Morning Briefing: Alamos issues Lynn Lake FS
Welcome to Mining Stock Daily. Standing in for Trevor Hall, I’m Paul Harris.
Today is Thursday August 3rd.
Gold spiked up to as high as $1992 per ounce early Wednesday morning on the news that the Fitch credit ratings service downgraded the credit rating of the US Government to AA+ from AAA. The Mining Stock Journal noted that, based on the publisher's experience trading junk bonds for a big bank, if the U.S. Government was a corporation, its credit rating would be the lowest tier junk rating. That said, the price containment squad could not let a spike up in the gold price signal to the financial world the negative implications of the downgrade and gold was aggressively spiked lower when the Comex assumed the global gold trading duties. Gold was hammered to as low as $1969 in the paper market and it settled at $1671. Silver traded up to $24.62 per ounce before it was shoved off the cliff in the Comex paper market down to as low as $23.77 and it settled at $23.82. The mining stocks were bludgeoned in response to both the price ambush on gold and silver as well as the big sell-off in the stock market. The GDX closed down 3.14%. The Mining Stock Journal commented that the precious metals sector is still in the seasonal dog days of summer which means lack of interest in the sector and a dormant India in terms of importing physical gold. However, the newsletter believes that in another three or four weeks, physical demand from India and general fundamentals will trigger a big rally in the sector.
We will get to the news from the miners and explorers in a moment, but first a word about today’s sponsor.
This episode of Mining Stock Daily is brought to you by… Fireweed Metals
Fireweed Metals is advancing 3 different projects within the Yukon and Northwest Territories, including the flagship Macmillan Pass Project, a large zinc-lead-silver deposit and the Mactung Project, one of the largest and highest-grade tungsten deposits in the world. Fireweed plans to advance these projects through exploration, resource definition, metallurgy, engineering, economic studies and collaboration with indigenous people on the path to production. For more information please visit fireweedmetals.com.
And here’s what you need to know this morning….
Alamos Gold reported an updated Feasibility Study on the Lynn Lake project in Manitoba, Canada, incorporating a 44% larger Mineral Reserve and 14% increase in milling rates to 8,000 tonnes per day compared with the 2017 feasibility, supporting a larger, longer-life, low-cost operation. This results in higher average annual gold production of 207,000ozpa over the first five years and 176,000ozpa over the initial 10 years, a 23% increase over the 143,000ozpa in the 2017 Study, at an all-in sustaining costs of $699 per ounce over the first 10-years and $814 per ounce over the life of mine, a decrease of 6% over the initial 10-years with economies of scale provided by the larger operation, and higher average grades, more than offsetting cost inflation. The Reserve is now 47.6Mt grading 1.52gpt of gold containing 2.3Moz for a 17-year mine life, up from 10 years, with Initial capital of $632 million, and life of mine capital including sustaining capital and reclamation of $832 million, an increase from the 2017 Study reflecting inflation and scope changes with the larger operation. Detailed engineering is 55% complete. The project yields an after-tax net present value of $428 million at a 5% discount rate at a base case gold price assumption of $1,675/oz and an after-tax internal rate of return (“IRR”) of 17%. Alamos Gold (TSX:AGI; NYSE:AGI) news release
SNOWLINE GOLD (TSX-V:SGD) (OTCQB:SNWGF) reported additional drilling results from its drill program at the Valley target on its Rogue Project in Canada's Yukon Territory. Highlights included 553.8m grading 2.48 g/t Au in Hole 039 from surface including 132m at 4.98 g/t Au demonstrating strong mineralization at surface and at depth near the western boundary of the Valley intrusion. The results confirm and improve upon strong grade and continuity of well mineralized, near-surface corridor on the Valley target, while identifying a new zone of >2 g/t Au mineralization at depth along the western margin of the intrusion, with an intercept of 223m grading 2.02 g/t Au from 287.0 m downhole. results for an additional 19 holes for 7,116 m at Valley are pending. SNOWLINE GOLD (TSX-V:SGD) (OTCQB:SNWGF) news release
Dakota Gold (NYSE American: DC) reported partial assay results from step out drill hole MA23C-022 which encountered Homestake Formation in two separate intersections at the Maitland Gold Project in the Homestake District of South Dakota. It intersected 4.7m at 12.51 grams/tonne. Dakota said the Maitland Drill Program is now transitioning from widely spaced drill holes designed to define stratigraphy, to more tightly spaced drilling on the JB Gold Zone and the Unionville Zone discoveries, halving the distance between holes to begin to define the size and continuity of the gold mineralization. Dakota Gold (NYSE American: DC) news release
Heliostar Metals (TSXV: HSTR) (OTCQX: HSTXF) is reviewing undergound mining scenarios at multiple cut-off grades and potential throughput rates as it re-scopes the Pre-Feasibility Study at the Ana Paula Project in Mexico. It is evaluating three underground mining scenarios for detailed evaluation and comparison, with all three being able to deliver high grades early and throughout the mine life. Heliostar said the deposit's favourable orientation, width, and shallow depth make the resource amenable to underground mining configurations that take advantage of an existing 412m long, production sized, portal and decline. Multiple potential mining scenarios are under review with a focus on increasing project economics while reducing initial CAPEX when compared to the open pit mining scenario proposed in the 2023 PFS. Heliostar Metals (TSXV: HSTR) (OTCQX: HSTXF) news release
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