Morning Briefing: Gold Fields to buy Yamana Gold

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

Today is Tuesday, May 30th

Gold rose last week ahead of the three-day U.S. holiday weekend, consolidating its move back over its 200 day moving average. Since gapping briefly below $1800 per ounce on May 16th down to $1785, gold has managed to rally $72, or 4%,  against the headwinds of bearish sentiment and a supposedly hawkish Fed. The Mining Stock Journal points out that gold has been in a steady uptrend since completing a double-bottom at $1725 at the beginning of October 2021. Similarly, silver has rallied 8.2%, or  $1.68, since trading down to $20.42 on May 16th. The Mining Stock Journal said that over the last several weeks, the Comex banks have reversed their net position in paper silver to go net long. The net long position increased last week through Tuesday, the cut-off day for the weekly COT report. Conversely the hedge funds, which are the largest counterparty to the Comex banks, have swung from a considerable net long position to go net short paper silver as of the latest COT report. 

The Mining Stock Journal said that it is rare when the banks are long paper silver against a net short hedge fund position. However, in the past this COT structure has always preceded a significant move higher in the precious metals sector. Similar to silver, the mining stocks have staged a rally since mid-May, with the GDX up 8.3%. Last week the GDX bumped its head on its 200 day moving average at $32.93 every day. But the Mining Stock Journal said it's just a matter of time before GDX pops above this key technical indicator and moves higher from there.

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 Western Copper and Gold

Western Copper and Gold is focused on developing the world-class Casino project in Canada's Yukon Territory. The Casino project consists of an impressive 11 billion pounds of copper and 21 million ounces of gold in an overall resource. Western Copper and Gold trades on the TSX and the NYSE American with WRN. Be sure to follow the company via their website, www.westerncopperandgold.com.

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

Gold Fields is to buy and Yamana Gold in an all-stock deal valued at US$6.7 billion with 33.8% premium to become the world’s fourth largest gold miner. Yamana shareholders will receive 0.6 of a Gold Fields share for each share held. Upon closing, Gold Fields and Yamana shareholders will own 61% and 39% of the combined company, respectively. The buy gives Gold Fields significant Americas diversification with producing assets and development projects in North and South America and proforma production of about 3.2 million ounces per year. Gold Fields trades on the NYSE under GFI while Yamana Gold trades on the TSX under YRI, the NYSE and LSE under AUY. News report

Minera Alamos said development of the Nicho Main Zone at its Santana gold project in Mexico is underway with haulage and access roads largely completed along with the removal of limited vegetation and surface cover. First mineralized material from the Nicho Main Zone should be stacked on the Santana leach pad in the second half of the year and will help drive gold production rates higher. Alamos also agreed to a US$3 million unsecured working capital facility with Ocean Partners to bolster working capital and provide added financial flexibility to assist with short-term demands related to the expansion of mining activities to incorporate production from both the Nicho Norte and Nicho Main Zone open pits. Minera Alamos trades on the under (TSXV: MAI). News release

Aurania Resources said it has found the “lost city” of Logroño de los Caballeros in Ecuador in collaboration with Metron. The site considered to be the ancient gold camp is not on Aurania’s concession block, but alluvial gold location downstream.  No archaeology has been found.  Aurania is now on the hunt to find Logroño’s source of gold within its Lost Cities – Cutucu Project Logroño de los Caballeros was one of seven historic mining areas operating during the time of the Spanish conquistadors. Metron worked with Aurania to help refine the search for the historic gold camps and locate prospective mineralized areas. Using Bayesian search theory, Metron worked through historical, geological, geochemical, and geophysical information from the concessions to generate probability maps for the Lost Cities; and likelihood ratio surfaces showing potential locations for deposits of copper, silver, and gold on the concession package. Aurania president and CEO Dr Keith Barron will present on this at the CGSQuito event next Monday that I am organsing. Aurania Resources trades on the (TSXV under ARU and on the (OTCQB: under AUIAF. News release

Adventus Mining and Salazar Resources received technical approval of the Environmental and Social Impact Assessment ("ESIA") from the Ministry of Environment and Water of Ecuador ("MAATE") for the Curipamba-El Domo Project ("El Domo"). The Ministry of Energy and Mines of Ecuador also  issued the Certificate of Technical Feasibility for the construction of the El Domo tailings and waste rock facilities, which is a key requirement for the environmental licence from MAATE. The technical approval of the ESIA allows El Domo to proceed to the Citizens Participation Process, final environmental license issuance and formal construction decision expected in the second half of 2022. Adventus Mining trades on the (TSXV: ADZN) and on the (OTCQX: ADVZF). Salazar Resources trades on the (TSXV: SRL)  and on the (OTCQX: SRLZF). News release

E2Gold received a C$3 million investment from Kinross Gold, which took a 9.9% stake in the junior. E2 is exploring the district-scale Hawkins Gold Project in north central Ontario. Kinross is buying Units at 6c, special "flow-through" units at 8.5c and "flow-through" units at 7c. E2Gold trades on the (TSXV:ETU | OTCQB: ETUGF). News release

That concludes today’s morning briefing.

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