Texas building gold depository with $100B capacity and security that rivals Fort Knox

Texas lawmakers created a new storage option for miners when they signed off on building America’s first state-backed gold depository in 2015.

The Texas Bullion Depository, currently under construction and with the capacity to house physical gold valued in excess of $100 billion will be the most secure facility outside of Fort Knox, will have the full protection of the state of Texas, and is insured by Lloyds of London.

Texas will have a lot of gold to protect — Governor Greg Abbott said when the project was announced last year that it would allow Texas to “repatriate” its gold from New York. The University of Texas/Texas A&M Investment Management Company holds $1 billion worth of gold bullion at the HSBC Bank in New York City, the Texas Tribune reported.

“This goes back to the precious metals storage industry here in the US. Most of the depositories are in the east coast. I say why don’t we have more depositories in Texas? So, the legislature ultimately decided this was something that they wanted to do,” Texas Comptroller Glenn Hegar told MINING.com.

“This is an opportunity for people to store precious metals in a variety of different options, another tool for those in the mining industry. This would also provide that additional oversight, that additional security, accountability, whether it is a short term or long term storage,” Hegar said.

Texas Bullion Depository Rendering.

Hegar’s office selected Lone Star Tangible Assets, a firm that specializes in moving and storing precious metals, to construct and operate the depository with state oversight.

Sean Forbes, chairman at Lone Star, is also managing director at the Texas Bullion Depository. Forbes said the new depository will provide benefits for the mining industry in terms of security, cost and mobility — the cost of transportation via Brinks armored trucks is included in the service.

“We have a sliding scale charge rate that is more than competitive with any other bank depository out there,” Forbes said.

According to Forbes, the depository is a solution for short- or long-term storage for mining companies that need a secure location to house treasury gold and other metals while holding for price changes or while waiting for the right buyer at the right price.

 “Miners will get the whole treasury bars of gold, if the price of gold is going up they could do better, often that’s a massive expense that they put into polymetallic rock than getting it into the treasury box so [it’s for] folks that don’t want an on-site risk or want a better than cost neutral alternative. You will get it insured, we will get it over here,” Forbes added.  Then [there is] is obviously the security layer around the triple audit, no one else can claim to have that.”

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Noront updates progress at McFaulds No.8 VMS discovery

Toronto-based Noront Resources, 85% owner of the McFaulds volcanogenic massive sulphide property in the Ring of Fire, has completed a 2,059-metre copper-zinc focused program at the No.8 deposit. (KWG Resources holds the other 15% of the project.)

Hole MCF-19-102 did not intersect massive sulphide, but returned a very respectable 20.0 metres grading 2.0% copper and 0.1% zinc within a zone of abundant copper laminations and stringers. The intersection formed part of a 36.6-metre section that graded 1.2% copper and 0.1% zinc.

Noront said in a news release that a 25-metre wide zone of strong garnet-magnetite alteration with an associated zinc-lead-silver anomaly has been drilled immediately beneath the copper zone. The horizon appears similar in character to the No.10 zone, which suggests the two hydrothermal systems (No.8 and No.10) overlap in the area.

A second phase of drilling at McFaulds is in the planning stages.

(This article first appeared in the Canadian Mining Journal)

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Graff creates 302-carat emerald cut stone from 1,109-carat Lesedi La Rona

In November 2015, Vancouver-based Lucara Diamond Corp. announced that it had recovered a 1,111-carat diamond – the second largest, gem quality stone ever found in the world – from its Karowe mine in Botswana. Following a country-wide contest, the stone was named Lesedi La Rona – meaning “our light”.

Lucara put the Lesedi La Rona up for sale, but initially felt the price offered was too low. The miner hung onto it until September 2017 when it was sold to Graff Diamonds for $53 million or $47,777 per carat.

Graff has now created a 302.37-ct square emerald cut diamond – the world’s largest of that particular cut. The company’s craftsmen used sophisticated software and lasers to make the initial cuts.

The rest of Lesedi La Rona became 66 exquisite satellite stones ranging in size from under a carat to more than 26 carats.

(This article first appeared in the Canadian Mining Journal)

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Probe Metals has potential to attract 'acquisition interest', BMO says

BMO Capital Markets has initiated coverage of Probe Metals (TSXV: PRB) with an outperform rating and a C$2.00 target price—double its current share price of C$0.98.

By Tuesday afternoon, the Canadian miner’s stock was up 7.37% on the TSX, trading at C$1.02. The company has a C$112.8 million market capitalization.

The junior explorer’s 100%-owned Val d’Or East project “is one of the higher quality Canadian gold exploration properties with good prospectivity for resource growth and the potential to transition towards a development stage project,” BMO mining analyst Andre Mikitchook noted in an April 23 research report.

“Val d’Or East has the prospectivity, jurisdiction and management team to potentially attract acquisition interest as it is advanced,” he continued. “The geological success and property consolidation is reminiscent of other successful names, including Osisko, Integra, Marathon, Atlantic Gold and Gold Standard Ventures.” According to its February 2018 estimate, Val d’Or East contains indicated resources for open-pit and underground of 9.04 million tonnes grading 2.35 grams gold per tonne 

Probe released assays at the end of March from its 24,000-metre winter drill program at Val d’Or East property, where its geologists have focused on an area around the former Beliveau, Bussiere, and Monique gold mines.

The work program discovered a new parallel gold trend on the Courvan property, a largely unexplored area about 1.5 km west of the New Beliveau deposit. Results from the Courvan area drill program included drill hole CO-73 that intersected 3.9 grams gold per tonne over 30 metres starting 144 metres downhole in the Southwest Zone. Drill hole CO-78 in Courvan’s Creek Zone returned a 4 metre intercept grading 16.7 grams gold from 113 metres downhole, including 57.8 grams over metre.

Probe expects to fold the results of its winter drill program into an updated resource scheduled for release in the early fall of 2019.

According to its February 2018 estimate, Val d’Or East contains indicated resources for open-pit and underground of 9.04 million tonnes grading 2.35 grams gold per tonne for 682,400 ounces of gold and inferred of 9.30 million tonnes averaging 2.41 grams gold for 722,100 ounces of gold.

“The current resource stands at 1.4 million ounces and the resource update in H2/19 will expand the resource and reflect the discovery of a second mineralized trend,” Mikitchook writes in his report. “For our valuation, we assume a further 0.75 million ounces is defined to show visibility on 2-3+ million ounces with development potential.”

Mikitchook also points to Probe’s other advantages: a proven management team and a strong treasury.

“Probe has a track record of shareholder value creation, having attracted a takeover of Probe Mines in 2015,” he comments. “This management track record is reflected in their ability to attract financing with our estimate of the treasury at C$25 million, which is sufficient for two years of exploration.”

The Courvan property is largely unexplored, the company says. The land package includes the historic Bussiere mine, which produced 42,000 ounces of gold at an average grade of 5.8 grams gold up until 1942, when it was destroyed by forest fires.

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6th Wave, CyPlus sign representation deal for gold extraction nanotechnology

6th Wave Innovations has signed sales and marketing agreement for its IXOS nanotech gold extraction resin with CyPlus GmbH of Germany. CyPlus will represent 6th Wave in Mexico, Europe, Turkey and Egypt.

IXOS resin provides a eco-friendly means of gold recovery. Each IXOS bead is imprinted at the molecular level to attract gold and ignore other elements leached from the ore. It also has the advantages of using fewer chemicals, reducing waste, and saving power than alternative technologies, according to 6th Wave. IXOS is supplied ready-to-use, with a range of particle sizes to accommodate heap leach solution and resin-in-leach/pulp circuits.

6th Wave has a pilot plant in operations at a major U.S. gold miner. It says IXOS has consistently outperformed activated carbon and conventional ion exchanges resins in both laboratory and field trials.

(This article first appeared in the Canadian Mining Journal)

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Aurania Resources receives C$3m loan from chairman, CEO

Keith Barron, who owns 53% of the outstanding common shares of Aurania Resources (TSXV: ARU), has agreed to loan the company up to C$3 million to support exploration at its 100%-owned Los Cities gold project in Ecuador.

The chairman and CEO also participated in the company’s rights offering in March that raised C$5.25 million. Barron acquired 1.48 million of the 1.95 million shares issued at C$2.70 per common share.

The geologist privately co-founded Ecuador gold explorer Aurelian Resources and discovered the Fruta del Norte deposit in 2006. The company was acquired by Kinross Gold (TSX: K; NYSE: KGC) in 2008 for $1.2 billion.

Aurania Resources’ Lost Cities—Cutucu project is in the eastern foothills of the Andes mountain range in southeastern Ecuador. So far Aurania has eleven targets for gold-silver mineralization, four copper targets and one silver-zinc-lead target.

So far Aurania has eleven targets for gold-silver mineralization, four copper targets and one silver-zinc-lead target

On April 9, the company announced it had doubled the size of its Kirus copper-silver target to an area measuring 6 km by 3 km, samples from boulders in streams contain up to 12% copper with 166 grams per tonne silver. Follow-up exploration found mineralization of up to 5.1% copper and 70 grams silver per tonne in sporadic outcrops in dense jungle over a 2 km trend northwest of the Kirus magnetic feature.

Kirus is about 6 km from Aurania’s Tsenken target, and both are associated with highly magnetic features evident in a geophysical survey the company flew over the Lost Cities project. Both targets have high-grade coper and silver in sedimentary rocks over, and adjacent to their respective magnetic features.

On April 2, Aurania announced that its team had enlarged the Tsenken target by 6 km and that it has found high-grade copper and silver over a 9 km trend. Grab samples from boulders in streams contain up to 7% copper with 70 grams silver.

In a press release at the time, president Richard Spencer noted that the company’s current exploration model is that copper and silver from the porphyry cluster “spread into the enclosing, permeable sedimentary rocks where it was trapped, creating a more or less flat-lying layer of copper-silver-bearing rock.”

“This sheet-like target should be relatively simple to drill,” he commented. “The potentially larger target presented by the covered porphyry would require much deeper drilling and would be investigated in a later phase of exploration.”

(This article first appeared in The Northern Miner)

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Westhaven stock takes hit after Shovelnose drill results

Shares of Westhaven Ventures Inc. (TSX-V: WHN) took a hit on Monday morning, down over 12% at market open and at one point traded at a six-month low of C$0.60. The company’s market capitalization sits at just over C$57 million.

Earlier, the company had released results from its ongoing drill campaign at the Shovelnose gold property, highlighted by 28.72 metres of 2.97 g/t gold and 13.68 g/t silver, including 1.55 metres of 32.60 g/t gold and 130.68 g/t silver.

Drilling will continue at Shovelnose and expand from one drill to two drills this summer, says the company.

The 15,542-hectare Shovelnose project is located in the prospective Spences Bridge Gold Belt (SBGB), which borders the Coquihalla Highway 30 kilometres south of Merritt, British Columbia. It is one of four gold properties owned by the company in the SBGB.

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One of world’s largest diamond mines gets 10-year life extension

Russia’s Alrosa, the world’s top diamond producer by output, is extending the life of its Aikhal mine to 2044 by digging deeper into the ground, in a project estimated to cost about RUB 10 billion ($16m).

The 300 metres underground extension, the company said, will add almost 20 million carats to the raw material base of the Aikhal mining and processing division, allowing it to keep annual output at 500,000 tonnes of ore.

Underground extension of Aikhal is estimated to cost about $16 million.

“The project is also attractive because there’s no need for major re-equipment or new infrastructure,” Evgeny Denisov, Director of Aikhal Mining and Processing Division said in a statement.

The Aikhal mine, located in the north-eastern part of Russia in the Sakha Republic, is one of the country’s and the world’s largest diamond mines.

The operation is part of the namesake division, which also includes two open-pit mines — Yubileyny and Komsomolsky. Last year, the unit mined almost 12 million carats worth more $1.2 billion.

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Explorer Agrees to Partner on Nevada Gold Project with OceanaGold

Source: Streetwise Reports 04/22/2019

This deal comes right before this year’s exploration season.

American Pacific Mining Corp. (USGD:CSE; USGDF:OTC) announced in a news release it entered into an agreement with OceanaGold U.S. Holdings Inc., allowing it to earn into its Tuscarora gold project in Nevada. OceanaGold U.S. Holdings Inc. is the U.S. subsidiary of the multinational OceanaGold Corp.

“For a company of our size, this transaction is a big milestone,” American Pacific’s CEO Warwick Smith said in the release.

According to the agreement, OceanaGold can earn up to 51% of the Tuscarora high-grade epithermal project by investing $4 million into it over the next four years. At that point, a joint venture management committee will be created. Also, OceanaGold may earn an additional 24% into Tuscarora by investing $6 million more over the following four years; the company has 60 days in which to exercise that option.

In addition, OceanaGold will pay American Pacific $50,000 upfront and $200,000 upon earning a 51% percent in Tuscarora, in both instances in cash or shares, whichever the payor prefers. OceanaGold will make all payments to holders of underlying property interests and for claim fees.

Whereas OceanaGold will be the operator of Tuscarora, both companies will work toward adding value to the project and identifying further drill targets on the expansive land package.

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Masochism and the Average Gold Investor

Source: Michael J. Ballanger for Streetwise Reports 04/22/2019

Sector expert Michael Ballanger discusses generational attitudes toward investing and how they are affecting the precious metals markets.

Masochism: “gratified by pain, degradation, deprivation, etc., inflicted on oneself either by one’s own actions or the actions of others.”

On Friday afternoon, I completed my weekly missive, which was composed of a detailed analysis of just how magnificently Barrick Gold Corp. (GOLD:US) had been used by the interventionalists to manipulate the ARCA NYSE Gold Bugs Index (HUI:US), all of the big ETFs (GDX, GDXJ, NUGT, JNUG) and ultimately, the prices for gold and silver. Then suddenly, with little warning, I had an epiphany. Not only was the nine hours of work a complete and total waste of time, it suddenly occurred to me that a forty-year career spent nurturing a belief system anchored in the bygone days of Bretton Woods might just have been an exercise in redundancy and cognitive dissonance.

As if driven to reveal a hidden secret for all the world to see, I have carried an unalterable obsession with the notion that sound money principles would, in the end, return to prominence and in fact become seriously entrenched in the practices of governments around the world with gold and, to a lesser degree, silver acting as key components of a fiscal and monetary renaissance. Alas, as the Baby Boom generation fades away into old age and irrelevancy, it is at once both sad and obvious that the new wave of Gen-Xers and Millennials and Echoboomers have determined that there is little or no validity to the concept of sound money and have therefore rendered gold and silver, as monetary and fiscal canaries in the Modern Monetary Theory coal mine, as irrelevant and from an investment standpoint, useless.

I have on average about 200 conversations per week with investors from all over the spectrum in terms of age, wealth, nationality and interests. I normally make notes of the discussions, a fallback to my days as a financial advisor, long before email replaced notes as the proof-bearer of action and intent. What I found astounding is that all discussions pertaining to cannabis, social media, technology, or the future direction of the S&P500 lasted greater than fifteen minutes. Metals and mining conversations, including gold and silver, tended to be less than seven minutes and chats related to junior mining and exploration were less than three minutes with many instances of “subject changed” or “I gotta go.”

Now, as a fervent addict to the thrill of new mineral discoveries (“There ain’t no fever like gold fever!”), I have recently begun to feel like the heroin addict searching through life for that rush of euphoria that arrived long ago with that first hypodermic injection but the reality is that the new generation of investors found their hypodermic adrenalin in the form of technology stocks, then crypto, and finally …read more

Mining Firm Expands Its Reach with Artificial Intelligence

Source: Peter Epstein for Streetwise Reports 04/22/2019

Peter Epstein of Epstein Research digs into the potential of this company’s AI technology, which he believes offers significant benefits for the stakeholders as well as investors.

Artificial intelligence (AI) is used in many sectors and applications, but not so much in the mining space. That makes no sense because AI is an extremely useful tool in dealing with challenges that have tremendous amounts of data and involve hundreds of variables. However, AI is just a tool, it’s not a silver bullet solution. For mining, the area most in need of what AI has to offer is exploration for new discoveries.

The costs of exploration are going up. The easy stuff has already been found, the higher-grade ore already mined. Most exploration programs are searching in part, or entirely, for mineralized zones that are “undercover” (under overburden). Overburden is worthless rock or soil overlying a mineral deposit. It’s the enemy of exploration geologists because it’s very difficult to “see through.” Various tools are deployed to understand what’s beneath the overburden: geophysics; geochemistry, etc.

But each property is unique. What works well in one place might not work at all in another. Exploration (not just for metals) is the perfect setting—high uncertainty, lots of data, lots of variables, the potential for a big reward and substantial cost savings—for AI to be a valuable, cost-effective tool to aid geologists. Albert Mining’s (AIIM:TSX.V) technology will never replace geologists, only assist them. Income tax software has been around for >20 years, but it has not replaced tax accountants—not even close.

Albert Mining has been using AI, machine learning and data mining for less than a decade. Clients benefit from a multidisciplinary team that includes professionals in geophysics, geology, AI and mathematics. Most of the team has been together for six to 10 years; they have 30+ proven discoveries. Management says it has a 70% success rate in identifying new zones of mineralization. If a gambler could be right just 60% or 65% of the time, he or she would become quite wealthy. Albert Mining’s success rate is not higher because sometimes there’s no additional mineralization to be found. Or, there’s not enough data for the technology to operate at an optimal level, or the geology is simply too difficult to understand.

Each time the company’s CARDS (Computer-Aided Resources Detection System) finds something, it saves the client considerable exploration time and money, and frees up managerial resources. The benefits are many, for all stakeholders, when there’s a successful outcome.

Let me throw in this testimonial by Ron Perry, then a director of Metanor Resources, that I paraphrased from a recently shot video [see 2-minute video clip]. This was an Albert Mining success story from 2009-10 that’s going into production. How many exploration projects make it to production? Not many!

Ron Perry, formerly of Metanor Resources: “I met Michel [Fontaine] of Albert Mining in …read more

Sandspring rethinks Toroparu in Guyana

Sandspring Resources (TSXV: SSP; US-OTC: SSPXF) is putting the finishing touches on a preliminary economic assessment (PEA) for its Toroparu gold project in Guyana that rescopes the project’s prefeasibility study (PFS), and includes a third gold pit. It aims to table the study in a couple of months.

“All we’re really doing is building this same concept, the same conceptual operating plan that we had in 2013–2014 — we’re just building it in two separate phases,” Sandspring CEO Rich Munson says in an interview with The Northern Miner.

Sandspring tabled its PFS in 2013, outlining a US$691-million, after-tax net present value (NPV) at a 5% discount rate, and a 23.1% after-tax internal rate of return (IRR) at US$1,400 per oz. gold, but with a US$464-million, pre-production initial capital expenditures (capex).

The company went public in 2009 after working in Guyana since the late 1990s as ETK. In the 80s and 90s, it was the largest uranium producer in the United States.

It built a 260 km road from a deepwater port to the project and drilled out a resource before realizing it needed to take the company public to keep advancing the project.

After its PFS, the company signed a precious metals streaming agreement with Wheaton Precious Metals (TSX: WPM; NYSE: WPM). Wheaton bought 10% of the project’s life-of-mine gold production at US$400 per oz. gold and half of its silver production at US$3.90 per oz. silver for a US$15.5-million early deposit that Sandspring has already received, and US$138 million in project installments.

Sandspring Resources’ Toroparu gold project in Guyana. Photo by Sandspring Resources.

The deal finances 30% of the project, although Munson says the two companies will have to “readjust the parameters of the amount of money they’ll be bringing,” because Wheaton’s contribution was based on a larger capex. That said, he thinks “they’ll bring a pro-rata amount that’s about the same.”

Development at Toroparu stalled during the market downturn. In 2015 the company survived by Munson drawing down on his home equity line of credit to advance money to Sandspring. That same year, Frank Giustra came in and took a 9.3% position in the company. With his help, the company raised enough money to drill some satellite targets.

“We’ve always been struggling to find a way to start this up at something less than 23,000 tonnes per day,” Munson says. “How can we get started with something small, but yet doesn’t destroy the upside of the deposit?”

Part of the problem was a copper component at the main Toroparu deposit.

“It’s not a lot. There’s about half a billion lb. copper,” Munson says. “But it’s right in the core of the deposit, so it’s very hard to start up without flotation and leach at the same time. Now with the satellite deposits, we can start up gold only at about half that rate — 11,500 tonnes per day.”

The main satellite deposit is called Sona Hill. It contains 11.7 million measured and indicated tonnes grading 1.04 grams gold per tonne for 394,000 oz. gold and 11.6 million inferred …read more