Velocity Minerals Scores Key Strategic Investment

Atlantic Gold Corp.

Source: Peter Epstein for Streetwise Reports 01/17/2019

Peter Epstein of Epstein Research discusses the strategic investment this gold explorer just received.

Velocity Minerals Ltd. (VLC:TSX.V; VLCJF:OTCQB), the Bulgarian gold exploration and development company, with a strong PEA on its Rozino project, and six additional near-surface gold prospects, announced a key strategic investment by Atlantic Gold Corp. (TSX-V: AGB; OTCQB: SPVEF).

A Vote of Confidence in Velocity Minerals

Atlantic Gold is a C$400 million company with proven mine building capabilities. It produced 90,531 ounces of gold in 2018 at a very low all-in sustainable cost of US$521–US$566/oz. The mine was built on time and on budget and production metrics are exceeding Feasibility levels. The mine is being expanded to 200,000 ounces/year.

This is a significant de-risking event for Velocity as it will receive a C$3.9 million equity investment at a premium to its market price, plus a C$5.1 million 5-year secured 8.5% convertible bond investment with a conversion price of C$0.25/share (a 35% premium). The convertible bond has no strings attached (no warrants or other equity kickers). In total Velocity will receive C$9 million from Atlantic Gold.

Velocity CEO Keith Henderson stated, “We are delighted to welcome Atlantic Gold as a strategic investor in the company. Atlantic’s development expertise in Nova Scotia complements our exploration success in Bulgaria. Our corporate strategies are aligned, with Velocity’s development objectives mirroring Atlantic’s successful hub-and-spoke approach of satellite deposits feeding a centralized processing plant. The proceeds from the financing will allow for the progression of our PEA-stage Rozino gold project toward feasibility and for exploration and resource definition of several additional projects. We believe that 2019 will be a transformative year for Velocity.”

$9 Million in Proceeds Will Go a Long Way….

Upon deployment of the C$9 million, Atlantic Gold will own 39.2% of Velocity Minerals on a partially diluted basis. Atlantic Gold and Velocity plan to work closely together to advance Velocity’s Rozino project through Feasibility studies and ultimately, if warranted, construction and commissioning.

Proceeds from the Strategic Investment will be used to fund the advancement of the Rozino gold project towards Feasibility and permitting, including resource expansion and definition drilling, engineering studies, and environmental monitoring and assessment. In addition, Velocity will proceed with exploration and assessment of satellite deposits where Velocity has negotiated option rights.

From the press release,

“Velocity envisions staged open pit mining of satellite deposits and processing in a central CIL plant. An existing, operating processing plant is available through an Exploration and Mining Alliance with its established Bulgarian operating partner. Velocity’s strategy is to build a production profile of more than 100,000 ounces of gold per year for over 10 years.”

Atlantic Gold was drawn to Velocity’s Rozino project due to the attractive features of its PEA.

PEA Based on Just a Six-Year Mine Life

AISC in the range of ~USD$550-650/oz, in the lower decile of industry costs

Low initial capex

Low strip ratio deposits with a 1.51 g/t Life …read more

Mining the Americas in 2019 — a forecast

Analysts at Fitch Solutions are feeling bullish from spot levels on nickel, lead, copper, tin and gold over 2019, but are bearish on iron and coal, according to new reports on mining the Americas.

The outlook for Americas mining remains positive over the coming years, but miners will face challenges from tension over water usage from local communities if El Niño strikes and political uncertainty stemming from recent election outcomes and corruption scandals. Chile and Canada will stand out as leaders in integrating innovative technology and alternative less polluting energy sources into mining operations

Fitch forecasts the mining industry recovery will continue on track, supported by a strong project pipeline and a positive outlook for prices from 2018’s rout.

The analysts predict miners will remain committed to supply and capital restraint, prioritising joint ventures and brownfield investment, and that a strong demand for cobalt, driven by the rapidly growing electric vehicle and battery storage sectors, will prompt significant investment in this nascent mineral sector in the Americas.

Copper will remain at the forefront with firms sprinting towards acquiring additional capacity for the same reason, the report reads.

Canada’s cobalt sector and Ecuador’s budding mining sector for copper and gold will be investment hot spots, analysts contend. Peru and Chile will continue to attract copper investment, currently accounting for 64% of new copper projects for Latin America in Fitch’s Global Mines Database.

Chile and Canada will stand out as leaders in integrating innovative technology and alternative less polluting energy sources into mining operations in a bid to remain profitable over the long term as the world transitions to a low carbon economy, Fitch forecasts.

Less rainfall could spell higher energy costs and lower mining production for miners in countries such as Brazil, Colombia, and Ecuador. Chile and Peru stand to benefit from the increased tax revenue generated from higher copper prices while Brazil will be hurt by a fall in iron ore, as the metal is the cornerstone of Brazilian mining.

The US mining industry will not fare as well in 2019, as Fitch forecasts thermal coal prices declining on top of a structural decrease in thermal coal consumption by the country.

Read the full report here.

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MineHub and IBM to introduce global mining and metals supply chain solution with blockchain

MineHub Technologies and IBM (NYSE: IBM) today announced a collaboration to use blockchain technology to help improve operational efficiencies, logistics and financing and reduce costs in the high-value mineral concentrates supply chain — from mine to end buyer.

Goldcorp Inc. (TSX: G), ING Bank (NASD: ING), Kutcho Copper Corp. (TSXV: KC), Ocean Partners USA Inc. and Wheaton Precious Metals Corp. (TSX: WPM) are working with mining technology company MineHub to build the new mining supply chain solution on top of the IBM Blockchain Platform. Each of the participating companies represent key areas of the supply chain from mining, streaming, trade and finance. Each of the participating companies represent key areas of the supply chain from mining, streaming, trade and finance.

“We are working with some of the most forward thinking and innovative companies from each area of the mining and metals industry. By digitizing the supply chain, we can increase the level of automation, reduce reliance on intermediaries and increase the speed at which goods are transferred from miners to end buyers.

This creates the opportunity for transformative efficiencies and cost reductions throughout all aspects of operations,” said Vince Sorace, founder and CEO of MineHub in a press release. “This is a significant advancement for an industry looking to integrate and use data in ways not previously possible”.

The first use case will be built on the MineHub platform and will manage concentrate from Goldcorp’s Penasquito mine in Mexico throughout its path to market.

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WPC Resources rebrands as Blue Star Gold

Vancouver-based WPC Resources Inc. (TSXV: WPQ) announced on Wednesday that effective January 18, 2019, the company will change its name to Blue Star Gold Corp.

Blue Star will be a Vancouver-based gold and silver exploration company focused on mineral exploration and development in Nunavut, Canada. Through its subsidiary, Inukshuk Exploration Inc., the company will own the 8,015 hectare Hood River gold property located contiguous to the Ulu mining lease. Blue Star will have a definitive agreement to acquire the Ulu, an advanced gold and silver project.

The new name better represents the company’s dedication and focus on Canada’s north with its potential for significant, world-class gold and silver deposits. The new name of the Company was taken from the official flag of Nunavut. Through its subsidiary, Inukshuk Exploration Inc., the company will own the 8,015 hectare Hood River gold property located contiguous to the Ulu mining lease

The company is undertaking its name change to reflect its other announced major changes to its management team and to the board of directors. In October 2018, Zara Kanji, CPA, CGA, joined the company as its new Chief Financial Officer and Mike C. Stewart, P.Eng has joined as corporate secretary.

Blue Star will be listed on the TSX Venture Exchange with the trading symbol: BAU. There will be no change to the number of shares issued and outstanding.

“Our board and Management team are fully committed to expansion of the measured and indicated resources of the Ulu property. At the same time, we plan to explore and drill the several high-grade gold occurrences within both the Ulu property and the Hood River Concessions.” Stephen Wilkinson, president and CEO said in the press release.

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NorZinc signs land use agreement with Dene

Vancouver-based NorZinc has signed a traditional land use agreement with the Nah?a Dehé Dene Band in Nahanni Butte. The agreement covers the construction and operation of an all season road connecting the Prairie Creek zinc-lead-silver mine and the Liard Highway. The mine is located 200  km west of Fort Simpson.

The agreement codifies the Band’s support for an all season road. It  is supplemental to the original impact benefits agreement of 2011 that was drawn up when access was anticipated via a winter road.

NorZinc and the Nah?a Dehé Dene Band will establish a committee to oversee both the land use and impact benefit agreements.

A signing ceremony was held on Jan. 15 in Nahanni Butte. A formal ceremony is planned in Vancouver during the AME Roundup 2019 conference at the end of January.

This article originally appeared in the Canadian Mining Journal. 

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New software uses machine learning to refine loading and haulage processes

Tech company Micromine announced the launching of a new underground mining precision performance software that uses machine learning to refine loading and haulage processes. The program is part of the company’s fleet management and mine control solution, Pitram, as was initially designed by a master’s student at the University of Western Australia.

In a press release, Micromine explained that by using the processes of computer vision and deep machine learning, onboard cameras are placed on loaders to track variables such as loading time, hauling time, dumping time and travelling empty time. The video feed generated is then processed on the Pitram vehicle computer edge device and the information is transferred to Pitram servers for processing and analyses.

“By capturing images and information via video cameras and analysing that information via comprehensive data models, mine managers can make adjustments to optimise performance and efficiency,” the Australian firm’s Chief Technology Officer Ivan Zelina said in the media statement. “It also provides underground mine managers with increased business knowledge, so they have more control over loading and hauling processes and can make more informed decisions which, in turn, improves safety in underground mining environments.”

According to Zelina, the technology was already tested through pilot programs in Australia, Mongolia, and Russia and the results showed enhancements in mining companies knowledge of their loading processes through automated data collection and analysis.

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Precipitate Gold purchases gold-copper project in the Dominican Republic

Precipitate Gold (TSXV: PRG) and Everton Resources signed the final papers through which the former acquired ownership of all of Everton’s Dominican Republic exploration concessions, consisting of Pueblo Grande project, adjoining Barrick and Goldcorp’s Pueblo Viejo gold-silver mine, and the Ponton project, located 30 kilometres east of Pueblo Grande.

“We are pleased to have completed our due diligence, satisfied all requirements, and attained the necessary government and regulatory approvals to close this transaction and acquire a 100% interest in this exciting new landholding adjacent to one of the largest gold-silver mining operations in the world,” Precipitate’s President and CEO, Jeffrey Wilson, said in a media statement.

According to Wilson, while the transaction was being finalized, his company’s technical team has been designing proposed first phases of work within certain priority target areas. They expect work activities on the ground to commence soon.

The Vancouver miner’s CEO also said that the immediate exploration priority will be the area directly west of Barrick’s mining pits, where a notable geophysical magnetic high coincides with an equally substantial area of advanced argillic lithocap alteration.

“This highly prospective lithocap target area measuring approximately 2.5 km by 3.0 km has seen little systematic exploration and will be the focus of initial phases of work,” Wilson stated.

The Pueblo Grande concessions cover an area of about 9,863 hectares and are located in the central Sanchez Ramirez province, some 50 kilometres north of the capital city of Santo Domingo.

To complete the transaction, Precipitate has to deliver to Everton C$25,000 cash and issue seven million common shares subject to sale legend restrictions for up to 3 years.

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B2Gold hits record gold output in 2018 thanks to new Mali mine

Mid-tier Canadian miner B2Gold (TSX:BTO)(NYSE: BTG) reported Wednesday record gold production in 2018 of 953,504 ounces, a figure the company says was near the top end of the revised guidance of between 920,000 and 960,000 ounces.

This is the 10th consecutive year the Vancouver-based miner achieves record annual production, with output this time climbing 51% thanks to the contribution of its 80%-owned Fekola mine in southwestern Mali.

This is the 10th consecutive year the Vancouver-based miner achieves record annual production, with output this time climbing 51%.

Full-year consolidated gold revenue totalled $1.2 billion ore 92% more than in 2017, marking a new company record.

In its first full year of commercial production, Fekola exceeded expectations, as it produced 439,068 ounces, while B2Gold  expected a maximum of 430,000 ounces.

The company’s Masbate mine in the Philippines also topped guidance, achieving record yearly gold production of 216,498 ounces.

B2Gold’s other African asset, the Otjikoto in Namibia, produced 167,346 ounces, reaching the mid-point of its production guidance range.

For 2019, the miner forecasts gold production of between 935,000 and 975,000 ounces at all-in sustaining costs estimated at between $835 and $875 per ounce.

The company noted it planned a year of aggressive exploration,  with a budget of approximately $43 million, from which almost half will be spent in Mali, Burkina Faso and Ghana.

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Ford to lead blockchain pilot that traces cobalt mined in Congo

Ford to lead blockchain pilot that traces cobalt mined in Congo

Automaker Ford has partnered up with IBM, South Korean battery maker LG Chem and China’s largest cobalt producer Huayou Cobalt to test the first blockchain project to trace supplies of the metal from Democratic Republic of Congo (DRC).

The pilot, overseen by multinational responsible-sourcing group RCS Global, seeks to help manufacturers ensure the cobalt they use is not linked to human rights abuses.

On the simulated sourcing scenario, cobalt produced at Huayou’s mine in the DRC will be traced through the supply chain as it travels from mine and smelter to LG Chem’s cathode plant and battery plant in South Korea, and finally into a Ford plant in the United States.

An audit trail will be created on the blockchain, which will include corresponding data to provide evidence of the cobalt production from mine to end user.

Pilot is the latest effort to use blockchain to improve the transparency of global supply chains, especially in the mining industry.

“With the growing demand for cobalt, this group has come together with clear objectives to illustrate how blockchain can be used for greater assurance around social responsibility in the mining supply chain,” Manish Chawla, GM, Global Industrial Products Industry at IBM, said in the statement.

The move is the latest effort to use blockchain to improve the transparency of global supply chains, especially in commodities.

Blockchain, the technology behind cryptocurrency bitcoin, provides a shared record of data held by a network of individual computers rather than a single party.

There already are some examples of the use of blockchain in the mining industry, with world’s No. 1 diamond producer by value De Beers testing its Tracr platform, which allows tracing gemstones throughout the entire value chain — from mine to buyer.

Eyes on the DRC

The DRC generates more than 60% of the world’s cobalt, but much of it is sent to China to be processed by multiple companies before it is used in batteries. In addition, up to 20 per cent of the DRC’s cobalt is mined by hand, often by children with picks and shovels.

Congo generates about two-thirds of the world’s cobalt, but much of it is sent to China to be processed by multiple companies before it is used in batteries.

Cobalt, a by-product of copper or nickel, is in high demand for its use in lithium-ion batteries, which power a wide range of products such as laptops, mobile devices, and electric vehicles (EVS). Currently, about two-thirds of it comes out the DRC. However, due to the region’s intense poverty and the mineral’s soaring price, thousands of impoverished Congolese have flocked to the cobalt rich areas to secure an income.

Traditionally, artisanal miners have sold their ore to local co-operatives, which then sell it to local merchants and traders. They, in turn, sell to international traders or operating mines with established transport links and the artisanal mined cobalt ends up being exported to China as concentrate.

In 2014, UNICEF estimated that around 40,000 children were involved in artisanal mining in …read more

Exploring for World-Class Gold, Silver and Copper Deposits in Nicaragua

Source: Maurice Jackson for Streetwise Reports 01/16/2019

Ryan King, vice president of corporate development at Calibre Mining, sits down with Maurice Jackson of Proven and Probable to discuss his company’s joint ventures, exploration in Nicaragua and strategic plans.

Maurice Jackson: Joining us today is Ryan King. He is the vice president, corporate development, of Calibre Mining Corp. (CXB:TSX.V; CXBMD:OTC), which is exploring for world-class gold, silver and copper deposits in Nicaragua.

For someone new to the story, who is Calibre Mining and what is the thesis you’re attempting to prove?

Ryan King: Calibre Mining’s thesis is twofold. One, we’re exploring for world-class discoveries in Nicaragua. We just had over 8 million ounces of produced gold in this district that we’re exploring.

Second, we believe Nicaragua provides optionality right now for our shareholders. Our team has a proven track record of successfully acquiring, advancing, optimizing and selling projects. Recently, Calibre has gone through a restructuring. We’ve added some new people to our team. We are trying to duplicate what we’ve done in our last deal called New Market Gold. That is go out and buy advanced stage development or producing gold opportunities and optimize those operations, spend money on them, drill them, find more resources, and potentially we’d love to merge or sell the company after we’ve spent some time adding value to the company.

Maurice Jackson: You referenced Nicaragua. Provide us with some historical context on the region in which your project portfolio is located.

Ryan King: For those who don’t know, Nicaragua does have a bit of a checkered past. It’s gone through different political situations, it’s gone through different civil war during the 1950s and 1960s. There is a significant period of time where there was no mineral exploration. It was a country that was difficult to work in.

However, over the years, we’ve seen gold developers and gold producers go there, Falconbridge and others, and there’s been some great gold development. There’s been some great gold production. We have a couple projects around us, and actually within portfolio, that has produced multi-million ounces, produced copper. But it has been underexplored for a number of decades.

One of the virtues of Calibre Mining is that we are on the Ring of Fire, a well-known phrase that’s used within the geological and mining community known for hosting large copper-gold deposits.

Calibre was able to pick up this land package from Yamana in 2009, which had recently done some restructuring. I believe it had recently merged with a company back in 2007, 2008. After the merger Yamana was looking at doing different things. There was no production in the portfolio there in Nicaragua currently or was there any at the time that we had fired these. These are just exploration projects around and within concessions that has seen historical production.

Maurice Jackson: Calibre’s flagship Borosi project has district-scale discovery potential in Nicaragua. Where are your projects located …read more

IAMGOLD announces $170m gold prepay arrangement

IAMGOLD Corporation (TSX: IMG) today announced that it has entered into a forward gold sale arrangement with financial institutions whereby the company will receive a prepayment amount of $170 million in exchange for delivering 150,000 ounces in 2022, with a gold floor price of $1,300 per ounce and a cap price of $1,500 per ounce.

The prepaid gold arrangement is supported by a syndicate of banks including Citibank N.A. and National Bank of Canada. According to the press release, terms of the prepay are:

Funding of $170 million is provided to IAMGOLD in December 2019 in exchange for physical delivery of 150,000 ounces of gold over the period of January 2022 to December 2022.
Delivery can be made from the production of gold from any of IAMGOLD’s operating mines.
The cost of the Prepay arrangement is 5.38% per annum, which is based on the date the prepayment is advanced, quantity of ounces settled and timing of delivery.
The collar on the prepay at the time of delivery of ounces occurs as follows:

If the prevailing gold price equal to or less than $1,300 per ounce, there is no incremental payment to IAMGOLD or from IAMGOLD;
If the prevailing gold price is greater than $1,300 per ounce but less than $1,500 per ounce, the syndicate pays IAMGOLD the difference between the prevailing gold price and $1,300;
If the prevailing gold price is greater than $1,500 per ounce, the syndicate pays IAMGOLD the incremental difference between $1,300 and $1,500, or $200 per ounce.

The funding is expected to be accounted for under IFRS as deferred revenue.

“Entering into the gold prepay provides additional liquidity to IAMGOLD at attractive terms to support the execution of the company’s growth strategy, while also mitigating any downside price risk below $1,300 an ounce on 150,000 ounces of production,” said Carol Banducci, EVP and CFO in a media statement.

On Tuesday, gold was trading at $1,292 per ounce, not far off a six-month high.

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