M&A News in both Gold and Uranium
Welcome to Mining Stock Daily. I’m Trevor Hall, and I’m Paul Harris.
Today is Tuesday November 9th.
The bull move in gold and silver continued on Monday, as gold ran from an early morning low of $1814 and settled at $1825. Silver ran from a low $24.20 up to as high as $24.60 before settling at $24.53. Silver outpaced gold on a percentage gain basis by more than a 2 to 1 margin.
The Mining Stock Journal said that data from India showed that it returned from a two-day holiday last week and continued buying gold hungrily. Likewise, delivery data on the Shanghai Gold Exchange showed a healthy appetite by the Chinese for physical gold. The open interest in gold on the Comex on Friday soared by over 30,000 contracts, with most of the
increase in the February contract.
The Mining Stock Journal said it's rare to see the open interest increase by that much on one day, especially a Friday, and it points to an aggressive effort by the banks to slow down the big move in gold and silver that day.
The mining stocks were somewhat subdued for most of the day in spite of the rally in the metals, although by the end of the day the GDX managed to close up nearly 0.5%. The silver stocks were particularly perky relative to the gold focused mining stocks. The Mining Stock Journal continues to believe that a big move in the precious metals sector is underway.
We’ll get to the news out of the miners and explorers in a moment, but first a quick mention of today’s sponsor.
This episode of Mining Stock Daily is brought to you by… Corvus Gold.
Corvus Gold Inc. is a North American gold exploration and development company, focused on its near-term gold-silver mining projects in southwestern Nevada. The Company holds a commanding land position within the Bullfrog Mining District. Neighbouring, adjacent projects controlled by AngloGold Ashanti, Kinross Gold and Coeur Mining highlight this active District. The two 100% owned North Bullfrog & Mother Lode projects have a combined nearly 4M oz gold of in-pit resource and continues to grow with an on-going, successful, resource expansion drill program.
And here’s what you need to know this morning.
More gold M&A. Newcrest Mining is to acquire Pretium Resources in a friendly US$2.6 billion cash and stock deal to add the high-grade Brucejack gold mine in British Columbia, Canada in what the company said is a value-driven deal. Pretium shareholders can choose to receive C$18.50 per share in cash or 0.81 of a Newcrest share for every Pretium share, capped at 50% cash and 50% shares. This represents a 22.5% premium. Shareholders who do not select either cash or shares will receive $9.25 cash and 0.4 Newcrest shares for every Pretium share held. Newcrest will fund the transaction via existing cash of US$1.9 billion and undrawn debt facilities of $2 billion. Newcrest already owns 4.8% of Pretium, having acquired a stake in 2019. Brucejack is expected to produce 311,000 ounces of gold per year at an all-in sustaining cost of $743 per ounce over a 13-year life and has considerable exploration upside. Pretium Resources trades on the TSX and NYSE under PVG. News release
And the deal’s aren’t just coming in gold.
Uranium Energy has agreed to buy Uranium One Investments, a subsidiary of Uranium One for US$112 million in cash and the replacement of $19 million in reclamation bonding. Uranium One is the world's fourth largest uranium producer, part of Russia's State Atomic Energy Corporation, Rosatom and has assets primarily including the Irigaray plant in the Powder River Basin of Wyoming; the most productive in-situ recovery uranium mining district in the western hemisphere. The purchase will be funded from UEC's existing balance sheet, which as of October 26th had over $235 million of cash and market value liquid assets. The deal positions UEC as the largest American uranium mining company with Wyoming hub-and-spoke operations. Irigaray is one of the largest central processing facilities in the US with a licensed capacity of 2.5 million pounds U3O8 per year. The deal will enable UEC to achieve synergies and savings with its permitted and nearby Reno Creek ISR project. Uranium Energy trades on the NYSE American under UEC. News release
i-80 Gold has announced a preliminary economic assessment (PEA) for its Granite Creek gold project in Nevada, USA for an open pit heap leach operation to produce about 138,000 ounces a year for nine years. The project would yield an after tax net present value of US$244.9 million at a 5% discount rate and an internal rate of return of 34.2% at an all-in sustaining cost of $963 following an initial capital cost of $69.9 million at a $1,650 per ounce gold price. As part of a recent deal under which Nevada Gold Mines obtain full ownership of the South Arturo mine, i-80 can process refractory ore at Nevada Gold Mine Twin Creeks facility for a number of years until its own Lone Tree facility is operational. Granite Creek hosts a measured and indicated resource of 263.1 million tonnes grading 0.76 grams per tonne gold and 12.33g/t silver for 6.5 million ounces gold and 104Moz silver. i-80 Gold trades on the TSX under IAU and on the OTCQX under IAUCF. News release
Meridian Mining provided an update on results from its ongoing drilling program at its camp scale Cabaçal Copper-Gold VMS Project in Mato Grosso, Brazil. Hole CD-072 was drilled as part of its ongoing delineation program along the Cabaçal Northwest Extension targeting high grade Copper Gold VMS type mineralization overprinted by high-grade Au structures along its length. Hole 72's strong zone of VMS Cu-Au mineralization returned 49.0m @ 1.4% CuEq* including a series of high-grade Au veins grading 3.2m @ 21.4g/t Au. 50m Northwest of CD-072, CNWE's highest-grade zone of Cu within a VMS feeder pipe has been cored by hole CD-070 which assayed 1.1m @ 4.5% CuEq. CD-070's Cu zone has potential extensions defined by an underlying Borehole Electromagnetic conductor. Meridian also reports that it has completed a review of BP Minerals' historic Induced Polarization data that has defined chargeability anomalies which are not only extending laterally out, but also extending below the Cabaçal VMS footwall unit ("TAC"). Meridian's, and BP's historical drill programs have traditionally been halted at, or only partially below the TAC, an area that remains untested but now prospective. Meridian Mining trades on the TSX Venture with MNO and on the OTCQB with MRRDF. News Release
Tin producer Alphamin Resources reported record EBITDA of US$53.7 million in the quarter to September 30, up 58% from the prior quarter as tin production increased 17% to 2,832 tonnes at an average price of US$33,704 per tonne. Alphamin, which produces tin from an operation in Democratic Republic of Congo, has initiated a strategic review to maximize shareholder value which may include fast-tracking its expansion and life-of-mine extension potential, balance sheet restructuring including revenue prepayments and streaming, shareholder distributions or a corporate merger or sale transaction. Alphamin Resources trades on the TSXV under AFM and on the JSE under APH. News release
P2 Gold reported results from the first 12 reverse circulation drill holes of phase one drilling at its Gabbs gold-copper project in the Walker-Lane Trend in Nevada, USA. Highlights included 103.6m grading 1.62 grams per tonne gold equivalent in hole 10 including 48.77m grading 2.3g/t. The company said that the mineralization intersected in these first holes is thicker and higher grade than seen in historical drilling. Gabbs hosts an inferred resource of 1.26 million ounces of gold and 422 million pounds of copper. P2 was formerly Central Timmins Exploration and acquired Gabbs in May from Waterton for up to US$10 million in cash and 30 million shares. P2 Gold trades on the TSXV under PGLD. News release
That concludes today’s morning briefing. We’ll be back later today with more market commentary and corporate updates.
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