Gold Summary for Jan. 10, 2019
NEW YORK spot gold fell $7.10 to $1,286.10 on Thursday. The TSX Venture Exchange fell 1.18 points to 596.93 and the TSX Gold Index slipped 1.67 points to 178.44. New Gold Inc. (NGD) traded briskly again today, but was lower, dropping 11 cents to $1.50 on 6.88 million shares.
John McCluskey’s Alamos Gold Inc. (AGI), down 10 cents to $5.04 on 2.08 million shares, has received assays of up to 152.07 grams of gold per tonne over five metres from drilling at the Western Extension zone at its Island mine, about 80 kilometres northeast of Wawa in Northern Ontario. The latest holes from the 2018 program, which included 141,000 metres of drilling across 719 holes, also yielded noteworthy assays from the Main Extension zone, which produced hits of up to 56.6 grams per tonne across 4.81 metres, and from the East Extension zone, where the company drilled 10.65 grams of gold across 2.94 metres.
Mr. McCluskey, president and chief executive officer, calls the Island gold mine a “tremendous success story,” both in terms of the mining operation and the mineral reserve and resource base. He cheered the company’s exploration effort last year in that regard, lauding the glittering hit in the Western zone as “one of the best directional holes ever.” (That intercept occurred 200 metres down plunge from the existing resource.) The latest Island resource estimate lists a reserve of 2.79 million tonnes at 10.69 grams of gold per tonne, plus another 841,000 tonnes measured and indicated at 8.18 grams per tonne and 3.67 million tonnes inferred at 9.99 grams per tonne, for a grand total of nearly 2.4 million ounces.
The Toronto-based Mr. McCluskey, now in his late 50s, has been with Alamos Gold and its predecessor since the mid-1990s. He has been drawing a base salary of over $550,000 (U.S.) for the past several years, and for his work in 2017 he received a regular cash bonus of over $800,000 (U.S.). If that was not enough, he also raked in just over $1-million (U.S.) to cover club dues, medical health coverage, parking fees and - for what hopefully are the big items — a retention payment and matching contributions for his share purchases. Dr. Michael Byron’s Nighthawk Gold Corp. (NHK), unchanged at 44.5 cents on 217,000 shares, has received assays of up to 6.91 grams of gold per tonne over 14.75 metres from drilling in the Horseshoe zone of its Damoti Lake gold project in the Northwest Territories. The assays, from the latest 17 holes drilled in the Horseshoe and Red Mountain zones, also included hits of 1.89 grams of gold per tonne over 8.65
metres in the Red Mountain zone. That hit, and another that returned 3.31 grams per tonne over 4.25 metres, represent a new discovery at Red Mountain that remains open in all directions.
Dr. Byron, Nighthawk’s $240,000-per-year president and CEO, was pleased, noting that while Nighthawk had not drilled Damoti since 2010, he nevertheless had been eager to “resume activities” on what he describes as a “unique, high-grade, near-surface deposit,” one that he considers to be — note the hedges — of great value as potential feed to augment possible future development at Colomac. Dr. Byron adds that the drilling nine years ago was designed to validate and expand the main deposit, but the most recent work was aimed at new targets beyond the main body, seeking new growth opportunities. He went on to offer what is often a promotion-stifling comment, that “additional drilling and exploration work will be contingent” upon the incorporation of all results so far into a geological model. (Dr. Byron is a geologist, not a natural promoter, and he likes his models.) Damoti hosts a resource of 40,600 tonnes measured and indicated at 26.17 grams per tonne and 17,800 tonnes inferred at 16.38 grams per tonne, for a total of 43,600 ounces of gold. Previous, now non-compli ant es timat es ranged as high as 2.08 million tonnes at 9.24 grams per tonne, or over 600,000 ounces. Dr. Byron says that the historical calculation is “believed relevant but should not be relied upon.” The regulators would offer only the latter opinion, while eager investors usually see only the rosy numbers.
Larry Phillips’s Compass Gold Corp. (CVB), down four cents to 24 cents on 148,000 shares, has received assays of up to 1.97 grams of gold per tonne over 13 metres, on the Ouassada portion of its Sikasso property in southern Mali. The assays are from the first eight holes drilled, which tested five of the 14 prospective targets on Ouassada. Mr. Phillips, CEO, says that he and his crew are pleased with the results — rarely do promoters admit otherwise — citing the gold hits in every hole, and because some of the intersections were up to 46 metres wide. Based on the results, he says that more drilling is planned — apparently without the need for an updated geological model.