Galiano Gold’s All-In Gold Costs ‘A Bit Scary,’ Says CEO
Trading: Alamos Gold | Galiano | I-80-Gold | Contango Ore | Osino | Avino Silver & Gold
ZÜRICH — Generalist fund managers and family offices here showed for a conference‘s large and mid-sized mining-cos this week.
Generalists are investors who snub most miners and prefer to be in the relentless, decades-long appreciation of blue chips, techs and banks.
Denver Gold Group’s European Forum in Zürich returned to the all-biz city after a Covid holiday of its own. Metals prices during the week were in the trade group’s favor; the rainy, cold weather was not.
[I was there as an unpaid co-moderator, questioning execs and presenting bankers. Most — Alamos Gold, Heliostar Metals, Canagold, Equinox Partners, Platinum Group Metals, Contango Ore, Gold Terra, I-80 Gold, GoGold, Avino Silver & Gold — were constructive answering my The Calandra Report/TCR queries; a few were dismissive.]
See: trading updates below of Contango Ore; Galiano Gold [detailed examination below); Avino Silver & Gold. Also: private note sent to TCRs re: lab IMV's 22% gain.
Zürich highlights (and my investing and research preferences):
— Alamos Gold, as reported here, was the show’s standout — rapidly accelerating gold cash flow — see report.
— Top presentation: Ewan Downie and I-80 Gold — I bought more IAUX during the 20-minute session. I-80 runs poly metallic and gold-silver deposits and producing properties across Nevada. Also: a mill for processing refractory gold (sulfides that attach to oxides and other material).
“Our plan is to develop 3 more gold mines in the next three years,” said Ewan, a Thunder Bay, Ontario, geo-CEO. Estimate for I-80 free cash flow: 2025.
— Sean Fieler of Equinox Partners: “I think we are going to see a reallocation (by generalist fund managers). Right now, funds are averaging 1% (mining-cos), maybe,” the chief investment officer of the assets manager said. Sean’s sometimes activist Equinox advertises board members lacking ownership of their companies’ stock at https://www.directorswithoutstock.com/.
The asset manager, when asked which one gold-co he might recommend as an immediate buy, put a shine on an AFRICA GOLD MINER.
That was Galiano Gold GAU in Ghana. I visited Galiano’s Asankrangwa Gold Belt holdings there with original geo-groomer and founder Dan McCoy about 12 years ago. Formerly Asanko and Keegan Resources, Galiano Gold, in a joint venture with Gold Fields of South Africa, looks on track for mining 100,000 to 120,000 ounces (break-even on income projected at $1,700 gold price) this year at its Asanko Gold Mine, and possibly double that in coming years across four pits. That is the JV total.
Galiano and its former, well-paid execs were not embraced by large investors. That looks to be changing — with Gold Fields actively declaring its expectations for the joint venture there. I bought shares of GAU right after Sean Fieler’s mention.
GAU boilerplate for the 2022 year at 45-45% Asanko Gold Mine JV with Gold Fields: the AISC (all-in cost of approx. $1,900 per oz) for 2023 “is a bit of a scary number,” Matt, a metallurgist who spent 14 years with Eldorado Gold, says.
The inflection that investors probably will see this year, before tailings retrieval shifts to hard-rock mining in the autumn of 2023, is pegged to the all-in cost number that “scares” investors right now. To wit: that $1,900 cost number has $150 an oz in non-cash costs (from the stockpile processing) and that expense is one off for 2023; plus another $250 an oz in the AISC number for tailings dam expansion — another one-time cost.
— Companies I met with (and already have viewed their projects) included two I likely will own shares of (for a second or third time): Platinum Group Metals PLG PTM (South Africa’s Waterberg project — I am as you know buying platinum in several ways this year and last — PPLT Aberdeen Trust among them); and Canagold CRCUF CCCM (British Columbia’s New Polaris gold project) — which strikes me as mostly “de-risked” of permitting challenges, First Nations hiccups, and likely to bring all of its resource in far northern B.C. into the “indicated” category.
Other mining-co ideas, observations (some positive and others decidedly not) are on the way, paying TCRs.
TRADING: Today-Friday, in transit home to Tiburon, California, I sold approx. 9,000 shares of Xtra-Gold Resources XTG XTGRF (Ghana operator) to pay U.S. taxes. We here at home own more than 100,000 shares, most of it from purchases dating to 2009.
I bought for a third time in five days shares of Osino Resources OSI OSIIF (Twin Hills gold project in Namibia); a definitive feasibility study soon probably will lead to an entirely bankable and interest-rate-efficient project financing.
I added to a growing stake in Group Eleven Resources ZNG GRLVF: zinc in Ireland and I believe among the very cheapest non-gold explorers in the northern hemisphere.
I boosted a stake in Contango Ore (Alaska operator) on the NYSE AMEX on Friday. Contango is a two-parter, as I call it: a partnership with Kinross Gold to process ore at Fort Knox facility north of Fairbanks — ore that will be mined at Contango’s Manh Choh mine; and a mid-stage exploration project at Lucky Shot, a concession of three former mines across 750 acres in what is called Willow Mining District (visited in September 2022).
CTGO stock fully diluted amounts to approx. 8 million shares and averages, during the past 65 trading days, according to MarketWatch.com, 2,960 shares daily. I think, after discussing with CEO-geo and Alaska explorer Rick Van Nieuwenhuyse, we could see Contango shares added to a couple of mining equity indexes, including one of the Russell 1000, 2000 or 3000 gauges.
Contango Ore stock, according to Schwab analytics, appears to be in a “strong bullish trend. Its 200-day moving average is upwards sloping and the MACD histogram is above zero.” Market value: $220 million USD.
I look to examine further these: Avino Silver ASM * (Durango, Mexico, and producing silver, gold, copper); Heliostar Metals HSTR HSTXF (owns two Mexico camps, one that I visited 6 or 8 years ago: San Antonio on Baja).
See: videos of miners’ 20-minute sessions.
— Thom Calandra
* I bought (in the post-market Friday) shares of Avino Silver & Gold ASM.
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.