Morning Briefing: Aris in C$560M RTO with GCM Mining

Welcome to Mining Stock Daily. Standing-in for Trevor Hall, I’m Paul Harris

Today is Monday, July 25th.

Last week the gold price treaded water in the low $1700's per ounce, briefly dropping to $1679 on Thursday before bouncing to close out the week at $1725. The Mining Stock Journal is encouraged that gold managed to hold the $1,700 level. Silver spent last week trading laterally between $18.50 and $19 per ounce, with a brief drop to test $18 on Thursday. It closed out the week at $18.50. As with gold, the Mining Stock Journal is encouraged that silver has now held firm at $18 three times in the last two weeks. 

The technical indicators like the RSI and MACD are deeply oversold and turned up late last week, which could possibly be another bullish indicator. Even more bullish, Friday's COT report showed that the hedge funds further expanded their net positions in Comex paper gold and silver. The banks continued to aggressively reduce their net short in gold and continued expanding their net long position in paper silver. The Mining Stock Journal said that the structure of the COT positioning is extraordinarily bullish, though it does not provide insight into the timing of when the hedge funds will reverse course and frantically cover their Comex gold and silver shorts and go long again. 

India and China are once again buying physical gold - perhaps a friendly squeeze in the physical market will provide the catalyst that triggers hedge fund short-covering and buying. The mining stocks trended sideways last week with the metals. For now the GDX is holding the $25.50 level and investor sentiment toward mining stocks is in the gutter.

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…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. 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….

GCM Mining is to acquire all the outstanding Aris Gold shares it does not already hold  in a C$560 million no premium reverse takeover which will be named Aris Gold and led by Ian Telfer as Chair and Neil Woodyer as CEO. GCM currently owns 44.3% of Aris. The company will have a strong Colombia focus with 200,000oz/y Segovia mines in Antioquia, the 175,000oz/y Marmato development project which is under construction and the Soto Norte JV with Mubadala which could produce 450,000oz/yr. In addition, it will have the Toroparu development stage project in Guyana which could sustain production of 225,000oz/yr. The combined group will have proven and probable mineral reserves of 3.8 million ounces of gold, measured and indicated mineral resources of 18.3Moz, inclusive of mineral reserves, and inferred mineral resources of 7.7Moz. GCM Mining trades on the TSX under GCM and on the OTCQX under TPRFF. Aris Gold trades on the TSX under ARIS and o the OTCQX under ALLXF. News release

Newmont reported its June quarter results with 1.5Moz attributable production and 330,000 gold equivalent ounces from co-products, an increase of more than 130,000 gold equivalent ounces from the first quarter, with All-In Sustaining Costs of $1,199 per ounce, 15% higher than a year ago and 4% up on the March quarter. The company generated $1.0 billion of cash from continuing operations and $514 million of Free Cash Flow.  It updated its full-year guidance of 6.0 million ounces of attributable gold production, and AISC of $1,150 per ounce with 1.5Moz of that from co-products. The company ended the quarter with $4.3 billion of consolidated cash and $7.3 billion of liquidity, and it has $475 million under an opportunistic $1 billion share repurchase program remaining. Newmont trades on the NYSE under NEM and on the TSX under NGT. News release

Voyager Metals announced a new Preliminary Economic Assessment at its Mont Sorcier iron and vanadium project near Chibougamau in Quebec, Canada with annual production targeted at about 5Mt of high grade, low impurity, iron concentrate grading ~65% iron with 0.52% vanadium V2O5 per tonne of concentrate for 21 years following an initial Capex estimated at US$574 million. Based on test work to date, the material is amenable for blast furnace use in either China or Europe. Voyager Metals trades on the TSXV under VONE. News release

AbraSilver Resource announced its highest-grade silver intercept from its Diablillos property in Salta, Argentina where hole 15 in phase 2 drilling returned 26m at 2,383 g/t AgEq comprised of 2,358 g/t Ag and 0.36 g/t Au), including 4m at 9,536 g/t AgEq, which extended the southwestern extension of the Tesoro Zone by additional 25m metres to over 500m in length by approximately 100m width. AbraSilver is working towards a resource update and Pre-Feasibility Study (PFS) for the Diablillos. AbraSilver Resource tardes on the TSXV under ABRA and on the OTC under ABBRF. News release

Osino Resources completed infill and step-out drilling at the Twin Hills Gold Project in Namibia and it now comprises five distinct mineralized zones. Highlights included 12m @ 6.87g/t in hole 450. With 41,000m of drilling completed so far this year, a resource update is underway which will feed into a PFS due in September and a feasibility in 2023. The project current has an indicated resource of 2.1moz of gold and 620,000oz Inferred. Osino Resources (TSXV:OSI) (OTCQX:OSIIF). News release

That concludes today’s morning briefing.

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