Dot Dot Dot … @$#*!

The Calandra Report / By
Ivanhoe MInes’ new Phase 3 copper concentrator adjacent to Kamoa and Kansoko underground mines in DRC Congo.

I would like to borrow Daniel Major’s choice words, below, for my take on our  second-week-of-July start to metals’ and miners’ %&^#*@)! prices.

That is, “not enough swear words” to cover my bases.

Spot and futures prices are losing 1% to 3% and most mining stocks as much and more. Here at home, tumbling miners get a checkbook look, as you all know.

I might not be as overjoyed as strategist and perennial metals investor Rick Rule, who is holding his annual Florida show this week; i.e., “I love days when everything falls. Do your due diligence.”

But for me, today and tumbling dice days are buying days. Primarily, this week, last week, today even (at $13.52 USD), I continue to add to our biggest holding, Ivanhoe Mines IVN IVPAF.

Ivanhoe’s second-quarter copper in concentrate logged 100,000 metric tons; that’s the start of a ramp-up that will bring the DRC Congo operation to as much as 490,000 tons for the year.

The company, which does not pay me to harp on Ivanhoe’s results or prospects, looks to boost yearly copper production capacity to more than 600,000 tonnes with its new concentrator and improved electricity sources. Click on links for releases please.

GoviEx Uranium

“There are not enough swear words to how I would describe the Ministry of Mines in Niger. The seizure is a travesty as they have not even followed their own rules.” — Daniel Major, GoviEx Uranium CEO More about the seizure in The Calandra Report.

GoviEx says it continues to develop its Zambia project, Mutanga. That one holds measured and indicated resource of 42.6 million metric tons — 33.7 million pounds of U3O8 — and an inferred resource of 10.9 million pounds of uranium.
 
Still, Madaoueula in Niger, as you can see from the number of updates in its news feed, was its No. 1 raison d’etre. GoviEx as a private, then public company has been developing the project since 2007 or so.
 
Niger government held at first a 10% free carried interest and in April 2019 acquired another 10% for $14.5 million. 
 

Eagle Gold Mine

 

Victoria Gold Mines says it will add to its update about the failed heap leach pad at Eagle Gold Mine in Yukon — this coming week.

 

I doubled down on our VGCX stake, as discussed. “You must be pazzo (crazy), right?” — is the general consensus from most of the professional investors I know.

 

VGCX Victoria Gold shares: 1 month — note declining volumes
Some financiers expect an emergency rock-bottom financing to dilute further existing shareholders. If that were to happen, I imagine royalty holder Osisko Gold Royalties will need to weigh in.

 

My view is the equity is cheap enough here at a $55 million CAD market value. — The Calandra Report  

“Yukon perceptions for permitting and values — feels like much more fallout to come, as happened in B.C. with Mount Polley,” says John-Mark Staude, whose Riverside Resources RRI RVSDF is a $10 million market-cap. “Then, much of British Columbia was impacted for a long time about tailings approaches.”

Mount Polley was 2014. The copper mine tailing pond collapsed, releasing 25 million cubic meters of  tailings and waste water into Quesnel Lake.

 

I added this to the latest VGCX reporting:

 

As to the matter of restructuring debt in the event the mine returns to production? Too many possibilities. A royalty company, Osisko Gold Royalties, put down $98 million CAD for Eagle in exchange for a 5% NSR in March 2018.

 

This is all intensely speculative. After owning VGCX on and off for the past five years, and making money, I find our stake is about 40% in the hole after the failure in late June. 
Kipushi Mine ball mill — Ivanhoe Mines

 

Current stock price: 78 cents CAD (off another 4% to start the week), approx. $9 million cash and a $55 million CAD market value.

 

As for loan holders, royalty holder(s) and any other VGCX debt holders: banks will give  leeway in these instances, as I understand it.

 

Part of that “generosity” is that banks aren’t miners and dread the thought of taking over the operation.

 

One investor who also is a geologist tells me,  “Of course, they could force a sale, but that won’t get all their money back unless the buyer is willing to assume the debt. I doubt a buyer will assume all the debt.”

 

Another gold-co CEO just told me, “Big question is will the government allow Victoria to ever start production again. If not, the project has little value, especially to the royalty holder.”

 

My interest in VGCX as an investment could prove to be much shorter than my usual years-long holding periods. We’ll see. Further declines will see another share purchase on my part, just don’t tell my professional money contacts.
 

 

GRANT’S ON GOLD

“Gold overtook the Euro as the second- largest reserve currency behind the American dollar in 2023. The yellow metal reached 18% of total international reserves, up from 11% in 2008 vS. 16% for the euro.” — Grant’s Interest Rate Observer

“Central bankers added 1,037 tons to their balance sheets last year, the second-highest annual haul after the record 1,082 tons purchased in 2022. A spring World Gold Council survey shows one-third of the queried mandarins expected to add more bullion in the coming 12 months, the highest count since the council began collecting data in 2018.” 

 

Draft Mode: Denver Gold Group‘s Tim Wood and I shared our thoughts about his 157-member trade group’s Americas Forum 25 and 20 years ago in downtown Denver and presently each September in Colorado Springs.

 

I am working on a piece that examines how capital markets, that is, available money, have shifted dramatically in two decades. Tim has 10 bullet points that deserve a look, and I will shout when this is available.

Denver Gold Group does not pay me for this extra-curricular report; neither does any other executive or group or company. I do this to put ordinary investors, individuals, on good ground for what I think will be a runaway interest in miners and their stocks and convertibles and placements and other investment vehicles. — Thom Calandra

WORKING DRAFT: Americas Forum mining conference
Back then, 20 and 25 years ago, I had to beg, pester, plead to the not-for-profit group for a press pass; sometimes I was successful and sometimes I was not.
The hotel setting back then in sketchy  downtown Denver was blah, musty —  yet the presentations were mostly top notch; most of them staged by  heavyweight miners.
The group of miners packed its bags to Colorado Springs years later. Americas Forum is staged each year the week after the popular Precious Metals Summit in early September — also in Colorado at Beaver Creek near Vail.
I’ll let TCRs know when the piece is ready to run. This will appear on the Denver group’s new information channel, called Mining Forum Live.