Newsletter 13 /2019
This newsletter contains news on the following topics:
Share of the week: Millennial Lithium + Quo Vadis Gold? + Steppe Gold + Aurania Resources + Caledonia Mining + IsoEnergy + EnWave + Copper Mountain Mining + Osisko Gold Royalties + RavenQuest BioMed + White Gold + US Gold
Share of the Week: Millennial Lithium
Millennial Lithium shines with top feasibility study
Millennial Lithium recently announced the results of its feasibility study on the production of lithium carbonate (>99.5% Li2CO3) from its Pastos Grandes project in the province of Salta, Argentina. The calculated values make Pastos Grandes one of the most economical lithium projects on the planet.
The net present value, i.e. the present value, is US$ 1.03 billion at a discount rate of 8%. The profitability (IRR) is a strong 24.2% for about 24,000 tons of annual production of battery grade lithium carbonate (> 99.5% LCE). The total initial cost of capital is estimated at US$448.2 million, including a buffer of just under US$50 million. The operational costs were estimated at only US$ 3,388 per tonne of battery grade lithium carbonate over the life of the mine, making it one of the most cost-effective lithium mines in the world. It is based on proven solar evaporation technology and conventional lithium brine preparation and is expected to have a mine life of 40 years.
This has allowed the Company to advance the Pastos Grandes project in just over two years from exploration to completion of the feasibility study. The results of the feasibility study show that Pastos Grandes has the potential to become a robust lithium carbonate producer and is in the lower quartile cost range.
Cantor Fitzgerald Calls 3.80 CA$ for Millennial Share
In response to the latest results of the feasibility study, the analyst house Cantor Fitzgerald published a new research report on Millennial Lithium. In doing so, it reiterated its buy recommendation and set a price target of CA$ 3.80 for the Millennial share.
Quo vadis gold?
The FED has done it: for the first time in ten years, the FED lowered the US key interest rate, primarily in order to (further) boost the economy. And what US President Trump in particular believes is absolutely essential is to devalue the US dollar. The latter initially went well missed and the US dollar continued to appreciate against most major currencies. This was ultimately also reflected in the gold price. This first collapsed last Wednesday, only to make up for the losses on Thursday and even gain further ground. The latter was probably mainly due to Trump's statements that he had the prospect of another punitive tariff package against China.
One thing became quite clear: while the rate cuts were less interesting for the gold price (although the 0.25% seemed to have been priced in before), once again flaring trade disputes have a much bigger impact on the price of the yellow metal. Either way, it seems the gold price can only win. Either by further interest rate cuts, which, as already mentioned, could relativize the recently noticeable disadvantage of the greenback against the euro or the yen, or by further disagreements about future trade between the large blocks. Both are good for gold and could have a positive impact on the price of the yellow metal in the coming months.
It will be really interesting in September, when both the latest punitive tariffs will take effect almost simultaneously and the FED will have its next meeting for interest rate measures. Until then, the gold price will have to keep above the important level of around US$ 1,380 and consolidate it further as a new technical support for the chart.
Steppe Gold puts heap leaching plant into operation + expansion of recent financing
Steppe Gold recently announced that it has completed the development of heap leach on its 100% owned Tsaagan Ovoo (ATO) gold project. The internal commissioning of the ADR facility has been satisfactorily completed and the Company is now awaiting final cyanide approvals before commencing irrigation and gold production.
In view of the previously announced private placement of 10% two-year unsecured convertible bonds as a result of increased investor interest, the Company now intends to take additional orders in a further tranche of US$3.0 million to close upon receipt of shareholder and regulatory approvals. The placement is now expected to result in total gross proceeds of US$ 8.4 million in debt securities.
Steppe Gold has been operating test mines at ATO since November 2018 and completed Phase I mining at 230,000 tonnes in the spring, grading 2.3 g/t gold for approximately 17,000 ounces of gold. The Company expects to produce approximately 40,000 ounces of gold per year from the stockpile leach operation during the first years of production, before making the expected transition to an expanded CIL operation of approximately 150,000 ounces per year, which is currently the subject of a new feasibility study.
Aurania Resources Finds 17th Epithermal Target for Gold and Silver
Aurania Resources recently announced that 50% of the river sediment sampling program at the Lost Cities - Cutucu project in southeastern Ecuador has now been completed. The program has identified a total of 17 epithermal targets for gold and silver. The most recent addition to the list of targets is "Apai", an epithermal target near the southern boundary of the project.
The Apai target area includes several river systems containing elevated concentrations of scout elements - including naturally occurring arsenic and antimony - typically found in halos enclosing epithermal gold-silver systems. The Apai target rivers also contain elevated silver concentrations. Subsequent field work has identified sinter - the equivalent of modern geyser systems that mark the position of the old land surface at the time of the formation of the epithermal system. Sinter, along with areas hosting porous quartz, are important leading horizons for the development of the exploration model at the Apai target.
Only half of the sampling program has been completed and 17 promising drill targets have been identified! Whether one of them is one of the old mines of the Spanish conquistadors, should be shown at the latest when Aurania should land a first direct hit.
Caledonia Mining completes central shaft sinking - production increase initiated!
Caledonia Mining announced a few days ago that the shaft construction at the new central shaft in the Blanket Mine has been completed. The Central Shaft project has been running since early 2015 and the company has invested approximately $44 million to dig a new shaft from the surface to a depth of over 1,200 meters. The project is now entering the equipment phase prior to commissioning, which is expected in the third quarter of 2020. Production from the Blanket Mine is expected to gradually increase to the target of 80,000 ounces of gold per year by 2022. The Company expects that the increased production, combined with economies of scale and lower future investments, will result in a significant increase in Caledonia's earnings and distributable liquidity.
Distributable liquidity is exactly what investors want to hear, because it means nothing more than that the already good dividend could be increased.
IsoEnergy hits the bull's eye
IsoEnergy has recently been able to provide an update on the ongoing drilling program in the hurricane zone on the Larocque East property. Highlights include assay results from hole LE19-16A and the intersection of uranium mineralization in hole LE19-18C1. Drill hole LE19-16A returned the best interval to date in the hurricane zone, consisting of 5.4% U3O8 over 7.0 metres, including 15.9% U3O8 over 2.0 metres. Uranium mineralization was intersected in hole LE19-18C1 with an intersection of 5.0 metres >1,000 CPS, including 0.5 metres >10,000 CPS.
One, even two real direct hits that clearly demonstrate the potential of Larocque East.
EnWave concludes first royalty licensing agreement with hemp growers
EnWave reported a few days ago that it has signed a commercial license agreement with Electric Farms LLC. Electric Farms cultivates high-quality hemp flowers in indoor and outdoor facilities at its licensed facility in Tennessee, USA. The license grants Electric Farms non-exclusive rights to use EnWave's proprietary radiation energy vacuum ("REV™") dehydrogenation technology for drying industrial hemp in Tennessee.
The license is the first extension of EnWave's REV™ technology for drying industrial hemp in the USA. This license is the basis for the entry into the further expansion of the EnWave technology for drying hemp in the production of smokable hemp products and hemp oil extracts. An important step for EnWave into an upcoming billion market!
EnWave receives down payment for REV™- Machine(s)
EnWave also reported that the company has received a non-refundable deposit of US$100,000 from Consulting Fresh Business S.L. to purchase machines with a rated output of at least 100kW. In April 2019, Fresh Business purchased a small commercial REV™ machine and signed an exclusive license to use EnWave's REV™ technology for Peru to dewater numerous food materials. Fresh Business has started to sell REV™ dry products commercially. The company therefore intends to procure either a 100 kW nutraREV®, a 120 kW quantaREV® or a combination of two 60 kW machines (one nutraREV® and one quantaREV®) within the calendar year 2019 to expand its production capacity.
Copper Mountain Mining Reports Strong Second Quarter
Copper Mountain Mining recently reported financial and operating results for the second quarter of 2019. Production for the second quarter of 2019 was 22.1 million pounds copper equivalent (consisting of 18.4 million pounds copper, 6,922 ounces gold and 65,707 ounces silver). Revenue for the second quarter of 2019 was US$65.1 million from the sale of 17.9 million pounds of copper, 7,044 ounces of gold and 55,276 ounces of silver. The cash cost of C1 per pound of produced copper was US$ 1.74 and the all-in-sustaining cost per pound of produced copper was US$ 1.85. The cash cost of C1 per pound of produced copper was US$ 1.74 and the all-in-sustaining cost per pound of produced copper was US$ 1.85. Basic earnings per share were $0.01 and diluted earnings per share were $0.00 for the second quarter of 2019. Cash provided by operating activities for the second quarter of 2019 was $23.7 million. Cash and cash equivalents at the end of the second quarter of 2019 were US$ 43.9 million.
The second quarter was thus another constant operating quarter. The company was able to maintain liquidity, reduce debt and further expand its growth opportunities, while achieving predictable and reliable quarterly results. It is to be expected that production will be stronger in the second half of 2019, when the transition to higher grade ore will take place.
Osisko Gold Royalties reports on the second quarter
A few days ago, Osisko Gold Royalties announced its consolidated results for the second quarter of 2019. Net cash provided by operating activities was $21.4 million compared to $19.7 million in the second quarter of 2018. 19,651 gold equivalent ounces were generated compared to 20,506 in the second quarter of 2018. The total net loss was US$ 6.5 million compared to US$ 0.5 million in the second quarter of 2018.
Osisko Gold Royalties also announced its 20th dividend payment on 15 October 2019.
RavenQuest BioMed closes financing deal
RavenQuest BioMed announced a few days ago that it has completed the final tranche of its previously announced private placement of units that had not been brokered. In connection with the closing of the final tranche of the placement, the Company issued an additional 907,000 units at a price of CA$0.50 per unit. Together with the first tranche, the Company has now issued a total of 5,047,000 units at a price of CA$0.50 per unit for gross proceeds of CA$2,523,000. The proceeds from the financing will be used for general corporate purposes.
The revenues give RavenQuest sufficient scope for the company's development again.
White Gold Publishes Technical Report on Recent Resource Increase
White Gold recently announced that the Company has filed a National Instrument 43-101 compliant technical report that discusses an increase in the mineral resource estimate for the White Gold property in the Yukon, Canada. The update was based on the results of the Company's 2018 exploration program conducted at the Golden Saddle and Arc deposits. The Company's fully funded $13 million 2019 program, supported by partners Agnico Eagle Mines Limited and Kinross Gold Corp, is underway and includes core drilling totaling 17,000 meters on the Vertigo Target (JP Ross Property), the Golden Saddle and Arc Deposits (White Gold Property) and the QV Property. The main points of the resource update include indicated mineral resources of 1,039,600 ounces gold within 14,330,000 tonnes at 2.26 g/t gold and inferred mineral resources of 508,700 ounces gold within 10,696,000 tonnes at 1.48 g/t gold in the Golden Saddle and Arc deposits, representing an increase of 25%. In total, this represents an 8% increase in indicated resources and an 80% increase in inferred resources.
This expansion continues to demonstrate the continued success of the Company's systematic data-driven exploration methodology and the value the Company generates in its unique property portfolio. The continued expansion of the deposits is an important part of the 2019 exploration program designed to add additional near surface ounces to the deposits and to demonstrate the potential of the newly identified targets.
US Gold launches landmark exploration campaign
US Gold recently announced that it has commenced the first phase of its previously announced targeted drilling program at the Keystone Project in Cortez-Trend, Nevada. This exploration drilling program is expected to consist of an initial phase of 9 reverse circulation (RC) holes and 1 core drill hole totaling approximately 6,400 meters. The first phase will focus on specific targets identified by detailed geology, Geochemistry, geophysics and drilling in the 650 lodge chambers covering 20 square miles of mineral rights.
A landmark drilling campaign to take the Keystone project to a whole new level.
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: Millennial Lithium + Steppe Gold + Aurania Resources + Caledonia Mining + IsoEnergy + EnWave + Copper Mountain Mining + Osisko Gold Royalties + RavenQuest BioMed + White Gold + US Gold.
Swiss Resource Capital AG has concluded IR consulting agreements with the following companies mentioned in this issue: Millennial Lithium + Steppe Gold + Aurania Resources + Caledonia Mining + IsoEnergy + EnWave + Copper Mountain Mining + Osisko Gold Royalties + RavenQuest BioMed + White Gold + US Gold.
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