Fiore’s (TSX-V:F│OTCQB:FIOGF│FSE:2FO) story kicked off with a bang back in 2016 when it acquired three gold assets in a distressed sale.
The previous owner had spent upwards of US$100 million on this portfolio, but Fiorebought all three projects for just US$5 million.
This is hugely impressive by anyone’s standards.
Yet the investment gets better the more you read.
Fast-forward four years, and Fiore has turned its portfolio into one of the gold market’s brightest opportunities.
The company’s two primary assets – the producing Pan Gold Mine and the Gold Rock exploration project – are located adjacent to each other in Nevada.
Pan already contributes over 40,000 ounces (“oz”) of gold production each, allowing Fiore to generate US$4 million operating cash flow in the most recent quarter alone!
This has provided the firm with an incredible boost.
Where nearly all of its competitors are at the mercy of the market to raise funds, Fiore has been able to support exploration internally over recent years.
2020 is no different.
For Fiore is now completing a fully-funded US$2 million drill campaign that aims to increase gold reserves and resources at Pan considerably.
Meanwhile, with permits in hand and a preliminary economic assessment (“PEA”) completed, Fiore also plans to complete drilling and a feasibility study at Gold Rock using internal funds.
Just imagine that.
A gold producer with massive exploration upside and minimal to no dilution!
Moving away from Nevada, and Fiore’s third, largely overlooked project – Golden Eagle – sits in Washington State
With a 2-million-ounce measured and indicated resource, Golden Eagle would represent a strong flagship project for any junior gold firm. The fact that it is just one of Fiore’s several top-tier opportunities speaks measures to the company’s quality and potential.
It all comes down to the company’s realizable ambition of producing 150,000 ounces (“oz”) of gold a year by 2023.
Pan already produced 41,491oz of gold in 2019. Mine-optimization carried out by Fiore in recent years is now helping to increase this figure significantly. Production already hit a record 12,085oz in the most recent quarter, and the company is now guiding 45-48,000oz for fiscal 2020.
Meanwhile, as it is already fully permitted, Gold Rock is expected to be production-ready by 2023 following the release of a Preliminary Economic Assessment (“PEA”) earlier this year. When this occurs, the project is expected to deliver a further 50-60,000oz of gold annually.
Not only could this more than double Fiore’s output, but it would also make it the only company listed in Canada or America with a US-only, multi-asset gold production base.
Talk about putting America first!
Beyond this, Fiore is now hunting for another US-based, near-term project that can take it beyond the all-important 150,000oz gold production target.
In parallel to this,Fiore is targeting a joint venture for Golden Eagle with two larger, reputable producers.
Golden Eagle sits next to an internal resource held by Hecla Mining (NYSE:HL) and infrastructure owned by Kinross Gold (NYSE:KCG).
An excellent opportunity exists for Fiore, Hecla and Kinross to consolidate their projects into a separate, stand-alone listed vehicle. This could create one of only a small number of, multi-million-ounce gold projects with existing infrastructure in the US.
As you can see in the table below, Golden Eagle is already the country’s sixth largest resource held by a junior miner, with the second highest grade! A combination with Hecla and Kinross would look even better.
And this is all happening while the gold price surges…
By the end of April, the company’s shares had risen 180% over the previous year.
But what if there is reason to believe this strong run could continue to accelerate long into the future?
With the operational progress Fiore is consistently continuing to make, the signs are all there that this well-run company will deliver on its ambitious plans.
That could very well be the trigger for some very interesting action in the market.
If we compare Fiore’s market cap to its producing peers, a picture starts to develop of what might be possible.
Look at the table below, which pits Fiore against a select group of junior gold firms producing fewer than 150,000oz of gold equivalent annually as at 21 May 2020.
Peer group of select sub 150kozpa AU Eq producers
At US$65 million, Fiore sits right at the bottom of the table – much smaller than its closest comparator, Great Panther (NSYE:GPL), and far below the peer group average of US$376 million.
A similar picture continues to present itself in the two graphs below.
These compare the same group of companies’ enterprise value to their projected 2020 production and their share price relative to their operating cash flow per share.
2020 production guidance based on each company’s mid-point estimate for 200 (pre-COVID), using 110 Ag:Au ratio Source: Company Reports, S&P Capital IQ. Figures calculated as of 21 May 2020.
In both cases, Fiore is considerably below the average, and positioned towards the very bottom of its group of peers.
The three comparisons all point towards one conclusion – Fiore looks undervalued.
However, an upside move could be just around the corner.
With no debt and working capital of US$28 million, the market is attributing just US$55 million of enterprise value to Fiore’s entire portfolio at its current valuation.
Pan stand-alone delivered US$6 million of operating cash flow in Q2 2020, demonstrating significant annualized cash flow potential.
Gold Rock’s recent PEA gave it an NPV of US$77.2 million at a US$1,600 gold price.
When you also consider Golden Eagle’s 2-million-ounce resource, it is obvious that the market has not yet understood Fiore’s ambitious, well-defined, largely internally-funded strategy, and its upside potential.
As the gold price continues to move from strength to strength, it seems only a matter of time before Fiore Gold’s (TSX-V:F│OTCQB:FIOGF│FSE:2FO) stock rerates higher to reflect its continued progress.
(This article was first published on Mining Maven's sister site ValueTheMarkets on 10 June 2020)
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Authors: Ben Turney and Daniel Flynn
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MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Greatland Gold (LSE:GGP) has reported another strong set of high-grade drill results at its copper-gold Havieron project in Western Australia.
Shares in the AIM-listed explorer were up 9% to 12.55p in early Thursday trading.
CEO Gervaise Heddle hailed the “truly spectacular” results, including short sections as high as 76g/t gold and 1.2% copper, 66g/t gold and 2.6% copper, and 86g/t gold and 0.87% copper.
Greatland has in its hands one of the most exciting mineral discoveries in Australia in recent years.
Since the last update on 30 April 2020 a further 20,202m of new drilling from 27 holes has been reported.
The drill also revealed lengthy high-grade gold and copper intercepts.
The higher the grade discovered, the more economically viable drilling becomes.
“Analytical results released today from the Havieron project are considered outstanding,” said Heddle, “and include 109m @6.3g/t gold and 0.71% copper from 668m, which represents one of the best results from the project to date.”
“Drilling continued to deliver high-grade broad intersections confirming the significance of this discovery, Activities were focused on infill drilling to support a maiden resource in the second half of 2020, as well as extension drilling to further understand the upside potential.”
Greatland said nine drill rigs are currently operational, supported by a camp comprising 100 staff.
Australian partner Newcrest Mining (ASX:NCM) is planning a further 80,000 metres of drilling at Haveiron in the 12 months from 1 July 2020.
Stage 2 of its farm-in agreement is now complete and as such Newcrest has earned a 40% interest in Haveiron.
In order to complete Stage 3 and earn an additional 20% interest, Newcrest must spend a further $25 million and deliver a pre-feasibility study. It will get first refusal on Greatland’s other local projects at Black Hills, Paterson Range East and the remainder of the Havieron licence.
Haveiron sits 45km from Newcrest’s large but ageing Telfer mine.
Greatland acquired the Havieron project from Pacific Trends Resources in September 2016 in a cash and shares deal. Greatland agreed an initial payment of $25,000AUD cash along with 65.5 million shares worth $225,000AUD, and a second payment of 145.5 million shares worth $500,000.
Greatland is pre-revenue and certainly pre-profit, having lost money every year for the last five years. Shareholders won’t be that concerned given the results that keep flowing from Havieron.
In the last six months GGP shares have rocketed 629% from 1.72p to today’s price north of 12.5p.
Author: Mark Sheridan
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Greatland Gold (LSE:GGP) has reported another strong set of high-grade drill results at its copper-gold Haveiron project in Western Australia.
Shares in the AIM-listed explorer were up 9% to 12.55p in early Thursday trading.
CEO Gervaise Heddle hailed the “truly spectacular” results, including short sections as high as 76g/t gold and 1.2% copper, 66g/t gold and 2.6% copper, and 86g/t gold and 0.87% copper.
Greatland has in its hands one of the most exciting mineral discoveries in Australia in recent years.
Since the last update on 30 April 2020 a further 20,202m of new drilling from 27 holes has been reported.
The drill also revealed lengthy high-grade gold and copper intercepts.
The higher the grade discovered, the more economically viable drilling becomes.
“Analytical results released today from the Haveiron project are considered outstanding,” said Heddle, “and include 109m @6.3g/t gold and 0.71% copper from 668m, which represents one of the best results from the project to date.”
“Drilling continued to deliver high-grade broad intersections confirming the significance of this discovery, Activities were focused on infill drilling to support a maiden resource in the second half of 2020, as well as extension drilling to further understand the upside potential.”
Greatland said nine drill rigs are currently operational, supported by a camp comprising 100 staff.
Australian partner Newcrest Mining (ASX:NCM) is planning a further 80,000 metres of drilling at Haveiron in the 12 months from 1 July 2020.
Stage 2 of its farm-in agreement is now complete and as such Newcrest has earned a 40% interest in Haveiron.
In order to complete Stage 3 and earn an additional 20% interest, Newcrest must spend a further $25 million and deliver a pre-feasibility study. It will get first refusal on Greatland’s other local projects at Black Hills, Paterson Range East and the remainder of the Haveiron licence.
Haveiron sits 45km from Newcrest’s large but ageing Telfer mine.
Greatland acquired the Haveiron project from Pacific Trends Resources in September 2016 in a cash and shares deal. Greatland agreed an initial payment of $25,000AUD cash along with 65.5 million shares worth $225,000AUD, and a second payment of 145.5 million shares worth $500,000.
Greatland is pre-revenue and certainly pre-profit, having lost money every year for the last five years. Shareholders won’t be that concerned given the results that keep flowing from Haveiron.
In the last six months GGP shares have rocketed 629% from 1.72p to today’s price north of 12.5p.
Author: Mark Sheridan
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Kavango Resources (LSE: KAV) has been granted two new prospecting licenses in the highly prospective Kalahari Copper belt in Botswana.
The two 100%-owned licenses, PL-036/2020 and PL037/2020 cover 1294.2km2 and have been granted on three year terms. This can be extended to a maximum of 7 years.
The location is directly south west of large copper-silver discoveries operated by $870m AUD market cap Australian explorer Sandfire Resources (ASX: SFR). Sandfire is currently infill drilling to confirm sought-after mineralisation at its test location.
Kavango Chief Executive Michael Foster said his management team’s quality in-country contacts helped the company snap up the licenses as soon as they came on the market.
He said: “Given the positioning of these two new licences, in such close proximity to major copper-silver discoveries, we are eager to commence exploration here as lockdown restrictions are loosened in Botswana."
Field exploration is expected to commence in mid-to-late June 2020.
He added that the acquisition of further licenses was underway.
The Kalahari Copper Belt is a key emerging exploration region for major copper-silver deposits.
In January 2020 the company signed up to a joint venture agreement with LVR GeoExplorers for two prospecting licenses, giving Kavango the right to take up to 90% interest by a staged earn-in. They are surrounded by developments operated by MOD Resources (ASX:MOD), AIM-listed metals investor Metal Tiger (LSE:MTR) and Sandfire.
At the time Johnson said: “We believe the signing of the JVA represents excellent value or shareholders.”
Kavango also has a particularly interesting world-class nickel-copper-PGM potential zone under exploration. More detail here.
Author: Mark Sheridan
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Main market-listed Kavango Resources (LSE:KAV) has a secret hiding under trillions of tons of rock in Botswana.
And something rather interesting cropped up in its full year results to 31 December 2019, published on 26 May 2020.
The company has a huge license area totalling 5,573km2 across the Kalahari Suture Zone (KSZ) in the south west of the African nation.
CEO Michael Foster noted how the region continues to show considerable potential for the discovery of world-class base metals deposits.
“Kavango has gathered more exploration data on the KSZ than any other company. Over the coming months we expect to make significant progress in validating our view that the underexplored KSZ is host to world-class copper-nickel-PCM deposits.”
“In addition, we are nearing completion of our first farm-out by selling a 51% interest in the Ditau project,” he said.
Power up
Ditau covers 1,386km2. At its centre are ten vast geological formations known as ring structures, many kilometres across. Ring structures are widely associated with the presence of volcanic carbonatites, the primary source of rare earth elements (REE).
On 15 April 2020 shares in partner firm Power Metals (LSE:POW)rocketed when it announced it had agreed to buy the stake in Ditau to target “highly prospective” REE deposits. Rare earth elements are critical for manufacturing numerous high-tech applications, including electric vehicle motors and batteries.
Kavango has also added to its portfolio in the Kalahari Copper Belt, where two new mines are being developed.
But excitement is growing here for another reason.
Kavango Chairman Douglas Wright writes: “Our primary goal in the coming months is to deepen our understanding of the KSZ project and identify future drill targets.”
This deeper understanding is what I want to focus on today.
Underground: watch this space
50 years ago, an important Canadian nickel-copper producer called Falconbridge was working in the Kalahari Suture Zone. Its scientists were convinced that south west Botswana held the key to vast deposits of undiscovered diamonds that could make fortunes and transform world markets.
Excitedly drilling target holes, the scientists were disappointed to find absolutely barren rock. It didn’t seem to make sense. Running out of money, the Canadian company was forced to abandon the site and leave perplexed.
Using much more precise instruments, a new hypothesis has been formed. And it’s good news for Kavango’s shareholders.
Advances in geological mapping since the 1970s, including 3D computer modelling, have revealed that, far from being barren, in fact, the opposite is true.
Wright notes: “There is now a large body of evidence suggesting that the accumulation of nickel and copper-bearing metal sulphides occurred within the high level gabbroic intrusions of the KSZ.”
What really happened
Kavango began drilling at the KSZ in October 2019, beginning with three target holes across 1,000m.
The point of the campaign was to identify high-potential targets in what are known as underground traps. It is these traps that so confused the Canadian scientists back in the 1970s.
Drilling confirmed the presence of an extensive magma plumbing system. This is a feature of established nickel-copper-PGM deposits in some of the largest and most profitable mines in the world, including Norilsk in Siberia, Canada’s Raglan and Voisey’s Bay, and Jinchuan in China.
This magma plumbing system had filtered molten magma, carrying dense metal sulphide liquid through a series of vertical and horizontal fissures. Because metallic elements are heavier than the surrounding rock, they accumulated and solidified in underground traps further below the surface.
Kavango believes — backed by the latest science — that these underground traps contain intensely concentrated metal deposits just waiting to be exploited.
In the next stage of its exploration Kavango will drill and test trap zones in the plumbing systems that lie within 300m of the surface. And initial drill samples are being sent to the University of Leicester for mineralogical and petrographic testing.
Then the main task is to combine Kavango’s data from extensive analysis, which includes airborne electromagnetic surveys and soil geochemistry, together with gravitational surveys in the public domain.
And 3D computer modelled reports to confirm their theory will be prepared across Q2 and Q3 2020. No wonder that chief executive Michael Foster says Kavango are looking forward to an “exciting programme” of exploration in 2020.
Author: Mark Sheridan
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
With gold prices soaring, junior miners with strong projects are in ultra-high demand.
The yellow metal pushed past eight-year highs against the US dollar on Monday 18 May to reach $1,762 per ounce (“/oz”). The same trading session saw the precious commodity smash all-time records against most of the world’s other major currencies. Strength has continued throughout the week.
In a market like this, one company, in particular, has a prime opportunity to make its investors a lot of money.
We sat down with Louis Coetzee, chief executive of Katoro Gold(LSE:KAT), to get the inside track on what’s next for Blyvoor – the firm’s exciting precious metals project in South Africa.
Aerial view of the Blyvoor project (Source: Katoro Gold)
Carltonville is a busy mining town west of South Africa’s capital Johannesburg. When gold was first discovered there in 1886, it transformed the country from a farming-led economy into the most industrialised nation on the continent. It also helped to create some of the world’s most profitable mining companies, like Anglo American (LSE:AAL).
The area is now home to Katoro’s Blyvoor project, a 50-50 joint venture with Blyvoor Gold Operations. At Blyvoor, Katoro and its partner will focus on processing “tailings” from previous gold mining schemes in the local area.
This is a lucrative niche.
Tailings are mineral loads that were once considered to be waste products. However, thanks to novel extraction techniques developed only in the last ten years, previously-overlooked gold in this discarded rock can now be extracted economically.
This approach has worked wonders for De Beers in South Africa. Thanks to advances in separating, sorting and crushing equipment, the world’s largest diamond miner famously managed to extract 815,036 carats of diamonds from several million tons of tailings in 2013 and operations will continue beyond 2030.
Outstanding scoping study
Earlier this month, Katoro took a huge step forward at Blyvoor when it released the results of its scoping study for the project.
The work assumes the asset will operate for 25 years, during which production capacity will build up to 500,000 tons of tailings ore per month and 35,000 ounces of gold production per year.
These rates translate into a net present value of US$131 million, a 25% internal rate of return, and a return on investment (“ROI”) of 260%. Meanwhile, revenues over the life of mine are expected to reach US$992 million against total capital costs of US$110 million. All-in sustaining costs are forecast to sit at just US$727 per ounce of gold.
These are already very impressive figures. However, they become even more impressive when you consider the extremely conservative measurements Katoro used to reach them.
One such example is the company’s assessment of Blyvoor’s recovery rate. Although test work showed this to be as high as 62%, Katoro used an average recovery of 52% - 10% lower.
Likewise, the ROI was calculated using a very conservative gold price of just $1500/oz. With gold now breaking record prices, this figure is free to rise exponentially.
“The context of the numbers is critical to consider,” explains Coetzee. “Our approach was not to see what is the best-case scenario, it was to say “If we pick this apart, and if we strip it down to the bare bones, does it still present us with a decent opportunity?" The answer is a clear yes, and this scoping study has demonstrated Blyvoor’s true integrity as a project."
Alongside the attractive economics of its contained resource, there are several other areas of potential financial upside to consider at Blyvoor.
For example, although novice investors often overlook the impact of currency on overseas operations, the exchange rate is essential for Katoro. See, the firm is paid in US dollars but incurs costs in South African rand. In the last 12 months, the rand exchange rate has surged against the US dollar- there is now 18.46 rand to the dollar, compared to just 14 a year ago. This means there’s no better time to undertake work in the country.
Meanwhile, another pivotal point is the fact that previous work completed at Blyvoor has been significant enough to allow Katoro to proceed straight to the definitive feasibility study (“DFS”) stage from its scoping study. In doing so, it skips the time burden and costs associated with the pre-feasibility stage.
Is this particularly common in mining?
“No,” says Coetzee. “It’s not common for projects like this at all, especially in the mining side. The historic work that was done on Blyvoor was more than enough in terms of quality and quantity that we can progress and proceed immediately with a DFS. This saves us both time and money.”
Finally, one of the most exciting things about Blyvoor is Katoro's belief that the project will reach first production within just 18-24 months. For shareholders, this is a very short timeline to revenue – especially when Katoro’s market cap currently sits at just £5.2 million.
So, where will news come from next? More importantly, will it be able to extend the strong run Katoro’s share price has enjoyed since March?
Coetzee believes so, pointing to the numerous potential funding partners now circling Blyvoor:
“From the time we first announced this transaction we started engaging with potential funders. There's quite a number of them. There's quite a few that have shown quite a keen interest, and this has only increased since we made the scoping study results available,” he says.
All in all, Katoro looks to have a brilliant opportunity ahead of it at Blyvoor. New investors should watch closely – the firm’s current 2.3p share price could soon look very cheap.
Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Power Metal Resources (LSE:POW) and Red Rock Resources (LSE:RRR) both enjoyed a strong lift on Tuesday after revealing yet another expansion to their joint venture (“JV”) in Australia’s Victoria Goldfields.
Through their shared outfit Red Rock Australasia, the firms have lodged applications for two new licence areas covering 215km2 in Victoria – one of the world’s most active and prospective high-grade gold mining region.
This takes the JV’s total licence application area to 919km2 of ground adjacent to the Ballarat gold mine owned and operated by Castlemaine Goldfields – a subsidiary of Liongold Corporate. Ballarat is currently producing 40,000 ounces of gold a year at an average grade of 5.6g/t gold from underground mining and has historically produced more than 13 million ounces of the precious metal.
Excitingly, all of the joint venture’s application areas have extensive evidence of gold mineralisation. In many cases, they even have recorded production and historical drilling.
In Tuesday’s announcement, Power Metal’s chief executive Paul Johnson said the expansion has granted Red Rock Australasia “critical mass” in Victoria with a broad spread of targets that could become mines. “I look forward to the coming weeks and months, when we will be providing further information to the market outlining the prospectivity of each project within the JV portfolio,” he added.
Shares in Power Metal were up 12.6% on the news at 0.39p, their highest level since March, while Red Rock had advanced 27.4% to 0.3p.
The two firms first announced their entry into the Victoria Goldfields in April, when they applied for 130km2 of ground. Several days afterwards, they added a further 581km2 to this holding.
Victoria is currently experiencing something of a modern day goldrush. Historically, work in the region has mostly been mostly alluvial – or at surface. However, many players are now looking to follow in the footsteps of Kirkland Lake Gold, whose Fosterville gold mine has become one of the world’s highest-grade, and lowest-cost projects through underground drilling. In Q1 2020 alone, the project produced 159,864 ounces at 42.4g/t primarily from underground operations.
In Tuesday’s update, Andrew Bell, the chairman of Red Rock Resources, elaborated on his new JV’s potential to this end:
“Each license contains evidence of gold mineralisation and historic gold workings, with in many cases recorded production from previous alluvial mining or underground drives.
At a time when the Goldfields are attracting considerable new interest after a series of discoveries and the opening up of the high grade zones at the Fosterville mine, RRAL has made a strategic decision to become a regional specialist in the Victoria Goldfields with a twin focus on bringing brownfield projects back into production and discovering new mines. Often it is by producing that one makes discoveries."
Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Gold is having a fantastic run. All-time price highs are in sight, and all the indicators are pointing to this bull market running well into 2021- if not beyond.
Since August 2018, the price of the precious metal has risen from around $1,200 an ounce (“/oz”) to its current $1,729/oz. In 2020 alone, it has surged from $1,500/oz.
The last time gold rose through this key price level in a bull market was back in 2011. This heralded the start of a two-year spree of corporate takeovers, with larger gold mining companies aggressively snapping up their smaller peers in a bid to boost their reserves.
It now looks like we are on the cusp of history repeating itself. For eagle-eyed investors, this presents a fantastic opportunity to make a great deal of money.
The trick will be to invest in the right companies.
In its 10-million-ounce Rovina Valley gold project in Romania, Euro Sun (TSX:ESM, OTCQB:CPNFF) owns Europe’s second-largest commercial gold resource. With permitting for mine construction also well on the way to completion, the asset has to be one of the sector’s most attractive takeout targets.
However, with Euro Sun’s (TSX:ESM, OTCQB:CPNFF) market-cap sitting at just $36.9 million, Rovina Valley’s gold is currently valued at only $2-3 an ounce (“/oz”).
Historically, you would expect to see a project of this quality, and at this late stage of development, valued closer to $20/oz valuation.
But with the gold price rocketing, something has surely got to give.
After all, Rovina Valley is drill-ready with a vast gold resource and is located in one of the world’s safest jurisdictions.
In short, this project ticks all the boxes for a significant acquisition.
How much longer can Euro Sun (TSX:ESM, OTCQB:CPNFF) trade at such a discount?
With increasingly cashed-up gold miners now on the hunt to boost their reserves, the answer is almost certainly “not long”.
Gold – in the early stages of a strengthening bull market
A big part of the investment case for Euro Sun (TSX:ESM, OTCQB:CPNFF) comes down to whether you believe gold’s bull market will continue into the medium term?
The renowned safe-haven asset was already performing exceptionally well as we entered 2020, boosted by growing concerns about the escalating US/China trade war and fears about weakening global growth.
Then the Coronavirus struck.
That black swan has changed everything, and with central banks now rushing to print money on an unprecedented scale, the outlook for many is frightening.
And there is nothing the price of gold loves more than fear.
As other markets recoil from the impact of Covid-19, gold has continued to soar.
There is no sign of this slowing down anytime soon.
The longer this run continues, the better the prospects for companies like Euro Sun (TSX:ESM, OTCQB:CPNFF).
To see how big an opportunity could be in front of you right now, take a step back for a moment.
Look at the graph below.
Gold price in dollars per ounce over the past 12 months (Source: Kitco)
The last time we saw a gold bull run break out beyond $1,500/oz was back in 2011. When it did, it stayed above this key psychological barrier until 2013.
This sustained period of price strength was marked by a massive surge in acquisitions from major gold producers as they used extra cash on their balance sheets to build up their long-term reserves and resources.
With so much turmoil in the world today, and the extraordinary actions of central banks gathering pace, gold’s run shows no sign of stopping in the near future. Bank of America even predicts that gold will reach $3,000/oz within 18 months!
This can only be positive for takeout targets like Euro Sun (TSX:ESM, OTCQB:CPNFF).
So, what makes Euro Sun (TSX:ESM, OTCQB:CPNFF) such an attractive takeover target?
In broad terms, there are three main criteria that miners use in their hunt for new projects. These are:
Quality – the major miner wants to produce as much metal as it can for as little cost
Jurisdiction – the major miner wants to operate over the long-term in an area that is safe and mining-friendly
Progress – the major miner wants projects that are as close to being “shovel ready” as possible
Rovina Valley scores about as high as you can get in all three areas.
The project is the European Union’s (“EU”) second-largest gold deposit, with 10.11 million equivalent ounces of gold in the measured and indicated categories. These are the two most valuable categories for any mining asset to have.
It also boasts a considerable amount of upside potential in the form of the Stanija prospecting permit, where sampling has returned grades of up to 25.9 grams per tonne gold and 0.34% copper. Stanija, also wholly-owned by Euro Sun (TSX:ESM, OTCQB:CPNFF), is based just six kilometers away from Rovina Valley.
Location of the Rovina Valley project and neighboring Stanija Prospect (Source: Euro Sun Mining)
Meanwhile, Rovina Valley is based in Romania’s “Golden Quadrilateral”, one of Europe’s largest gold-producing areas. This is a critical jurisdictional de-risking factor for Euro Sun (TSX:ESM, OTCQB:CPNFF).
Since joining the EU in 2007, Romania has taken full advantage of its membership of the world’s largest trading block, regenerating its economy and opening up for international business – particularly in the mining space.
Euro Sun (TSX:ESM, OTCQB:CPNFF) broke new ground in November 2018 when it became the first non-state-owned firm in Romania to be awarded a mining licence. The clincher was the firm’s deep-rooted commitment to Environmental, Social, and Governance (“ESG”) principals, which saw it win government-backed authorizations at Rovina Valley previously denied to other firms.
In a March 2020 update, Euro Sun (TSX:ESM, OTCQB:CPNFF) went on to state publicly that it is confident it will win a construction permit and deliver a definitive feasibility study for Rovina Valleyin 2020. Notwithstanding any minor Covid-19-related delays, the asset will at this point be “shovel ready” and primed for production.
With Europe’s second-largest gold resource in an EU-member state and permitting well on the way to completion, Rovina Valley really is an ideal takeout target.
It is no surprise that billion-dollar fund manager Ruffer and specialist resource investor Orion Mine Finance have taken such considerable stakes in Euro Sun (TSX:ESM, OTCQB:CPNFF).
These backers represent some of the smartest money around. They recognize true value when they see it.
With Rovina Valley’s 10 million ounces of gold priced at only $2-3/oz, against an expected value of $20/oz, it is obvious what attracted them to this investment.
Given the huge discount currently being offered by the market, it will not be long before Euro Sun (TSX:ESM, OTCQB:CPNFF) sees a significant and hugely positive rerate.
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Authors: Daniel Flynn & Ben Turney
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MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Download this EXCLUSIVE report from ValueTheMarkets to discover why Fosterville South (TSX-V:FSX) is among the world’s hottest, high-grade gold exploration plays.
A spectacular underground gold rush is underway in the Australian state of Victoria.
It began just five years ago with the discovery of vast seams of high-grade gold at the Fosterville Gold Mine.
Thanks to significant advances in drilling technology and subterranean surveying techniques, mining companies can now access previously untapped, large-scaledeposits of high-grade gold.
For gold exploration firms, this is an extremely exciting new frontier.
The official Geological Survey of Victoria has even gone on-the-record to say it believes that at least 75,000,000 ounces of the precious metal are now waiting to be discovered across the state.
To put this into context, 88,000,000 ounces of gold have been mined in Victoria in the last 170 years.
At current spot prices, those undiscovered ounces would be worth a staggering $127,500,000,000.
With such great potential, it is no wonder the region is attracting so much international investor interest.
After all, the results at Fosterville have been stunning.
By the end of 2019, the mine’s owner, Kirkland Lake Gold (TSX:KL) (NYSE:KL), reported high-grade gold reserves of 2 million ounces with an additional 1.7 million inferred ounces at the site.
Better yet, between 2017 and 2019, the company mined 1.2 million ounces at Fosterville for a cost of just $315 an ounce, and an incredible average grade of 30.6 grams a tonne!
The Fosterville Gold Mine comfortably leads the pack when it comes to the world’s highest-grade, lowest-cost mining operations.
With such phenomenal success, it is no surprise that Kirkland Lake’s share price shot up over 27 TIMES, from C$2.20 in July 2015 to more than C$60 by the end of last year.
This has transformed the miner into a C$15 billion firm.
Now, with so much more high-grade gold potential remaining in Victoria, which company might be the next to experience such meteoric growth?
Fosterville South Exploration(TSX-V:FSX) certainly has strong potential.
Read this SPECIAL REPORT from ValueTheMarkets to learn the fascinating backstory to the incredible opportunity at Fosterville South (TSX-V:FSX)
The pitch for Fosterville South(TSX-V:FSX) is as straightforward as it comes.
Fosterville South(TSX-V:FSX) has managed to secure 1,386km2 of what could prove to be some of the most promising prospecting land for large-scale, high-grade gold deposits anywhere on the planet.
With a fully-funded, high-impact drill campaign ready to go in 2020, Fosterville South’s(TSX-V:FSX) award-winning technical team is particularly bullish about the company’s Lauriston Project.
Lauriston directly borders the Fosterville Gold mine, and the indications are that it shares the same geological features.
Rex Motton, Fosterville South’s(TSX-V:FSX) chief operating officer and the original inspiration behind this opportunity, is convinced about the potential for what modern drilling could uncover:
“Victoria has hardly scratched the surface when it comes to exploring these newly identified, high-grade underground gold zones.
There has been a lot of exploration done at Ballarat and Bendigo as they are very big goldfields, but when you look in a regional sense, there are very few deep drill holes.
Even on our ground in Lauriston, which sits directly adjacent to the Fosterville Gold Mine, there are only about a dozen reverse circulation holes and half a dozen diamond holes
None of these have gone deeper than about 200m in terms of drilling. For an area that is 600km2 in size that is minuscule.With such high-grade, near-surface historic production here, that is extremely surprising, but it also opens up an incredible opportunity for Fosterville South.)
To learn exactly why Rex Motton is so confident about Fosterville South (TSX-V:FSX) and how he was able to secure such a large area of prime high-grade gold exploration land DOWNLOAD THIS EXCLUSIVE REPORT from ValueTheMarkets.
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This communication is a paid advertisement. ValueTheMarkets, Digitonic Ltd, and their owners, managers, employees, and assigns (collectively “the Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Fosterville South Exploration Ltd. to conduct investor awareness advertising and marketing. Fosterville South Exploration Ltd. paid the Publisher the equivalent of one hundred thousand US dollars to produce and disseminate this and other similar articles and certain banner ads. This compensation should be viewed as a major conflict with our ability to be unbiased. Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our articles experience a large increase in volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price may likely occur. This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser. This communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results. This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher cannot guarantee the accuracy or completeness of the information.
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Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
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MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
Greatland Gold (LSE:GGP) was one of Wednesday's biggest winners after announcing another excellent set of drilling results at its Havieron project in Australia.
The company said work by major miner Newcrest (ASX:NCM), which is currently completing a farm-in to Havieron, has expanded further the continuity of high-grade gold mineralisation at the project. Mineralisation now extends over a 450-metre strike length to vertical depths of 600 metres while still remaining open at depth and to the northwest.
Highlight intersections from Newcrest's latest round of drilling include:
-142 m @ 1.9g/t Au, 0.38% Cu from 534m, including 15.7m @ 9.8g/t Au, 0.61% Cu from 572.3m
- 24m @ 3.9g/t Au, 0.21% Cu from 734m, including 17.3m @ 19g/t Au, 0.62% Cu from 790.7m
Work will now continue with the aim of establishing a maiden resource for Havieron by the second half of this year. Numerous environmental, geotechnical, and metallurgical studies are currently in place to support these efforts alongside future permitting requirements.
Meanwhile, Greatland expects Newcrest to complete the second stage of its farm-in to Havieron by the end of this month. The company is looking to begin an exploration decline at the project by the of this year or early 2021. It is also examining the likelihood of establishing commercial production within two to three years from this point.
Results to date support both high-grade selective and bulk mining methods at the project, and both options are currently being evaluated.
Greatland's chief executive Gervaise Heddle said: "We are delighted by this sixth consecutive set of excellent results from Newcrest's drilling campaign, which continue to demonstrate the continuity of high-grade mineralisation and expand the mineralised footprint. These latest results represent one of the best sets of drilling results at Havieron since Newcrest began its exploration campaign and reinforce the potential to accelerate the timetable for commercial production.
"As we enter the Australian exploration season, Newcrest continues to drill Havieron at pace and will shortly complete Stage 2 of the Farm-in. Meanwhile, we are planning to be very active with our own systematic exploration campaign across the Paterson, which will focus on drill testing many of the high-priority targets we identified last year."
As at writing, the company was trading 11.45 higher with a share price of 4.7p and a market capitalisation of £170.9 million.
The latest round of work adds further fuel to our recent argument that Havieron could be truly transformational for Greatland. To read our analysis, please click here.
Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance
