Another 10MT of iron ore off the market as Vale halts Alegria mine

Brazil’s Vale (NYSE:VALE) has halted operations at the Alegria iron mine in the Mariana complex of Minas Gerais state, which may remove up to 10 million tonnes a year from the market.

The preventive measure, said the world’s top iron ore producer, was taken after a stress test failed to guarantee stability of the mine’s structures. Vale noted it would restart production when new studies are completed and their results are conclusive.

What’s unclear is what “structures” Vale is referring to. Based on data provided by Brazil’s regulator, there is no upstream dam at Alegria, and the dry processing means no dam should have been needed, at least in recent years.

Alegria iron ore mine is close to the Samarco operations and was already impacted after the dam failure in 2015. 

The mine is close to the Samarco operations and was already impacted after the dam failure in 2015. Following that accident, Alegria was operating at a reduced rate using dry processing only.

Since January’s dam collapse at the company’s Corrego do Feijão mine, which left at least 300 people dead, both authorities and companies have stepped up scrutiny of so-called upstream dams, the cheapest but generally regarded as the riskiest method to store mine waste.

Last week, Vale was forced to shut its Timbopeba mine, also in Minas Gerais state, which produces 12.8 million tonnes of iron ore per year, due to safety concerns.

The company later received a fresh order to halt another two dams — Minervino and Cordao Nova Vista. The same day, prosecutors took a separate action, seeking guarantees of 50 billion reais (or roughly $13 billion) for environmental restoration.

While BMO Global Commodities Research added back on Wednesday 16Mt of iron ore into its estimate for Vale’s 2019 iron ore production on the announced restart of Brucutu mine, analyst Edward Sterck said Thursday he was holding off making changes related to Alegria, but noted that removing that mine’s output would reduce 2019 EBITDA by 1.5%

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Secova acquires cheap vanadium mineral claims in Quebec

Secova Metals (TSXV: SEK) acquired this week 100% interest in 3,809 hectares of vanadium mineral claims located in three land packages in the eastern Canadian province of Quebec.

“CIBC Mellon has estimated that there will be $35 trillion dollars of global infrastructure projects starting over the next 20 years, which will spark big demand for vanadium”

In a press release, the Vancouver-based miner said the acquisition, which is a $75,000 arms-length transaction, is aimed at taking advantage of the “hot vanadium market.”

The media brief states that Secova’s strategy is to buy under-valued long-term viable assets, develop a systematic exploration plan and work the properties.

“Secova could not ignore the high-levels of interest for the vanadium demand due to a globally increased need for the mineral in both Vanadium Redox Flow Battery Technology and as an alloy for strengthening steel in infrastructure, rebar, pipelines, airplanes and car frames,” the communiqué reads.

According to the document, the miner will develop and release an exploration plan based on the historic work performed on the claims.

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Beauce Gold using new technology to identify mineralized zones in St-Simon-les-Mines

Beauce Gold Fields (TSX: BGF) announced this week that it is testing a new Russian technology at Quebec’s Rang St-Gustave Road in St-Simon-les-Mines.

In detail, the miner is conducting a high resolution mobile electromagnetic or TDEM survey that measures electrical chargeability and electrical conductivity at a horizontal resolution of 15cm. In a press release, Beauce Gold explained the system also allows a vertical penetration at depth to the order of 200m.

“The method is optimal for detecting narrow ore bodies (auriferous zones) and for prospecting within conductive geological stratums that are particularly frequent in the Beauceville Formation and throughout the Bellechasse gold belt,” the media brief reads.

The geophysical team consists of people from the Institute National de la Recherche et des Sciences and two geophysicists from Russia’s Aerogeophysica Surveys.

According to the Montreal-based company, the primary objective of the geophysical survey is to identify potentially mineralized zones that could possibly be the hard rock source of the gold contained in the placers of St-Simon-les-Mines.

“Using this new state-of-the-art exploration technology will add to our understanding of the geology and help us reach our goal of finding a hard rock source of the famous Beauce’s placer gold deposits,” Patrick Levasseur, President and CEO of Beauce Gold Fields, said in the media brief.

The Beauce Gold Fields project comprises a block of 152 claims 100% owned by Beauce Gold Fields. The project area hosts a six kilometre long unconsolidated gold-bearing sedimentary unit and numerous historical gold mines that were active from 1860s to the 1960s.

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Chinese electric vehicle makers are gorging on nickel

Battery metals tracker Adamas Intelligence says Chinese electric vehicle manufacturers deployed 253% more nickel in passenger EV batteries in January this year compared to 2018.

The Dutch-Canadian research company which tracks EV registrations and battery chemistries in more than 80 countries says the jump is due to an ongoing shift from lithium iron phosphate (LFP) to nickel-cobalt-manganese (NCM) cathodes.

The average EV registered in China in January 2019 contained nearly double the mass of battery metals/materials as the year prior

First generation NCM batteries contained around a third cobalt with a chemical composition of 111 – 1 part nickel, 1 part cobalt and 1 part manganese, but NCM batteries with higher nickel content (622 and 523 chemistries) have become standard in China.

According to Adamas is now the the largest market for passenger EV battery nickel, ahead of Japan and the US, which were the two largest markets in January 2018. Nickel used in car batteries jumped 88% in Germany and 54% in the US year on year.

The EV boom is China is only accelerating and Adamas says despite being a seasonally-slow month in January 2019, 3.27 GWh of passenger EV battery capacity was deployed in the world’s largest car market, an increase of 439% over January 2018 levels:

Even more remarkable, from January 2018 through January 2019, the sales-weighted average passenger EV battery capacity in China increased by a staggering 95%, from 14.9 kWh to 29.1 kWh, meaning that the average EV registered in China in January 2019 contained nearly double the mass of battery metals/materials as the year prior.

The price of nickel is up more than 20% in 2019 as stocks held in warehouses around the world registered with the London Metal Exchange fall to multi-year lows.

Continue reading at Adamas Intelligence.

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Advanced Zinc Explorer in Ireland Looks 'Attractive'

Source: Clive Maund for Streetwise Reports 03/21/2019

Technical analyst Clive Maund explains why he sees this zinc explorer as a good value.

To be sure, Group Eleven Resources Corp.’s (ZNG:TSX.V; GRLVF:OTCQB) stock looks cheap here and good value. It is an advanced zinc explorer based in Ireland, the Emerald Isle, and it is understood that it is very much liked by Peter Megaw, of MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) fame. MAG Silver in fact owns 21.4% of its stock (fully diluted) while Teck Resources Ltd. (TCK:TSX; TCK:NYSE) owns 4.3% fully diluted.

An 18-month chart is sufficient to show the entire history of the stock. After starting trading in December of 2017 it wasted no time in going straight into a bear market, which persisted until last November when a trading range started to form that is believed to have evolved into a Triple Bottom. With the current quite tight bunching of the price and its moving averages, the conditions are ripe for a reversal here, with the stock trading at less than a third of its price at inception. We would like to see stronger volume indicators, but these sometimes improve with the price rather than ahead of it.

Although it is of limited use technically, the 6-month chart shows recent action in more detail, and on it we can see that the stock is oversold here near to the bottom of its trading range and cheap. It is completely “off the radar” of most investors, which is a big reason why it is good value.

The attractive and interesting Corporate Presentation includes pages showing the long-term course of the zinc price and current low LME inventories as well as the capital structure and usual details about projects, management etc.

The conclusion is that Group Eleven is an attractive, good value zinc investment here, which due to its low price must be classed as speculative Because it is still in a basing phase, we cannot and do not expect it to go storming out of the gate two days after we buy it, but on the other hand it is certainly not overvalued, and when it does decide to move it should make good percentage gains from the current price.

A disadvantage for company employees recruited from overseas is the rotten cloudy damp maritime climate in Ireland, but this can be mitigated by listening to Irish music in pubs, assisted by drinking Irish beer, songs such as The Orange and the Green, which is about a lad who turns the apparent misfortune of having a Catholic (Irish Republic) mother and a Protestant (Ulster) father to his advantage. Here is a clearer version with lyrics and a version including the U.S. Army Band in Florida.

Group Eleven Resources website.

Group Eleven Resources Corp ZNG.V, GRLVP on OTC, closed at C$0.12 on 18th March 2019.

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Target Price Raised on Metals Firm 'Growing Substantial High-Grade Project'

Source: Streetwise Reports 03/21/2019

The newly announced resource update and what it means in terms of project economics is captured in a ROTH Capital Partners report.

In a March 18 research note, analyst Jake Sekelsky reported that ROTH Capital Partners raised its target price on Buy-rated SilverCrest Metals Inc. (SIL:TSX.V) to CA$5.50 per share from CA$5 because its “positive resource update sets the stage for a robust preliminary economic assessment (PEA).”

Sekelsky reviewed the updated Las Chispas resource estimate and how it compares to the previous one.

The new estimate encompasses Indicated resources of 1 million tons (1 Mt) at average grades of 6.98 grams per ton (6.98 g/t) gold and 710.6 g/t silver, or 1,234 g/t silver equivalent (Ag eq), for a total of 39.8 million ounces (39.7 Moz) Ag eq.

Inferred resources now total 3.6 Mt at average grades of 3.32 g/t gold and 332.5 g/t silver, or 68.1 Moz Ag eq.

The entire Las Chispas resource grew 24% to 108 Moz Ag eq, in line with ROTH’s estimate of 110 Moz. Sekelsky purported that SilverCrest could potentially add another 25 Moz to the resource by 2020, taking the total to 135 Moz Ag eq, in light of its “aggressive exploration plans and past hit rate.”

The increase in ounces along with a boost in grades since the previous resource estimate are reflected in the update, highlighted Sekelsky. That should make for a robust maiden PEA, expected in Q2/1, which depicts a “high-grade, low-capex project generating significant free cash flow.”

Sekelsky concluded, “Las Chispas is a rare asset that has the potential to generate positive cash flow at even lower metals prices, an attribute we believe majors would gravitate toward in a lower price environment.” As such, the project is a prime takeout candidate, particularly as SilverCrest continues derisking it and growing its resource.

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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Update on Tanzanian Royalty Exploration Company

Source: Clive Maund for Streetwise Reports 03/21/2019

Technical analyst Clive Maund charts this exploration company and explains why he believes it is at an “excellent entry point.”

Tanzanian Royalty Exploration Corp. (TNX:TSX; TRX:NYSE.MKT) is a good performer technically and we have traded it well, buying it on the 20th January, scaling back positions when it got very overbought on 29th January, bought back what we’d sold at a better price on the 8th February, scaled back positions again on the 15th Feb. after another rally, and bought it back after another dip on 22nd Feb. as you will see on its latest 3-month chart shown below. We could have done what we did on two prior occasions and sold some at the late February peak and bought back on the dip to the lower boundary of the range about a week ago, but we never got round to it, and also because there is an increasing risk that such aggressive trading will result in missing “The Big One,” which is where it breaks out of the top of the pattern to commence its next upleg.

Speaking of upside breakouts, Tanzanian Royalty now looks about ready to break out of this trading range and embark on the next upleg, which is likely to be big and could be huge if the deep drill rig now working its way through the planned open pit at Buckreef to probe what lies beneath strikes it rich—if it does we could be looking at a world-class gold mine here, and at a time when the long sector malaise is coming to an end. The technical chart setup looks very positive indeed as we can see on the range of charts presented below. The upward skew of the current trading range makes it a very bullish “Running Flag,” an interpretation that is supported by the now strongly bullish volume pattern, with volume having ebbed away to a low level as the Flag pattern approaches completion. The duration of this Flag has allowed the overbought condition of various oscillators resulting from the spike higher in January (which we rode) to almost fully unwind, and the rising 50-day moving average to almost catch up with the price, which means that the stock is “gassed up” for the next run.

The 6-month chart allows us to view a less cluttered picture over a timeframe twice as long, and enables us to look at additional indicators like the Accumulation line and On-balance Volume line added to this chart. They look OK with the latter indicator being the strongest of the two.

On the 4-year chart we gain a broader perspective and you can see why we were wary of a deeper correction in recent weeks—the strong upleg in January stalled out exactly where one would expect, at the resistance at the 2018 highs, which is why we sold almost …read more

Wheaton Precious Metals exceeds 2018 production guidance, declares dividend

Wheaton Precious Metals, (TSE: WPM) one of the largest precious metals streaming companies in the world, announced record gold production and sales in 2018 and declared a $0.09 per share first quarter dividend for 2019 on Wednesday.

In the fourth quarter of 2018, Wheaton generated almost $110 million in operating cash flow, bringing total operating cash flow for the year to over $475 million, founded on production of over 370,000 ounces of gold, 24 million ounces of silver and 14 thousand ounces of palladium, all in excess of the company’s guidance.

Wheaton exceeded production guidance for gold, silver and palladium by 5%, 9% and 41%, respectively, and annual gold production and sales in 2018 represented a record for the company, Wheaton said in a media statement.

Wheaton’s estimated attributable production in 2019 is forecast to be 365,000 ounces of gold, 24.5 million ounces of silver and 22,000 ounces of palladium, resulting in gold equivalent production of about 690,000 ounces.

For the five-year period ending in 2023, the company estimates that average, annual gold equivalent production will amount to 750,000 ounces.

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Chalice files new 43-101 for East Cadillac property

Chalice Gold Mines has filed an amended 43-101 report on SEDAR for its East Cadillac gold project. The property is 35 km east of Val d’Or, on the prolific Cadillac-Larder Lake fault. The amended report includes non-material changes requested by the Ontario Securities Commission, and the resource estimated made in the original report dated Feb. 12, 2017, has not changed.

The resources include 225,342 measured and indicated tonnes grading 4.17 g/t gold for 30,212 oz. of contained gold. There are also 1.1 million inferred tonnes at 4.09 g/t for 146,315 contained oz.

The report recommended two phases of exploration. In 2017, phase one – surface sampling, airborne surveying, a LiDAR survey, data compilation, and drilling – would cost $1.1 million. Phase two – drilling additional targets identified in phase one – would cost about $1.2 million. The actual costs may be higher.

Chalice is going forward with exploration at East Cadillac this year.

(This article first appeared in the Canadian Mining Journal)

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Champion Iron hunts high grade zones at Powderhorn

Montreal-based Champion Iron has excellent results from its 9,350-metre drill program last fall on its Powderhorn property located in north-central Newfoundland, 40 km southwest of Springdale. The results come from both a copper-rich and a zinc-rich zone.

Results from the copper zone include:

Hole PH18-16: 0.89% copper, 1.1 g/t gold, 13.9 g/t silver and 0.09% zinc over 3.92 metres. The best intersection in the hole was 2.31% copper and 1.8 g/t gold, 28.6 g/t silver and 0.33% zinc over 0.5 metre.
Hole PH18-17: 1.11% copper, 1.0 g/t gold, 7.7 g/t silver and 0.08% zinc over 3.0 metres. The best intersection in the hole was 1.33% copper, 0.6 g/t gold, 8.3 g/t silver and 0.29% zinc over 0.7 metre.
Hole PH18-42: 1.16% copper 0.3 g/t gold, 8.3 g/t silver and 0.29% zinc, with two higher grade inclusions. The best one was 1.19% copper, 0.3 g/t gold, 7.9 g/t silver and 0.48% zinc over 1.0 metre.

Results from the zinc zone include:

Hole PH18-12: 6.90% zinc, 0.14% copper, 7.7 g/t silver and no gold over 3.22 metres. The hole best 1.0-metre inclusion was 16.10% zinc, 0.16% copper and 1.2 g/t silver.
Hole PH18-34: 14.54% zinc, 0.40% copper and 105.9 g/t silver and less than 0.1 g/t gold over 1.68 metres. The best zinc grade in a 0.9-metre inclusion was 23.60%
Hole PH18-38: 10.21% zinc, 0.42% copper, 10.7 g/t silver and less than 0.1 g/t gold over2.76 metres. There was a 1.0-metre inclusion that tested 12.50% zinc, 0.50% copper and 14.1 g/t silver.
Hole PH18-40: 2.57$ zinc, 0.72% copper, 21.6 g/t silver and less than 0.1% gold over 2.57 metres. The best inclusion was 13.90% zinc, 0.74% copper, 17.5 g/t silver over 0.6 metre.

Champion says the data acquired in 2017 and 2018 demonstrates the presence of a 50-metre thick zinc-bearing unit with several high grade lenses. It has an overall zinc grade of 0.22%. The zinc zone may reach from near surface down to 630 metres. The target remains open in all directions. The geology at Powderhorn is said to be similar to that at the former Buchans mine.

(This article first appeared in the Canadian Mining Journal)

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Iamgold cuts Westwood workforce by 32%

Iamgold Corp. has announced a 32% reduction in the workforce at its Westwood gold mine 40 km east of Rouyn-Noranda and only 2.5 km east of the former Doyon gold mine. The process is to begin this week.

A planned reduction due to the stage of mine development and a realignment due to the 2019 guidance numbers were considered in making the decision, said Iamgold. Westwood production is to be between 100,000 and 120,000 oz. of gold this year. The workforce reduction is also intended to be a cost control measure.

Iamgold is developing a revised life of mine plan for Westwood, and it is due in Q4 2019.

At the end of 2018, Westwood had proven reserves of 1.3 million tonnes grading 7.9 g/t gold and probable reserves of 3.6 million tonnes grading 7.5 g/t gold. There are an estimated 1.2 million oz. of gold contained in the reserves.

(This article first appeared in the Canadian Mining Journal)

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