provided an update on geological modeling and assay results from one of twenty-three high-grade gold domains being modeled within the LP Fault at its Dixie Project. The highlights from this news release include:

• The Auro2 domain begins at bedrock surface, follows a highly consistent, steeply-dipping geological contact between meta-sedimentary and felsic volcanic rocks, and is situated near the center of the LP Fault zone. It has been drilled from bedrock surface to over 450m depth and remains open to extension.
• All composite intervals defining the Auro2 high-grade domain.
• An updated three-dimensional plan map of all 23 high-grade domains.

I-80 Gold: The Company made a smart, strategic asset swap with Nevada Gold Mines (NGM), the Barrick-Newmont JV in Nevada. The Company signed definitive agreements to create a comprehensive Nevada mining complex whereby it can advance all its assets (all of which are in Nevada) much more quickly towards production. I-80 via an asset exchange will acquire/divest the following assets:

• Acquisition of certain processing infrastructure, including an autoclave and the Lone Tree and Buffalo Mountain gold deposits from NGM in exchange for:
  • I-80 Gold’s 40% ownership in South Arturo, giving the NGM a 100% interest in the operation, providing NGM will flexibility to pursue potential synergies with NGM’s other Nevada assets.
  • Assignment of I-80’s option to acquire the adjacent Rodeo Cree exploration property
  • Contingent consideration of up to $50m based on production from the Lone Tree property
  • Arrangement of substitute bonding in respect of the Lone Tree and Buffalo Mountain reclamation obligations at closing.

Further, the Company also entered into an acquisition agreement to acquire the Ruby Hill Mine from Waterton Global Resource Management. In addition, I-80 entered into a private placement commitment with NGM's whereby, conditional on the asset exchange being completed, NGM will acquire up to a 9.9% equity interest in the new I-80 common shares for total proceeds up to $50m, and a non-binding term sheet with Orion Mine Finance for up to $240m in acquisition and development financing. Equinox Gold also indicated that it would participate in the private placement by exercising a portion of its anti-dilution rights and will likely maintain its 30% interest in I-80 Gold. Highlights from this transaction are as follows:

• I-80 increased overall Inferred resourced more than three and a half times and more than doubles I-80's overall M&I gold resources.
• The addition of 100m oz. (M&I) and 70m oz. (Inferred) of silver resources via the Ruby Hill deposits.
• Secures for i-80, the ability to process all types of gold-bearing mineralization at the centrally located Lone Tree processing facility situated on Interstate 80 once the necessary refurbishment of the facility is completed. The Lone Tree facility includes an autoclave, CIL mill, Floatation Plant, and heap leach facility.
• The lost production from South Arturo will be replaced by production from the Ruby Hill open-pit and residual leaching at Lone Tree.

This helps position I-80 gold to become a significant gold (and silver) in Nevada. In addition, this asset exchange and acquisition allows the Company to greatly reduce the timeline to production at all of its assets.

K92 Mining: Announced additional high-grade surface and underground drill results at the Kora deposit at the Kainantu gold mine in PNG. Highlights include:

• 6.45m @ 106.95 g/t AuEq.
• 5.3m @ 96.85 g/t AuEq.
• 17.76m @ 14.40 g/t AuEq.
• 6.35m @ 60.25 g/t Au, 321 g/t Ag and 7.96% Cu.
• 6.1m @ 7.53 g/t Au, 78 g/t Ag and 3.87% Cu.
• 9.4m @ 48.69 g/t AuEq.
• 9.80m @ 22.45 g/t AuEq.
• 2.50m @ 48.39 g/t AuEq.

Lion One Metals: The Company announced additional high-grade intercepts from its ongoing deep extensional step-out drilling and near-surface infill drilling at its Tuvatu gold project in Fiji. Highlights from this release include:

• 8.48m @ 10.24 g/t Au (Near-Surface Infill)
• 3.7m @ 24.92 g/t Au (Deep Feeder zone 500)

Recent intercepts are believed to be the continuation of the interpreted deep feeder structure. Multiple new high-grade intercepts have been encountered in drill hole TG135 drilled from the Tuvatu decline and hole TUDDH533W1, a wedge hole to TUDDH533 (reported July 26, 2021). According to the Company, “these additional deep intercepts significantly increase the degree of confidence that the Tuvatu orebody extends to a considerable depth, and that it remains fully open, laterally and at depth. It is clear that the current Tuvatu resource represents but a fraction of a much larger and considerably more extensive, high-grade Au deposit for which additional drilling is warranted.”

MAG Silver: Reported successful Phase I Deer Trail results at its CRD project in Utah. Phase I successfully fulfilled all three of its objectives, including confirming the presents of a thick section of favorable carbonate host rocks below the Deer Trail mine, confirming and projecting two suspected mineralization feeder structures to depth, and intercepting high-grade mineralization related to those structures in the host rocks. The drill highlights include: 0.50m @ 426 g/t Ag, 6.5 g/t Au, 17.1% Pb & Zn, and 1.90m @ 952 g/t Ag, 38.2 g/t Au, 9.2% Pb & Zn. The primary goal of Phase I was to locate the Redwall Limestone, a thick, clean limestone unit thought to be a more favorable rock than the thinly layered Calville Formation. Phase II drilling began August 20, 2021, with the first hole designed to test the Wet fault 150m deeper where it cuts through the Redwall.

Maple Gold Mines: Reported additional results from the final three drill holes completed in the 531 zone and four regional exploration holes drilled during the 10,217m winter drill program at the Douay Gold Project (50/50% JV). The stand-out highlight from this release is 28.5m @ 8.8 g/t Au (The best intercept drill in the 531 zone to date ~ grade x thickness). The Company has reported 13 of 22 holes from the 2021 winter drill campaign, with additional assay results expected to be released in the coming weeks.

New Found Gold: Released the results from seven drill holes at the Lotto zone at its Queensway project in Newfoundland. Highlights from this release include:

• 2.65m @ 111.36 g/t Au
• 2.05m @ 15.54 g/t Au
• 2.80m @ 76.81 g/t Au

PureGold Mining: The Company is back on track after a rough start-up/ramp-up over the last couple of quarters. The Company set a new single-day record processing 1,307 dry tonnes of ore and a new single-day record of 2,050 tonnes of ore brought to surface from underground. The 1,037 tonnes of ore are 30% higher than the current design capacity of 800tpd. During the last week of August, the Company achieved average daily throughput of 870tpd @ 6.50 g/t Au. Milestones anticipated to be achieved for the remainder of 2021 include completion of mill pump upgrades in September to further stabilize mill capacity at 1ktpd (25% above design capacity), an updated MRE, and the announcement of a start date for initial underground drill program targeting the high-grade 8 zone. The significant scalability at the mine is already starting to be recognized, with the next expansion (timing unknown) planned to increase throughout to 1.6ktpd.

Reyna Silver: Reyna release initial drill results as it Batopilas, highlighted by native silver and high-grade gold. Results from the firs seven holes were released totaling 1,095m of its 10,000m stage 1 drill program at Batopilas in southwestern Chihuahua, Mexico. Highlights from the first holes include:

• 3.20m @ 703 g/t Ag and 3.03 g/t Au
  • Including 0.85m @ 8.74 g/t Au and 0.20m @ 10,565 g/t Ag
• 1.50m @ 10.67 g/t Ag and 4.88 g/t Au
  • Including 0.25m @ 59 g/t Ag and 28.70 g/t Au
• 2.20m @ 4.55 g/t Ag and 2.33 g/t Au

Silver Tiger Metals: Reported highlight results from its ongoing drill program including:

• 0.8m @ 1,039 g/t AgEq.
• 1.7m @ 2,025 g/t AgEq within 4.8m @ 1,265 g/t AgEq.
• 1.3m @ 2,036 g/t AgEq within 5.4m @ 833 g/t AgEq.
• 0.9m @ 2,559 g/t AgEq within 1,495 g/t AgEq.

Tier One Silver: announce results from the first-ever drill hole into the Curibaya project in southern Peru. Although the first drill hole did not intersect the feeder structure interpreted from surface information, it encountered broad widths of intense hydrothermal silica clay alteration within three sub-horizontal bodies over a drill width of approximately 70m. The first hole was drilled parallel to the interpreted high-grade Madre feeder structure where 2m @ 1,256 g/t AgEq and 7m @ 178 g/t AgEq were channel sampled on surface.