CHART: Silver price drops one millstone

The price of silver was trending lower on Wednesday, pushing the metal to below its 2019 opening levels of around $15.30 an ounce.

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Silver has been underperforming gold for much longer than even ardent bears had expected – the ratio of the prices of the precious metals recently hit the highest since 1991.

Zinc, lead and copper mines produce more than 60% of the world’s silver as a byproduct and with prices of these base metals also struggling there is little incentive to increase output

The lacklustre trading in silver exists despite a range of positive drivers – the first annual increase in global demand since 2015 to above one billion ounces, a slump in mine production (particularly primary silver producers where output is down 7%), relatively healthy demand from investors in silver-backed ETFs and a rebound in US coin demand.

One explanation for the weak silver market is the fact that the bulk of demand is from the industrial sector and the price tracks the performance of base metals closely.

In industry, the outlook is clouded by expectations of slower global economic growth that is affecting major and previously fast growing sources of demand for silver including photovoltaics and automotive applications.

Zinc, lead and copper mines produce more than 60% of the world’s silver as a byproduct and with prices of these base metals also struggling there is little incentive to increase output.

In addition, the world’s third largest silver mine – Escobal in Guatemala owned by Canada’s Pan American Silver – shuttered since 2017 is not likely to reopen before next year.

But a positive trend for silver now seems to be finally developing with the price decoupling from a basket of industrial metals.

This combined with a return of the gold-silver ratio to more historical levels could at last give silver bulls something to look forward to.

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High-grade drill results send Aurion Resources shares to 8-month high

In the latest wave of drill result releases from gold miners, Aurion Resources Ltd. (TSXV: AU) today reported that it has intersected a wide zone of gold mineralization at its Risti project in northern Finland. This marks the second time in five months that Aurion has reported high-grade results from exploration in Finland.

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Shares of the Newfoundland-based company shot up over 10% to an 8-month high of C$1.52 on the latest announcement.

Today’s drill results signal a positive start for Aurion’s drill program recently started at Risti. The first two of ten planned drill holes at the Aamurusko Northwest (NW) prospect returned 13.31 g/t Au over 19.54 m and 1.84 g/t Au over 31.12 m.

The Aamurusko NW prospect is situated in proximity to the Aamurusko main target area where several high-grade intercepts were previously reported, including 789.10 g/t Au over 2.9 m, 42.40 g/t Au over 4.0 m and 24.50 g/t Au over 4.75 m.

Geologically the Risti project in Finland has been compared by the company to several gold-rich orogenic gold belts around the world like the Timmins camp in Ontario. Aurion has been actively exploring in the Scandinavian nation since 2014.

The company is also backed by Canadian gold miner Kinross Gold Corp. (TSX: K), which participated in Aurion’s recent C$6.5 million financing and now owns 9.98% of its shares.

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Lundin Gold starts mining of first production stope at Fruta del Norte

Canada’s Lundin Gold (TSX:LUG) has
begun mining of the first production stope at its Fruta del Norte gold project
in Ecuador.

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Construction of the process plant
and tailings facility continue to be on schedule, the Vancouver-based miner
said, with commissioning of the process plant to begin in the third quarter of
this year.

At the end of May, overall construction progress was 73% complete and 88% of the project’s capital expenditure was already committed, the company’s president and CEO, Ron Hochstein, said in a statement.

Lundin has been developing the asset for almost two years, following a 2016 agreement with Ecuador’s government

Underground mine development reached 7.3 km as at May 31, compared to the targeted 7.1 km, while the processing plant reached 80% completion last month.

Wet Commissioning of the initial
systems is expected to start in early July and continue throughout the third
quarter of this year.

“The majority of process plant
operations and maintenance staff have been hired and will participate in the
commissioning process,” the miner said.

Lundin Gold, worth almost C$1.5 billion in Toronto, has been developing the asset for almost two years, following a 2016 agreement with Ecuador’s government that allowed it to move ahead with the project.

The company acquired the project in 2015 for $240 million from fellow Canadian miner Kinross Gold (TSX:K) (NYSE:KGC), which had to halt operations after being unable to reach an agreement with authorities regarding the terms for developing the asset.

The underground gold and silver
mine, which will be Ecuador’s largest, contains six of Lundin’s 29 mining
concessions and covers 70,000 hectares of land.

Discovered in 2006, Fruta del Norte is expected to
produce 4.6 million ounces of gold over a 15 year mine life.

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Leagold begins Los Filos mine expansion

Canada’s Leagold Mining (TSX: LMC) has kicked off the first of three major projects aimed at expanding facilities at its Los Filos gold mining complex in Mexico, 180 km south of the capital city.

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The move is part of the Latin
America-focused miner’s plan to become a 700,000 ounce-per-annum gold producer,
having closed a previously announced $400 million financing.

The expanded Los Filos project will have a 20-year mine life (2019-28), during which time 3.2 million ounces of gold are expected to be recovered

The Vancouver-based company, which expects works to take about 2.5 years, said the Bermejal underground development would start in the third quarter of this year.

Work on the Guadalupe open pit , in
turn, will get under way in the final quarter of 2019, and construction of
the 4,000 t/d carbon-in-leach (CIL) plant would start in the third quarter of
next year.

Leagold also said it would secure a
portion of its revenue from gold sales over the time it takes to finish the parallel
projects, which will require a $209.1 million investment.

The expanded Los Filos project will have a 20-year mine life (2019-28), during which 3.2 million ounces of gold are expected to be recovered.

From 2021 onwards, the average
annual output will be 350,000 ounces. That number will rise to 420,000 ounces
going forward until 2024.

The Canadian miner acquired Los Filos mine from Goldcorp in January 2017, in a deal valued at $438 million.

The gold giant had put the operation
on the block the previous year, under a push to prioritize its biggest and best
mines.

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Rubicon provides further update on Phoenix project

Toronto-based Rubicon Minerals Corp. continues to advance its Phoenix gold project near Red Lake as it prepares to release a preliminary economic assessment in Q3 2018.

The trial mining and bulk sampling program completed in 2018 will provide much of the data for the PEA. The mill achieved 1,540 t/d throughput rate with total gold recovery of 85.1%, including 43.2% that reported to the gravity circuit. Bulk mining was accomplished using sublevel longhole methods at an average dilution of only 8.7% in the three test stopes.

The underground infrastructure has a 730-metre-deep operational shaft and more than 14,000 metres of finished development. There is also an underground ramp. On the surface the hoist is ready to go, civil and earthworks are in place, and the electric substation is operational. The 200-person camp, tailings management facility and tails water treatment plant have all been upgraded.

“We remain excited and optimistic,” said Rubicon president and CEO George Ogilvie. “The new PEA will benefit from real, operational data collected during our recent test trial mining and bulk sampling program, where we implemented actual mining techniques that could be utilized under a potential commercial production scenario.”

This article first appeared in the Canadian Mining Journal

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CITIC ok’d to complete C$612m investment in Ivanhoe Mines

Ivanhoe Mines (TSX:IVN) secured on Tuesday an additional C$612 million (about $464m) granted by its largest shareholder, China’s state-owned CITIC Metal, in April this year, which the Canadian miner is using to build a giant copper mine in the Democratic Republic of Congo.

The investment, now fully approved, is CITIC’s second major one in less than a year, bringing its total financing to about $1 billion.

IF FULLY DEVELOPED, THE KAMOA-KAKULA MINING COMPLEX COULD PRODUCE 382,000 TONNES OF COPPER A YEAR DURING THE FIRST 10 YEARS

Another Chinese firm, Zijin Mining Group — which became Ivanhoe’s partner in the project four years ago — exercised its anti-dilution rights last month, which in turn will generate additional proceeds for Ivanhoe of C$67 million ($50 million).

Friedland, who made his fortune from the Voisey’s Bay nickel project in Canada in the 1990s, has said the capacity of the project’s first phase could later be easily tripled. He believes Kamoa-Kakula has the potential to become the world’s second-largest copper mine.

Once fully developed, the mining complex could produce
382,000 tonnes of copper a year during the first 10 years, climbing to 700,000
tonnes of copper after 12 years of operations. That means that Kamoa-Kakula has
the potential to become the world’s second-largest copper mine.

Analysts also believe the giant mine could restore the DRC’s
historical position as one of the world’s top copper producing countries.

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Kirkland Lake jumps on the gold deal-making wagon with online assessment tool

Canada’s Kirkland Lake Gold (TSX, NYSE: KL) is taking advantage of the deal making boom in the global bullion sector by launching an online tool to help attract, assess and refine investment opportunities.

The new corporate development initiative, named KL Gold Deal Room, was created with the collaboration of technology firm VRIFY.

The miner has outlined a set of
criteria to evaluate assets that may have the potential to complement its
growth strategy.

Kirkland Lake said it would consider possible strategic investments, joint ventures and merger and acquisitions (M&A) opportunities.

“Using the KL Gold Deal Room, companies with assets that require capital, and meet these criteria, are invited to make online submissions to the KL Gold Deal Room using one standardized format that can be accessed anywhere, anytime,” it said in a statement.

The miner has launched the KL Gold Deal Room, an online tool to help attract, assess and refine investment opportunities

“We believe informed decisions are
better decisions, and by utilizing VRIFY Deal Room, Kirkland Lake Gold will be
one of the most informed companies in the world,” Stephen de Jong, the founder,
president and CEO of VRIFY said.

“We are looking to grow shareholder
value by investing in new, high-quality gold projects that, with the benefit of
our capital and expertise, have the potential to become world-class mining
operations,” noted Tony Makuch, president and CEO of Kirkland Lake Gold.

Kirkland said it would be
interested in all sorts of gold projects, including those with by-products in a
variety of jurisdictions, such as Canada, Australia, Europe, New Zealand and Latin
America.

The news come at a time gold prices have climbed past $1,400 an ounce for the first time since 2013 following the US Federal Reserve comments on getting ready to decrease interest rates.

It also coincides with fresh geopolitical tensions triggered by an escalating military strike between the US and Iran, which has helped nudge investors into gold, with the precious metal poised to mark its highest finish in more than six years on Tuesday.

Analysts, including Citigroup Inc., see gold hitting $1,500 to $1,600 in the next 12 months under a bullish-case scenario.

Learn more about the Deal Room in this video:

VRIFY Deal Room from VRIFY Technology, Inc. on Vimeo.

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Endeavour Mining ups reserves at flagship Houndé mine in Burkina Faso by 41%

West Africa-focused Endeavour Mining (TSX: EDV) has reported a 41% increase in reserves at its flagship Houndé mine in Burkina Faso after a large portion of the Kari Pump maiden estimate for measured and indicated resource was converted to reserves.

The company said it planned to start mining at Kari Pump, located about 7 km west of the Houndé processing plant, as soon as during the last quarter of this year.

The gold producer note Kari Pump holds a 7.3 million tonne reserve grading 3.01g/t for 710,000 ounces. It’s one of three discoveries made in the large Kari gold-in-soil anomaly which covers a 6km-long by 2.5km-wide area.

Endeavour plans to start mining at Kari Pump, located about 7 km west of the Houndé processing plant, before the end of 2019

Based on a gold price of $1,250 per ounce, the project’s gold reserves had been converted into probable reserves out of an indicated resource base of 796,000 ounces, representing a conversion ratio of 89%.

This increases the Houndé mine’s proven and probable reserves to 34.8-million tonnes, at a grade of 2.19 g/t gold, for 2.45-million ounces of gold.

The company highlighted that the Kari Pump discovery represented only 35% of the Kari gold-in-soil anomaly.

Endeavour president and chief executive, Sébastien de Montessus, said the company will soon publish drill results from the ongoing 2019 Houndé exploration program, which is mainly focused on the nearby Kari West and Kari Center discoveries. There, Endeavour we expects to define maiden resources and reserves before the end of the year.

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Beware the Feint

https://c.stockcharts.com/c-sc/sc?s=%24COMPQ&p=D&yr=19&mn=0&dy=0&i=t8289270562c&r=1561417174408

Source: Michael Ballanger for Streetwise Reports 06/25/2019

Precious metals expert Michael Ballanger looks at the recent run-up in gold and reveals his recent trades.

I am so confused tonight that I had to crowbar the booze cabinet in order to calm my scrambled soul and ease the pain in my pseudo-analytical chest. That’s right. “PSEUDO” as opposed to “QUASI” and as opposed to “FAUX.” The latter two adjectives imply vagueness and deceit and I would expect that my ramblings are a far cry away from vague and, despite the fact that I spent thirty-seven years employed peddling securities to people, certainly not with “deceit.” Well, maybe a tad of deceit but never of my making and always with honorable intent. Then again, deceit is deceit and it might take a hard look into the inner workings of the mirror to honestly decipher “intent.” Outcome and impact are far better conditions to observe in order to make any semblance of “moral judgement” so I beg you all to be the final arbiters of this tripe.

What sent me into veritable agony was the ease with which the surgeons of market operations were able to pivot from “fiscal integrity” to “monetary irresponsibility” with nothing more than a “written statement” and a “rehearsed press conference.” Every single Federal Reserve Board “event” is rife with drama, suspense and the inevitability of surprise, but not this one. It was carefully scripted, cautiously crafted, and magnificently delivered by a man who claims that the current POTUS has no authority to “fire” him. The result is that we have just entered into the Twilight Zone of pre-election politics with the “mightily revered stock market” as the scorecard from which the U.S. voting public will decide. You will recall that in all elections prior to the Millennium, GDP and employment numbers were all that mattered while the stock market averages were a mere yawn on the face of John Q. Well, welcome to the world of instantaneous satisfaction, delivered by others and appreciated by none. The scorecard has been now officially rendered: Speculators 10, Savers 0 (as in a great big fat ZERO). No need to ever again shop the oh-so-trustworthy banks for a “competitive rate”; they have been ordered to screw you by taking your savings with a positive-return “teaser” with the full knowledge that in due course, you will be paying THEM for the privilege of using their “services,” which is capsulized by the term “usury,” which is a felony in most countries.

We, as a global money-changing populace, are now officially embarked upon the ultimate fiscal and monetary voyage of “Spin ’til you Win” processing; it is government officials telling you upon which horse to bet, which lottery ticket to own, which roll of toilet paper to buy. It is about everything about to which Ayn Rand objected; she wrote “Atlas Shrugged” in 1957 and spoke of “totalitarian …read more

Precious Metals Expert Rick Rule Shares 'Gold Nuggets of Wisdom'

Source: Maurice Jackson for Streetwise Reports 06/25/2019

Maurice Jackson of Proven and Probable and Rick Rule of Sprott USA engage in a wide-ranging discussion covering Pareto’s law, the importance of courage and conviction in investment, copper, mentors and the upcoming Sprott Natural Resource Symposium.

Maurice Jackson: Joining us for conversation is legendary investor Rick Rule of Sprott USA. Mr. Rule, welcome to the show. In our interview last month, we addressed a number of topics regarding where and what Sprott USA is focusing their attention on in the natural resource space. And at the conclusion of the interview, Rick, you stated that we should discuss Pareto’s law, which is known as the 80/20 law. But you put an interesting perspective on the law that I had not considered. Mr. Rule, expand the narrative on Pareto’s law and please introduce us to the concept of the 4%.

Rick Rule: Sure. And actually I’ll take a little further than that with your permission. Most people have heard of the 80/20 principle, which suggests that in any sort of major field of human endeavor, 20% of the people engaged in that activity generate 80% of the utility. In other words, 20% of the people do 80% of the work.

This turns out to be, broadly speaking, true. And it was pointed out in social sciences by an Italian social scientist at the turn of the last century named Pareto. Hence it’s called Pareto’s law.

It’s appropriate to junior mining speculation because among other things, the performance dispersion curves—that is, the performance of relative management teams—aligns well, meaning that 20% of the management teams in junior mining generate 80% of the money made.

What’s important for readers to understand is that if you take that successful population, the 20%, and you run them through the same performance dispersion curve, they conformably align. Meaning that 20% of the 20 do 80% of the 80. Or 4% of the population base generates about 65% of the positive utility in the sector.

And I think it works for at least one more standard deviation, which would suggest that 20% of the 20% of the 20%, or eight-tenths of 1% generate about 40% of the total utility generated in the sector. Which is to say that one of the most important things that you can do as a speculator is identify and align yourself very patiently with the serially successful operators in the sector. And that is probably the most important work that you can do as a speculator.

That isn’t to say that identifying a Robert Friedland, or a Ross Beaty, or a Lukas Lundin, or a Bob Quartermain, is the only work you need to do. The truth is that when you buy stocks that are headed by those people, you are still subjected to risk. You’re still subjected to volatility. You’re still subjected to the vagaries of exploration.

But your most …read more

South America snapshot: eight companies advancing assets

Jean-Paul Pallier (left), Aurania Resources’ vice-president of exploration, and Richard Spencer, president, discussing stream sediment sampling techniques at the Lost Cities-Cutucu gold project in Ecuador. Credit: Aurania Resources.

With its vast mineral potential and pro-mining business environment, South America has long been a home away from home for North American-listed mineral explorers, developers and miners. Here is a look at eight such companies that are active at gold projects and mines.

Aurania Resources

Toronto-based Aurania Resources (TSXV: ARU) is exploring for gold at its Lost Cities project in southeastern Ecuador in the Cordillera del Cutucu region, which is contiguous with the Cordillera del Condor. The Cutucu forms part of the Northern Andean Jurassic metallogenic belt, which contains clusters of porphyry copper, gold-copper skarn and epithermal gold deposits.

Jean-Paul Pallier (left), Aurania Resources’ vice-president of exploration, and Richard Spencer, president, discussing stream sediment sampling techniques at the Lost Cities-Cutucu gold project in Ecuador. Credit: Aurania Resources.

In an update in early May, Aurania reported that its first scout drilling program at Crunchy Hill on the property indicates an epithermal gold-silver system and epithermal-related alteration, though no significant vein systems were intersected.

Corporately, developments this year include: Aurania entering an agreement with Aurania chairman and CEO Keith Barron, providing for an unsecured loan of up to US$3 million (not convertible into Aurania shares); Barron turning a 2018 convertible debenture into 877,192 common shares, and extending the maturity date of a 2017 promissory note to May 29, 2020; Aurania finishing a rights offering for gross proceeds of $5.3 million from 1.95 million shares issued; and Aurania paying US$2 million to the Ecuador government to renew its 42 mineral concessions.

The junior notes that its reconnaissance exploration program is 40% complete, with seven dedicated teams, and access agreements signed with 67% of the communities located within the project area.

Continental Gold

Toronto-based, Ari Sussman-led Continental Gold (TSX: CNL) describes itself as “the most advanced, large-scale gold mining company in Colombia,” as it develops its wholly owned Buritica gold mine project in Antioquia for scheduled production in 2020.

Continental Gold’s Buritica gold project in Colombia. Photo by David Perri.

Miners at Buritica will soon tap into reserves of 13.7 million tonnes grading 8.4 grams gold per tonne, or 3.7 million oz. gold. A recently updated resource estimate tallied 16 million measured and indicated tonnes grading 10.32 grams gold per tonne, or 5.32 million oz. gold, plus 21.9 million tonnes at 8.56 grams gold for 6.02 million oz. gold.

Continental says Buritica is a “rare combination of size, grade, straightforward metallurgy, excellent infrastructure, and growth potential,” and that according to an updated technical report released in March 19, Buritica “will be a lowest-quartile cost producer and an economically robust mine,” with the “potential to approximately double the formal production of gold in Colombia, and become the largest single gold mine in the country.”

Golden Arrow Resources

Golden Arrow Resources (TSXV: GRG), part of the Vancouver-based Grosso Group, owns a 25% share of Puna Operations Inc., a joint venture with SSR Mining that owns the Chinchillas open-pit silver-lead-zinc mine in Argentina. Golden Arrow discovered the Chinchillas deposit and delineated it between 2012 and 2015, and the partners put it into commercial production on Dec. 1, 2018.

In the …read more