Morning Briefing: BHP Pursues Hostile Take-over Bid for Oz Minerals

Welcome to Mining Stock Daily. I’m Trevor Hall. And I’m Paul Harris.

Today is Monday, August 8th

Last week gold rose $13 per ounce on the week to close at $1791 after briefly spiking over $1800 on Thursday. But the paper gold price buckled under an avalanche of summer Friday selling after the employment report came in hotter than expected putting downward pressure on the entire complex of paper financial assets. Silver held over $20 per ounce for most the week but was similarly smashed lower on Friday to as low at $19.50, before bouncing to end the week at $19.85. If the CPI and PPI reports are in-line or worse than expected, the Mining Stock Journal said that gold will make a run for $1900 and silver will shoot through $20 and head toward $21. The newsletter said it still is confident that the path of least resistance of the metals is up. 

The mining stocks held up relatively well in the face of the downward price pressure on the metals. The Amex Gold Bugs Index tested and held support at 200 every day last week. Similarly, the GDX tested and held support at $25.50 the last three days of the week and closed at $26.28. The Mining Stock Journal said that the charts for both mining stock indices appear to have formed a bottom, while the RSI and MACD indicators are trending higher from deeply oversold. Additionally, the newsletter said that recent emails from several subscribers suggest that sentiment is starting to turn bullish.

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…Arizona Sonoran Copper Company.

Arizona Sonoran Copper Company is a lower-risk copper developer with a significant exploration potential on private land just south of Phoenix, in an infrastructure rich area of Arizona. The Cactus Project PEA illustrates an 18 year mine life, generating US$1 Billion post-tax free cash flow. It is a scalable, low capital intensity project with strong leverage to the copper price. The Company is led by an executive management team and Board which have a long-standing track record of successful project delivery in North America complemented by global capital markets expertise. Read more about the company at arizonasonoran.com.

And here’s what you need to know this morning…

Diversified miner BHP has made an A$8.4 billion unsolicited cash takeover offer for Australian mid-tier copper-gold producer OZ Minerals which has mines in South Australia and Brazil and expects to produce 120,000-135,000 tonnes of copper and 208,000-230,000 ounces of gold this year. The A$25 per share offer is a 32.1% premium to OZ's Friday closing price of $18.92 and a 41.4% premium to the 30-day volume-weighted average price, but is a 14.4% discount to the company’s January peak of $29.21. BHP has accumulated a less than 5% interest in Oz shares. OZ rejected the offer saying it undervalued the company as it had traded above the offer price for five of the past 12 months.

GR silver provided a result of a new silver discovery in the first drill hole stepping out 250 m to the southeast of the San Marcial Resource Area on the wholly-owned Plomosas Project in Sinaloa, Mexico. Surface drill hole SMS22-10 intersected 101.6 m at 308 g/t Ag (from 98.5 m down hole), including multiple intervals grading over 1,000 g/t Ag. The drilling to date in the new area has identified a more extensive breccia and stockwork mineralization, rich in Ag, immediately below the contact zone and extending mineralization far below the original target zone. This new, wide, high-grade silver discovery coincides with an inflexion in the NW-SE trending contact where it intersects with two key NE-SW trending faults. This defines a highly prospective target for continued drilling, both along strike and down dip. Additional drilling is in progress along strike and down dip in the new Southeast Area discovery, and on seven Ag geochemical anomalies in the 1.5 km long target zone. GR Siler trades on the TSXV with GRSL and on the OTCQB with GRSLF. News Release

Hot Chili announced its highest-grade drill intersection to date in the first assays from drilling at the historical Valentina copper mine in Chile, which confirmed a 120m strike extension to the deposit. The highlight was 8m grading 5.7% copper and 24.1g/t silver  for 5.9% CuEq from 27m in hole 9. Valentina and its neighbouring San Antonio satellite copper deposit are immediately to the east of Hot Chili’s Cortadera deposit within its Costa Fuego project. The company said Valentina and San Antonio represent shallow high grade open pit opportunities, with the potential to provide front-end ore sources and make a positive material impact on the payback period and overall project economics of Costa Fuego. Thirteen holes have been completed at San Antonio to upgrade resources from Inferred to Indicated, ahead of a planned resource upgrade for Costa Fuego in late 2022. Hot Chili trades on the ASX and TSXV under HCH and on the OTCQX under HHLKF. News release

New Pacific Metals reported assay results from seven drill holes at its Carangas Silver-Gold Project in Oruro, Bolivia. Highlights included 514.85m grading 1.10 g/t gold and 6 g/t silver in hole 44, including higher grade intervals of 14.15m grading 3.8 g/t Au, 11g/t Ag and 0.12% copper. The company said drilling continues to expand silver and gold mineralization at Carangas where near surface silver horizons are stacked over a broad bulk gold mineralization. So far this year, 21,980 meters in 43 drill holes have been drilled with assays for 12 holes received and 31 holes pending. New Pacific Metals trades on the TSX under NUAG and on the NYSE American under NEWP. News release

Fury Gold Mines (TSX:FURY), (NYSE American:FURY) and Newmont have agreed to buy-out the remaining 23.77% participating interest of Azimut Exploration on a pro-rata basis to consolidate ownership of the Éléonore South Joint Venture. Following the transaction, Fury will own 50.022% and remain operator and Newmont 49.978%. Fury will pay C$1.2M for its 11.902% additional participating interest in the JV. Éléonore South is within the James Bay Gold Camp and south of Newmont's Éléonore Mine whose geology has been interpreted to extend onto the Éléonore South property. Fury Gold Mines trades on the TSX and NYSE American under FURY. News release

HighGold Mining expanded its Timmins regional land holdings through claim staking and acquisition by 25% to 335 square kilometers. The new Acquisition consists of 255 mining claims covering 56 square kilometers in the heart of the Timmins gold camp that ties onto the Company’s existing Timmins South mining claims and borders Newmont’s Dome mine property. It paid C$80,000 cash and 160,000 shares to the Vendor with half payable on the 1st anniversary. Additional claims were also staked and acquired that expand its Golden Mile and Munro-Croesus properties. HighGold Mining trades on the TSXV under HIGH and o the OTCQX under HGGOF. News release

Kingfisher Metals provided updates on its rotary air blast drilling on its Goldrange Project in southwest British Columbia. Six RAB holes have been completed on the Langara Zone and portable XRF analysis has delineated multi-element anomalism in all holes drilled from one pad to target a historical adit. Visual chip logs identified sulfide minerals and quartz veins typical of gold mineralization style observed on surface in all drill holes to date. The Langara Adit and surrounding quartz-hosted mineralization is defined by surface grades up to 60.4 g/t Au and 1500 g/t Ag from grab samples. The sulfide minerals identified in RAB holes are comparable to gold-bearing rocks observed at surface. Hole GRR22-033 intercepted quartz and sulfide vein material from surface to 9.14 m, where the historical adit was intersected. Kingfisher Metals trades on the TSXV with KFR and on the OTCQB with KGFMF. News Release

That concludes today’s morning briefing.

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