Market Eyes Inflation Data; Integra PFS and Minera Alamos Update
Welcome to Mining Stock Daily. I’m Trevor Hall. And I’m Paul Harris.
Today is Thursday, February 10th.
Gold and silver once again rewarded the faithful on Wednesday. The yellow metal jumped US$8.70 per ounce, settling at $1,836, while silver rose 14 cents and outperformed gold on a percentage gain basis. Over the last three days the gold/silver ratio has dropped below 80 and appears to be forming a downtrend starting from when it peaked at 82 in mid-December. This is significant because a sustainable decline in the gold/silver ratio is another indicator that a bull move in the sector is under way.
All eyes will be watching the CPI for January, which will be released this morning. It should be a win-win for the precious metals sector. A lower than expected print would lessen the probability of a Fed funds rate hike anytime soon while an easement of money policy is bullish for the precious metals sector. A hot headline number indicating accelerating inflation would also be gold/silver friendly.
The mining stocks started the day strong but sold off when gold and silver pulled back from their respective highs of the day. The Mining Stock Journal noted it was likely profit-taking by short term traders, as the GDX has jumped nearly 8% over the last eight trading sessions.
We’ll get to the news out of the miners and explorers here in a moment, but first a mention on today’s sponsor.
This episode of Mining Stock Daily is brought to you by… Rio2
Rio2 is advancing the Fenix Gold Project in Chile, the largest undeveloped gold heap leach project in the Americas. Fenix consists of 5 million ounces in the measured and indicated resource category and 1.4 million ounces in the inferred resource category. With a robust PFS in place, Fenix is set up for fast-tracked construction and production. You can find a list of project and company information on their website, rio2.com.
And here’s what you need to know this morning….
Integra Resources announced a pre-feasibility study and for its DeLamar gold project in Idaho, USA for a two-stage 35,000 tonnes per day heap leach and 6,000tpd mill operation to produce 110,000 ounces of gold equivalent per year for 16 years with production of 163,000oz/y for first eight years following pre-production capital expenditure of $282 million. The project is expected to yield an after-tax internal rate of return of 27% at a $1,700/oz gold price and $21.50/oz silver. At spot prices, this increases to 33%. Silver is expected to account for about 35% of revenue, which perhaps hints at how the project may eventually be financed. The company said the PFS is a materially different and larger scale than the 2019 preliminary economic assessment both in heap leaching and milling and that having a multi-phase development in an inflationary environment is critically important as it demonstrates maximum flexibility and transparency. Integra intends to use railveyor light rail system as the ore haulage system rather than diesel haul trucks to reduce scope 1 greenhouse gas emissions and have an onsite microgrid with a solar array and liquified natural gas power generation plant to provide power which will lower emissions and costs. Integra Resources trades on the TSXV under ITR and on the NYSE American under ITRG. News release
Staying in Idaho, Liberty Gold said it secured water rights in excess of 2,300 acre-feet per annum near its Black Pine gold project, which are intended for future use as process water supply, with preliminary engineering studies suggesting it is sufficient to sustain up to a ~70,000 ore tonnes per day, run-of-mine heap leach operation. Liberty also obtained a 2.6km2 strategic mineral rights lease from the State of Idaho adjacent to the deposit, which it said represents both an exploration opportunity and a potential area for future heap leach infrastructure. Historical drilling confirms that the Rangefront mineralization extends northeast into this block. Liberty Gold trades on the TSX under LGD and on the OTCQX under LGDTF. News release
Minera Alamos provided a year-end summary of mining activities at the Santana Gold Mine in Sonora, Mexico. The company says through the end of 2021 approximately 9,100 ounces of gold were mined and stacked on the leach pad during the first phase of the project mining activities. The total exceeded its initial mine opening projections and provides a sufficient amount of mining, crushing and leaching data to allow for final optimization of the operation through the last stages of ramp-up. Although economically positive, higher than anticipated gold grades from the Nicho Norte starter severely strained the capacity of the site crushing operations due to a much higher proportion of mine material (+70%) being crushed versus sent to the pad as run-of-mine (<30%). This also negatively impacted the overall efficiency of material flows between the mine and leach pad. Crushing cut-offs will be increased in the next phase of operations in order to rebalance the ratio of crushed to ROM material at closer to 50/50 which should remove most of the production bottlenecks. Minera Alamos trades on the TSX V with MAI. News Release
Barrick Gold replaced the depletion of gold mineral reserves by 150% in 2021 before acquisition and equity changes at South Arturo and Porgera, and improved its reserve grade by 3% while maintaining its US$1,200 per ounce reserve gold price assumption. Barrick’s attributable proven and probable mineral reserves now stand at 69 million ounces grading 1.71 grams per tonne, up from 68Moz grading 1.66g/t in 2020. Attributable copper reserves were 12 billion pounds grading 0.38% in 2021 using a $2.75 per pound price assumption. Barrick Gold trades on the NYSE under GOLD and on the TSX under ABX. News release
Arizona Sonoran Copper announced assay results from the first two drill holes at its Parks/Salyer project in Arizona, USA which extended known mineralization to the northeast by 183m with a highlight of 32.9m grading 0.89% copper and 0.02% molybdenum. The company also entered into an agreement to lease 158 acres of state lands between its Cactus project and Parks/Salyer to bring its land position to 4,846 acres covering the entire 4km mine trend. Arizona Sonoran also completed an assignment and assumption, and royalty agreement with EMX Royalty for the transfer of EMX’s Arizona state exploration permit which covers a portion of Parks-Salyer. The agreements provide EMX with a one-time US$200,000 cash payment and a 1.5% net smelter return royalty. Arizona Sonoran Copper trades on the TSX under ASCU. EMX Royalty trades on the TSXV and NYSE American under EMX. News release News release
Los Andes Copper reported an intercept of 732m grading 0.51% copper and 160 parts per million molybdenum from near surface at its Vizcachitas project in central Chile. Silver assays are pending. Drilling aims to expand resources within the open pit designs and to explore the deposit below the open pit boundaries of its 2019 preliminary economic assessment. The company is expanding the drill programme from four to five drill rigs with 18,000m of drilling planned within the full 30,000m of expansion drilling. The June 2019 PEA outlined a US$1.8 billion project which would produce 179,000 tonnes a year of copper in concentrate with a 45-year mine life. Los Andes Copper trades on the TSXV under LA and on the OTCQX under LSANF. News release
White Gold reported assay results for the maiden diamond drilling program on its Ulli’s Ridge target located approximately 3 km southwest of the Company’s flagship Golden Saddle and Arc deposits and 11 km south of the Company’s VG deposit. 2021 diamond drilling at the Ulli’s Ridge target comprised 7 holes totalling 1,408.7m which tested an approximately 550m strike length where early season 2021 rotary air blast (RAB) drilling encountered encouraging gold mineralization including 4.67 g/t Au over 6.10m and 1.35 g/t Au over 21.33m. All holes intersected gold mineralization with significant results including 6.94 g/t Au over 19.50m, including 39.10 g/t Au over 1.50m and 45.40 g/t Au over 0.83m. Drilling at Ulli’s Ridge has now identified gold mineralization along an approximately 650m strike length with mineralization remaining open along strike and at depth. White Gold trades on the TSX Venture with WGO and on the OTCQX with WHGOF. News Release
That concludes today’s morning briefing.
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