Gold, silver, and the mining stocks got hit again this week on really no news (and little volume). The market can't decide whether recent Fed-speak is bullish or bearish for the precious metals. However, anyone with a basic understanding of the current economics circumstance [i.e., why the Fed can't raise rates such that real interest rates are no longer negative, national debt issues, debt monetization and deficit spending, continuous and accelerating monetary debasement, et al.] understand the Fed is between a rock and a hard place and this (along with countless other issues across all major world economies) is bullish for gold. The mining stocks are where every growing value can be found as the indices continue to move lower; however, silver stock valuations aren't out of line relative to the price of silver.
News-flow from gold and silver companies fell significantly this week
$AYA, $BRK, $BNKR, $EQX, $IAG, $LAB, $NFG, $NJMC, $RPX, $SSVR
Aya Gold & Silver: The North African silver producer announced new high-grade assay results from its 2021 drill campaign at the Zgounder silver mine, Morocco. Key highlights include:
- 15m @ 1,299 g/t Ag
- Including: 0.5m @ 13,138 g/t
- Including 0.5m @ 5,621 g/t
- Including 0.5m @ 5,168 g/t
- 6.0m @ 845 g/t Ag
- Including: 0.5m @ 3,825 g/t
- Including 0.5m @ 1,358 g/t
- 10.5m @ 448 g/t Ag
Drilling continued to expand mineralization at depth, which defined continuous high-grade mineralization below the current mine workings and remains open in both directions. Drilling confirmed high-grade mineralization and identified a new mineralized structure below 2,000m in the Zgounder East Zone. Step-out drilling is planned shortly in this high-potential area, in addition to the target zones below the mine to the granite contact.
"Today's diamond drill exploration results continue to expand Zgounder's mineral envelope at depth in two distinct areas, both of which remain open for further growth. Notably, holes ZG-21-40 and ZG-21-41 defined high-grade intervals below 2,000 meters, opening up a previously undrilled area of Zgounder East and generating new targets for exploration. Overall, results continue to underscore Zgounder's near-mine expansion potential, providing additional support for our resource target and upcoming feasibility study," said Benoit La Salle, President & CEO.
Blackrock Silver: The company provided an update regarding its Tonopah North project located adjacent to the Tonopah West Ag-Au resource along Walker Lane in Nevada. The Tonopah West project consists of unpatented lode mining claims covering approx. 20 square kilometers north and west of the Tonopah West DPB resource area. The claims had been staked to cover the western margin of the recently identified Tonopah Caldera.
Mapping and a gravity geophysical survey show the caldera is east-west at the Tonopah West project and swings northwest, then north, and finally eastward. The configuration of the caldera is paramount to finding new veins in the district, and two specific high-priority targets have emerged.
The first target is along the western edge of the Tonopah Caldera, where a large northwest fault system appears to offset the caldera rim. The structure appears to be the strike extension of the Pittsburg-Monarch fault system “PMFS," which controls thick veins in the Victor and Ohio areas of the Tonopah West project. At Victor, the vein was 24m thick at the intersection with the PMFS. Similarly, the Ohio vein was 14m thick where it intersected the PMFS. The second exciting target is on the north side of the Tonopah Caldera. A strong east-west structural fabric has been mapped, and regional magnetic data shows a strong east-west structural domain. The geologic setting for the second target is very similar to the Tonopah district itself. The Tonopah North property covers the area which has roughly the same strike as the existing Tonopah silver district.
Bunker Hill: The company announced an updated PEA for the Bunker Hill mine, illustrating improved financial returns, cash flow generation, and operating costs. The updated PEA envisions initial capital costs of $44m to restart the mine over 18 months, generating approx. $25m of average annual free cash flow over an 11-year mine life. The project will produce 1b zinc-equivalent pounds of metal over the mine life, including over 8m oz. Ag. The after-tax NPV increased 42% to $143m relative to the first PEA, and the project has an IRR of 35%, using the following price decks: $1.15/lb. Zn, $0.90/lb., and $20/oz. Ag. The increased use of long-hole open-stoping results in a 29% decrease in all-in sustaining costs (AISC) to $0.47/lb. Zn.
Equinox Gold: Equinox, one of our favorite mid-tier gold producers over the next several years, announced a positive pre-feasibility study for an expansion of its Aurizona mine as well as a 73% increase in reserves. While we believe there is still upside potential regarding long-term production, this is a good first step. By mining the underground deposit and satellite open-pit deposits concurrently with the existing Piaba open-pit. The expansion would extend the Aurizona mine life significantly to 11-years at higher average annual production of 137k oz. Au, including more than 160k oz. Au during 2026-2029. The following are highlights from the PFS:
- After-tax NPV (at $1,800/oz. Au): $600m
- LOM cash costs: $803/oz.
- LOM AISC of $1,058/oz. and $944/oz. from 2024 onward.
- Gold reserves of 1.7m oz. @ 1.60 g/t Au.
- Underground initial capital costs: $154m.
Equinox had begun to optimize the Aurizona. Once complete, we envision production growing to between 170k oz. Au to 220k oz. Au p.a. This is yet another organic growth project in Equinox Gold’s deep portfolio of new projects, including Santa Luz [+100k oz. Au], the large Greenstone project [+235-250k oz. Au] and expansion projects including the Los Filos expansion [+200k oz. Au vs. 2021E output] and the Castle Mountain Phase II expansion [+175k oz. Au vs. Castle Mountain Phase I]. By 2025, if not 2026, production will increase approx. 600-625k oz. Au to 1.25-1.35m oz. at much lower operating and all-in sustaining costs.
IAMGOLD: Announced additional positive assay results from its delineation diamond drilling program at the Gosselin zone discovery, approximately 1.5 km northeast of the Côté Gold construction project. The Gosselin delineation drilling program is being undertaken as part of the Côté Gold 70:30 joint venture between IAMGOLD, as the operator, and Sumitomo Metal Mining. Côté Gold, located 175 km north of Sudbury, Ontario, Canada and 125km southwest of Timmins, Ontario, Canada, is currently under construction, with commercial production anticipated in the second half of 2023. Once in production, this will transform IAMGold into an emerging, lower-cost mid-tier producer and more exposure to Canada. In March 2021, IAMGOLD reported the results of the remaining nine diamond drill holes totaling 3,686m as part of the resource delineation drilling program completed in the fourth quarter of 2020.
IAMGOLD is now reporting assay results from an additional thirty-one diamond drill holes totaling 11,735m completed in 2021. Drill holes were completed from land-based drill platforms on Three Ducks Lake's north and south shores and lake ice and barge-based platforms directly on Three Ducks Lake.
Highlights from this release include:
- 242m @ 1.57 g/t Au
- Including 33m @ 6 g/t
- 151.5m @ 1.25 g/t
- 48.5m @ 7.83 g/t
- Including 3.5m @ 96.1 g/t
- 430m @ 0.95 g/t
- 393m @ 1.41 g/t
- 220m @ 1.25 g/t
- 350m @ 1.25 g/t
Labrador Gold: The company sampled 338 g/t Au in a discovery at Golden Glove, 3.5km south of Big Vein. Rock chip samples include 338 g/t Au, 194 g/t Au, 193 g/t Au and 83.6 g/t, confirming the presence of high-grade epizonal gold in a second location on the Kingsway property. This further demonstrates the significant potential for high-grade near-surface gold mineralization along the Appleton Fault zone. However, we are still waiting for Labrador to hit wider, higher-grade intercepts.
New Found Gold: The company reported recent assay results from field sampling along the Appleton Fault zone. High-grade surface samples have been found in a new area 2km north of the Lotto zone at the company’s Queensway project. Highlight sample assays include 1,131.2 g/t Au and 568.2 g/t Au. This potential new zone of high-grade gold mineralization is being called “Big Dave.” This area of the Appleton Fault demonstrates limited outcrop, and the two high-grade grab samples collected were of highly angular quartz float containing visible gold. In addition, the samples were located close to one another, indicating the high potential for further discoveries along the Appleton Fault.
The company will also be listed on the NYSE on or around September 29th [next Wednesday] under the ticker NFGC. The stock price is approx. 40-50% lower compared to its peak earlier in the year, and while it got well ahead of itself, trading with a valuation of >$1.5b and it isn't particularly cheap today. It is increasingly looking like the Kingsway project is a future Tier-I asset (or very close), and with the increased liquidity and access to capital, the company can continue its aggressive drill program. It will continue raising capital at a very low-cost equity, allowing it to create value more quickly.
New Jersey Mining: Announced their latest assay results from the ongoing core drilling program at the Golden Chest Mine. These recent gold intercepts lie within the Klondike area. GC 21-205 is the third diamond drill hole completed in the Klondike to show highly favorable results in what is quickly developing into an extensive mineral system. The company will continue with its step-out drilling program to define the limits of this new gold resource. Highlights from this release include:
- 1.4m @ 12.2 g/t Au
- 1.1m @ 6.4 g/t
- 2.3m @ 15.5 g/t
- 1.8m @ 3.8 g/t
- 6m @ 3.1 g/t
- 1.3m @ 7.8 g/t
Red Pine Exploration: Reported new results from its 2021 drill program at the Wawa Gold Project, including discovering high-grade gold mineralization in the Jubilee Shear zone more than 400m down-dip of the Surluga resource. Highlights of the 2021 drill program:
- 4.78m @ 25.73 g/t Au
- 2.55m @ 4.39 g/t
- 2.91m @ 3.38 g/t
- Visible gold has been observed in two different veins in the Jubilee Shear zone
Summa Silver: Announced additional high-grade silver and gold intercepts from its ongoing drill program at its high-grade silver and gold project, the Hughes property in Nevada. The following are drill highlights from this press release:
- 4.3m @ 913 g/t Ag and 7.86 g/t Au. (Rescue: Belmont)
- 0.6m @ 4,338 g/t Ag and 56.5 g/t Au. (Rescue: Belmont)
- 5.7m @ 337 g/t Ag and 2.10 g/t Au. (Rescue: Belmont)
- 0.9m @ 1,301 g/t Ag and 7.86 g/t Au. (Rescue: Belmont)
- 6.1m @ 253 g/t Ag and 2.53 g/t Au (Murray Target)
- 0.9m @ 543 g/t Ag and 5.43 g/t Au (Murray Target)
High-grade mineralization at Rescue has been intersected in several stacked structures over an area of 375 x 100m, where it remains open to expansion. High-grade mineralization at Murray has been intersected over an area of 300 x 200m, where it remains open to expansion. Further mineralization is present in multiple additional areas over a length of 3.5km, including the Ruby discovery, a 1.3km step-out from the historic Belmont mine, and the current site of drilling.