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Newsletter 12 /2019

This newsletter contains news on the following topics:

Share of the Week: First Cobalt + Silver price starts to rise; with Endeavour Silver, MAG Silver, Osisko Gold Royalties + Maple Gold Mines + Caledonia Mining + IsoEnergy + White Gold + Uranium Energy + Bluestone Resources + Aurania Resources

Share of the week: First Cobalt

First Cobalt and Glencore Agree Schedule for Restart of First Cobalt Refinery
First Cobalt has recently agreed a term sheet with Glencore that outlines the framework for a non-dilutive, fully funded, phased approach to restarting the First Cobalt refinery in Ontario, Canada. This remains subject to a number of conditions and outlines the key milestones for a long-term strategic relationship that could bring a reliable source of domestically refined cobalt to the North American market.

Highlights of the most recent agreement are:

  • The aim is to establish a long-term collaboration to supply refined cobalt to the North American market.
  • Phase 1 includes a US$5 million loan from Glencore to support additional metallurgical testing, engineering, cost estimates, field work and permits related to the recommissioning of the First Cobalt refinery, including a final feasibility study for an extension of the refinery to 55 tonnes per day (tpd).
  • Phase 2 envisages commissioning the refinery in 2020 with a capacity of 12 tpd to produce a battery-compatible cobalt sulphate for pre-qualification in the supply chain of electric vehicles.
  • Phase 3 includes the expansion of the refinery to a feed-in quantity of 55 tpd by 2021 using the current site infrastructure and buildings.
  • Total investments in the three phases are estimated at approximately US$45 million and phases 2 and 3 remain subject to the results of the Phase 1 studies. The invested capital will be repaid by First Cobalt from the cash flow generated under a long-term refining agreement.

A powerful milestone for First Cobalt, which now (only) has to survive the first phase in order to finally start a lucrative cobalt business with one of the big names in the industry.

News: First Cobalt and Glencore Conclude Term Sheet for Refinery Restart

Market overview:

Silver price starts to rise

In the last SRC-Newsletter we wrote about the enormous potential that the silver price currently offers. Only a few days later, this one jumped on and could gain up to 10% within only a few days. The price rises of corresponding silver stocks were correspondingly lavish. Even an Endeavour Silver, which recently attracted attention with rather little good news, could easily make up one CA$ per share within a week. Even though we assume that there will also be a setback, as happened impressively last Friday, the whole thing shows what is possible within a very short time with a real hype. Keep up the good work, because other silver stocks such as MAG Silver or stocks that hold silver in their portfolio, such as Osisko Gold Royalties, should also benefit from this enormous upward trend.

Video:  Point And Figure Chart Analysis On Gold & Silver, June 2019

Company news:

Endeavour Silver Mines 1.8 Million Ounces of Silver Equivalent in Second Quarter

Endeavour Silver recently reported production results for the second quarter of 2019 from the Company's four silver-gold mines in Mexico. Silver production in the second quarter of 2019 was 1,059,322 ounces and gold production 9,558 ounces, resulting in a silver equivalent production of 1.8 million ounces at a silver to gold ratio of 80:1. The 22% lower silver production and 30% lower gold production compared to the second quarter of 2018 were due to the planned reduction in mine production at El Cubo and lower throughput and grade at Bolanitos, partially offset by higher production at Guanacevi and a first commercial production at El Compas.
Measures initiated in the same period are expected to lead to an improvement in consolidated earnings in the second quarter.
News: Endeavour Silver Produces 1,059,322 oz Silver and 9,558 oz Gold (1.8 Million oz Silver Equivalents) in the Second Quarter, 2019

Endeavour Silver Acquires Strategic Exploration Areas

Endeavour Silver recently announced that it has acquired exploration and production rights to two concessions adjacent to the Guanacevi Mine in Durango, Mexico. Both concessions extend across potential extensions of Endeavour Silver's orebody.
The Company now has access to two important concessions immediately adjacent to two abandoned mining operations at Guanacevi, where extensions of the Porvenir Norte and Porvenir Cuatro ore bodies are being sought and developed and mined. If the exploration work is successful, this will not only provide the Company with the opportunity to extend the life of the Guanacevi Mine, but also to begin development and initial production in the El Curso concession this year.
News:  Endeavour Silver Acquires Exploration and Exploitation Rights to Two Properties Adjacent to the Guanacevi Mine, Durango State, Mexico

Maple Gold Mines hits 1.75g/t gold over 42.5 metres

Maple Gold Mines announced assay results from four holes drilled in the Nika Zone a few days ago during this year's winter campaign. The Company successfully deepened drill hole DO-12-105 by 114 metres, with the combined 2012 and 2019 interval returning 42.5 metres, averaging 1.75 g/t Au from a vertical depth of approximately 320 metres, including 8 metres averaging 2.86 g/t Au from a combined interval of 2012 and 2019.
Further drilling is expected to eventually result in the connection of the Nika and porphyry zones.
News: Maple Gold reports new drill results from the Nika Zone, including 42.5 metres of 1.75 g/t Au

Caledonia Mining Increases Quarterly Gold Production

Caledonia Mining recently announced quarterly gold production from the Zimbabwe blanket mine for the quarter ended June 30, 2019. During the quarter, approximately 12,712 ounces of gold were mined, 6.4% more than in the first quarter of 2019 (11,948 ounces). Gold production for the first half of 2019 was 24,660 ounces, down approximately 3.4% from production of 25,582 ounces in the first half of 2018.
Caledonia is therefore maintaining its 2019 production guidance of 53,000 to 56,000 ounces for the full year and remains on track to meet its target of 80,000 ounces by 2022.
News: Q2 2019 Production Update

IsoEnergy Announces Strong Uranium Mineralization from Larocque East

Iso Energy recently announced the results of four drill holes from the hurricane zone on the Larocque East project. Results include 3.0 metres of uranium mineralization (>1,000 CPS, including 1.0 metres at >10,000 CPS) in step-out hole LE19-18 located 100 metres east of the previous hole and a 7.0 metre interval (>1,000 CPS, including 6.0 metres at >5,000 CPS) of strong uranium mineralization in hole LE19-16A.
The hurricane zone is now 250 meters long and open for expansion. Eleven wells remain in the fully financed summer program.
News: IsoEnergy Intersects Strong Uranium Mineralization in 100m Step-out at the Hurricane Zone
Video:  IsoEnergy: Drilling For Uranium At Multiple Projects In Athabasca Basin

White Gold finds top-class gold trends

White Gold recently announced that it has identified several new high-grade gold mineralization trends on its JP Ross property that are expanding the Company's pipeline with regional gold discoveries. The new trends have been identified on the Stage Fright, Sabotage, Topaz and Vertigo targets, all within 10 kilometres of the Vertigo discovery. In addition, several other targets have been identified on JP Ross which will be tested in due course. Highlights to date include several basement samples of traces up to 4.65 g/t Au and several surface samples of traces up to 94.4 g/t Au.
The 2019 program includes 17,000 metres of diamond drilling being completed on the Vertigo target (JP Ross property), the Golden Saddle & Arc deposits (White Gold property) and the QV property in the Yukon, Canada.
News: White Gold Corp. Identifies New District Scale High Grade Gold Trends on and Contiguous to Vertigo Discovery, JP Ross Property

Uranium Energy sees positive Trump decision

A short summary including an assessment of Trump's decision regarding the US Petition 232 has already been sent to you by special newsletter. Below is an assessment of Uranium Energy, its sign US uranium value and former producer:
News:  UEC Comments on the Presidential Memoranda Issued on Uranium and Establishment of the U.S. Nuclear Fuel Working Group
Video: Uranium Special On Donald Trumps Section 232 Decision On Uranium Imports In The US

H.C.Wainwright & Co. confirms price target for Uranium Energy

Following the announcement of Trump's decision, the analyst firm H.C.Wainwright&Co. published a new research report in which it maintained its previous target price of US$ 3.50 per share.  
Report: H.C. Wainwright confirms buy recommendation after Trump decision. Target price 3.50 USD

Bluestone Resources with tight program until the end of the year

Bluestone Resources recently announced its plans for the second half of 2019. Drilling activities continue to focus on improving resources at Cerro Blanco to increase Measured and Indicated resources. Given the success of the program in the first six months, management is confident that this program will ultimately have a positive impact on the value creation of the Cerro Blanco project. The Company expects to release an updated resource later this year that reflects the additional information gained from drilling in the Northern Zone. Project preparation activities will continue to be the focus for the remainder of 2019 as the company continues to take important steps to assess the project's risk mitigation and value enhancement capabilities as a baseline case using the feasibility study. Evaluations of contract strategies and preparations for staffing and training needs are ongoing and are expected to be a focus for the rest of 2019. Financing activities also remain a focus of Bluestone management as they work to build a financing structure that reflects the high quality of Cerro Blanco's proven assets. Given the variety of options that need to be pursued, management hopes to have financing to start engineering and construction work in early 2020.
News: Bluestone Resources Provides Corporate Update

Aurania Resources arranges $4 million financing

Aurania Resources recently announced that its Board of Directors has approved a non-brokered private placement of up to 1,481,481 units at a price of CA$ 2.70 per unit for total gross proceeds of CA$ 4 million, subject to receipt of all applicable regulatory approvals. The offering includes an over-allotment option allowing Aurania to issue up to 370,370 additional units for additional gross proceeds of up to CA$1,000,000. The Company intends to use the net proceeds from the sale of the units for further exploration on the Lost Cities - Cutucu project in southeastern Ecuador and the surrounding area, including the evaluation of large data packages, initial drilling on gold targets, further development of copper targets and general working capital purposes.
Existing shareholders are mainly entitled to participate, with management continuing to focus on a long-term, loyal shareholder structure.
News: Aurania Resources Ltd. Announces $4 Million Financing

Swiss Resource Capital AG and the authors of Swiss Resource Capital AG currently hold or intend to hold shares in the following companies mentioned in this issue: First Cobalt + Endeavour Silver + MAG Silver + Osisko Gold Royalties + Maple Gold Mines + Caledonia Mining + IsoEnergy + White Gold + Uranium Energy + Bluestone Resources + Aurania Resources.

Swiss Resource Capital AG has concluded IR consulting agreements with the following companies mentioned in this issue: First Cobalt + Endeavour Silver + MAG Silver + Osisko Gold Royalties + Maple Gold Mines + Caledonia Mining + IsoEnergy + White Gold + Uranium Energy + Bluestone Resources + Aurania Resources.

This publication is based on Swiss Resource Capital AG's detailed risk warnings, limitations of liability and disclaimers, which can be viewed here: Disclosure and Disclaimer

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