Gold Summary for Oct. 12, 2018
NEW YORK spot gold fell $6.20 to $1,217.40 on Friday. The TSX Venture Exchange rose 7.14 points to 698.60 while the TSX Gold Index lost 1.48 points to 168.52. Canadian golds followed bullion lower today, with Alamos Gold Inc. (AGI) shedding 19 cents to $6.38 on 2.21 million shares. Centerra Gold Inc. (CG) bucked the trend, adding 19 cents to $5.39 on 2.58 million shares.
Ross Beaty and Christian Milau’s Equinox Gold Corp. (EQX), up two cents to $1 on 1.04 million shares, has sold 102.6 million shares at 95 cents, raising $75-million (U.S.). The cash is for the acquisition of the Mesquite gold mine in California, as per a month-old definitive agreement with New Gold Inc. (NGD: $1.05). Equinox agreed to pay $158-million (U.S.) in cash for Mesquite and in addition to the equity sale, Equinox is setting up a $100-million (U.S.) credit facility with the Bank of Nova Scotia and a $20-million (U.S.) credit facility with Sprott Private Resource Lending LP.
The Mesquite mine hosts a reserve of 65.1 million tonnes at 0.54 gram of gold per tonne, or about 1.1 million ounces. As well, the mine hosts another 80.2 million tonnes measured and indicated at 0.46 gram per tonne and 8.9 million tonnes inferred at 0.38 gram per tonne, providing another 1.29 million ounces. New Gold’s most recent guidance projected Mesquite as on track to produce between 140,000 and 150,000 ounces of gold this year, somewhat higher than its 10-year average of 135,000 ounces produced at an average all-in sustaining cost of $870 (U.S.) per ounce.
Mr. Milau, chief executive officer, described the acquisition of Mesquite as one that would bring immediate production and cash flow to Equinox, adding that it was a “perfect fit for our portfolio of gold assets” and would advance the company’s strategy of becoming a major gold producer over the next few years.
The Vancouver-based Mr. Milau arrived in the spring of 2017. He earns $300,000 per year in salary. Greg Smith, president, earns about $240,000 per year in salary. Mr. Beaty, also of Vancouver, was appointed as chairman early this year. He is a major shareholder, holding over 50 million shares.
Sean Roosen and John Burzynski’s Osisko Mining Inc. (OSK), down 19 cents to $2.56 on 1.31 million shares, has reached Zone 27 with its exploration ramp at the Windfall Lake gold project in Quebec. Osisko will now start collecting its planned 5,000-tonne bulk sample from Zone 27, with processing of the rock scheduled to occur in November. Mr. Burzynski, president and CEO, says that the Zone 27 geology compares very well with what had been predicted by the company’s modelling based on drill results.
At last report, Windfall Lake held 2.38 million tonnes indicated at 7.85 grams of gold per tonne and another 10.6 million tonnes inferred at 6.7 grams per tonne, for a combined 2.9 million ounces of gold. Zone 27, which is a higher-grade portion of the Main zone at Windfall, accounted for just 375,000 of those ounces, with 628,000 tonnes indicated at 8.69 grams per tonne and 852,000 tonnes inferred at 7.28 grams per tonne.
The Toronto-based Mr. Burzynski has been with the company since 2010. He had been chairman, but he took the role of CEO in 2015 when his primary employer, Osisko Gold Royalties Ltd. (OR: $10.72) restructured the arrangement between it and its subsidiary. Mr. Burzynski was getting $300,000 per year, but he got a boost to $500,000 per year in 2016. Mr. Roosen, also of Toronto, collects $55,000 per year in fees. He took over from Ned Goodman who is now called chairman emeritus. (“Emeritus” is Latin for “veteran soldier,” but today it is a synonym for “lending your good name for free.”)
Ed Kruchkowski’s Decade Resources Ltd. (DEC), up one-half cent to 5.5 cents on 44,000 shares, has received assays of up to 10.6 grams of gold per tonne over 7.26 metres from a hole drilled into the Waterpump zone at its Red Cliff project, near Stewart in northwestern British Columbia. Mr. Kruchkowski, president, says that he is “very encouraged” with the initial assays from Red Cliff, although much of his encouragement stemmed from the assays obtained earlier this year. There could be more encouragement to come, as the company is waiting for assays from the final 22 holes, which are expected “in the coming weeks.” Mr. Kruchkowski is looking to the Montrose zone particularly, as the company reported visible gold in at least one of the pending tests.
The Calgary-based Mr. Kruchkowski, who has been with Decade for over a decade, has been drawing just
$24,000 per year in salary for the past few years. (His private company did better, billing Decade for nearly $150,000 in services last year.) He is also the president and CEO of Mountain Boy Minerals Ltd. (MTB: $0.055), with which he and his private company have similar arrangements.