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Msg  67674 of 68614  at  7/3/2020 9:12:17 PM  by


Gold Summary - 3rd

Gold Summary for July 3, 2020

2020-07-03 20:06 ET - Market Summary

by Stockwatch Business Reporter

New York spot gold fell $0.10 to $1,774.40 on Friday. The TSX-V rose 5.51 points to 633.02 while the TSX gold index slipped 0.58 point to 340.04. Oceanagold Corp. (OGC) helped lead Canadian gold miners higher today. It added six cents to $3.03 on 721,000 shares. Iamgold Corp. (IMG) also did well, adding 21 cents to $5.64 on 1.86 million shares. Gran Colombia Gold Corp. (GCM) was weaker. It fell two cents to $6.83 on 766,000 shares.

Oliver Friesen's Gold Lion Resources Inc. (GL), unchanged at 58 cents on 994,000 shares, has received assays of up to 6.49 grams of gold per tonne from rock sampling at its Robber Gulch oxide gold project in southern Idaho. The sampling shows an area of mineralization spanning a strike length of greater than two kilometres displaying "strongly anomalous" amounts of gold. (Anomalous is typically geologist-speak for low-grade; this would be at the higher end of that discouraging descriptor.)

Gold Lion goes on to describe the geology to be "highly complex" -- typically a term used to explain away weak results -- but the company points out that four holes drilled in the mid-1980s produced grades as high as 1.25 grams of gold per tonne over 6.1 metres, within a 24.4-metre interval averaging 0.56 gram per tonne, despite the holes having been drilled beyond the anomalous zone now identified at surface.

Mr. Friesen, chief executive officer, was "very excited" to have the sampling assays. He says that strong gold values at surface are highly encouraging for a Carlin-type oxide gold system, which are typically low-grade and bulk-tonnage deposits. Mr. Friesen warms further to the promotional challenge, noting that mapping at Robber Gulch shows "strong similarities" to the geology at nearby Black Pine, which is being worked by Liberty Gold Corp. (LGD: $1.95). Liberty has been producing assays of up to 3.93 grams of gold per tonne over 15.2 metres this year at Black Pine, with historical assays of up to two grams per tonne over 50 metres.

Mr. Friesen says that Gold Lion will immediately start more soil sampling to extend and infill its grid, focusing of course on the strongly anomalous areas. Following this second phase of soil sampling, the company will roll out a final phase of geologic mapping and rock sampling, work that will "aim to select and define the best possible drill targets for the 2020 season." (Although Mr. Friesen does not explicitly say the targets will be drilled this year, his statement at least dangles the hope.)

Gold Lion is working to acquire Robber Gulch, which is under option from EMX Royalty Corp. (EMX: $3.08). The company acquired the option on the prospect and two others, South Orogrande and Erikson Ridge, in early April, in exchange for a hefty gold royalty and potential payments of gold should the projects reach certain exploration milestones. The deal has been a good one for Gold Lion: Its shares, oscillating near the 25-cent mark since the company's launch last fall, went on a tear after the deal, getting as high as 75 cents in mid-June.

Peter Dougherty's Argonaut Gold Inc. (AR), up 10 cents to $2.98 on 1.83 million shares, has updated its life-of-mine plan for the just-acquired Florida Canyon mine in Nevada. Argonaut now owns a 100-per-cent interest in the operation, having just closed its acquisition of Alio Gold Inc. (ALO) this week. (Alio, which owned the mine, traded its last today, adding four cents to $1.96 on 390,000 shares.)

Argonaut's plan for Florida Canyon is based on an indicated resource of 137 million tonnes averaging 0.38 gram of gold per tonne and 24.7 million tonnes inferred at 0.34 gram per tonne -- strongly anomalous grades, one might say -- from which Argonaut expects to pull about 77,000 ounces of gold per year.

The study projects further capital expenditures of $108-million (U.S.). Mr. Dougherty, president and CEO, says that the spending will begin this year, with improvements to the crushing and stacking system and ancillary equipment, to "ensure that we can reap the benefits of lower operating costs in 2021 and onward." High costs plagued Alio Gold last year. It lost $136.2-million (U.S.) in 2019, as Florida Canyon's all-in sustaining costs averaged $1,337 (U.S.) per gold ounce.

Argonaut thinks that it can reel that expenditure in, reducing it to $1,040 (U.S.) per ounce. Even so, Argonaut is betting big that the price of gold will remain high. The company's updated plan credits Florida Canyon with a discounted net present value of $232-million (U.S.) after taxes, but that is based on an average gold price of $1,700 (U.S.) per ounce. At $1,350 (U.S.) per ounce, the projected value is just $85-million. Fortunately, Mr. Dougherty sees blue sky over Florida Canyon. He points to the exploration potential there and at the nearby Standard mine, as well as the potential of mining transitional and sulphide ore.

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