|Stock of the week: Endeavour Silver
Endeavour Silver Improves Operating Metrics of the El Compas Gold-Silver Mine Project
Endeavour Silver recently reported an update on development progress and improved operating metrics for the El Compas gold-silver project, located in Zacatecas state, Mexico.
Highlights of Improved Operating Metrics:
Endeavour Silver reports net earnings increase for 2017
- Plant design modified to increase capacity from 250 tonnes per day (“tpd”) to 325 tpd as a result of the lower work index of the ore and utilizing the existing motor capacity on the mill
- Mine plan expanded from 200 tpd to 250 tpd using mechanized cut and fill mining method
- Potential to expand to 500 tpd with further plant refurbishment and more reserves and resources
- Ore grind size increased while maintaining metal recoveries to improve the tailings stability long term and decrease overall life of mine power costs
- Higher mine output, plant throughput and grind size should each have a beneficial impact on the on the El Compas PEA project economics
- Comparing the improved operating metrics to the PEA, production is expected to rise 25% to 1.175 million oz silver equivalent per year (using 75:1 silver:gold ratio)
- Capex will rise 13% to $11.3 million
- Cash costs in PEA of $9.09 per Ag Eq oz and all-in-sustaining costs of $9.64 per Ag Eq oz should improve with expanded production
Endeavour Silver recently announced its financial results for the fourth quarter and year ended December 31, 2017.
Highlights of Fiscal 2017 (Compared to Fiscal 2016), all in US$:
- Net earnings increased 148% to $9.7 million ($0.08 per share), compared to $3.9 million ($0.03 per share)
- EBITDA decreased 8% to $25.6 million
- Cash flow from operations before working capital changes decreased 2% to $23.6 million
- Mine operating cash flow decreased 14% to $45.4 million
- Revenue decreased 4% to $150.5 million on 4,892,855 silver oz sold and 51,460 gold oz sold
- Realized silver price increased 2% to $17.24 per ounce (oz) sold (consistent with the 2017 average spot price)
- Realized gold price increased 3% to $1,285 per oz sold (2% above the 2017 average spot price)
- Cash costs increased 19% to $8.06 per oz silver payable (net of gold credits)
- All-in sustaining costs increased 36% to $16.96 per oz silver payable (net of gold credits)
- Bullion inventory at year-end included 209,337 oz silver and 487 oz gold
- Concentrate inventory at year-end included 31,984 oz silver and 739 oz gold
- Working capital decreased 19% to $66.2 million at year end
- No outstanding debt as of December 31, 2017
After steel and aluminum: will import restrictions for uranium come next?
After a few little compromises, US-president Trump was able to finalize its plans for import tariffs on steel and aluminum. But this shouldn’t be the end of his plans, because Trump wants to strengthen the US-mining industry, which means not only to secure jobs, but more important: to create new jobs. Therefore, it should be only a matter of time until import restriction will also follow for other commodities. The USA are currently faced with an enormous dependency from uranium imports (95% of the whole demand), mainly from countries like Russia and Kazakhstan.
Two US-uranium companies – Energy Fuels and Ur-Energy recognized this and filed a Section 232 Petition with the U.S. Department of Commerce (a cabinet-level agency of the U.S. federal government) to have them investigate the effects of today’s high levels of uranium and nuclear fuel imports on U.S. national and energy security. The U.S. is currently about 40% dependent on imports of uranium from Russia and its satellites – and that number may grow to 50% or more in 2018 and 2019 without prompt action. The U.S. generates 20% of its electricity from nuclear energy. Therefore, Russia exerts a large degree of control over 10% of U.S. electricity. The companies felt that they needed to bring this to the attention of the US-government. To help fix the problem, Energy Fuels and Ur-Energy have recommended that uranium imports into the U.S. be limited, so that 25% of the U.S. uranium market is reserved for U.S. producers (about 10-12 million pounds of uranium per year). Once the investigation is initiated, Commerce will have 270 days to complete the investigation and submit a recommendation to President Trump. Then, the President has 90 days to impose a remedy. If successful, the U.S. uranium mining industry would be revitalized and at especially US uranium companies with already permitted projects and production facilities like Energy Fuels, Uranium Energy and Anfield Resources would be in a strategically good position. But they would need a uranium price of around US$50 to get (back) into production, which should not be a problem for US-utilities to pay, as the uranium itself is only a small part of the overall energy producing costs. More important would be the signaling effect for the uranium market and the uranium spot price, which should then run towards a price level of US40 to 50. And this would have a really positive effect on many well-developed uranium stocks.
Fission Uranium drastically expands resource base
A few days ago, Fission Uranium announced the results of an updated independent resource estimate for the Triple R deposit, which now includes the R1515W, R840W, R00E, R780E and R1620E zones at its 100% owned, award-winning Patterson Lake South (PLS) property in Canada's Athabasca Basin region. The updated resource represents a 95% increase in pounds U3O8 classified as Inferred and an 8% increase in pounds U3O8 classified as Indicated as compared to the previous Mineral Resource dated July 28, 2015. The increase in resource classified as Indicated is primarily due to infill drilling on the R780E zone, while the increase in resource classified as Inferred is primarily due to the discovery and delineation of the R1620E, R840W, and R1515W zones. This significant increase to the overall resource, has been achieved with prudent spending during the last three years of low uranium prices.
The Triple R deposit is now estimated to contain:
First Cobalt starts drill program at Cobalt North
- 87,760,000 pounds U3O8 Indicated Mineral Resource based on 2,186,000 tons at an average grade of 1.82% U3O8, including:
- R780E high-grade zone of 48,246,000 pounds U3O8 based on 119,000 tons at a grade of 18.39% U3O8
- 52,850,000 pounds U3O8 Inferred Mineral Resource based on 1,331,000 tons at an average grade of 1.80% U3O8, including:
- R780E high-grade zone of 14,710,000 pounds U3O8 based on 32,000 tons at a grade of 20.85% U3O8
A short time ago, First Cobalt announced, that it has begun drilling in Cobalt North, near the historic Drummond, Kerr and Conisil mines. This new program follows completion of a maiden drill program in Cobalt South that identified three distinct mineralized areas that will require follow up.
EnWave acquires rest of NutraDried
- Three distinct mineralized areas identified in Cobalt South to date: Woods Extension Zone, Keeley South Zone and Bellellen Mine
- Initial Cobalt North drill program to consist of 16 holes for 3,500m to follow up on polymetallic mineralization found in muckpile grab samples that returned grades of up to 0.65% cobalt with 4,990 g/t silver and up to 1.79% copper with 56 g/t silver
- Drill hole targeting in Cobalt North guided by new 3D geological model based on extensive historic data compilation and 2017 regional field mapping
EnWave Signs Commercial Royalty-Bearing License Agreement with Nomad Nutrition Limited
A couple of days ago, EnWave announced, that it has purchased an additional 49% interest in NutraDried LLP and now owns 100% of the business. The 49% was sold by NutraDried Creations LLP, a Washington State concern. Total cash consideration for the acquisition was US$1,800,000 (CA$2,266,000).
NutraDried has been the most profitable business unit for the Company. Fiscal 2017 net income was $716,000 and revenues were $6,556,000. Based on the $2,266,000 purchase price for the 49%, the purchase price multiples were 6.5 times income and 0.7 times revenues.
EnWave expects NutraDried to continue contributing positive earnings, revenue growth and cash flow for the Company.
News: EnWave Acquires Remaining 49% Non-Controlling Interest in NutraDried LLP
EnWave Expands Agreement with Tilray Providing for Cannabis Drying in Portugal
In addition to that, EnWave has signed a commercial royalty-bearing license agreement with Nomad Nutrition Limited, a Canadian company focused on the development and commercialization of premium shelf-stable, nutrient-packed gourmet products that are made from locally sourced organic ingredients. Nomad also signed an Equipment Purchase Agreement to obtain an introductory-scale Radiant Energy Vacuum (“REV™”) machine for immediate commercial production. Nomad has agreed to pay EnWave an undisclosed royalty on the revenue derived from the the sales of their products in exchange for the exclusive right to manufacture their specific products in Canada using REV™ technology. Prior to signing the License, Nomad was using EnWave’s pilot plant facility to toll manufacture its line of innovative and healthy ready-to-eat meals. After successfully launching Hungarian Goulash, Indian Red Lentil Stew, Kathmandu Curry and Irish Shepard’s Pie meals, Nomad determined that the business opportunity justified investing in their own REV™ machinery.
This commercial license agreement is EnWave’s first in the ready-to-eat meal market vertical.
News: EnWave Signs Commercial Royalty-Bearing License Agreement with Nomad Nutrition Limited to Produce Ready-to-Eat Meals in Canada, Receives Purchase Order for Radiant Energy Vacuum Machinery
GoldMining Inc. drastically reduces Cachoeira royalty
Furthermore, EnWave reported, that it has expanded its exclusive, sub-licensable, royalty bearing commercial license with Tilray to include an exclusive option for the use of EnWave’s Radiant Energy Vacuum (“REVTM”) technology for the processing of medical cannabis products in Portugal. In order to exercise the Option, Tilray must submit a purchase order for large-scale REVTM machinery in the first half of calendar year 2018, and pay the deposit required thereunder, to be installed in Portugal for commercial processing of cannabis products. All other terms of the Option are confidential. In June 2016, Tilray became the first company to legally export medical cannabis products from North America to the European Union (the “EU”). In 2017, Tilray received a cultivation license from the Government of Portugal to produce products for the EU market. Tilray products are currently available at pharmacies in several EU countries.
The grant of the Option marks the initial expansion of EnWave’s patented REVTM dehydration technology for the dehydration of medical cannabis into international markets outside of Canada. EnWave’s strategy is to deploy its REVTM technology across multiple market verticals and geographies, including legalized cannabis markets, through its proven royalty-licensing business model.
News: EnWave Expands Agreement with Tilray Providing for Cannabis Drying in Portugal
Sibanye-Stillwater announces loss for the year 2017
GoldMining Inc. recently announced, that BRI Mineração Ltda., a wholly-owned subsidiary of the Company, has entered into a royalty purchase agreement with certain royalty holders on the Cachoeira Project. Pursuant to the Agreement, BRI will acquire the Vendors' 66.66% interest in the existing 4.0% net production royalty on the Company's Cachoeira Project, in consideration for US$133,320 payable in cash to the Vendors, and 698,161 common shares of the Company.
Therewith, the company has reached an agreement with several of the royalty holders on the Cachoeira Project, which extinguishes a portion of the current advance royalty payment, as well as making it more attractive in the future when the deposit is developed or sold. In 2018, GoldMining Inc. will continue to look at innovative ways to advance its portfolio of resource-stage gold projects in the Americas.
News: GoldMining Buys Down Cachoeira Royalty and Files Crucero Technical Report
Video-Interview: GoldMining: Sticking To Strategy Of Accretive Acquisitions
MAG Silver: BMO sees fair value at CA$23!
TerraX Minerals drastically expands Yellowknife City Gold Project
A couple of days ago, Sibanye-Stillwater announced its numbers for the year 2017. The shareholders have been advised that the Group expects to report an attributable loss of R4,437 million (US$333 million) for the year ended 31 December 2017, compared with attributable earnings of R3,473 million (US$237 million) for the year ended 31 December 2016. The attributable loss is due to a number of factors, primarily in the first half of the year, which resulted in an attributable loss of R4,804 million (US$364 million) for the six months ended 30 June 2017. These factors include: impairments, provision for occupational healthcare claims, restructuring and transaction costs and significant differences in commodity prices and the average rand:dollar exchange rate year-on-year. A R2,179 million gain on acquisition which was recognized during the comparative period, was also a significant contributing factor to the year-on-year difference. Normalized earnings of R522 million (US$39 million) for the second half of 2017 was significantly higher than the R1,002 million (US$76 million) normalized loss for the first half of the year, resulting in a normalized loss of R480 million (US$36 million) for the year ended 31 December 2017 compared with normalized earnings of R3,678 million (US$251 million) for the comparative period.
News: Updated trading statement for the year ended 31 December 2017
TerraX Minerals recently announced, that it has expanded its land position at its wholly-owned Yellowknife City Gold project through the staking of an additional 337.5 square kilometers immediately to the north of its current properties. These additional 47 claims were staked based on extensive field exploration completed on the YCG during the summer and fall of 2017 and brings the company’s total holdings adjacent to the City of Yellowknife to 771.6 sq km covering approximately 70 km of strike.
News: TerraX stakes 337.5 square kilometers of contiguous ground in the highly prospective Yellowknife Gold District
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