Gold Summary for July 2, 2019

ew York spot gold leapt $34.40 to $1,418.10 on Tuesday. The TSX Venture Exchange fell 0.01 point to 585.46 while the TSX Gold Index added 0.01 point to 220.51. Barrick GoldCorp. (ABX) was among the Canadian gold miners in retreat today. It lost 20 cents to $20.47 on 8.57 million shares. New Gold Inc. (NGD) was another. It lost three cents to $1.24 on 3.83 million shares. Eldorado Gold Corp. (ELD) was among those managing to post gains today. It rose 58 cents to $8.19 on 4.26 million shares.

Benjamin Mossman’s Rise Gold Corp. (RISE) has inched closer to reopening the old Idaho-Maryland goldmine in northern California. Mr. Mossman, chief executive officer, says that the company has completed an initial surface drilling program spanning just over 20,000 metres, and it has “estimated a significant initial exploration target” — not to be confused with an actual resource estimate. These two key steps — beware the coming gaggle of weasels — aid the company’s “strategy to advance the Idaho-Maryland goldproject toward the reopening of the mine.”

Rise has a good handle on the tonnage of its not-yet-a-resource target, listing between 2.28 million and 3.41 million tons of mineralized material, about half of which resides within wide intervals averaging about nine metres in true width and being potentially amenable to long-hole mining methods. The rest of the rock has a true width of about three metres and would likely require “more selective” — more expensive — mining methods.

The question, of course, is grade, and Mr. Mossman, CEO, says that the grade of the mineralized material cannot reliably be estimated without more extensive sampling. He quickly suggested for those perhaps interested in an unreliable estimate, that Rise’s latest drilling shows high-grade gold comparable with grades encountered in historical operations at the old mine. (Taking it a step further, the old mine produced 2.4 million ounces of gold, and in a four-year stretch from 1937 through 1941, the mine averaged 100,000 ounces of gold per year at an average of 17 grams per tonne.)

It was only a matter of time, of course: This morning, the regulators prodded Mr. Mossman and his crew to clarify the “conceptual in nature” grade. It varies between 6.5 and 10.3 grams of gold per tonne, yielding a possible range of between 432,000 and 1.02 million ounces of gold.

The Vancouver-based Mr. Mossman, now 41, arrived three years ago as CEO at $120,000 per year and he added the title of president the following year, getting a raise to $180,000 per year. He could be worth every penny, if he gets Idaho-Maryland producing again in California. The a state was founded on goldmining, but now ranks toward the bottom of mining-friendly jurisdictions.

Bahman Yamini’s Canasil Resources Inc. (CLZ), down one-half cent to six cents on 109,000 shares, is selling its Sandra-Escobar silver and gold project in Durango, Mexico to Pan American Silver Corp.(PAAS: $17.08) for $2-million in cash and a 2-per-cent net smelter return royalty. Mr. Yamini, CEO of Canasil, is pleased with the sale, as it “provides significant non-dilutive funding” to maintain and advance the company’s drill-ready, high-grade precious metals prospects in Mexico and prospective gold and copper projects in British Columbia. (While that spin may be true for investors intrigued by the company’s other Mexican silver and gold properties, the dilution is total for those who were bullish on Sandra-Escobar.) A now three-year-old resource estimate for Sandra-Escobar listed 9.8 million tonnes inferred at 106 grams of silver per tonne, or 33.3 million ounces of silver.

The Vancouver-based Mr. Yamini had been earning $150,000 per year in salary as Canasil’s CEO, but he got a bump to $225,000 per year in 2017. The company’s chart, which shows Canasil’s stock far below its 2016 high of 73 cents, suggests that Mr. Yamini’s shareholders cannot be pleased.

Dr. Quinton Hennigh’s Novo Resources Corp, (NVO) — a new paradigm in gold exploration and investing — has a tentative deal covering gold-bearing lag gravel deposits adjacent to its Egina goldproject in Australia’s Pilbara district. Novo, up six cents to $2.17 on 280,000 shares today, is acquiring the right to explore the tenements held by Australia-based De Grey Mining Ltd. over an initial three-year period, for $1-million. (The agreement can be extended in two-year increments, each for a further payment of $1-million.)

The De Grey landholding is immediately adjacent to Egina, reminds Dr. Hennigh, chairman and president of Novo — merely being adjacent not being enough. He says that with the deal, Novo is effectively adding 110,000 hectares of additional exposure to gold-bearing gravels in the area. He says that Novo plans to evaluate the gold content and the continuity of shallowly-occurring gravels at Egina in the coming months, adding that the program can easily be expanded to the new ground. Although this is an unusual style of gold mineralization, Dr. Hennigh says, “we are very excited by the potential the terrace deposits have to offer.”

 

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