Orford Mining | Azimut Exploration | Osino Resources | Newcore Gold
+ Uranium Rage *
The Calandra Report/TCR subscribers: continuing with rough notes, direct quotes from Colorado's Beaver Creek Precious Metals Summit. Earlier caches here. And here please.
*Please see STEPDOWN DAY close* of this report for the uranium update. $70 SPOT HERE
Playing catch-up here with these notes, verbatim, from a few of our preferred one-on-ones at the Colorado conferences earlier this month.
[The now-available Beaver Creek "webcasts," the compelling ones, anyway, are a time-saving boon for all investors who want a look-see at the execs and their high and low points. A real-time compendium briefing of oral material.] Here.
This year, I attended Precious Metal Summit at Beaver Creek. Last year, I was at and helped moderate Denver Gold Forum (Colorado Springs).
Both of them this year drew one of their greatest flocks, i.e., number of exhibitors and investors, in the history of the two separate trade-conference groups.
[In November, I will attend Precious Metals Summit in Zürich, providing a helping (and not-compensated) hand to my long-held Ghana gold developer and producer, Xtra-Gold Resources. In April 2024, I look to attend Denver Gold Forum in Zürich.]
Catching up: each of these three are in the OWNERSHIP BAG HERE AT HOME, all for multiple years.
Heye Daun of Osino Resources OSI OSIIF: the Namibia developer and his chairman, financier Alan Friedman, are amidst assembling an approx. $300 million financing facility for the Twin Hills gold project.
There likely will be some equity in the mix, and a “stream.”
Osino notes from the 1-on-1 — “The biggest challenge for developers is the gold market. Equity is dead right now but the debt market is alive and well.”
Heye, a mining engineer, says Twin Hills already is in pre-construction. Initial cap-ex for the project is about $365 million.”
He has to straddle a dynamic that embraces all comers: banks. bond holders, current equity shareholders, potential M&A suitors and mid-sized to large royalty-cos that could take a gold stream from the future mine.
“We know this could be expensive debt in this rate setting (12%?) but it will be paid quickly and refinanced at lower rates. As for buyers of the project, this is not the right time for that, probably, with acquirers stock prices so low.” Even B2Gold, and from whom Osino bought two properties in the Africa nation. Heye sold Auryx Gold Corp. to B2Gold BTG.
“Look for M&A to move up, the whole market (prices) needs to move up.”
Azimut Exploration AZM: Jean-Marc Lulin, France born and Québec much of his professional life, has been modeling lake beds across the province for 20 years. A lot of bytes of info: more than 80 million; thus giving his Azimut the largest holding of claims and concessions for gold, copper, nickel, lithium, even uranium, in Québec.
I have known Jean-Marc and invested in AZM for almost 5 years now.
The shares, AZM AZMT — ups with the Elmer Gold discovery and downs with the interminable
wait for a first resource there at James Bay.
Two takeaways from my 1-on-1 with Jean-Marc and his assistant, Jonathan Rosset.
1. the resource work is nearly complete, delayed by forest fires this summer, and we could see a large portion of the ounces into the coveted “indicated” category — hopefully upwards of 2 million ounces along the Patwon targets.
2. Lithium — the province, he says, is dead serious about pumping $3 billion or more into processing plants for the battery element; that is the “downstream” element. Some $3 billion or more of government money and loans are in the works for processing and sale of LCT pegmatites –lithium-cesium-tantalum, or granitic pegmatites.
“Lithium in Québec is not a short-term bubble. This will last,” he says.
I invested in and visited James Bay for AZM’s gold find at Elmer; lithium is not something I chase. I suppose I am fortunate to have two Québec windows into the element: AZIMUT and ORFORD MINING.
As for the gold, the scientist and predictive modeler-geologist says a current survey is looking to get ounces for a first-time resource into INDICATED from INFERRED, 43-101 categories.
“Patwon is just one zone in the Elmer district.” The company has completed approx. 54,000 meters of frilling in 137 holes,
That he notes is expensive. His all-in costs per meter are $350 CAD. Thus, $28 million spent on rigs, labor, geochemistry, prospecting, surveying.
He is looking for 94% recoveries of gold.
Some $4 million was left in the treasury before Jean-Marc turned heads at the show with a blink-of-an-eye, $9 million financing.
Orford Mining ORM: DAVE CHRISTIE at Orford has the backing of Alamos Gold, a 20 percent-plus owner. I toured the far north Québec projects in Nunavik, as it happens, with Alamos Gold CEO John McCluskey and Alamos’ top-geo, Scott Parsons.
Dave is a geologist and a former fund manager. He has managed to get eyes on the tiny gold-nickel-copper-lithium explorer from a few institutions, from a partnering nickel miner, Wyloo, in Australia, and from a flock of individual investors.
As McCluskey says, “To find massive deposits you have to go to the end of the road and beyond.”
That is where Nunavik is. Way up just below Nunavut and the Arctic archipelago.
Nunavik is where Glencore has its super profitable multi-metallic Raglan mine. The Chinese also are in the region. You can view the projects in an intensely geo-technical investor presentation.
Dave, aside from the Qiqavik and West Raglan and lithium sites up there, also is working Joutel in the Abitibi for gold.
It is one of those companies, and stocks, that is tiny yet with enough cash to make a large discovery of (pick one): gold, nickel, copper, lithium, platinum. You just have to wait on it.
“Drilling holes too early is how you kill things,” he says. “Step by step is best.” That is in reference to the pegmatite-bearing lithium.
David Christie knows he has a lot of property in the far north. SOME 450 SQUARE KILOMETERS.
“We’re just looking for parallel economic zones. We are big so we miss things. I think that is OK.”
He also knows his $17 million company has a stock, ORM, that is subject to the whims of its smallest investors: up and down. That is why I own it.
I happen to believe the West Raglan nickel-copper,platinum project, backed by WYLOO METALS, a private Aussie company, will be the discovery that lights up the north.
Newcore Gold NCAU NCAUF: This is the other Ghana explorer-developer that is in my wheelhouse, but unlike Xtra-Gold XTG, this is not yet in my portfolio. Newcore is as cheap as they get these woeful metals-equities days (weeks, months, years).
Luke Alexander, CEO, has strong backing, notably from Canada’s Doug Forster, who was an early investor in successful Calibre Mining (Nicaragua gold-silver producer; Nevada explorer). Doug is still lead director at Calibre CBX. George Salamis of Integra Resources also is on Luke’s board at Newcore.
Luke, with his team at Beaver Creek, including former Calibre CEO and geo Greg Smith, acknowledges: “We are trading near all-time lows, at ~US$6/oz with a defined global gold resource of 1.7 million ounces that has significant longer-term growth potential in both the near-surface oxide as well as deeper higher-grade sulphide mineralisation. We have $5 million of cash … to complete low-cost de-risking work of our Enchi Gold Project.”
Yes, $6 per ounce in the ground is about as cheap as small explorers get these days. Any lift in metals prices or gold sentiment and shares of NCAU NCAUF likely double instantly, the secular way I see it.
“So $6/oz is extremely cheap, especially given 740,000 ounces have been moved into the indicated category with an additional 970,000 ounces in the inferred category. We have also wrapped a PEA around the ounces, which highlights that we have an extremely economic project.”
Greg Smith, now VP of exploration at Newcore, calls ENchi “a very simple project.” Cap-ex: $97 million to start with a heap leach method.
On the macro:
“It is hard to compare the value of ounces in Ghana compared to more risky jurisdictions in other parts of west Africa.” Ghana, for all of its economic woes, is the longest standing democracy on that continent and I believe second largest producer of gold. Offshore oil there is coloring the metals picture in Ghana, and that is probably good for talent and for gaining respect from international buyers of commodities.
Luke says, “Maybe another way to look at it, is that Cardinal Resources was acquired by Shandong of China for $90/oz in the ground. Yes, the resource was larger and they were at an FS (feasibility) stage, but needless to say there is a lot of room for us to rerate.”
Later this week: TCR notes, direct quotes regarding Banyan Gold, Snowline Gold, Radisson Mining, Western Copper & Gold, Amex Exploration.
*U Uranium Stepdown Day
Yellow Cake PLC Physical Trust in U.K. — 3-month chart YCA stock symbol in London
The producers, the handful there are outside of China and Russia, naturally stand to benefit most from higher spot and contract prices. Cameco, National Atomic Co. Kazatomprom, Uranium One and the like are just the largest.
Others, small producers, future producers and developers not tagged here include enCore Energy EU; UR-Energy URG; and URANIUM ENERGY Corp. UEC, that one with a $2 billion market value.
— Thom Calandra
Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.