Industrial Metals, Metals, Precious Metals
Fall, for most people, is a time of change. It’s when kids and teachers head back to school, bread winners come off of vacation and return to the office/ factory/ work site. Farmers are busy bringing in the harvest, as shadows lengthen, the days get shorter, and mornings become crisp.
In the mining world, autumn/ early winter is results season. In exploration camps, drill crews gear up, and geologists dig in, as shareholders hold their collective breath for results.
Months of poring over historical drill logs, maps and surveys, formulating geological models, and pinpointing drill targets, are about to be proven, or invalidated, by “the truth machine”.
For many a junior, the interval between each summer and the following March, usually corresponding with PDAC in Toronto, is their most exciting time of the year. In 2020 the annual Prospectors and Developers Association Convention went ahead as planned. Next year it will be a virtual conference, a decision no doubt prompted by a number of conference go-ers contracting the disease in March, while visiting booths at the Metro Toronto Convention Centre.
Notwithstanding covid concerns, this year’s bull market in precious metals has fueled a rally in junior mining stocks – especially companies exploring for gold and silver.
Bullion prices have climbed 25% year to date, as investors choose gold as a safe haven amid widespread economic uncertainty created by the pandemic. They believe gold will hold its value better than other assets such as stocks and bonds. In August gold surpassed US$2,000 an ounce for the first time ever. Silver hasn’t done quite so well (characteristically, it has been more volatile than gold, slumping to $12.59/oz in March, before rocketing to $29.14 in August) but it is still at its highest in seven years.
More exploration companies than usual are out in the field drilling, to take advantage of higher commodity prices, which should make for a very exciting next few months, as results pour in.
The Toronto Venture Exchange (TSX-V) is home to more mining companies than any other market in the world. From a covid-related low on March 23, the S&P/TSX Venture Composite Index has jumped nearly 45%.
GDXJ, an ETF used to gauge the health of junior gold miners, nearly doubled over the same period, from $28.50/sh on March 13 to the current $76.98.
At Ahead of the Herd, we’ve been swept up in the excitement. And no wonder, many stocks in our portfolio have run up quite nicely this summer.
Following is a run-down on our AOTH stocks, including some with exciting drill plays, as we enter the fall drilling season.
Boreal Metals (TSX-V:BMX)
Boreal Metals currently has two projects on the go: Gumsberg in Sweden and Burfjord in Norway. In June Boreal signed a deal with major Scandinavian mining company Boliden, to advance Boreal’s 100%-owned Burfjord (pronounced “burf yord”) copper-gold project in northern Norway. The agreement means that Boliden, a base and precious metals miner with six active mines in Europe and five smelters across Norway, Sweden and Finland, will have the opportunity to earn a 51% stake (Boreal would be the operator) in the project by spending US$6 million in exploration over the next four years.
The prospect of a large mineralized system right at Boliden’s doorstep must have been a factor in persuading the Scandinavian miner and mineral processor to take a $6-million chance on Boreal Metals. The next steps for Boreal involve gathering information, to come up with drill targets to present to its new partner.
Boreal’s Gumsberg project has seen exceptionally high silver grades. The company has only just started exploring this property with 30 historic mines including Östra Silvberg, at one time the largest silver mine in Sweden.
“The Fredriksson Mine contains silver-zinc mineralization reminiscent of Broken Hill-type Pb-Zn-Ag (BHT) deposits, named after the Broken Hill Deposit, the largest accumulation of Pb-Zn-Ag on Earth. Boreal is committed to advancing Fredriksson to drill testing as a significant step forward for the Company and is part of a broader strategy to conduct exploration drilling in three significant areas with past production including Ostra Silvberg, Vallberget-Loberget and Fredriksson.” Boreal Metals Chairman and CEO Pat Varas
We expect plenty of news flow as Boreal looks for more high-grade VMS among the historic mine workings and identifies additional prospects within this 18,000-hectare land assemblage.
Brigadier Gold (TSX-V:BRG)
Brigadier is readying drill targets for an exploration program focused on the past-producing San Agustín mine. A minimum 5,000 meters is planned, in approximately 40 holes targeting four high-grade gold-silver veins. The company is focused on proving the potential for multiple high-grade gold-silver veins; the depth, strike length and continuity of the veins; and understanding the source of the vein-hosted mineralization, along with its potential relationship to copper porphyry mineralization identified on the property.
Along with San Agustín, the first-ever drill program at Picachos will zero in on the Mochomos vein, where a historic rock chip channel sample yielded 18.5 g/t Au and 570 g/t Ag over half a meter; the Los Tejones vein with values of 28.6 g/t Au and 114 g/t Ag across a meter; and the Fermin vein, which sampled 268 parts per million (ppm) Ag and 0.3 g/t Au over 1m.
The first round of drilling is designed to test approximately one kilometer of vein strike between the past-producing San Agustín mine and the Tejones Prospects.
Cypress Development Corp (TSX-V:CYP)
In August, Cypress released an updated resource estimate on its Clayton Valley Lithium Project in Nevada. The new Measured & Indicated (M&I) resources represent a 57% increase in tonnes of material, and a 55% increase in contained lithium. There are also 100.4Mt of Inferred resources, averaging 986 ppm lithium. Measured resources grew to 574.1Mt or 3.3Mt (contained) lithium carbonate equivalent (LCE). In the Indicated category, resources increased to 355.6Mt or 2.0Mt LCE. The previous resource estimate tallied Measured and Indicated resources of 593.3Mt averaging 1,073 ppm lithium, or 3.387Mt LCE.
The proposed mine would produce an average 27,400 tonnes of LCE a year and have a mine life of +40 years. The mine would be neither a hard-rock mine nor a lithium brine operation, but rather, would process the lithium from claystones in Nevada’s Clayton Valley by leaching the material with dilute sulfuric acid.
Cypress’ Clayton Valley Lithium Project has the size and scalability to interest a large mining company like Albemarle, a major EV automaker like Tesla, or a world-class battery-maker like SK Innovation, developing a large facility in the southern United States. The proof in the pudding for a major taking a serious look at Cypress, will be the mine’s ability to scale up.
To offer this proof, Cyprus is designing a pilot plant capable of continuous production of at least one tonne per day of claystone, for a month. If that test phase is successful, ie., if the flow sheet works and the lithium hydroxide finished product is acceptable, then a potential acquirer could envision 5 tonnes per day, or 20 tpd, whatever production rate is required.
The pilot plant will require raising an estimated $7 million. Cypress currently has about a million dollars in its treasury. The company’s business plan has always involved attracting a major financial or mining partner that can help drive the project forward.
Cypress is continuing testing in preparation for the pilot plant, has begun baseline environmental studies, and is engaged in sourcing funds for further studies. CYP is looking at government grants and have applied for several, including one for $3.5 million, and a $500,000 grant to look at the operation’s rare earths recovery potential.
The next step is proof of concept. The purpose of the pilot plant is proving, in a real-world application, everything that Cypress has done so far in a laboratory. It’s showing to everyone that its technology works, on a commercial scale. After that, it’s on to a feasibility study – another major milestone in Cypress’ path to production.
Getchell Gold (CSE:GTCH)
Getchell’s Fondaway Canyon is an advanced-stage gold property comprising 171 unpatented lode claims totaling 1,186 hectares (2,932 acres) in Churchill County, Nevada. An upcoming 2,000-meter drill campaign is designed to extend the known high-grade gold zones, and to test the geological model the company has been devising.
To help shareholders to visualize the mineralized domains used for exploration targeting and mineral inventory, Getchell created an animated video, using a 3D exploration modeling package.
Getchell’s job is to figure out whether its project fits the picture of a big “Carlin-style” Nevada gold system , and if it does, how do they find the pathways that carried the gold from a presumably much larger deposit, below the near-surface mineralization? Equally important: Where is/ are the intrusive(s)? ie., the igneous rock potentially hosting hundreds of meters of mineralization?
One drill hole of six is planned to test the mid-point between these two historic gold intercepts. The goal is to characterize the geological setting and gold mineralization, in order todetermine orientation and design a follow-up drill program. South. The other five holes are planned for the highly mineralized Central Target Area – a 1,000 x 700-meter highly mineralized NE-SW extensional zone within the 3.5-km east-west trending Fondaway Canyon gold trend. According to Getchell, the Central Target Area is a nexus for the extensive gold emplacement mineralizing system observed at the project.
Global Vanadium (TSX-V:GLV)
Global Vanadium’s Stony Lake project is within central Newfoundland’s Cape Ray/ Valentine Lake structural trend. The 13,625-hectare property is situated between Sokoman’s Moosehead discovery to the northeast, and Marathon’s Valentine Lake deposit to the southwest.
In November 2019, New Found Gold Corp (TSX:NFG) announced one of the highest-grade, most significant gold intercepts ever drilled in the Canadian province of Newfoundland. Hole 19-01 was reported with a 19-meter intercept of 92.86 grams per tonne gold.
The discovery sparked a staking rush, a flood of financing to a host of other Newfoundland explorers, and a bonanza of exploration programs kicking off across the province.
In early August Global Vanadium (soon to be re-named) announced a private placement, for up to $2.5M). Funding box, checked. GLV has a tight share structure, thereby checking another box, and the market is loving it. In July the company was trading for 11.5 cents a share, in August it hit a dollar.
It’s early stage, but Stony Lake is getting “boots on the ground” very soon, will have a lot of news flow of its own and is situated in a mineralized district that is all but guaranteed to deliver steady news flow for years.
Great Thunder Gold (CSE:GTG)
Great Thunder Gold has the first part of its 2020 exploration program in the bag, with the completion of an airborne survey at its Northbound, Northbound Extension, Southern Star and Southern Star Extension projects in Quebec’s Fenelon Gold Camp.
In total, 2,349 line-km was flown over the four properties. The survey was strategically targeted to detect anomalies and to better define structures.
An 853 line-km airborne survey at the company’s Northbound and Northbound Extension – both are adjacent and on-trend with Wallbridge’s Fenelon deposit and Balmoral’s new Reaper discovery – pinpointed magnetic response structures representing shear zones with quartz.
At Southern Star and Southern Star Extension, 1,496 line-km of airborne magnetic and electromagnetics was flown on 100m line spacings, in volcanic-rock areas covered with heavy overburden.
The data from the survey is currently being analyzed and is expected to be released soon. The next step is defining potential geophysical anomalies on the ground, to be followed up by a ground geophysical survey and drilling.
Mountain Boy Minerals (TSX-V:MTB)
On May 27, Mountain Boy announced the kick-off to its 2020 exploration program at its American Creek project. The two-phase campaign first involves a LiDar aerial survey of the property, as well as further prospecting and mapping to confirm the drill locations. Three targets will then be drilled in Phase 2, with the objective of confirming the geological model, ie., that the various mineralized occurrences are surface expressions of a large geological system, analogous to the neighboring Premier District. This district, which produced 2.5 million ounces of gold and 60 million oz of silver, is about to go back into production.
The drills will target three areas, according to an Aug. 6 new release.
MB Silver: Drilling around the historic Mountain Boy mine will follow up the 2006 drill program, which intersected multi-kg silver values over significant widths. The drilling is intended to test the high-grade zone for continuity, both along strike and at depth.
Dorothy: The second target is the northern extension of the mine’s silver-bearing veins onto the recently optioned Dorothy property.
Wolfmoon: The IP survey will focus on the third target – the recently discovered Wolfmoon zone.
Mountain Boy Minerals is active in one of the best jurisdictions for base and precious metals exploration. Between past-producing gold mines and current compliant resources, BC’s Golden Triangle has yielded a whopping 200 million gold ounces, putting it in the same league as the Carlin Trend in Nevada, the second-largest repository of gold on Earth.
The Triangle is also one of only a few billion-ounce silver districts in the world.
Mountain Boy is ready to get results on multiple targets, which hopefully will provide evidence of a district-scale opportunity that will create an enormous amount of interest, from the market and larger mining companies.
Max Resource Corp (TSX-V:MXR)
Since November 2019, Max Resources has been identifying copper and silver targets within a 120- x 20-km area, at their CESAR copper + silver project in northeastern Colombia.
Rock chip samples taken thus far have returned high-grade copper and silver assays. The fact that the AM North and AM South targets appear to be large sub-horizontal sheets, that partly outcrop at surface, adds credibility to the “Kupferschiefer analog”.
State-owned KGHM Polska Miedz is the world’s eighth largest copper producer and the second biggest silver producer. Its Kupferschiefer (“copper shale” in German) copper-silver deposits are regionally extensive. Continuous mineralization extends down dip and laterally for kilometers. Could the mineralization at CESAR do the same? If so Max could be looking at a district-scale, even a regionally extensive copper-silver mineralized system.
Max has entered into non-exclusive confidentiality agreements with a leading copper producer and a global miner.
The first phase of the partnership with one of the yet-to-be-named companies, involves a technical study by Fathom Geophysics.
The aim of the study is to map stratigraphic (rock layers) features that can help to pinpoint stratabound copper-silver mineral horizons at CESAR.
Though still early-stage, Max’s CESAR, in under a year, has demonstrated the massive scale needed to interest a major mining company.
Palladium One (TSX-V:PDM)
Palladium One has two significant projects in Finland with the potential for large mineralized systems, similarities to Platreef and Norilsk/ Voisey’s Bay-type deposits. Having such deposits in a top-tier mining jurisdiction ought to attract much fanfare.
Drilling resumed in August on a planned 5,000m program, with a focus on expanding known mineralization to the east of existing drill intercepts in the Kaukua South zone of its open-pit Lantinen Koillismaa (LK) PGE-Cu-Ni (platinum-group-element-copper-nickel) project.
On August 10 Palladium revealed that data from this past winter’s Induced Polarization (“IP”) geophysical program, suggests the Kaukua South anomaly now extends for over 5.5 kilometers. The next day the company press-released the results of the first hole to test the eastern section of a >5.5-km-long IP charageability anomaly.
Hole LK20-006 intersected 166.7m @ 1.16 g/t palladium equivalent, including 63.4m @ 1.88 g/t Pd_Eq.
On August 25 Palladium One released the first drill results from the Murtilampi zone, 2.5 km north of the Kaukua deposit at LK. Starting at 5.8 meters downhole, hole LK20-012 intersected 87.2m at 1.43 grams per tonne PdEq including 20.2m at 2.26 g/t PdEq.
Cashed up and fully funded with Cdn$3 million in the bank, we look forward to more exploration and news flow regarding PDM’s flagship LK project, and are curious to see what Palladium One is planning to do with KS, a new property they acquired in April.
Renforth Resources (CSE:RFR)
Cashed up from a recent property sale, Renforth Resources is ready to go to work on its 100%-owned Parbec project, located within the gold-rich Cadillac Break that is part of the Abitibi Greenstone Belt, running through northern Quebec and Ontario.
Parbec borders Canadian Malartic – Canada’s largest gold mine – and is adjacent to the past-producing East Amphi mine.
On September 8 Renforth announced the start of a 7,000m drill program aimed at adding to the just over 200,000 ounces delineated at Parbec.
Among the highlights are three areas of mineralization: the discovery zone within the Cadillac Break, where the gold resource is largely above 200m, with the zone open to depth; the “Island Trench Zone”, sampled on surface and pierced to 738m, where 0.96 g/t gold was drilled over 0.5m; and the “Diorite Splay Zone” where gold is present on surface,within cross-cutting faults, and at contacts between sediments and diorite intrusives, in the Pontiac sediments – a unique setting similar to Canadian Malartic.
Parbec currently hosts an open-pit-constrained gold resource estimate of 104,500 indicated ounces gold at a grade of 1.78 grams per tonne and an inferred 177,300 ounces gold at a grade of 1.77 grams per tonne.
Drilling will consist of 26 holes totaling 7,261 meters, starting this week with the mobilization of one drill rig and technical staff to the property.
Silver Dollar Resources (CSE:SLV)
Having recently gone public, SLV started field work at one of two prospects in the famous Red Lake District of northwestern Ontario, where a number of gold juniors including 2019 belle of the ball Great Bear Resources (TSX-V:GBR), are proving up gold ounces in a new “Red Lake 2.0” area play.
Meanwhile, Silver Dollar has finalized a letter of intent (LOI) with First Majestic Silver to acquire up to a 100% interest in its La Joya silver project in Mexico.
The company has been going through historical exploration data at La Joya, including records of a 2014 Phase 3 drilling program conducted by previous owner SilverCrest, before it was bought out by First Majestic. What it has found is breathtaking.
Hole LJ DD14-116 intercepted 2.0 meters grading 723.5 grams per tonne (g/t) silver (Ag), 8.97% copper (Cu) and 0.09 g/t gold (Au), or 1,778.1 g/t silver equivalent (AgEq).
These are very high silver and copper grades; in my opinion the extreme high-grade nature of the vein makes it a mineable width.
We love the La Joya silver project, and so, apparently, does the market.
Investors who bought shares in June, 2020 and held on, already have a 5-timer. On Aug. 17 this unknown silver stock nearly hit $2.00, having only been trading for 3 months! It IPO’d on the CSE on May 1 @ $0.15 a share.
The La Joya property is well-positioned, in a prolific mining region with past-producing and operating mines nearby, including those owned by major silver companies like First Majestic, Pan American Silver and Grupo Mexico. Road, rail and power lines to the property tick the all-important infrastructure box.
The ink is barely dry on the LOI with First Majestic, and Silver Dollar is already pulling eye-popping silver intercepts, from its grab bag of historical drill data. What else is hiding in those SilverCrest documents? I can’t wait to find out.
Richard (Rick) Mills
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Richard owns shares of Boreal Metals (TSX.V:BMX). BMX is a paid advertiser on his site aheadoftheherd.com
Richard owns shares of Brigadier Gold (TSX-V:BRG). BRG is a paid advertiser on his site aheadoftheherd.com
Richard owns shares of Cypress Development Corp (TSX-V:CYP).
Richard owns shares of Getchell Gold (CSE:GTCH). GTCH is a paid advertiser on his site aheadoftheherd.com
Richard does not own shares of Global Vanadium (TSX-V:GLV). GLV is a paid advertiser on his site aheadoftheherd.com
Richard does not own shares of Great Thunder Gold (CSE:GTG). GTG is a paid advertiser on his site aheadoftheherd.com
Richard owns shares of Mountain Boy Minerals (TSX-V:MTB). MTB is a paid advertiser on his site aheadoftheherd.com
Richard owns shares of Max Resource Corp (TSX-V:MXR). MXR is a paid advertiser on his site aheadoftheherd.com
Richard owns shares of Palladium One (TSX-V:PDM). PDM is a paid advertiser on his site aheadoftheherd.com
Richard does not own shares of Renforth Resources (CSE:RFR). RFR is a paid advertiser on his site aheadoftheherd.com
Richard does not own shares of Silver Dollar Resources (CSE:SLV). SLV is a paid advertiser on his site aheadoftheherd.com
Industrial Metals, Metals, Precious Metals