Hi Premium, A different opportunity today. West Red Lake Gold Mines needs to spend roughly $50 million this year to get the Madsen mine ready for restart. And by ‘ready’, I really mean ready – after this investment, which will add important areas and connections underground, develop a bunch of new stopes for mining flexibility, drive a short tunnel under the public road that’s between the portal and the plant (so they don’t have to change the ore onto public-road-allowed trucks, a transfer that costs money and likely drops free gold on the ground), fix a few parts of the plant, and build some missing infrastructure like an on-site office building (rather than leasing a dozen trailers!), WRLG should be just about ready to turn the mine on. I say ‘just about’ because the company is working on the official, detailed mine restart plan. That will come out in about 6 months. It’s a bit backwards that the official document won’t be out until a good chunk of the work is already done or underway, but that’s just how much time it takes to prepare such a document. Since the document isn’t out, I can’t know the full costs or […]
I’m off to Toronto early tomorrow for the back-to-back Metals Investor Forum and Prospectors and Developers Convention (PDAC). PDAC is the largest mining conference in the world, with more than 20,000 people usually attending to discuss everything from dump trucks and mining automation systems to indigenous relations to project partnerships to government supports or challenges. It’s a doozy of an event. I have hours of work ahead today to create a talk for MIF and then to pack, which is not simple as I’m taking both kids with me. We have lots of family and friends in the Toronto area so it’s a good chance for a visit…as long as I survive the plane ride (15 months is just about the worst age to ask a kid to sit still for multiple hours!). So the letter is out early today! I start with uranium, a topic I haven’t covered in several weeks. The spot price dropped in that time; I explain why and why I am unfazed and very bullish. Then it’s time to introduce the discovery-focused company I mentioned last week: Strikepoint Gold. We owned Strikepoint many years ago when it was focused on Yukon. Today’s Strikepoint is very […]
Financing: raising up to $3 million by selling units for $0.125 apiece. Each unit comprises a share and half a warrant exercisable at $0.25 for 2 years. I am participating in the financing. If you would like to participate, please let me know your desired allocations by end of day Monday February 26th. Emperor Metals is about two things: the Duquesne West project, which is the prolific Rouyn-Noranda gold belt in Quebec, and John Florek. Florek is a geologist who has worked for several major and mid-tier miners. The thread that connects the work he did at those companies is making better use of data to (1) find more ounces at known deposits, (2) create more accurate resource models, and (3) as a result make mines more profitable. One key example is the work Florek did with Detour Gold, which was struggling to break even at its Detour Lake gold mine. By creating an AI model of the data and then following the targets it pointed to, Florek’s team was able to increase the ounce count through the mill by 20%, which generated $90 – $150 million in additional revenue annually. Kirkland Lake Gold acquired Detour shortly thereafter for the profits this […]
Financing: raising up to $2 million by selling units for $0.04 apiece. Each unit comprises a share and half a warrant exercisable at $0.07 for 2 years. I am participating in the financing. If you would like to participate, please let me know your desired allocations by end of day Monday February 26th. Strikepoint Gold is about to start drilling the Cuprite project for the first time. To summarize the evidence that Cuprite hosts a gold system in three points: Three independent investigations – geologic mapping, geophysics, and soil sampling – all generated precisely the evidence you want to see when looking for this kind of gold system and the evidence all points to the same large target area The project covers the intersection of a series of east-west faults and the western edge of the Stonewall Mountain Caldera. There are half a dozen major gold systems in the area that exist where a major structure crosses a caldera rim Geologists have long eyed this ground because of the obvious alteration across white hills almost beside the highway, but for decades the ground was not available for staking because of its proximity to a rail line that runs […]
Maven Buys: Emperor Metals (CSE: AUOZ, USOTC: EMAUF). Maven Buys: Global Atomic Energy (TSV: GLO, USOTC: GLATF). Portfolio Table
February 20, 2024 I’ve been trying to get a read on the near-term economic outlook, but it’s not easy. One economic indicator is positive on one day, the next day it’s another indicator that’s negative. Take last week for example. U.S. January CPI was reported, up 0.3% for the month and 3.1% for the year. That was up from December’s 0.2% gain, though down from December’s annual 3.4% gain. Meanwhile, economists had expected a 0.2% gain for month of January, and a 2.9% annual increase. Ok, so now let’s strip out volatile food and gas. What we have is “core’ inflation, which was actually worse, with January prices up 0.4% and 3.9% for the year. That (naturally) caused gold and silver to tank, with gold dropping from $2,030 to $1,990. Silver dropped from $22.80 to $22, but quickly recovered to $23.40 over the next few days. That sudden weakness was not a surprise, because the market was starting to price in later Fed rate cuts, rather than sooner. What was a surprise was the much stronger bounce in silver over the second half of the week as consumer sentiment rose to its highest in about 2.5 years. I think that’s […]
Lithium Reckoning. Portfolio Table. Portfolio Updates.
Last week, I said I was only going to comment on macroeconomics every three or four weeks because rarely do things change enough on a weekly basis to impact a metals investment thesis. The market immediately decided to prove me wrong. So I have a macro article to start, on why it’s clear rates are not going to be cut anytime soon…and why economic strength means that, instead of setting up for a risk-off gold run, we might be setting up for a growth-driven multi-metal bull market that brings gold along for the ride. Then I run through my thesis for buying Scorpio Gold (TSXV: SGN). SGN’s share price ticked up 25% today, annoyingly, but I am optimistic it will ease back some over the coming days, given that the price has bounced between $0.20 and $0.27 for months. I will try to enter around $0.22. There was drill results from Headwater, a new resource from Alaska Energy Metals, a debt conversion for Encore Energy, an idea to test mine at Ana Paula to pay for underground development, and drill results from Vizsla. I will cover those tomorrow. ————————————————————————————————————— The Metals Thesis Shifts What a week. Two […]
Monthly Macro: Rate Cuts Paused (sigh). Uranium: the Kazatomprom Effect. Maven Buys: Skyharbour Resources (TSXV: SYH; USOTC: SYHBF). Portfolio Table. Portfolio Updates: Artemis, Banyan, Calibre, Cameco, Founders, West Red Lake Gold Mines.
February 6, 2024 I recently spent five days in Vancouver, aka junior mining central, to meet with companies either in the portfolio or being considered, as well as to speak at the Metals Investor Forum (MIF) and the Vancouver Resource Investment Conference (VRIC). But here’s the single most interesting thing that happened in those five days. At the end of the last day I bumped into one of those new investors in the street that I had met two days earlier at MIF. We’ll call him Charlie. He told me he’s a blueberry farmer in British Columbia, and he’d spent the entire four days listening to newsletter writers, company presentations, and talking with CEOs and geologists. And then he shocked me. Charlie said he was in the process of buying about $40,000 of silver and asked me what I thought. I told him I couldn’t give him any personal investment advice, but that I did think owning silver was a great way to get started in this sector. I also said he would do well to assess his own risk tolerance, and how that was crucial in determining how he might allocate funds across the silver investment space. I also […]