Gold Summary for June 26 2019

New York spot gold lost its upward momentum Wednesday, dropping $14.40 to $1,408.60. The TSX Venture Exchange rose 1.08 points to 580.07 while the TSX Gold Index slipped 0.53 point to 220.80. Most Canadian gold miners remained within a narrow range today, although Barrick Gold Corp. (ABX) did drop 27 cents to $20.81 on 10.39 million shares.

If you are an analyst or institutional investor eager to see Northwestern Ontario in June, then give New Gold Inc. (NGD:$1.17) a call as the company is offering a tour of its Rainy River mine today and tomorrow. (Bring bug spray and keep an open mind.) The mine has been the source of most of the company’s woes over the past few years. New Gold traded as high as $7.87 in 2016, thanks to initial enthusiasm about the then soon-to-be mine. Gaps downward in 2017, 2018 and early this year were the result of delays in getting the mine into production, lower than expected production when it did get running last year, and this year’s $1.07-billion (U.S.) loss triggered by a $670-million (U.S.) writedown at Rainy River. New Gold lost three cents to $1.17 on 4.65 million shares today.

David Lotan and Mike Basha’s Aurion Resources Ltd. (AU:$1.30) jumped smartly following a daylong halt waiting on new assays from its Aamurusko Northwest prospect at Risti, a gold project in northern Finland. The assays, which were from the first two holes of the 2019 drill program, ranged as high as 13.3 grams of gold per tonne over 19.5 metres, a hit that included an 8.18-metre zone that averaged 22.58 grams per tonne. The second hole produced 1.84 grams of gold per tonne over 31.1 metres. Both holes are now being deepened.

Mr. Basha, president and chief executive officer, says that a review of a wide variety of data, completed after the winter drilling, has improved drill targeting. He says that the results suggest potential for additional zones of gold mineralization along strike between Aamurusko Northwest and Aamurusko Main. Mr. Basha was particularly enthused with the “high-grade, bonanza-grade mineralization” found within wide zones of weakly mineralized but highly-anomalous gold-bearing bedrock, which he deemed to be “encouraging!” (Investors succumbed to his exclamatory enthusiasm, sending Aurion to an early morning high of $1.53, but it ended the day up just three cents to $1.30 on 551,000 shares.)

There was considerably more reason for enthusiasm last summer and fall, when Aurion drilled Aamurusko Main, 600 metres southeast of Aamurusko Northwest. Those assays included a bonanza hit of 789.1 grams of gold over 2.9 metres, accompanied by lesser but still high-grade hits of 42.4 grams per tonne over four metres and 24.5 grams per tonne over 4.75 metres. If Mr. Basha is right about the improved targeting, there could be more enthusiasm to come, as the 2019 drill program includes another eight holes at Aamurusko Northwest.

Mr. Basha, a St. John’s resident, has been president and CEO of Aurion since 2008. At last report he was collecting $200,000 per year in salary, and he earned a $220,000 bonus for his work in 2017. Mr. Lotan, of Toronto, is chairman and a major shareholder. He does not collect any cash remuneration from the company.

Dr. Michael Byron’s Nighthawk Gold Corp. (NHK), up two cents to 53 cents on 134,000 shares, says that it “continues drilling widespread mineralization” at its Colomac gold project at Indin Lake in the Northwest Territories. “Widespread” is typically a Howe Street euphemism for “lower grade,” and that appears the case today, as Nighthawk’s new assays from Colomac ranged as high as 2.61 grams of goldper tonne over 60.75 metres, with a lower interval in the same hole returning 3.2 grams per tonne over 26.95 metres. (If one focuses on less widespread, higher-grade gold, the assays get as high as 6.85 grams per tonne over 7.75 metres.)

These new assays are from nine new holes that targeted the south-central area of Zone 2.0 within the Colomac Main sill, an area deemed favourable for hosting higher-grade mineralization. A second hole produced 2.31 grams per tonne over 55 metres, a third mustered 0.52 gram per tonne over 75 metres and a fourth yielded 0.56 gram per tonne over 28 metres. Dr. Byron, president and CEO, says that Zone 2.0 is the site of a former open-pit mine and it is also the widest section of the sill and contains the largest portion of the current resource.

That resource lists 50.3 million tonnes inferred at 1.62 grams per tonne, or about 2.6 million ounces, spread across five deposits. (The largest of those, the Colomac Main sill, accounts for nearly all the gold.) Colomac supported a mine that ran from 1990 through 1997, during which it milled 11.8 million tonnes at 1.66 grams per tonne, producing 527,000 ounces of gold at a time when the metal sold for less than $400 (U.S.) per ounce.

The Sudbury-based Dr. Byron collected $240,000 in salary as president, CEO and chief geologist last year, a bump upward from the $220,000 he earned the year before. Late last year, Nighthawk also granted him a $120,000 cash bonus for his work in 2018, a modest increase over the $110,000 it granted him a year earlier.

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