What ‘due diligence’ means for the tin supply chain

The International Tin Association and the Responsible Minerals Initiative joined forces to develop a set of guidelines aimed at clarifying what ‘due diligence requirements’ mean for the tin supply chain. 

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“These Criteria are designed to align with the internationally recognized OECD (Organisation for Economic Co-operation and Development) due diligence guidance, assist with the new London Metal Exchange (LME) responsible sourcing requirements, and satisfy other upcoming requirements such as the EU Minerals Due Diligence Regulation,” ITA and RMI said in a media statement.

The OECD has 36 members, mostly countries with high-income economies and very high Human Development Index

The criteria enable audit firms and their individual auditors to conduct rigorous and consistent checks on whether any smelter has implemented OECD supply chain due diligence. 

The OECD conformance criteria specify that steps to establish policies and management systems, conduct a red flag review based on the collection of relevant supply chain information, and report on due diligence have to be implemented by all companies that meet the definition of a primary smelter, regardless of the source of their minerals.

The criteria also provide guidelines when it comes to the steps to be taken to collect additional supply chain information, conduct a risk assessment, establish an on-the-ground assessment team to assist in reporting and managing identified risks, as well as undergoing independent third-party assessments when companies are sourcing minerals known or suspected to be from a conflict-affected and high-risk area.

Incorporating these ground rules, the ITA and RMI “Assessment Criteria for Tin Smelting Companies” presents five steps that smelters are required to follow, namely:

Establish strong company management systems, which requires companies to adopt and commit to a supply chain policy for minerals originating from conflict-affected and high-risk areas; structure internal management to support supply chain due diligence; establish a system of controls and transparency over the mineral supply chain; strengthen company engagement with suppliers; and establish a company-level grievance mechanism.Identify and assess risks in the supply chain, meaning that companies should identify and assess risks on the circumstances of extraction, trading, handling and export of minerals from conflict-affected and high-risk areas; identify the scope of the risk assessment of the mineral supply chain; map the factual circumstances of the company’s supply chains, underway and planned; and assess risks in the supply chain.Design and implement a strategy to respond to identified risks, particularly where a red flag review confirms the need for a risk assessment on minerals known or suspected to be from problematic areas. This entails that companies have a duty to report findings to designated senior management; devise and adopt a risk management plan; implement the risk management plan, monitor and track performance of risk mitigation efforts and report back to the designated senior management of the company and consider suspending or discontinuing engagement with a supplier after failed attempts at mitigation; and undertake additional fact and risk assessments for risks requiring mitigation or after a change of circumstances.Carry out independent, third-party audit of smelter’s due diligence practices where a red …read more

New Zealand launches new mineral strategy, industry cautious

The New Zealand government recently issued its 2019-2029 Minerals and Petroleum Resource Strategy, which highlights the importance of the mining and oil sectors to the country’s goal of transitioning into a low-emissions economy. 

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According to the document, the island-nation could soon start exploring opportunities to meet its domestic and the global demand for clean-tech minerals such as cobalt and lithium. 

“As the energy system transforms, we also need to make sure we have the minerals (such as rare earth elements) necessary to produce the technology we need to power our future. To meet these challenges, the minerals and petroleum sector needs to plan now, in order to build a more productive, sustainable, and inclusive economy.”

Besides battery metals and REE, the proposal acknowledges the need for fossil fuels and base metals. “We need to make sure we have the aggregate (crushed rock and stone) required, or alternative replacement material, to build the foundations of our houses and roads. We need coal to make the steel necessary to build our cities, but we should start to investigate alternative methods of steel production which reduce environmental impacts.”

The document emphasizes the importance of protecting the environment and properly consulting communities surrounding mining projects and Indigenous communities whose heritage could be affected by extractive activities.

In this regard, the strategy provides a number of principles that should guide mining operations. Namely, it asks miners to pursue continuous improvements in health and safety and to seek innovative ways to improve the resource efficiency of extraction operations, while minimizing their negative impacts.

Where impacts cannot be avoided, industry is being asked to engage with stakeholders and implement management systems to understand and manage the negative effects of their operations, while realizing opportunities for redress.

The Kiwi government says it plans to achieve those grand objectives by modernizing the Crown Minerals Act; securing affordable resources to meet the country’s mineral and energy needs; improving Treaty Partnerships and stakeholder and community engagement; improving industry compliance; and promoting research and investment in better mining and resource use. 

Industry cautious 

In response to the strategy, Straterra, New Zealand’s minerals sector industry organization, issued a communiqué saying its members “cautiously welcomed” the document.

Even though the group applauds that the strategy recognizes the importance of minerals to society and shows a willingness to work with the sector, it laments the fact that it stays the executive’s support to the No New Mines on Conservation Land policy. This proposed regulation was announced in 2017 soon after Prime Minister Jacinda Ardern took power but it still hasn’t come into effect.

“The resource sector faces a number of reforms, the objective of which is to improve environmental outcomes. The reality is that many aspects of these reforms will simply result in reduced or zero investment,” Straterra’s CEO, Chris Baker, said in the statement. “We hope that this Resource Strategy goes some way to influencing the balance that is required in these reforms, to get better environmental outcomes and to attract more responsible investment.”

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Artisanal gold mining polluting Peruvian biodiversity hotspot -study

Researchers at Dartmouth College analyzed satellite data and discovered that artisanal mining is altering the water clarity and dynamics of the Madre de Dios River watershed in the Peruvian Amazon.

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In a paper published in the Proceedings of the National Academy of Sciences, the researchers explained that higher levels of suspended sediment were found in rivers near the mining sites. The sediments contain mercury and other contaminants. 

According to the Center for Amazonian Scientific Innovation, Canada’s NGO Artisanal Gold Council has registered that some 181 tonnes of mercury are released into the environment every year in the Madre de Dios region.

Scientists consider the Madre de Dios River area one of the most understudied tropical biodiversity hotspots in the world

Such a massive, cumulative amount of pollutants is showing its effects now. “Significant impacts to rivers were observed as a result of the artisanal scale gold mining, with as much as 10 times normal suspended sediment concentrations—a measurement of how many sediment particles are in the water,” the Dartmouth scientists said in their report. 

According to their study, though higher sediment concentrations were observed year-round, they were most pronounced during the dry season, when undisrupted rivers in this region of southeastern Peru generally run clear, with low sediment concentrations as compared to the wet season. 

“Most artisanal-scale gold mining in Madre de Dios is conducted during the dry season, as the heavy machinery that is required to clear the land for operations cannot be used during the wet season. As a result, the mining activity is triggering a reversal of natural seasonal cycles, turning clear water muddy and disrupting the hydrological activity of the riverine ecosystems,” the experts wrote.

How they did it

To reach these conclusions, the Dartmouth scholars used satellite imagery from 1984 to 2018 at 32 river reaches in the Madre de Dios River watershed, which is located near the largest tributary to the Amazon, the Madeira River. This effort meant analyzing over 15,500 samples from 3,200+ NASA LandSat images, including images of the same sites through time. 

Based on the spectral reflectance properties of rivers and sediment, the estimated amount of sediment was calculated using algorithms developed for the study, and changes were tracked over the 34-year study period.

The findings demonstrated that 16 of 18 stretches of rivers near artisanal-scale gold mining areas had higher levels of suspended sediment concentrations. By comparison, for the 14 sites studied that had not been affected by mining, only five were found to have higher levels of sediment over time. The increase in sediment in rivers downstream of the artisanal scale gold mining areas was found to be related to the area of upstream land being mined. 

“Though these mining operations are called ‘artisanal,’ they are occurring on a widespread scale, and our data shows that sediment introduced into the rivers of the Madre de Dios region is profoundly changing important natural systems,” Evan N. Dethier, the lead author of the study said in a media statement. “Similar to deforestation for …read more

Detour Gold stock hits two-month high on strong Q3 results

Shares of Detour Gold (TSX: DGC) surged over 11% to a two-month high on Friday following the release of the company’s third quarter operational and financial results. For the quarter in review, the Toronto-based gold miner reported adjusted earnings of $35.3 million, compared to a net loss of $1.5 million in the same quarter last year, beating analysts’ estimates.

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The company is currently focused on its wholly owned Detour Lake mine in Ontario, situated in the same area as the historic Detour Lake open-pit/underground mine operated by Placer Dome which produced 1.8 million oz gold from 1983 to 1999.

During the third quarter, Detour Gold incurred all-in sustaining cost (AISC) of $1,198/oz and total cash cost of $730/oz, representing a 13% and 9% improvement respectively over the prior-year period

During the third quarter, Detour Gold incurred all-in sustaining cost (AISC) of $1,198/oz and total cash cost of $730/oz, representing a 13% and 9% improvement respectively over the prior-year period. Accordingly, the company reduced the AISC and cash cost guidance range for the year to reflect its enhanced operating performance.

Gold output reached 137,670 oz in Q3 2019, in line with the forecast grade profile, and the company has also decided to increase the lower end of its full-year production guidance to 590,000-605,000 oz.

Despite the lower ounces produced quarter over quarter, the company says it has made “very good progress” on reducing absolute costs, and this quarter represents its highest ever cash cost margin per ounce.

Contractor management improved significantly in Q3, and based on the work to date, the company expects to save approximately C$15 million to C$20 million per annum from 2020 onwards on contractor spend, representing C$300 million in value life-of-mine.

Subsequent to quarter end, the company received approval from the Ontario government for its updated closure plan for the Detour Lake mine.

Detour Gold has a current market capitalization of C$3.8 billion.

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Russian steel giant MMK to spend $600 million on environmental projects

During the company’s Capital Markets Day in London on Friday, Magnitogorsk Iron & Steel PJSC, (MMK) Russia’s oldest steelmaker, told analysts, investors and press that its strategy is focused on sustainable development principles which “reflect a balance between improvement in operational and financial performance and social responsibility, along with environmental protection.”

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A key strategic priority for MMK is to improve the environmental situation in Magnitogorsk, the steel giant said.

“We continue to implement our large-scale investment programme focused on upgrading and improving efficiency of sinter, coke and blast-furnace production processes. In particular, this is supported by using the best available technologies,” said chairman of the board of directors Viсtor Rashnikov.

Since 2000, the company has reduced its impact on the city’s air by half, while reducing discharge of pollutants into water fivefold

Earlier this month, MMK said that official data shows the Comprehensive Air Quality Index (CAQI) indicator for Magnitogorsk has almost halved over the past two years, indicating a twofold improvement in air quality. The reading is the lowest in the history of Magnitogorsk.

Before 2000, MMK was known as a serial polluter, with steel factories near Russia’s Urals Mountains so polluting that the snow-capped peaks turned shades of reddish brown from rust and soot, Bloomberg reported.

MMK cleaned up the mountains starting in the early 2000s and is now going ahead with a program to clean the air from the sulfurous fumes and recycle water, spending $600 million on environmental projects by 2025.

The company said implementation of its environmental initiatives should allow MMK to reduce its air emissions and discharge of water pollutants by an additional 20% and 70%, respectively, by 2025.

The news comes only a week after Russia ditched plans to set greenhouse-gas emissions targets for companies as a sign of its commitment to fighting climate change, following lobbying from big businesses that risked fines if they didn’t comply.

(With files from Bloomberg)

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Nemaska Lithium shares hit new low, says project shutdown “within weeks”

Canadian lithium developer Nemaska Lithium (TSX: NMX) said on Friday its Whabouchi project in Quebec would be put on care and maintenance before the end of the year, as financing discussions with investment firm Pallinghurst continue.

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Montreal-based Nemaska said, “in the coming weeks, the Whabouchi site winterization and orderly demobilization will be completed”:

A small crew will conduct care and maintenance activities as well as ensuring site security. Detailed engineering will be pursued, at an adapted pace, to continue the development of project until financing is secured for both the Whabouchi mine and the Shawinigan plant.

“We continue working with Pallinghurst and our other strategic partners on completing an optimized project financing structure to be submitted to the shareholders’ approval as soon as possible,” said Guy Bourassa, president and CEO of Nemaska Lithium.

Nemaska said it also working to fulfill the last orders at the demonstration plant which has been in operation since February 2017 as well as preparing samples of lithium hydroxide to continue product qualification trials with potential end users.

As of August 31, it had incurred capital expenditure of C$392 million on a total project budget of C$1.27 billion.

The company said at the end of the September quarter it had on hand approximately $77 million in unrestricted cash and cash equivalents to finance its current activities, plus cash and cash equivalents of $40 million that it has agreed, for the moment, to maintain in a cost overrun account.

Nemaska’s stock was trading down 8.6% by early afternoon on Friday with double usual volume of shares exchanging hands. At 16c per share, the decline since the start of the year is now 80%.

After peaking at $2.35 per share two years ago with a market value approaching $2 billion, the lithium developer is now worth C$128 million on the Toronto stock exchange.

Lithium hydroxide prices have fallen 21% this year, bringing the Benchmark Mineral Intelligence LiOH index to its lowest point since February 2016.

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Nevada Copper on track to start production before end 2019

Nevada Copper on track to start production before end 2019

Nevada Copper Corp. (TSX:NCU) on Friday said it remains on track to put its Pumpkin Hollow underground mine into production before the end of the year.

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In a statement, the company said construction of the processing plant is “materially complete” and roughly 95,000 tonnes of ore has been mined and stockpiled to feed the processing plant.

Wholly-owned Pumpkin Hollow would be the first new copper mine in decades to be built in the US. Pre-production capex is pegged at $197 million and Nevada Copper says construction costs “continue to be within the range” the company announced earlier this year.

The company also announced it has entered into a binding term sheet for a $30 million credit facility arranged by major shareholder Pala Investments that provides “additional financial resources to navigate the current depressed copper price environment to address the impact of the delay in East-North Vent Shaft, and to address normal technical risks associated with ramp-up.” The facility replaces a prior equity backstop facility.

CEO Matt Gili, who joined Nevada Copper from Barrick Gold last year as part of a management overhaul and recapitalisation program, said, “We are now entering the final stages before the commencement of production at Pumpkin Hollow. Our team and contractors are continuing to deliver on schedule as we prepare for production this quarter. The addition of a credit facility, non-dilutive to shareholders, provides access to additional liquidity as we ramp up copper production during the first half of 2020.”

Ventilation upgrade on the 2850 level. Image: Nevada Copper, November 2019

The 5,000 tonnes-per-day underground mine will produce 60m pounds of copper (~27,000 tonnes) per year during the first five years of operations, as well as 9,000 ounces of gold and 173,000 ounces of silver.

The mine plan is based on total reserves of 23.9m tonnes grading 1.74% copper equivalent, with the grade averaging just over 2% copper during the first five years of production.

Pumpkin Hollow boasts an initial mine life of 13-and-a-half years, with extension potential from inferred resources estimated at 636m tonnes.

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Two schools, six producers extend RIME partnership to 2026

Two universities – Université du Québec en Abitibi-Témiscamingue (UQAT) and Polytechnique Montréal – and six mining companies – Agnico Eagle Mines, Canadian Malartic Mine, Iamgold, Glencore’s Raglan mine, Newmont Goldcorp’s Eleonore mine, and Rio Tinto Fer et Titane – have pledged to extend their funding of the Research Institute on Mines and Environment (RIME) through 2026.

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RIME, founded in 2013, is dedicated to developing environmental solutions for the entire lifecycle of a mine. New partner funding from 2020 to 2026 will total C$11.2 million for research. Additional funds will be sought from government agencies.

Over the past six years, the first phase of activities supported just over 75 students earning a masters or doctorate degree. RIME carried out 30 major projects in addition to those launched by three Canada Research Chairs and the Industrial Research Chair. Total investments were more than C$29 million, with C$10 million coming from miners and the schools and C$19 million from granting agencies.

(This article first appeared in the Canadian Mining Journal)

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Osisko Mining raises $24m from flow-through shares

Osisko Mining is raising C$32.9 million (about $24 m) through the private placement of approximately 7 million flow-through shares with a syndicate of underwriters led by Canaccord Genuity. The shares were priced at C$4.70 each. (Earlier today Osisko described the flow-through offering as being worth C$25 million with 5.3 million shares for sale. By press time, the deal had grown to the larger numbers.) This is tranche one.

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Osisko also said it had entered into a second agreement for a bought deal purchase of approximately 4.4 million flow-through shares priced at C$3.40 each for gross proceeds of C$15 million. There is also an option for taking up 662,000 flow-through shares at the same price for an additional C$4.9 million. This is tranche two.

The underwriters’ option on the first tranche has also been increased to about 1 million flow-through shares priced at C$4.70 each (up from 798,200 shares) for gross proceeds of C$15 million.

The proceeds of the sale will be spent on Osisko’s exploration projects. The company is active at the Windfall, Urban Barry Greenfields and Quevillon properties in Quebec. All are 100% owned by the company.

Osisko’s most advanced project is the Windfall gold project in the Abitibi greenstone belt 200 km northeast of Val d’Or. Mineralization has been traced to a vertical extent of 1,200 metres in four zones. Using a cut-off grade of 3.0 g/t gold, the May 2018 resource estimate included 2.4 million indicated tonnes grading 7.85 g/t gold, containing 601,000 oz. The inferred resource was 10.6 million tonnes at 6.70 g/t gold, containing almost 2.3 million oz.

(This article first appeared in the Canadian Mining Journal)

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ATAC commences resource update for Tiger deposit

ATAC Resources announced that work has started on an updated resource estimate and preliminary economic assessment for the Tiger deposit located at the Rau project within the 170,000 hectare Rackla gold property in Canada’s Yukon territory.

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The updates will incorporate the results of drilling completed in 2017 and 2019, updated metallurgical test work on the upper part of the sulphide unit and a new geologic model.

Drilling completed on the Tiger deposit in 2019 was focused on testing near-surface oxides identified outside of the area of the main deposit. Drilling also intersected oxide mineralization within the 2016 PEA pit areas that were thought to contain waste material. Surface sampling indicates the presence of oxide zones further outside of current resource and pit shell areas.

The Tiger deposit, with current measured and indicated resources of 5.68 million tonnes grading 2.66 g/t gold for a total of 485,700 oz. and inferred resources of 3.23 million tonnes at 1.8 1g/t for 188,500 oz. was evaluated in a 2016 PEA as an open pit operation with a carbon in pulp recovery process. Pre-production capital was estimated at $109.4 million with average annual gold production of 50,000 oz.

Tiger mineralization is comprised of oxide gold, fracture hosted native gold and gold-bearing arsenopyrite. Based on the 2015 resource estimate, oxide resources at Tiger total 409,100 oz.

The company also completed eight diamond drill holes to test geophysical anomalies 4 km to the east of Tiger. While the drilling returned intercepts grading on the order of 0.2 g/t to 0.3 g/t gold, ATAC believes that based on the intensity of the anomaly, there remains potential for additional mineralization at depth.

ATAC is working on development of the 185 km Rackla belt. Rackla is comprised of the Rau, Orion and Osiris projects where Rau is considered an intrusion related polymetallic district and Orion and Osiris are classified as Carlin type districts.

(This article first appeared in the Canadian Mining Journal)

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Copper price bulls take another beating

Copper price bulls take another beating

Copper bulls hung out to dry. Stock image

The price of copper fell on Thursday amid worries about China’s economic slowdown vital to overall demand for the metal widely used in the manufacturing, construction, transportation and electricity sectors.

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In afternoon trading in New York, copper for delivery in July was trading just off its low for the day of $2.61 a pound ($5,760 a tonne), down more than 4% over the last week.

The National Bureau of Statistics also outlined a drop in fixed investment from 4.8% in September to 3.7% last month. Adding to the bearishness of the numbers is the fact that state-owned firms kept capital spending largely in tact (no doubt guided by the invisible hand of Beijing), but private firms were loathe to make any new investments.

Even if a minor deal is agreed upon in the coming months, this would merely allow the focus to shift to the more intractable issues that we think will eventually lead the trade talks to break down

Chinese industrial production growth for October released on Thursday also came in way below expectations – falling to 4.7% year-on-year from 5.8% in September.

Trade worries have dogged copper price bulls for the better part of a year, and the recently announced “phase one” deal between the Trump administration and Beijing only briefly lifted spirits.

Despite strong fundamentals – weakening mine supply, threat of disruptions most notably from top producer Chile, low global stocks and robust demand outlook – spikes in the copper price this year has turned out to be temporary.

In a note Capital Economics’ senior China analyst Julian Evans-Pritchard says “not only were last month’s data weak, but further weakness lurks ahead”:

Real estate is primed for a further moderation as financing to the sector is being squeezed by a regulatory crackdown and construction growth continues to outpace sales growth.

Admittedly, optimism surrounding a phase-one US-China trade deal could provide a boost to corporate investment in the near term. But even if a minor deal is agreed upon in the coming months, this would merely allow the focus to shift to the more intractable issues that we think will eventually lead the trade talks to break down. 

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Southwest US Snapshot: Precious metals, battery metals and uranium activity

In our annual overview of exploration and mining activity in the Southwestern US, we focus on eight companies active in the region. Precious metals appear to be the exploration target of choice in the area with battery metals (vanadium and lithium) gaining prominence. 

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First Vanadium

A drill site at First Vanadium’s Carlin vanadium property, south of Elko, Nevada. Credit: First Vanadium.

First Vanadium’s (TSXV: FVAN)  flagship asset is the Carlin vanadium property, 22 km from Carlin, Nevada. The 43 sq. km property is made up of 150 mining claims. First Vanadium owns 100% of 78 of the claims, and is working to earn a 100% interest in the remaining 72 claims from a private subsidiary of Golden Predator Mining (TSXV: GPY).

The Carlin Vanadium property is host to vanadium pentoxide (V2O5) mineralization. Vanadium is used in steel production with a growing importance in energy storage for batteries. Drilling indicates the presence of a shale-hosted, shallow-dipping, near-surface mineralized unit that averages 35 meters thick, which has been traced over 1,800 meters of strike and 600 meters across, outcropping at surface. The deposit remains open. A February 2019 mineral resource estimate outlined 22.35 million indicated tonnes at 0.615% V2O5 for a total of 303 million lb. V2O5, with an additional inferred resource of 6.52 million tonnes at 0.52% V2O5 for a total of 75 million lb. V2O5. In October, the company engaged Wood Canada to prepare a preliminary economic assessment (PEA) for the project, which is expected in the first quarter of 2020.

The company also holds 100% of the 5 sq. km West Jerome property in central Arizona. West Jerome is located within an area that is host to volcanogenic massive sulphide deposits, and the company has identified a number of untested drill targets on the property. First Vanadium has a C$10.2-million market capitalization.

Kore Mining

KORE Mining’s Imperial gold property in southeast California. Credit: KORE Mining.

Kore Mining’s (TSXV: KORE) focus is gold exploration in California and British Columbia. The company’s whilly owned Imperial project in Imperial County, California is located within 16 km of Equinox Gold’s (TSXV: EQX, NYSE: EQX) Mesquite mine. Historic resources at the 206 sq. km Imperial project stand at 879,000 indicated oz. contained gold within 0.6 gram gold per tonne material with an additional 1.3 million inferred ounces within 0.53 gram gold material. The historic resource features oxide mineralization starting at 25 to 40 meters depth with an average width of 50 meters.  Parts of the deposit remain open with additional targets identified. The Imperial project covers a 28 km trend. In May, Macquarie Bank closed a $4 million strategic investment in Kore to fund the restart of permitting, which is expected in early 2020.

The company’s wholly owned Long Valley project is located in Mono County, California. Measured and indicated resources stand at 66.8 million tonnes at 0.58 gram gold for 1.25 million oz. gold and inferred resources are at 23.6 million tonnes at 0.64 gram gold for 486,000 ounces. These include an oxide gold deposit, approximately 60 meters thick, with a current footprint …read more