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Msg  68968 of 69198  at  1/21/2021 7:34:00 PM  by

carswell


Gold Summary - 21st

Gold Summary for Jan. 21, 2021

2021-01-21 19:16 ET - Market Summary

by Stockwatch Business Reporter

New York spot gold lost $2 to $1,870 on Thursday. Also down were the TSX Venture Exchange index, which shed 6.94 points to 939.21, and the TSX gold index, which dropped 3.13 points to 312.28. Eldorado Gold Corp. (ELD) helped drive the retreat with a 47-cent drop to $14.30 on 2.83 million shares. The decline was driven by word that the company is offering 30 cents per share for Brad Humphrey's QMX Gold Corp. (QMX).

Naturally, QMX shares were a hot commodity today. Its stock leapt 6.5 cents to 28 cents on 103.1 million shares following word of the deal, in which shareholders will get 7.5 cents in cash and 0.01523 Eldorado share for each QMX share they own. Mr. Humphrey, president and chief executive officer of QMX, says that the friendly takeover is a "testament to all the hard work and effort" that he and his crew put in over the four years since they "set to refocus QMX into a premier exploration company" by maximizing the value of the company's Val d'Or gold property in Quebec.

George Burns, president and CEO of Eldorado, presumably believes that QMX still has plenty of value to add, as his company is offering a premium of nearly 40 per cent to Wednesday's close. The attraction of QMX's property is its adjacent location to Eldorado's Lamaque mine, and Mr. Burns believes his company's ample treasury will allow the expanded Eldorado to "continue to identify and secure opportunities for prudent growth within our operating footprint" -- promotional puffery meaning he hopes to find more gold nearby.

QMX's property hosts the Bonnefond deposit, which currently lists 4.76 million tonnes indicated at 1.69 grams of gold per tonne and 2.41 million tonnes inferred at 1.87 grams per tonne, about 400,000 ounces of gold in all. The company has been a busy driller lately, producing lengthy hits with grades topping the resource averages. Further, a new 35,000-metre program is just getting under way. QMX's vice-president of exploration, Dr. Andreas Rompel, had said his goal was to expand the Bonnefond resource, but that value-adding effort will now fall to Mr. Burns and his Eldorado crew.

Darwin Green's Highgold Mining Inc. (HIGH) went low, dropping 19 cents to $1.48 on 639,000 shares after underwhelming investors with new assays from Johnson Tract, its polymetallic gold project in south-central Alaska. The headline hit, which occurred in the area surrounding the JT deposit, returned 5.9 grams of gold equivalent per tonne over 11 metres, but with the actual gold content at just 0.17 gram per tonne. Zinc, at 8.59 per cent, was the main metal in the interval, with copper averaging 0.35 per cent. Highgold also cheered a 20.7-metre hit in the Footwall zone that averaged seven grams of gold equivalent per tonne, this time led by copper, at 2.38 per cent, with 4.86-per-cent zinc providing most of the remaining value.

The current resource estimate at JT leans hard the other way -- fortunate for a prospect touted as a gold play -- with 2.14 million tonnes indicated at 6.07 grams of gold per tonne. As well, 5.8 grams of silver per tonne, 0.57 per cent copper, 5.85 per cent zinc and 0.8 per cent lead boost the gold-equivalent grade to 10.93 grams per tonne. Another 580,000 tonnes are inferred at lower grades. In all, JT hosts 455,000 ounces of gold and 559,000 ounces of silver, plus enough base metals to boost the count to 884,000 equivalent ounces of gold.

Mr. Green, president and CEO, conceded that the "current batch of drill results are base metal dominant," adding that they highlight the presence of copper- and zinc-rich areas within the generally gold-rich JT deposit. He says that as new assays are received, the company's "geological and structural model continues to evolve." So, too, does Highland's share price -- just not in the desired direction.

Highgold's stock topped $3 in September, aided by assays from JT that included a 74.1-metre hit averaging 17.89 grams of gold per tonne, and with enough of the lesser metals to boost the grade to 23.8 grams per tonne on an equivalent basis. Much of the gold came from a 14-metre interval that averaged 53.22 grams per tonne, with just modest amounts of other metals. There was no worry about evolving concepts then -- Mr. Green cheered that the assays "support our exploration model" that suggests that the lower parts of JT, the thicker and highest-grade areas, are open to expansion.

The changing models and devolving share price notwithstanding, Mr. Green believes that a significant portion of the mineral system is open to expansion down plunge, and he adds that the system is not cut-off at depth, as previous explorers had postulated. He and his crew will continue work to prove that point this year, with a plan to "further test the limits" of these and other zones. Hopefully, the coming assays will not further test the limits of the market's patience.

 


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