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Msg  67695 of 69935  at  7/7/2020 8:33:45 PM  by


Gold Summary - 7th

Gold Summary for July 7, 2020

2020-07-07 19:48 ET - Market Summary

by Stockwatch Business Reporter

New York spot gold rose $10.50 to $1,795.60 on Tuesday. The TSX-V rose 6.67 points to 651.66 while the TSX gold index added 9.70 points to 354.51. Argonaut Gold Inc. (AR), down 16 cents to $2.82 on 3.94 million shares in a halt-shortened session yesterday, fell another 17 cents to $2.65 on 8.68 million shares today. The company said after Monday's close that it has arranged a $110-million bought-deal financing in which it is selling 43.14 million shares at $2.55. The cash is for further advancement of the company's Magino gold mine, northeast of Wawa in Ontario. Magino is a former producer that Argonaut would like to revive.

Peter Akerley's Erdene Resource Development Corp. (ERD) added 7.5 cents to 51 cents on 3.96 million shares. The company has just received assays of up to 126 grams of gold per tonne over 5.5 metres from its Bayan Khundii gold project in Mongolia. That near-surface hit -- it began at just 11.5 metres -- was buoyed by a one-metre interval averaging 581.63 grams per tonne. It was not the only bonanza-grade encounter, as a second hole among the 17 new holes yielded 338.26 grams per tonne over one metre, within a 15.1-metre interval averaging 25.59 grams per tonne.

Mr. Akerley, president and chief executive officer, a fellow who goes about his job feeling "very pleased" most days, and "extremely pleased" on occasion, ratcheted up his enthusiasm to "exceptionally pleased" when presented with the latest assays. He noted that the two bonanza-grade hits occurred 15 metres apart, confirming the existence of a new high-grade zone in an area currently classified as waste or low-grade material, so it "could add meaningfully to resources during the early stages of the project."

Erdene already has a bankable feasibility study of Bayan Khundii under way, so that material will probably remain blue sky for now. Indeed, Mr. Akerley is already musing about prioritizing near-mine expansion opportunities as the company develops follow-up drill programs for "exciting targets" at Striker, Dark Horse and elsewhere on the Bayan Khundii and Altan Nar projects. This drilling to come is "expected to add to our established resource base," he says.

The project cleared prefeasibility last fall, based on a plan to mine Bayan Khundii for six years and Altan Nar for four, with a mining rate of 1,800 tonnes per day. Bayan Khundii is projected to yield an average of 61,000 ounces of gold per year, Altan Nar 48,000 -- modest sums that could use a material boost from continuing exploration. The capital cost of the plan is relatively light $42-million (U.S.), so the bottom line is encouraging, with a discounted net present value of $97-million (U.S.) for Bayan Khundii and another $24-million (U.S.) for Altan Nar.

Tom MacNeill's Omineca Mining and Metals Ltd. (OMM) gained another two cents to 67 cents on 800,000 shares. Omineca, flatlined at a nickel last year and at a slightly higher plateau -- 16 cents -- through the first five months of 2020, has been on a tear lately, getting as high as 70 cents last week. The rally began in mid-May, just as the company was closing its placement of 13 million shares. The heavily oversubscribed $1-million placement had been priced at 12 cents per share -- little wonder it was oversubscribed -- providing $1.55-million in cash for hardrock exploration and drilling at the Wingdam gold project, near Barkerville in the Cariboo district of British Columbia.

Omineca's latest news, which came in early June, had the company beginning its 2020 field program at Wingdam. The work included the usual preliminaries, with the plan culminating with an 8,000-metre drill program across 27 holes. That drilling was to come after the preliminary data are assessed and the sites are prepared; further, the work carried the qualifier "pending approval of permits." While the drilling is still a future event, investors have been unusually bullish.

Wingdam has been a placer gold play. In 2012 the company pulled roughly 175 ounces of gold from a crosscut tunnel 2.4 metres wide and 24 metres long. The company has -- or at least had -- plans to continue the process along the entire 2,400-metre channel at Wingdam, but for now at least, the focus is on finding the bedrock source of the gold. The steady surge in Omineca's share price without benefit of news has the usual chat rooms buzzing, although none of the posters have any idea what is up -- other than their shares.

Mr. MacNeill, the brother of Ken MacNeill, whose Star Diamond Corp. (DIAM: $0.255) has proven a difficult stock to move even with good news, does like to compare Wingdam to the high-grade Cariboo project that drew enough interest to Barkerville Gold Mines Ltd. that Osisko Gold Royalties Ltd. (OR: $14.43) acquired Barkerville through a $340-million stock swap late last year.

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