Gold Sum­mary for Nov. 14, 2017

Stockwatch Daily - - MINES & METALS - By Stock­watch Busi­ness Re­porter

NEW YORK spot gold gained $1.90 to $1,279.80 on Tues­day. The TSX Ven­ture Ex­change slid 7.80 points to 794.95 while the TSX Gold In­dex added 0.70 point to 193.56. Ya­mana Gold Inc. (YRI) led Cana­dian golds lower, dropping nine cents to $3.31 on 5.83 mil­lion shares, while Ag­nico Ea­gle Mines Ltd. (AEM) went the other way, gain­ing 47 cents to $57.83 on 528,000 shares.

Dr. Alexan­der Becker and Brian Slusarchuk’s Ke­nadyr Min­ing (Hold­ings) Ltd. (KEN), un­changed at 13.5 cents on 432,000 shares, has re­ceived as­says of up to 5.35 grams of gold per tonne over 29 me­tres from its 10th drill hole at the East zone on its Borubai project in the Kyr­gyz Repub­lic. In June, the com­pany re­ceived as­says of up to 8.15 grams of gold per tonne across 50 me­tres in the first of nine holes it drilled this year. Two weeks ago, as­says from the fol­low­ing eight holes also showed gold, although with lesser grades av­er­ag­ing be­tween one and 2.5 grams per

tonne across solid in­ter­vals.

Three of the 10 holes re­ported so far pro­duced in­ter­vals av­er­ag­ing over 10 grams per tonne over shorter in­ter­vals: 12.8 grams per tonne across 18 me­tres in the first hole, 10.41 grams per tonne across five me­tres in the eighth hole and 10.54 grams per tonne over four me­tres in the fi­nal hole. The Borubai project sur­rounds the new TBL mine, de­vel­oped by Zi­jin Min­ing Group Co. Ltd, which holds a reserve of 4.95 mil­lion tonnes av­er­ag­ing 7.02 grams per tonne.

Dr. Backer, chief ex­ec­u­tive of­fi­cer, and Mr. Slusarchuk, pres­i­dent, say that the min­er­al­iza­tion in the ore­body sur­round­ing the TBL mine ap­pears to con­tinue in two di­rec­tions along strike onto the com­pany’s Borubai li­cence. He says that the gold en­coun­tered in the East zone ap­pears to be an en ech­e­lon body sep­a­rate from TBL, so they are treat­ing it as a new dis­cov­ery. In­vestors are treat­ing that news as en­cour­ag­ing but their re­ac­tion this year has been bear­ish: Ke­nadyr’s now 13.5-cent stock be­gan trad­ing at $1 in April.

The com­pany did not pay any salaries to its pre­vi­ous crew last year when it was a cash shell, but through the first half of 2017 it paid nearly $190,000 in man­age­ment fees and nearly $120,000 to its di­rec­tors.

Chris­tian Mi­lau’s Trek Min­ing Inc. (TREK), down one cent to $1.01 on 281,000 shares, has re­ceived the last per­mit needed to build its Aur­i­zona mine in Brazil. (The “its” is soon to be­come “ours.” Trek is merg­ing with New­cas­tle Gold Ltd. (NCA: $0.78) and An­field Gold Corp. (ANF: $0.375) and will re­name it­self Equinox Gold Corp. Trek and New­cas­tle’s share­hold­ers will each hold 44 per cent of Equinox’s stock while An­field’s back­ers will hold the re­main­ing 12 per cent. Mr. Mi­lau, CEO of Trek will con­tinue in that role with Equinox, and Greg Smith, Trek’s pres­i­dent, will also keep his job, while Ross Beaty, An­field’s ma­jor share­holder, will in­vest $20-mil­lion into Equinox and be­come chair­man — or in the lan­guage of Howe Street — its “strate­gic leader and share­holder.”)

Mr. Mi­lau says that his com­pany also has the fi­nanc­ing in place to build the Aur­i­zona mine, which car­ries an es­ti­mated cap­i­tal cost of $130.8-mil­lion (U.S.) ac­cord­ing to a fea­si­bil­ity study com­pleted in July. Aur­i­zona, which is ex­pected to start pro­duc­tion late next year, is pro­posed to be an open-pit mine oper­at­ing at 8,000 tonnes per day, pro­duc­ing an av­er­age of 136,000 ounces an­nu­ally over a pro­jected life of 6.5 years. Trek’s study pro­jected a discounted net present value of $197.1-mil­lion (U.S.) af­ter taxes.

The salaries of Equinox’s crew are un­known, but pay cuts ap­pear un­likely. Mr. Smith hired on at $250,000 per year as CEO a year ago. He sub­se­quently handed that ti­tle over to Mr. Mi­lau early this year and be­came pres­i­dent, a switcheroo that usu­ally in­volves a larger to­tal ex­pen­di­ture, of­ten with­out any pay cuts.

Peter Dougherty’s Arg­onaut Gold Inc. (AR), up three cents to $2.47 on 690,000 shares, has agreed to ac­quire the Cerro del Gallo (CDG) gold project in cen­tral Mex­ico from Primero Min­ing Corp. (P: $0.08). Arg­onaut will pay $15-mil­lion to do so, although it ex­pects to re­cover $1.7-mil­lion of value added tax, cut­ting its gross cost to $13.3-mil­lion. Mr. Dougherty, the com­pany’s $375,000-(U.S.)-per-year pres­i­dent and CEO, says that he and his crew view the project as a low-risk, high-re­ward in­vest­ment for his share­hold­ers.

CDG cleared fea­si­bil­ity five years ago as a pro­posed 12,500-tonne-per-day open-pit, heap leach mine that would av­er­age 95,000 ounces of gold equiv­a­lent over seven years, with the pos­si­bil­ity of an ex­pan­sion that could dou­ble its life to 14 years. The project hosts a reserve of 32.2 mil­lion tonnes at 0.7 gram of gold per tonne and an ad­di­tional mea­sured and in­di­cated re­source of 47.9 mil­lion tonnes at 0.6 gram per tonne, for a com­bined 1.63 mil­lion ounces.


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