Vancouver, British Columbia–(Newsfile Corp. – November 8, 2018) – Maritime ResourcesCorp. (TSXV: MAE) (“Maritime” or the “Company”) is pleased to announce that it has closed its non – brokered private placement previously announced on October 11, 2018. The Company has raised $3,502,959 through the issuance of a combination of 25,460,900 Units (the “Units”) at a price of $0.11 per Unit and 5,402,000 Flow-Through units (the “FT Units”) at a price of $0.13 per FT Unit (the “Offering”).
Each Unit consists of one common share and one-half (1/2) of one transferable common share purchase warrant (“Warrant”). Each whole Warrant will entitle the holder to acquire one common share of the Company at a price of $0.15 per common share for a period of 24 months expiring November 7, 2020.
Each FT Unit consists of one common flow-through share and one-half (1/2) of one transferable common share purchase warrant (“FT Warrant”). Each whole FT Warrant will entitle the holder to acquire one non-flow-through common share of the Company at a price of $0.15 per common share for a period of 24 months expiring November 7, 2020.
All Warrants will include an acceleration clause that, if at any time after 4 months from the closing of the Offering, if the closing price of the Company’s common shares on the TSX Venture Exchange is greater than $0.25 for 20 consecutive trading days, then the expiry date for the Warrants and the Warrants may, by notice in writing by the Company, be accelerated to 30 days following the date that such notice is given.
The Company issued a total of 2,152,791 finder units (“Finder Units”) at a price of $0.11 per Finder Unit. Each Finder Unit is comprised of one common share and one-half (1/2) of one non-transferable warrant (“Unit Finder Warrant”). Each whole Unit Finder Warrant is exercisable to purchase one common share of the Company at a price of $0.15 per common share for a period of 24 months expiring November 7, 2020.
The Company also issued 2,152,791 finder warrants exercisable at a price of $0.11 for a period of 24 months expiring November 7, 2020.
All securities issued are subject to a four month hold period expiring March 9, 2019.
Dundee Resources Ltd. purchased $1.77 million of the financing and now, together with its affiliates, owns or controls approximately 18.54% of Maritime Resources on an undiluted basis and 25.28% on a partially diluted basis. As finder, Sprott Capital Partners, a division of Sprott Private Wealth has placed $1.5 million, with Sprott Inc. purchasing $625,000 and together with its affiliates will own 13.25% of Maritime Resources on a partially diluted basis.
Doug Fulcher, President and CEO of Maritime commented, “With the closing of this placement and the significant participation by both Dundee and Sprott as strategic partners we are now in a position to move forward with our goals for the Hammerdown and Whisker Projects. We are continuing to add to our team of professional to further enhance our ability to advance our project in Newfoundland.”
Use of Proceeds
The net proceeds from the financing will be used to advance the Company’s 100% owned Hammerdown Mine project as well as the Whisker Valley and Orion project in Newfoundland and for general working capital and corporate purposes.
About Maritime Resources Corp:
Maritime Resources holds 100% of the Green Bay Property, located near Springdale, Newfoundland and Labrador, Canada. The property hosts the past producing Hammerdown gold mine and the Orion gold deposit separated by a 1.5 km distance that sits within an overall strike length of 4000 metres. As well the Lochinvar base metals/precious metals deposit sits to the north east end of the Rumbullion deposit.
Based on the Company’s March 2017 PFS, the Hammerdown mine is expected to produce approximately 180,000 ounces over a 5 year life at a cash cost of $558 CDN with an all in cost (including capital, sustaining capital and operating cost) of $955 CDN per ounce of gold. Total estimated upfront capital is $35M CDN, and the project has a pre-tax NPV8% = $72M CDN with an IRR of 47% based on a toll milling arrangement at the nearby Nugget Pond Mill. The after tax NPV8% = $44M CDN with an IRR = 35% based on a $1250/oz gold price.
There exist numerous opportunities for improvement, including a significant reduction in planned development and capital costs, as well as increasing the mine life with the conversion of approximately 400,000 ounces of gold in the inferred category adjacent to existing mine development.
Further information on the Green Bay Gold Property can be found on our website along with the NI43-101 compliant Technical Report filed on SEDAR on July 11, 2013 at www.maritimeresourcescorp.com.
Bernard H. Kahlert, P.Eng. is the Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical disclosure contained in this release.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Statements in this press release, other than purely historical information, including statements relating to the Company’s future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
Caution Regarding Forward Looking Statements:
Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute “forward-looking statements”.Such forward-looking statements include, without limitation, statements regarding copper, gold and silver forecasts, the financial strength of the Company, estimates regarding timing of future development and production and statements concerning possible expansion opportunities for the Company.Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis.Such assumptions include, without limitation, the price of and anticipated costs of recovery of, copper concentrate, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others.However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements.Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations.Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection.Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable security law.
From the offices of Amir Adnani:
Scott Melbye, our executive VP just returned from the Nuclear Energy Institute Uranium Fuel Conference in Boston. His takeaways are indicative of improving fundamentals that are driving the uranium market:
There was a strong turnout for this conference that focuses solely on nuclear fuel cycle issues. Continuing the trend of recent industry meetings, a number of attendees from the investment community were also present.
Cameco’s care and maintenance of the McArthur River mine was also a leading topic of conversation, particularly their ongoing procurement activity focused on the backfilling of customer contract commitments from open market purchases. While the price is already up over 60% from the 12-year low, they advised their purchasing program is still only in the early stages. They have increased their targeted purchase volumes expecting to buy 1-3 million pounds additionally by years-end and 10-12 million pounds in 2019.
UxC gave an unusually upbeat presentation on the uranium market, titled “Market on the Mend” noting global nuclear energy generation in 2018 has now surpassed the level of global nuclear power output that existed pre-Fukushima. They also stated 2018 has been a key year on the supply side with accelerated rebalancing of fundamentals due to the massive cuts to global production and increased investor purchases of uranium. They added that this was the first time since 2010 that global reactor demand and supplies fell back into balance (and deficit) as a result.
While Enricher underfeeding has contributed to oversupply of the uranium market over the past several years, both Urenco and Tenex confirmed the 20 million lbs. per year source of supply has peaked and is slated to decline. All expansion plans have been scrapped and older centrifuges are being taken off-line and decommissioned. The return of Japanese demand and supplies to other new entrants is contributing to the fuller utilization of existing capacity for enrichment activities and less for uranium creation.
In meetings with most of the utilities present, discussions centered around the Department of Commerce section 232 on foreign imports. This has put off some procurements plans on hold until the outcome is more clear, but the utilities acknowledge that their uncommitted requirements are rising in the coming years and a renewed procurement cycle needs to take place.
Finally, keynote speaker, Michael Shellenberger made a number of compelling arguments for nuclear in the global energy debate:
Over the past 40 years, nuclear energy has been shown to be the safest form of generating electricity, having saved over 1.8 million lives, compared to alternatives.
Nuclear power scaled up over this time to provide 6% of global electricity at a cost of $1.8 trillion, whereas, solar and wind has taken $2 trillion to scale up to provide only 3% of global energy.
Germany, which has increased its share of renewables while phasing out nuclear power, produces 10 times more CO2 per unit of energy than nuclear-heavy France, and German energy is twice as expensive as France’s.
In summary, this was an upbeat conference with a positive tone compared to recent years and encouraging for a continued recovery in the uranium price.
Best,
Amir Amir Adnani | President & CEO URANIUM ENERGY CORP NYSE AMERICAN: UEC | www.uraniumenergy.com
TORONTO, ON / ACCESSWIRE / November 8, 2018 / DNI Metals Inc. (CSE: DNI; OTC PINK: DMNKF) (“DNI” or the “Company”),
Environmental Licenses
DNI has put together all the information needed to properly file the documents for the Vohitsara and Marofody properties. The documents must be signed off by the Director General, “DG”, of the Mines Ministry. These documents are with the DG now.
Vohitsara:
These documents were filed with the Office National pour l’Environnement Madagascar, ONE, in December of 2017, but the proper capex calculation was not completed, and the proper fees were not paid.
As per our environmental impact study and the Cahier de Charges Minieres, DNI will file for the production of 15,000 tonnes of graphite per year. The pilot plant will be capable of 5-6,000 tonnes of graphite per year. When DNI builds its commercial plant, it will not have to re-apply or file additional information. DNI is preparing for the future.
The procedures from the Malagasy Office National Pour L’Environnement, “ONE”, National Environmental Office state the following:
Un permisenvironnemental est délivre par l’ONE à la suite d’une évaluation favorable de l’EIE (pour un délai légal de 60 jours)
Translation: An environmental license will be issued by the ONE following a favorable evaluation of the EIA, legally the ONE must complete this within 60 days.
The ONE will need to visit the properties twice. DNI is hoping to complete this within the 60 days.
OFFICE NATIONAL POUR L’ENVIRONNEMENT
NOTES SUR LES PROCEDURES MECIE (EIE)
Le dossier est dépose, contre accuse de réception, auprès de l’ONE.
Le promoteur contribue aux frais d’évaluation de l’EIE (art. 14 nouveau) selon le niveau de son imiestissement, aux barèmes suivants :
0,5%du montant de l’investissement matériel lorsque celui-ci est inferieur a 2 milliards de ARIARY
2 millions de ARIARY majores de 0,4% du montant de l’investissement matériel lorsque celui-ci est compris entre 2 milliards et 5 milliards de ARIARY
7 millions de ARIARY majores de 0,3% du montant de l’investissement matériel lorsque celui-ci est compris entre 5 milliards et 25 milliards de ARIARY
32 millions de ARIARY majores de 0,2% du montant de l’investissement matériel lorsque celui-ci est compris entre 25 milliards et 50 milliards de ARIARY
82 millions de ARIARY majores de 0,1% du montant de l’investissement matériel lorsque celui-ci est supérieur a 50 milliards de ARIARY
Les frais d’évaluation sont versés par l’investisseur a un compte spécial ouvert à cet effet par l’ONE et acquittes avant toute évaluation environnementale de l’investissement.
Mode de paiement:
Virement bancaire
Remise de chèque : Cheque barre libelle au nom de !’Office National pour I’ Environnement.
Un permisenvironnemental est délivre par l’ONE à la suite d’une évaluation favorable de l’EIE (pour un délai légal de 60 jours)
New Madagascar Team – In Place
Dan Weir, the CEO of DNI, has taken charge of all of DNI’s Madagascar operations which includes, but is not limited to, obtaining the environmental licenses for its Vohitsara and Marofody properties. The new team, which includes inhouse legal counsel, government relations personal, an office manager, and a CSR consultant.
As DNI constructs its pilot plant and ultimately larger scale production, additional team members will be required.
Annual Meeting
DNI has set its annual and special meeting date for December 20, 2018.
The Record date is November 19, 2018.
Resolutions will include:
Election of Directors
Appointment of Auditors
Changing Financial Year End to December 31, to match the Malagasy and Mauritian subsidiary companies.
Continuing DNI as a Canadian company under the Canada Business Corporations Act, from its current domicile as a Quebec company.
As DNI moves towards building its pilot plant and ultimately a commercial plant, Paul Hart and Brian Howlett have decided not to stand for re-election to the Board. DNI will bring additional technical and sales oriented people to the board. Brian and Paul have decided to step down effective today. DNI would like to thank both Brian and Paul for their support, and wish them all the best in their future endeavours.
DNI’s board will consist of the following:
John Carter Director Process Engineer
Mr. Carter is currently the CEO of Northern Sphere Mining. Has over 35 years experience in the metals and mining industries. Mr. Carter specializes in the engineering design and manufacturing of mineral processing equipment for mining operations and operators such as Timcal Inc., currently the largest natural graphite mining company in North America. John has built over 200 mineral processing plants around the world, including 3 graphite processing plants.
Keith Minty Director Mining Engineer, MBA
Keith has more than 30 years professional experience in mineral resource exploration and development in precious and base metals, industrial minerals. Mr. Minty obtained extensive graphite technical and operating experience at both North Coast Industries (now Northern Graphite Corporation) Bissett Creek Graphite and Cal Graphite Corporation (now Ontario Graphite Inc.) Kearney graphite mine and has experience of in the development of several past and new Sri Lanka graphite projects. Mr. Minty has had the opportunity of conducting Madagascar precious metals project valuations and is knowledgeable of the political and social requirements associated with Madagascar project development and operations.
Daniel J. Weir Chairman CEO, President
Dan has worked for over 20 years at some of the top financial firms in Canada. He worked as an Institutional Equity Trader, and as a broker he managed over $500 million. Before joining DNI in November 2014, he was the Head of Institutional Sales at a boutique firm focused on financing Mining companies. Having raised millions of dollars, both publicly and privately, Mr. Weir has expertise at evaluating and financing mining deals. Dan has managed large high tech electrical and energy management projects, having owned his own electrical management firm. Dan graduated from the University of Toronto.
Dan has the skills to not only build and manage a graphite processing plant, but also the needed skills to fund, promote, and market graphite products.
This press release contains forward-looking statements, including statements that relate to, among other things, the following: (i) the geological characteristics of the projects; (ii) the potential to discover additional mineralization and to extend the area of mineralization; (iii) the potential to raise additional financing; and (iv) the potential to expand and upgrade the resource estimate of the projects. Forward-looking information is subject to the risks, uncertainties and other important factors that could cause the Company’s actual performance to differ materially from that expressed in or implied by such statements. Such factors include, but are not limited to volatility and sensitivity to market metal prices, impact of change in foreign exchange rates, interest rates, imprecision in resource estimates, imprecision in opinions on geology, environmental risks including increased regulatory burdens, unexpected geological conditions, adverse mining conditions, changes in government regulations and policies, including laws and policies; and failure to obtain necessary permits and approvals from government authorities, and other development and operating risks, and can generally be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “likely”, “possible”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective”, “hope” and “continue” (or the negative thereof) and words and expressions of similar import. Although DNI believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company’s most recent annual and interim Management’s Discussion and Analysis under “Risk and Uncertainties” as well as in other public disclosure documents filed with Canadian securities regulatory authorities. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.
CITIC Metal and Zijin Mining invested more than C$800 million to advance Ivanhoe’s three world-scale mine projects in Southern Africa
Ivanhoeannounced the MakokoDiscovery on its 100%-owned Western Foreland exploration licences near Kamoa-Kakula– the company’s third major copper discovery in the DRC
Toronto, Ontario–(Newsfile Corp. – November 8, 2018) – Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) today announced its financial results for the third quarter ended September 30, 2018. All figures are in U.S. dollars unless otherwise stated. Ivanhoe Mines is a Canadian mining company focused on advancing its three principal projects in Southern Africa: the development of new mines at the Kamoa-Kakula copper discovery in the Democratic Republic of Congo (DRC) and the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa; and the extensive redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-lead mine, also in the DRC.
Highlights
On September 19, 2018, China-based CITIC Metal Co., Ltd. (CITIC Metal) completed a long-term, strategic cooperation and investment agreement that saw its direct subsidiary, CITIC Metal Africa Investments Limited (CITIC Metal Africa), invest C$723 million ($555 million) to advance Ivanhoe’s three projects in Southern Africa. Under the terms of the investment agreement, CITIC Metal Africa acquired a 19.5% stake in Ivanhoe Mines through a private placement at a price of C$3.68 per share.
Also on September 19, 2018, Zijin Mining Group Co., Ltd. (Zijin Mining), Ivanhoe’s joint-venture partner at the Kamoa-Kakula Project, exercised its anti-dilution rights at a price of C$3.68 per share, generating additional proceeds for Ivanhoe of C$78 million (approximately US$60 million). This resulted in Zijin retaining a 9.7% ownership stake in Ivanhoe Mines – its level of ownership prior to the completion of CITIC Metal Africa’s strategic investment.
Pursuant to the terms of the strategic cooperation and investment agreement with CITIC Metal, Yufeng “Miles” Sun, President of CITIC Metal Group Limited, and Tadeu Carneiro, former Chief Executive Officer of Brazil-based Companhia Brasileira de Metalurgia e Mineração (CBMM), have joined the Ivanhoe Mines Board of Directors. Mr. Sun and Mr. Carneiro were nominated by CITIC Metal. Mr. Carneiro is an independent director of Ivanhoe Mines.
On October 1, 2018, Ivanhoe announced the Makoko Copper Discovery on its 100%-owned Western Foreland exploration licences, near Kamoa-Kakula in the DRC. Makoko, Ivanhoe’s third major copper discovery in the DRC, shows geological characteristics identical to the tier-one Kamoa-Kakula Discoveries. Drilling is continuing on other Western Foreland targets.
Underground development at the planned initial mine at Kakula is making steady progress and is expected to reach the high-grade copper mineralization later this year. The service and conveyor declines each have been advanced more than 1,000 metres through underground development work. The 3,535-metre decline development contract is scheduled to be completed by the end of 2018.
A pre-feasibility study (PFS) for phase 1 of the Kamoa-Kakula Project is underway and is expected to be completed early in 2019. The planned initial, six-million-tonne-per-annum (Mtpa) mine and concentrator at Kakula is estimated to have an initial capital cost of $1.2 billion. Subsequent expansions and a smelter can be funded from cash flows or project finance. Ivanhoe and Zijin Mining are exploring options to accelerate building of the first two mines at Kamoa-Kakula, and the potential for expanding production to 18 Mtpa, and beyond.
A total of 25,298 metres of drilling was completed at Kakula, Kakula West and Kamoa North and surrounding areas during Q3 2018, increasing the total drilling completed during the first nine months of 2018 to 62,224 metres.
On July 30, 2018, Ivanhoe announced a new Mineral Resource estimate for the Kipushi Mine in the DRC that increased zinc-rich Measured and Indicated Mineral Resources by 16%, from 10.2 million tonnes to 11.8 million tonnes.
The new estimate also increased Kipushi’s zinc grade from 34.89% to 35.34%. In addition, the mine’s copper-rich Measured and Indicated Resources have increased by 40% from 1.6 million tonnes to 2.3 million tonnes, with a slight increase in the copper grade from 4.01% to 4.03%.
The updated Mineral Resource will be used in the preparation of the Kipushi definitive feasibility study (DFS), which is expected early in 2019. The DFS will update and refine the findings of the PFS issued last December. Similar to the PFS, the DFS will focus on the initial mining of Kipushi’s Big Zinc Zone.
The December 2017 PFS analyzed the plan to bring Kipushi’s Big Zinc Zone into production in less than two years, with a life-of-mine, average annual production rate of 225,000 tonnes of zinc and cash costs of $0.48 per pound of zinc. The planned return to production would establish Kipushi as the world’s highest-grade, major zinc mine.
On October 8, 2018, Ivanhoe announced that the sinking of Shaft 1 at the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa reached the top of the Flatreef orebody, at a depth of approximately 780 metres. Sinking has reached a depth of 809 metres and will continue to its planned final depth of 982 metres. The Platreef mining team delivered the first ore from the underground mine development to surface stockpiles for metallurgical sampling.
The estimated thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 26 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 26-metre intersection will yield approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals.
Surface construction for Platreef’s Shaft 2 is progressing. Blasting and excavation of a box cut to a depth of approximately 29 metres below surface is underway. Construction of a concrete hitch for the headframe is expected to be completed early in 2019.
Based on the findings of an independent, DFS issued in July 2017, the Platreef Mine is projected to be Africa’s lowest-cost producer of platinum-group metals, with a cash cost of $351 per ounce of platinum, palladium, rhodium and gold, net of by-products, including sustaining capital costs.
At the end of Q3 2018, Kamoa-Kakula had recorded 11.27 million work hours free of lost-time injuries, Kipushi 1.72 million work hours, and Platreef 666,009 work hours.
Principal projects and review of activities
1. Platreef Project
64%-owned by Ivanhoe Mines
South Africa
The Platreef Project is owned by Ivanplats (Pty) Ltd (Ivanplats), which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic empowerment (B-BBEE) partners, which include 20 local host communities with a total of approximately 150,000 people, project employees and local entrepreneurs. In April 2018, Ivanplats reconfirmed its Level 3 status in its fourth verification assessment on a B-BBEE scorecard. A Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation owns a 10% interest in Ivanplats, which it acquired in two tranches in 2010 and 2011 for a total investment of $290 million.
The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province, approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane.
On the Northern Limb, platinum-group metals mineralization is hosted primarily within the Platreef, a mineralized sequence that is traced more than 30 kilometres along strike. Ivanhoe’s Platreef Project, within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and properties.
Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties, which form part of the company’s mining right.
Health and safety at Platreef
At the end of Q3 2018, the Platreef Project reached a total of 666,009 lost-time, injury-free hours worked in terms of South Africa’s Mine Health and Safety Act and Occupational Health and Safety Act. It has been four months since the last lost-time injury occurred at the Platreef Project, which continues to strive toward its workplace objective of an environment that causes zero harm to employees, contractors, sub-contractors and consultants.
Shaft 1 now extends to a depth of 800 metres below surface
Shaft 1 reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth of 780.2 metres below surface in September 2018. The Platreef mining team has delivered the first ore from the underground mine development to surface stockpiles for metallurgical sampling. The estimated thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 26 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 26-metre intersection will yield approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals.
Current shaft depth is 809 metres and sinking is continuing through the mineralized reef. The 750-metre-level station was successfully developed, with steelwork and concrete construction ongoing. The station will provide initial, underground access to the high-grade orebody, enabling mine development to proceed during the construction of Shaft 2. With a hoisting capacity of six million tonnes a year, Shaft 2 will become the mine’s main production shaft and will allow access for the first raise-bore shaft that will provide ventilation to the underground workings during the mine’s ramp-up phase.
As shaft sinking advances, two additional stations will be developed at mine-working depths of 850 metres and 950 metres. Shaft 1 is expected to reach its projected, final depth of 982 metres below surface in early 2020. Shaft 1 ultimately will become the primary ventilation intake shaft during the project’s initial, four-Mtpa production case.
Figure 1: Members of the PlatreefProject team and its South African sinking contractor,
Aveng Mining, in Shaft 1 at the intersection of the Flatreef Deposit.
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Shaft 2 early-works construction progressing
Shaft 2, to be located approximately 100 metres northeast of Shaft 1, will have an internal diameter of 10 metres. It will be lined with concrete and sunk to a planned, final depth of more than 1,104 metres below surface. It will be equipped with two, 40-tonne, rock-hoisting skips capable of hoisting a total of six million tonnes of ore a year – the single largest hoisting capacity at any mine in Africa.
The headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts Cementation. The first seven blasts for Shaft 2’s box cut were successfully completed, with the last two remaining blasts expected to take place before the end of 2018. The blasting will enable the excavation of the box cut to a depth of approximately 29 metres below surface and the construction of the concrete hitch (shaft collar foundation) for the 103-metre-tall concrete headgear that will house the shaft’s permanent hoisting facilities and support the shaft collar. Excavation of the box cut and construction of the hitch foundation is expected to be completed in early 2019, enabling the beginning of the pre-sink that will extend 84 metres below surface.
Figure 2: Shaft 2 box-cut excavation in progress.
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Underground mining to incorporate highly productive, mechanized methods
Ivanhoe plans to develop the Platreef Mine in phases. The initial annual production rate of four Mtpa is designed to establish an operating platform to support future expansions. This is expected to be followed by a potential doubling of production to eight Mtpa, and then a third expansion phase to a steady-state 12 Mtpa, which would establish Platreef among the largest platinum-group-metals mines in the world.
The mining zones in the current Platreef mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below surface. Shaft 2 will provide primary access to the mining zones; secondary access will be via Shaft 1. During mine production, both shafts also will serve as ventilation intakes. Three additional ventilation exhaust raises are planned to achieve steady-state production.
Planned mining methods will use highly productive, mechanized methods, including long-hole stoping and drift-and-fill mining. Each method will utilize cemented backfill for maximum ore extraction. The ore will be hauled from the stopes to a series of internal ore passes and fed to the bottom of Shaft 2, where it will be crushed and hoisted to surface.
The current mine plan has been improved beyond earlier projections in the 2015 PFS mine plan by optimizing stope design, employing a declining Net Smelter Return (NSR) strategy and targeting higher-grade zones early in the mine’s life. This strategy has increased the grade profile by 23% on a 3PE+Au basis in the first 10 years of operation and by 10% during the life of the mine.
Platreef project financing continuingto advance
Ivanhoe continues to advance the arrangement of project financing for the development of the Platreef Project. Negotiation of a term sheet is progressing well with the Initial Mandated Lead Arrangers (IMLAs), which are KfW IPEX-Bank, a 100% subsidiary of the German promotional bank KfW; Swedish Export Credit Corporation; Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division); and Societe Generale Corporate & Investment Banking.
In October 2018, Export Development Canada (EDC) advised Ivanhoe that it would not renew its IMLA mandate, as it is currently reviewing its market position for South Africa. EDC informed Ivanhoe that its decision was not, based on the due diligence completed to date, related to any specific concern it had with the company or the Platreef Project. In addition preliminary discussions are underway with leading South African financial institutions regarding the financing of the black economic empowerment partners’ contribution to the development capital which would thereby reduce the amount that would otherwise have to be contributed by Ivanhoe on their behalf.
Long-term supply of bulk water secured for the Platreef Mine
On May 7, 2018, Ivanhoe announced the signing of a new agreement to receive local, treated water to supply most of the bulk water needed for the first phase of production at Platreef. The Mogalakwena Local Municipality has agreed to supply a minimum of five million litres of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi Treatment Works. Initial supply will be used in Platreef’s ongoing underground mine development and surface infrastructure construction.
Under terms of the agreement, which is subject to certain suspensive conditions, Ivanplats will provide financial assistance to the municipality for certified costs of up to a maximum of R248 million (approximately $19.6 million) to complete the Masodi treatment plant. Ivanplats will purchase the treated wastewater at a reduced rate of R5 per thousand litres for the first 10 Ml/day to offset a portion of the initial capital contributed.
Development of human resources and job skills
Work progressed on the implementation of Ivanhoe’s Social and Labour Plan (SLP). The company has pledged a total of R160 million ($13 million) during the first five years, culminating in November 2019. The approved plan includes R67 million ($6 million) for the development of job skills among local residents and R88 million ($7 million) for local economic development projects.
2. Kipushi Project
68%-owned by Ivanhoe Mines
Democratic Republic of Congo
The Kipushi copper-zinc-germanium-lead mine, in the DRC, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It is located on the Central African Copperbelt, approximately 250 kilometres southeast of the Kamoa-Kakula Project and less than one kilometre from the Zambian border. Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the state-owned mining company, La Générale des Carrières et des Mines (Gécamines).
Health, safety and community development
At the end of Q3 2018, the Kipushi Project had achieved a total 1,724,816 work hours free of lost-time injuries. On September 16, 2018, it had been a year since a lost-time injury had occurred at the Kipushi Project.
The Kipushi Project operates a potable-water station to supply the municipality with water. This includes power supply, disinfectant chemicals, routine maintenance, security and emergency repair of leaks to the primary reticulation. The Kipushi Project also installed and commissioned new overhead powerlines to the pump station. Other community development projects continued during Q3 and included the Kipushi women’s literacy project.
Kipushi Mineral Resources
The Kipushi Project’s current Mineral Resource estimate was updated with an effective date of June 14, 2018, and was prepared by the MSA Group, of Johannesburg, South Africa, in compliance with 2014 CIM Definition Standards.
Zinc-rich Measured and Indicated Mineral Resources, primarily in the Big Zinc Zone, total 11.78 million tonnes at grades of 35.34% zinc, 0.80% copper, 23 g/t silver and 64 g/t germanium, at a 7% zinc cut-off – containing an estimated 9.2 billion pounds of zinc. Zinc-rich Inferred Mineral Resources total an additional 1.14 million tonnes at grades of 33.77% zinc, 1.24% copper, 12 g/t silver and 62 g/t germanium. The Inferred Mineral Resources are contained partly in the Big Zinc Zone and partly in the Southern Zinc Zone.
Copper-rich Measured and Indicated Mineral Resources contained in the adjacent Fault Zone, Fault Zone Splay and Série Récurrente Zone total an additional 2.29 million tonnes at grades of 4.03% copper, 2.85% zinc, 21 g/t silver and 19 g/t germanium, at a 1.5% copper cut-off – containing 144 million pounds of copper. Copper-rich Inferred Mineral Resources in these zones total an additional 0.44 million tonnes at grades of 3.89% copper, 10.77% zinc, 19 g/t silver and 55 g/t germanium.
The new Mineral Resource estimate incorporates Ivanhoe’s second phase of underground drilling at Kipushi that was completed in 2017.
Pre-feasibility study for Kipushi completed in December 2017; definitive feasibility study underway
The Kipushi Project’s PFS, announced by Ivanhoe Mines on December 13, 2017, anticipated annual production of an average of 381,000 tonnes of zinc concentrate over an 11-year, initial mine life at a total cash cost of approximately $0.48 per pound of zinc.
Highlights of the PFS, based on a long-term zinc price of $1.10 per pound, include:
After-tax net present value (NPV) at an 8% real discount rate of $683 million.
After-tax real internal rate of return (IRR) of 35.3%.
After-tax project payback period of 2.2 years.
Pre-production capital costs, including contingency, estimated at $337 million.
Existing surface and underground infrastructure allows for significantly lower capital costs than comparable greenfield development projects.
Life-of-mine average planned zinc concentrate production of 381,000 dry tonnes per annum, with a concentrate grade of 59% zinc, is expected to rank Kipushi, once in production, among the world’s largest zinc mines.
Estimated life-of-mine average cash cost of $0.48 per pound of zinc is expected to rank Kipushi, once in production, in the bottom quartile of the cash-cost curve for zinc producers internationally.
The planned primary mining method for the Big Zinc Deposit in the PFS is sublevel, long-hole, open stoping, with cemented backfill. The crown pillars are expected to be mined once adjacent stopes are backfilled using a pillar-retreat mining method. The Big Zinc Deposit is expected to be accessed via the existing decline and without any significant new development. The main levels are planned to be at 60-metre vertical intervals, with sublevels at 30-metre intervals.
Geology and exploration
Work is focused on additional information required for the ongoing feasibility study as well as planning the geological delineation drilling for the underground mine development. The design criteria targeted areas along the edge of the Big Zinc, which presently are inaccessible from the historic workings.
Figure 3: BukasaLengesha, a boilermaker at Kipushi, inspecting the recently installed ore-loading flask at the bottom of Shaft 5.
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Significant progress has been made in modernizing the Kipushi Mine’s underground infrastructure as part of preparations for the mine to resume commercial production. In Q3 2018, the Kipushi Project successfully completed initial, pre-production testing as part of the equipment commissioning process for the new, large-capacity rock crusher that has been installed 1,150 metres below surface. The Sandvik jaw crusher has a maximum capacity of 1,085 tonnes an hour. The 54-tonne machine was re-assembled and installed in the crusher chamber after it was disassembled on surface and its pieces were lowered down Shaft 5, which is the Kipushi Mine’s main production shaft.
Ivanhoe completed the upgrading of a significant amount of underground infrastructure at the Kipushi Project, including a series of vertical mine shafts to various depths, with associated head frames, as well as underground mine excavations. A series of crosscuts and ventilation infrastructure still are in working condition. The underground infrastructure also includes a series of pumps to manage the influx of water into the mine.
Figure 4: Kipushi’s new primary rock crusher at the mine’s 1,150-metre level. The crusher was successfully cold-commissioned in September.
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Shaft 5 is eight metres in diameter and 1,240 metres deep. It now has been upgraded and re-commissioned. The main personnel and material winder has been upgraded and modernized to meet international industry standards and safety criteria. The Shaft 5 rock-hoisting winder now is fully operational, with new head- and tail-ropes also installed. The two newly manufactured rock conveyances (skips) and the supporting frames (bridles) have been installed in the shaft to facilitate the hoisting of rock from the main ore and waste storage silos feeding rock on the 1,200-metre level.
The main haulage way on the 1,150-metre level between the Big Zinc access decline and Shaft 5 rock load-out facilities has been resurfaced with concrete so the mine now can use modern, trackless, mobile machinery.
With the underground upgrading program nearing completion, the project’s focus now will shift to modernizing and upgrading Kipushi’s surface infrastructure to handle and process Kipushi’s high-grade zinc and copper resources.
3. Kamoa-KakulaCopper Project
39.6%-owned by Ivanhoe Mines
Democratic Republic of Congo
The Kamoa-Kakula Copper Project, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the largest copper discovery ever made on the African continent – with adjacent prospective exploration areas within the Central African Copperbelt in the Democratic Republic of Congo. The project is approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi.
Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining in December 2015 for an aggregate consideration of $412 million. At the time, Kamoa Holding held a 95% interest in the Kamoa Project. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River Global Limited (Crystal River) for $8.32 million – which Crystal River will pay through a non-interest-bearing, 10-year promissory note. Since the conclusion of the Zijin transaction in December 2015, each shareholder has been required to fund expenditures at the Kamoa-Kakula Project in an amount equivalent to its proportionate shareholding interest in Kamoa Holding.
A 5%, non-dilutable interest in the Kamoa-Kakula Project was transferred to the DRC government on September 11, 2012, for no consideration, pursuant to the 2002 DRC mining code. Following the signing of an agreement with the DRC government in November 2016, in which an additional 15% interest in the Kamoa-Kakula Project was transferred to the DRC government, Ivanhoe and Zijin Mining now each hold an indirect, 39.6% interest in the Kamoa-Kakula Project, Crystal River holds an indirect 0.8% interest and the DRC government holds a direct 20% interest. Kamoa Holding holds an 80% interest in the project.
Health and safety at Kamoa-Kakula
At the end of Q3 2018, the Kamoa-Kakula Project had achieved a total of 11,271,678 work hours free of lost-time injuries. It has been approximately seven years since the last lost-time injury occurred at the project. This outstanding achievement reflects the dedication and safety-focused culture of the entire Kamoa-Kakula exploration and development teams.
Kamoa-Kakula Mineral Resources
Ivanhoe issued an updated Mineral Resource estimate for the Kamoa-Kakula Project on February 26, 2018. It included an updated Kakula Mineral Resource estimate and was prepared by Ivanhoe Mines under the direction of Amec Foster Wheeler E&C Services Inc., of Reno, USA, in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. The Qualified Persons for the Kamoa-Kakula Mineral Resource estimate are Dr. Harry Parker, RM, SME, and Gordon Seibel, RM, SME, both of Amec Foster Wheeler E&C Services Inc.
Indicated Mineral Resources for the combined Kamoa-Kakula Project now total 1,340 million tonnes grading 2.72% copper, containing 80.7 billion pounds of copper at a 1.0% copper cut-off grade and a minimum thickness of three metres. Kamoa-Kakula also has Inferred Mineral Resources of 315 million tonnes grading 1.87% copper and containing 13.0 billion pounds of copper, also at a 1.0% copper cut-off grade and a minimum thickness of three metres.
The Kakula estimate covers a mineralized strike length of 13.3 kilometres and is based on results from approximately 151,000 metres of drilling in 271 holes completed by December 31, 2017. Indicated Mineral Resources total 585 million tonnes at a grade of 2.92% copper, containing 37.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Indicated Mineral Resources total 330 million tonnes at a 4.07% copper grade, containing 29.6 billion pounds of copper. At a 3% copper cut-off, Indicated Mineral Resources total 174 million tonnes at a grade of 5.62% copper, containing 21.5 billion pounds of copper.
Inferred Mineral Resources total 113 million tonnes at a grade of 1.90% copper, containing 4.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Inferred Mineral Resources total 44 million tonnes at a 2.59% copper grade, containing 2.5 billion pounds of copper. At a 3% copper cut-off, Inferred Mineral Resources total nine million tonnes at a grade of 3.66% copper, containing 0.7 billion pounds of copper.
The average true thickness of the selective mineralized zone (SMZ) at a 1% copper cut-off is 10.1 metres in the Indicated Mineral Resources area and 6.7 metres in the Inferred Mineral Resources area. At a higher 3% copper cut-off, the average true thickness of the SMZ is 4.7 metres in the Indicated Mineral Resources area and 3.3 metres in the Inferred Mineral Resources area.
The Kakula Mineral Resources are defined within a total area of 24.9 square kilometres at a 1% copper cut-off. At the same cut-off grade, the areal extent of Indicated Mineral Resources is 19.4 square kilometres and the areal extent of the Inferred Mineral Resources is 5.5 square kilometres. The Kakula Discovery remains open for significant expansion in multiple directions, while the remainder of the southern parts of the Kamoa-Kakula mining-licence area is virtually untested.
KakulaPFS currently underway
A PFS for phase 1 of the Kamoa-Kakula Project is underway. The study is considering a six-Mtpa mine and concentrator at Kakula, and is expected to be completed early in 2019.
Underground development progressing at the Kakula Deposit
Each of the twin declines at Kakula had been advanced more than 1,000 metres from the portal face toward the mineralized zone at the end of Q3 2018. Construction of the 1,050-metre-level dam has started and is planned to be commissioned by mid-2019. The next priority will be the drifts to the development tip and bottom of Ventilation Shaft 1, which will be developed via raise boring. The 3,535-metre decline development contract is scheduled to be completed by the end of 2018.
The detailed design and tenders for the conveyor system for the main decline, the development tip and west tip one are well advanced. The earthworks design for the surface conveyor drive station has been completed and construction is due to start shortly. All tenders for major conveyor components, including steelwork, drives, belting and pulleys, have been received and are being adjudicated. Tenders for the rock breaker and apron feeders have been adjudicated. Adjudication for the steelwork fabrication has been completed and the order will be placed shortly. Commissioning of the conveyor system is planned to be completed by September 2019.
Contract discussions have been concluded for construction of Ventilation Shaft 1 by raise boring. Bottom access to the shaft is expected via the Kakula declines by January 2019 and reaming of the shaft is expected to start in February 2019.
Exploration activities continue at Kakula and Kamoa North
Exploration drilling during Q3 2018 was split between Kakula and Kamoa North, with 25,298 metres drilled during the quarter in 66 holes. A total of 21 holes were completed in Kamoa North.
Drilling at Kamoa North focused on continued testing of previously identified, shallow, high-grade trends that were not fully evaluated in the 2017 program. The results of this program are due to be released when the final assays are returned. Exploration has continued at Kakula, with known mineralization remaining open and unconstrained to the north of Kakula West.
Regional geophysical surveys
The seismic survey to complete the final part of seismic transects toward the northern part of the area was completed early in Q3 2018. Vertical seismic profiles (VSPs), were completed down a number of boreholes during the quarter. VSPs are used to calibrate the seismic survey and facilitate a more accurate conversion of travel time of the seismic signal to depth below surface.
Ongoing upgrading work enables Mwadingusha power station to supply 32 megawatts of clean electricity to national grid
In January 2018, Ivanhoe announced that ongoing upgrading work at the Mwadingusha hydropower plant in the DRC had almost tripled the plant’s interim power output from 11 to 32 megawatts (MW). This represents 45% of the plant’s designed capacity. Three of Mwadingusha’s six generators now have been modernized. The remaining three generators are due to be upgraded and fully operational by the end of 2019 – restoring the plant to its installed output capacity of approximately 71 MW of power.
The work at Mwadingusha, part of a program to eventually overhaul and boost output from three hydropower plants, is being conducted by engineering firm Stucky, of Lausanne, Switzerland, under the direction of Ivanhoe Mines and its joint-venture partner, Zijin Mining, in conjunction with the DRC’s state-owned power company, La Société Nationale d’Electricité (SNEL). Once fully reconditioned, the three plants will have a combined installed capacity of approximately 200 MW of electricity for the national grid, which is expected to be more than sufficient for the Kamoa-Kakula Project.
The Kansoko Mine, Kakula Mine and Kamoa camp have been connected to the national hydroelectric power grid since the completion of a 12-kilometre, 120-kilovolt, dual-circuit power line between Kansoko and Kakula last December. The design of permanent, 11-kilovolt reticulation to the vent shafts and mine has started, which includes substations, overhead lines and surface cables.
Figure 5: Engineers inspecting pipes (penstocks) feeding water to turbines driving generators inside the Mwadingusha hydroelectric power plant
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The Kamoa-Kakula Sustainable Livelihoods program is committed to sustainable development in the communities within the project’s footprint.
The main objective of the livelihoods program is to enhance food security and the living standards of the people who reside within the project’s footprint. The program is mainly implemented through fish farming and food crops, including farming of maize (corn) and vegetables, plus poultry production and beekeeping.
Additional, non-farming-related activities for Q3 2018 included education and literacy programs; the completion of a new school at the Muvunda village; a community water program; the continuation of the brick-making program; the creation of unskilled job opportunities; and the completion of the Kakula mine resettlement project.
Figure 6: Fabrice Mazeze with fresh tomatoes produced in the livelihoods vegetable garden.
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Figure 7: Community adult literacy program at Kamoa-Kakula, sponsored by Kamoa Copper and Ivanhoe Mines and implemented in partnership with Alfa Congo, a non-profit, non-governmental organization based in Kinshasa.
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4. Western Foreland Exploration Project
100%-owned by Ivanhoe Mines
Democratic Republic of Congo
Exploration continuing on Ivanhoe’s 100%-owned Western Foreland exploration licences west of Kamoa-Kakula
Ivanhoe’s DRC exploration group is targeting Kamoa-Kakula-style copper mineralization through a regional drilling program on its 100%-owned Western Foreland exploration licences, located to the north and west of the Kamoa-Kakula Project.
During Q3 2018, the team commissioned two extra rigs for its dry-season exploration drilling campaign. Three rigs began drilling north and west of Kamoa at the Kamilli, Mbali and Kiala targets, with one remaining at Makoko. A total of 8,895 metres in 17 diamond drill holes were completed during the quarter.
Four holes have been completed at Kiala and a further eight at Kamilli and Mbali. Detailed geological interpretation and assay results are pending. Drilling continued at Makoko throughout the quarter; 11 holes were completed.
Figure 8: HéritierTshiminyiKatembo, a driller with Ivanhoe’s contractor, Titan Drilling, examinesa piece of drill core from the Makoko area on Ivanhoe’s 100%-owned Western Foreland exploration licences.
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On October 1, 2018, Ivanhoe announced the Makoko Copper Discovery on its 100%-owned Western Foreland Exploration licences, near Kamoa-Kakula in the DRC. The Makoko Discovery is Ivanhoe’s third major copper discovery in the DRC and shows characteristics identical to Ivanhoe’s tier-one Kamoa-Kakula Discoveries.
Selected drill holes at the Makoko Discovery include:
DD004 (the Makoko discovery hole) intersected 3.94 metres (true width) of 5.46% copper, at a 2.0% copper cut-off, and 3.94 metres (true width) of 5.46% copper at a 1.0% copper cut-off, from a downhole depth of 306 metres.
DD010 intersected 3.21 metres (true width) of 6.78% copper, at a 2.0% copper cut-off, and 3.95 metres (true width) of 5.81% copper at a 1.0% copper cut-off, from a downhole depth of 441 metres.
DD017 intersected 3.19 metres (true width) of 6.49% copper at a 2.0% copper cut-off, and 4.64 metres (true width) of 4.88% copper, at a 1.0% copper cut-off, from a downhole depth of 471.7 metres.
DD025 intersected 3.00 metres (true width) of 7.61% copper at a 2.0% copper cut-off, and 3.00 metres (true width) of 7.61% copper, at a 1.0% copper cut-off, from a downhole depth of 406 metres.
DD046 intersected 7.44 metres (true width) of 7.81% copper at a 2.0% copper cut-off, and 9.39 metres (true width) of 6.51% copper, at a 1.0% copper cut-off, from a downhole depth of 523.51 metres.
The initial discovery hole at Makoko, DD004, was drilled in September 2017; follow-up and infill drilling has been ongoing since then. Drilling to date at Makoko has defined a flat-lying, near-surface stratiform copper deposit, similar to the Kamoa and Kakula deposits. The structure contour map indicates that the mineralized formation in the Makoko area is within 1,000 metres of surface. The majority of the drilling to date at Makoko has intersected the copper-rich zone between 400 metres and 800 metres below surface. The mineralized zone at Makoko strikes approximately south-southeast. It has been tested over a strike length of 4.5 kilometres and a dip extent of between one and two kilometres. Copper mineralization remains open both along strike and down dip.
Figure 9: Drilling locations at Ivanhoe’s Makoko Discovery.
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The Grand Conglomerate unit (coarse-grained clastic sedimentary rock), the base of which hosts copper mineralization in the Western Foreland area, underlies the majority of the area covered by Ivanhoe’s exploration licences, with the base of the unit interpreted to be generally within 600 metres of surface.
At the nearby Kakula Discovery, the highest copper grades are associated with a siltstone-sandstone unit occurring within the Grand Conglomerate, located approximately one metre above the top of the Mwashia sandstone unit. Mineralization at Kakula consistently is bottom loaded, with grades increasing down-hole toward the contact between the host Grand Conglomerate and the underlying sandstone unit.
Copper mineralization at the Makoko Discovery similarly is located at the base of the Grand Conglomerate, just above the contact with the underlying Roan footwall rocks. This location is consistent with copper mineralization seen in earlier drilling into the Kakula Discovery and elsewhere in the Western Foreland area.
High-grade copper intersections at Makoko are associated with a rhythmically-banded, fine-grained siltstone-sandstone unit similar to the siltstone-hosted mineralization at Kakula, although at Makoko the host package of rocks also includes zones of reworked diamictite. The siltstone-rich zones appear to have been controlled by the underlying basin architecture at the time of deposition.
Sulphide copper mineralization generally is fine-grained and shows typical downward vertical zonation of chalcopyrite to bornite to chalcocite, similar to Kakula. The dominant copper sulphide mineral at Makoko tends to be bornite.
Selected quarterly financial information
The following table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any financial reporting period and did not declare or pay any dividend or distribution in any financial reporting period.
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Review of the three months ended September 30, 2018, vs. September 30, 2017
The company recorded a total comprehensive loss of $7.9 million for Q3 2018 compared to a total comprehensive loss of $21.2 million for the same period in 2017. Exploration and project expenditure for Q3 2018 amounted to $2.4 million and was $9.2 million less than for the same period in 2017 ($11.6 million). The decrease in exploration and project expenditure was the main reason for the decrease in the total comprehensive loss and is attributable to the capitalization of costs incurred at the Kipushi Project subsequent to the finalization of its PFS in December 2017.
With the focus at the Kipushi and Platreef projects being on development and the Kamoa-Kakula Project being accounted for as a joint venture, the total $2.4 million exploration and project expenditure in the three months ended September 30, 2018, related to exploration at Ivanhoe’s 100%-owned Western Foreland exploration licences. In Q3 2017, $10.8 million of the total $11.6 million exploration and project expenditure related to the Kipushi Project.
The company’s share of losses from the Kamoa Holding joint venture increased from $6.8 million in Q3 2017 to $7.8 million in Q3 2018. The following table summarizes the company’s share of the comprehensive loss from Kamoa Holding for the three months ended September 30, 2018, and for the same period in 2017:
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The costs associated with mine development are capitalized as development costs in Kamoa Holding, while the exploration expenditure is expensed. Capitalization of costs at Kakula commenced during Q2 2017, coinciding with the start of the Kakula box cut. Expenditure attributable to exploration at Kamoa North, Kakula West and in the saddle area between Kakula West and Kakula still is expensed.
The interest expense in the Kamoa Holding joint venture relates to shareholder loans where each shareholder is required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest. The company is advancing Crystal River’s portion on its behalf in return for an increase in the promissory note due to Ivanhoe.
Finance income for the three months ended September 30, 2018, amounted to $12.1 million, and was $4.1 million more than for the same period in 2017 ($8.0 million). The increase mainly was due to interest earned on loans to the Kamoa Holding joint venture to fund operations that amounted to $10.4 million in 2018, and increased by $3.3 million as the accumulated loan balance increased.
Review of the ninemonths ended September 30, 2018, vs. September 30, 2017
The company’s total comprehensive loss of $42.0 million for the nine months ended September 30, 2018, was $4.5 million higher than for the same period in 2017 ($37.5 million). The increased loss mainly was due to an exchange loss on translation of foreign operations of $23.9 million for the nine months ended September 30, 2018, resulting from the weakening of the South African Rand by 14% from December 31, 2017, to September 30, 2018, compared to an exchange gain on translation of foreign operations recognized in the same period of 2017 of $1.4 million.
Exploration and project expenditure for the nine months ended September 30, 2018, amounted to $6.6 million and was $22.9 million less than for the same period in 2017 ($29.5 million). Exploration and project expenditure for the nine months ended September 30, 2018, related to Ivanhoe’s 100%-owned Western Foreland exploration licences, while $28.4 million for the same period in 2017 related to the Kipushi Project.
Finance income for the nine months ended September 30, 2018, amounted to $33.4 million, and was $9.8 million more than for the same period in 2017 ($23.6 million). The increase mainly was due to interest earned on loans to the Kamoa Holding joint venture to fund operations that amounted to $28.7 million in 2018, and increased by $9.4 million as the accumulated loan balance increased.
The company’s share of losses from the Kamoa Holding joint venture increased to $21.7 million for the nine months ended September 30, 2018, from $17.3 million for the same period in 2017. The following table summarizes the company’s share of the comprehensive loss of Kamoa Holding for the nine months ended September 30, 2018, and for the same period in 2017:
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Financial positionas atSeptember 30, 2018 vs. December31, 2017
The company’s total assets increased by $576.4 million, from $1,271.3 million as at December 31, 2017, to $1,847.7 million as at September 30, 2018. The increase mainly was due to the proceeds received on completion of the equity investment by CITIC Metal Africa Investments Limited (CITIC Metal Africa) and Zijin exercising its anti-dilution rights, for gross proceeds of $555 million and $60 million respectively.
Cash and cash equivalents and short-term deposits increased by $358.1 million and $116.2 million respectively. The company utilized $8.3 million of its cash resources in its operations, which includes interest of $2.9 million received during the nine months ended September 30, 2018.
The company’s investment in the Kamoa Holding joint venture increased by $44.5 million from $552.4 million as at December 31, 2017, to $596.9 million as at September 30, 2018, with each of the current shareholders funding the operations equivalent to their proportionate shareholding interest. The company’s portion of the Kamoa Holding joint venture cash calls amounted to $37.4 million during the nine months ended September 30, 2018, while the company’s share of comprehensive loss from the joint venture amounted to $21.7 million.
The net increase of property, plant and equipment amounted to $64.1 million, with a total of $92.4 million being spent on project development and to acquire other property, plant and equipment. Of this total, $40.6 million and $50.9 million pertained to development costs and other acquisitions of property, plant and equipment at the Platreef Project and Kipushi Project respectively.
The main components of the additions to property, plant and equipment at the Platreef and Kipushi projects for the nine months ended September 30, 2018, and for the same period in 2017, are set out in the following table:
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The company’s total liabilities increased by $1.3 million to $61.1 million as at September 30, 2018, from $59.8 million as at December 31, 2017.
Liquidity and capital resources
The company had $539.5 million in cash and cash equivalents and $116.2 million in short-term deposits as at September 30, 2018. At this date, the company had consolidated working capital of approximately $646.7 million, compared to $181.9 million at December 31, 2017.
On September 19, 2018, Ivanhoe announced the completion of a major strategic equity investment totalling C$723 million ($555 million) in Ivanhoe Mines by CITIC Metal Africa, a direct subsidiary of CITIC Metal Co., Ltd. (CITIC Metal), one of China’s leading international resources companies. Ivanhoe Mines issued 196,602,037 common shares to CITIC Metal Africa through a private placement at a price of C$3.68 per share. Zijin exercised its anti-dilution rights, generating additional proceeds for Ivanhoe of C$78 million ($60 million). The exercise by Zijin of its anti-dilution rights also was at a price of C$3.68 per share.
The Platreef Project’s restricted cash, which were funds of $290 million invested by the Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation, has been fully utilized and the project’s current expenditure is being funded solely by Ivanhoe as the Japanese consortium has elected not to contribute to current expenditures. Since the Platreef Project’s restricted cash was fully utilized, the company has contributed a total of $10.0 million on behalf of the Japanese consortium.
Since December 8, 2015, each shareholder in Kamoa Holding has been required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest. The company is advancing Crystal River’s portion on its behalf in return for an increase in the promissory note due to Ivanhoe.
The company’s main objectives for 2018 at the Platreef Project are the continuation of Shaft 1 construction, securing a bulk-water supply and completion of early-works construction of Shaft 2. At Kipushi, the principal objectives are the completion of the feasibility study and continued upgrading of mining infrastructure. At the Kamoa-Kakula Project, priorities are the continuation of decline construction at Kakula and the completion of a PFS for Kakula. The company has budgeted to spend $13 million on further development at the Platreef Project; $25 million at the Kipushi Project; $3 million on regional exploration in the DRC; and $5 million on corporate overheads for Q4 2018 – as well as its proportionate funding of the Kamoa-Kakula Project, expected to be $32 million for Q4 2018.
The company has a mortgage bond outstanding on its offices in London, United Kingdom, of £3.2 million ($4.2 million). The bond is fully repayable on August 31, 2020, secured by the property and incurs interest at a rate of LIBOR plus 1.9% payable monthly in arrears. Only interest will be payable until maturity.
In 2013, the company became party to a loan payable to ITC Platinum Development Limited, which had a carrying value of $26.6 million as at September 30, 2018, and a contractual amount due of $32.2 million. The loan is repayable once the Platreef Project has residual cashflow, which is defined in the loan agreement as gross revenue generated by the Platreef Project, less all operating costs attributable thereto, including all mining development and operating costs. The loan attracts interest of LIBOR plus 2% calculated monthly in arrears. Interest is not capitalized. The difference of $5.6 million between the contractual amount due and the fair value of the loan is the benefit derived from the low-interest loan.
This news release should be read in conjunction with Ivanhoe Mines’ Q3 2018 Financial Statements and Management’s Discussion and Analysis report available at www.ivanhoemines.com and at www.sedar.com.
Qualified Person
Disclosures of a scientific or technical nature in this news release have been reviewed and approved by Stephen Torr, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101 as he is Ivanhoe Mines’ Vice President, Project Geology and Evaluation. Mr. Torr has verified the technical data disclosed in this news release.
Ivanhoe has prepared a current, independent, NI 43-101-compliant technical report for the Platreef Project, the Kipushi Project and the Kamoa-Kakula Project, which are available under the company’s SEDAR profile at www.sedar.com:
The Kamoa-Kakula 2018 Resource Update dated March 23, 2018, prepared by OreWin, Amec Foster Wheeler, MDM (Technical) Africa, Stantec Consulting International and SRK Consulting (South Africa), covering the company’s Kamoa-Kakula Project.
The Platreef 2017 Feasibility Study Technical Report dated September 4, 2017, prepared by DRA Global, OreWin, Amec Foster Wheeler, Stantec Consulting, Murray & Roberts Cementation, SRK Consulting, Golder Associates and Digby Wells Environmental, covering the company’s Platreef Project.
The Kipushi 2017 Prefeasibility Study Technical Report dated January 25, 2018, prepared by OreWin, The MSA Group, SRK Consulting (South Africa) and MDM (Technical) Africa, covering the company’s Kipushi Project.
These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef Project, the Kipushi Project and the Kamoa-Kakula Project cited in this news release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this news release in respect of the Platreef Project, Kipushi Project and Kamoa-Kakula Project.
Information contacts
Investors
Bill Trenaman +1.604.331.9834
Media
North America: Bob Williamson +1.604.512.4856
South Africa: Jeremy Michaels +27.82.772.1122
Certain statements in this news release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company, its projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the company’s current expectations regarding future events, performance and results and speak only as of the date of this release.
Such statements include without limitation, the timing and results of: (i) statements regarding Shaft 1 providing initial underground access to the high-grade orebody at the Flatreef Deposit; (ii) statements regarding Shaft 1 reaching the planned, final depth at 982 metres below surface in early 2020; (iii) statements regarding the timing of Shaft 2 development, including that excavation of the box cut and construction of the tower hitch foundation are expected to be completed by early 2019 and that Shaft 2 will be sunk to a final depth of more than 1,104 metres; (iv) statements regarding the operational and technical capacity of Shaft 1; (v) statements regarding the internal diameter and hoisting capacity of Shaft 2; (vi) statements regarding the company’s plans to develop the Platreef Mine in three phases: an initial annual rate of four million tonnes per annum (Mtpa) to establish an operating platform to support future expansions; followed by a doubling of production to eight Mtpa; and then a third expansion phase to a steady-state 12 Mtpa; (vii) statements regarding the planned underground mining methods of the Platreef Project, including long-hole stoping and drift-and-fill mining; (viii) statements regarding supply of treated water from the town of Mokopane’s new Masodi treatment plant, including that it will supply five million litres of treated water a day for 32 years; (ix) statements regarding the timing and completion of a pre-feasibility study for a six Mtpa mine and concentrator at Kakula early in 2019; (x) statements regarding the timing, size and objectives of drilling and other exploration programs for 2018 and future periods; (xi) statements regarding exploration on the Western Foreland exploration licences; (xii) statements regarding completion of the twin declines at Kakula by the end of 2018; (xiii) statements regarding the timing and completion of a definitive feasibility study at the Kipushi Project; (xiv) statements regarding expected expenditure of $13 million on further development at the Platreef Project; $25 million at the Kipushi Project; $3 million on regional exploration in the DRC; and $5 million on corporate overheads for Q4 2018 – as well as its proportionate funding of the Kamoa-Kakula Project, expected to be $32 million for Q4 2018; (xv) statements regarding Platreef projecting it to be Africa’s lowest-cost producer of platinum-group metals; and (xvi) statements regarding the construction of a 1,050-metre-level-dam at the Kakula deposit to be commissioned in mid-2019.
As well, all of the results of the pre-feasibility study of the Kamoa-Kakula Project and preliminary economic assessment of development options for the Kakula deposit, the feasibility study of the Platreef Project and the pre-feasibility study of the Kipushi Project, constitute forward-looking statements or information, and include future estimates of internal rates of return, net present value, future production, estimates of cash cost, proposed mining plans and methods, mine-life estimates, cash-flow forecasts, metal recoveries, estimates of capital and operating costs and the size and timing of phased development of the projects. Furthermore, with respect to this specific forward-looking information concerning the development of the Kamoa-Kakula, Platreef and Kipushi projects, the company has based its assumptions and analysis on certain factors that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii) geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc, platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities necessary to complete development; (vii) the cost of consumables and mining and processing equipment; (viii) unforeseen technological and engineering problems; (ix) accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in regulations; (xii) the compliance by joint-venture partners with terms of agreements; (xiii) the availability and productivity of skilled labour; (xiv) the regulation of the mining industry by various governmental agencies; and (xv) political factors.
This release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources is inherently uncertain and involves subjective judgments about many relevant factors. Estimates of Mineral Reserves provide more certainty but still involve similar subjective judgments. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation (including estimated future production from the company’s projects, the anticipated tonnages and grades that will be mined and the estimated level of recovery that will be realized), which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that ultimately may prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on: (i) fluctuations in copper, nickel, zinc, platinum group elements (PGE), gold or other mineral prices; (ii) results of drilling; (iii) metallurgical testing and other studies; (iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates and/or changes in mine plans; (vi) the possible failure to receive required permits, approvals and licences; and (vii) changes in law or regulation.
Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to, the factors discussed below and under the “Risk Factors” section and elsewhere in the company’s Q3 2018 Financial Statements and Management’s Discussion and Analysis, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.
Although the forward-looking statements contained in this release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release.
The company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors set forth in the “Risk Factors” section and elsewhere in the company’s Q3 2018 Financial Statements and Management’s Discussion and Analysis.
VANCOUVER, BC / ACCESSWIRE / November 7, 2018 / Sandstorm Gold Ltd. (“Sandstorm Gold Royalties” or “Sandstorm”) (NYSE American: SAND) (SSL.TO) will release its 2018 third quarter results on Wednesday, November 14, 2018 after markets close.
A conference call will be held on Thursday, November 15, 2018 starting at 8:30am PDT to further discuss the third quarter results. To participate in the conference call, use the following dial-in numbers and conference ID, or join the webcast using the link below:
Local/International: (+1) 201 389 0899
North American Toll-Free: (+1) 877 407 0312
Conference ID: 13684537
Webcast URL https://bit.ly/2RHxZN4
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. Sandstorm has acquired a portfolio of 188 royalties, of which 20 of the underlying mines are producing. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold royalties.
You will be reading a lot about the mid-term elections in the coming days. No matter how it plays out, half the people in the U.S. will not be happy. Maybe the best result would be for the Democrats to take either the House or the Senate. That way, government will grind to a halt. The less government does, the better. Sure, under President Trump the stock market soared, and more jobs were created, but our deficits are totally out of control and we are isolating ourselves from our friends and allies. We are backing Russia and China into a corner and a new conflict in the Middle East with Iran
seems very likely.
(Doug Case interview on Kitco. Who Will Take The Mid-Term Election?)
A neighbor of mine does a lot of traveling throughout Europe and Asia. He tells me that the people he talks to over there all ask him, “What is going on in America?” They think we are crazy. I’m not sure about the “we” but I can certainly understand that they think Trump is out of his mind. In 24 hours we will know how this will play out. Either Trump will have a mandate to continue to pursue his policies – or he will be a lame duck president for the next two years.
I hope that this doesn’t confuse you. Gold is getting ready for one of the greatest bull markets of all time. Hum! Haven’t I been telling you to trade in your gold for silver all of this year? If we are getting ready to see the highest gold prices of our lifetime, why would I tell you that gold is “overpriced”? The thing is, I am not telling you that gold is overpriced. I am saying that gold is “overpriced” relative to silver. The upcoming gains in gold, and it will be something to see, will not match the gains in silver.
Recently, Dr. Stephen Leeb told King World News
“Gold Is Set For One Of The Greatest Bull Markets Of All Time. The last 40 to 50 years have been outliers for gold. Gold has played a monetary role for several thousand years. But until the 1970s, its well-deserved reputation as a store of value was earned almost exclusively during periods of deflation, not inflation. I am comfortable in saying that while gold could have one more downdraft, it almost surely will be the last one. Buying now and buying with both hands on any weakness is buying a stake in what will be one of the greatest bull markets of all time…
David’s Commentary:
Contrary to what most people think, Dr. Leeb states that gold does better in deflation than during inflation. He is correct. He sites The Golden Constant, a book written in 1977 by Roy Jastram and data on the stock market culled from Roger Ibbotson. I have written articles on both of these in the past.
Dr. Leeb has created a chart that compares the performance of gold to stocks going back to 1824
David’s Commentary:
Most of our readers probably think that inflation and the dollar have the greatest affect the price of gold. They would be wrong. In fact, it is not the dollar that is relevant to gold bull markets, but the stock market. Dr. Leeb says,
“A bear market for stocks for nearly two centuries has been a bull market for gold.”
Ah, but here is where things get interesting. Since 1972 things have changed. And what could have possibly caused that? We can thank Richard Nixon, who in August 1971 removed gold as the backing for the U.S. Dollar. Nixon let the price of gold “float” instead of fixing it to the dollar at a set price.
Dr. Leeb writes,
“What’s particularly relevant for investors today is that the three most recent periods of poor market performance/positive gold performance occurred during commodity bull markets, years in which commodity scarcities led to rising commodity prices and higher overall inflation. In all three periods, the first of which started in 1972, gold was the leading performer among assets considered commodities (gold should be viewed as both a commodity and a currency).
In other words, since 1972, gold has been behaving in a very different manner from all the years before. The change occurred in the context of gold prices that, starting in the early 1970s, were no longer fixed and with gold no longer playing a direct role in the global monetary system. (Jastram likely thought the gains in gold in the 1972-77 period were not durable when he made the conclusions we noted above.)
Gold Will Rise During Bear Market In Stocks This is more than a history lesson. Rather, it offers a clear message to investors today: If there is a bear market in stocks in 2019 that leaves the three-year total return in equities in negative territory, gold is nearly sure to rise.
Here is where the rubber hits the road. Dr. Leeb says,
If there is a bear market in stocks in 2019 that leaves the three-year total return in equities in negative territory, gold is nearly sure to rise. So we need to look at how likely it is we might get such a bear market in stocks, one that could wipe out the gains we have seen since 2016 and will leading to the blistering bull market in gold that will underlie a new monetary system in the East and possibly the entire world.
This is another theme I have been pounding on. Gold will not start its bull market move until the stock market implodes.
Dr. Leeb says, “It all revolves around China.”
The U.S. won the Cold War by outspending the Soviet Union on defense, with the Soviet Union running itself into the ground by trying to keep up. That led to a decade or more of dire consequences for most of the FSU, including Russia.
This time around it’s the U.S. vs. China, a much more formidable foe. And this time around, it’s the U.S. that appears to be in the far more vulnerable position.
A startling recent data point has been the poor performance of defense stocks despite blockbuster earnings. Whenever stocks sell off in the face of much better than expected earnings, it signals that investors have some general unease about the sector. In this case, I see it as a sign that investors believe we won’t be able to raise defense spending. Even Trump in a cabinet briefing on October 31st said defense expenditures will fall in 2020. The current allocation of $716 billion has become a ceiling not a floor.
In other words, when it comes to defense we have shot our bolt. We are spending as much as we can afford given all our other obligations, which now translate into trillion-dollar deficits.
A strong military defense is one of the critical ingredients for any country that has or wants to maintain its currency as a global reserve currency. And when it comes to defense, China has some major advantages over the U.S. First and most important, it isn’t looking to dominate throughout the world. Rather, the sphere where it wants to be dominant is the East and in most emerging economies. This more limited objective means it doesn’t risk bankrupting itself by seeking to be everywhere at once.
After a brief discussion of China’s military spending and relationships with Japan and India, Dr. Leeb concluded,
China has the edge in defense, in the size of its economy, and in trade. Those are the three key factors that make a currency credible and desirable as a reserve currency. It’s why it seems so evident that the yuan – which, as China has made plain, will be linked in some fashion to gold – will become the new reserve currency at the very least throughout the East.
Perhaps this is why China has been accumulating massive amounts of gold for the past decade or two. Gold has been moving closely in sync with the yuan. Is this the precursor to a yuan-gold backed new “reserve currency?” Leeb thinks so.
The dollar’s global reserve currency status at this point is essentially a legacy based on oil and the petrodollar. This brings us back to the Eastern oil benchmark that China has launched and that I’ve written about a lot previously. I had expected that by now we would have seen more progress in gold as well as a strengthening of the yuan in response to the benchmark. But the tariffs threw a curve ball – one that, for all the reasons cited above, I expect will prove temporary. In addition, China is deleveraging, and to mitigate any near-term damage from the tariffs it has let the yuan fall. That, in turn, has kept gold – which as we’ve pointed out has been moving closely in sync with the yuan – in check for now.
As we go forward, we expect to see the tariffs wind down and to be less of an issue. Among other things, the U.S. can’t afford to shoulder the effective tax that tariffs impose. And that will leave the path free and clear for the yuan. In the end, the current quiet period for gold should turn out to be just a brief hiatus before a new monetary system, backed by gold, falls into place.
A New Monetary System As I have said before this new monetary system will likely be defined in terms of baskets of currencies and commodities that are exchanged using sophisticated blockchains. Gold will be the floating backstop. And given the amount of world trade I continue to expect most of us to see five digit gold prices in our lifetimes.
Adam Tumerkan, @ Palisade-Research.com points out that central banks are buying their most cold in years as they look to reduce risk. He says,
‘Gold is key for risk reduction’
Having a certain amount of gold in a portfolio works well to protect against sudden market drops – as I’ve shown previously (read here).
As I wrote then – “Just look at the average price of gold during times when the S&P 500 fell more than 15% over the last 20 years. . . You can see that during times when markets collapse more than 15%, gold positions would do very well. The gold mining equities and warrants do even better. . .”
Here is his data on central bank gold purchases…
This highlights the trend we’ve seen by central banks charging in to gold since after the 2008 crisis.
I wrote two weeks ago (click here if you missed it) that post-2008, central banks – especially the Emerging Markets – have insatiable gold appetite. And I believe this is helping to put a floor under the price of gold.
Just look for yourself. . .
After two decades of selling – throughout the 1990’s and early 2000’s – central banks worldwide are now diversifying their dollar reserves with gold.
The latest report by the World Gold Council (WGC) showed that central bank gold reserves grew 150 tons in the third-quarter 2018.
That’s up 22% from 2017 – one year ago.
This marks the 8th straight year of central bank gold buying – and the highest level of net purchases since 2015 – both quarterly and year-to-date.
To name just a few: India – Turkey – Kazakhstan – China – Russia – Poland – Hungary – Iraq – and Mongolia. . .
What did all this buying from various central banks have in common? It was the lower price of gold triggered a buying opportunity. Meaning central bankers wanted to take advantage of the stronger dollar and buy cheaper gold.
Remember – when the dollar’s stronger, gold costs less (i.e. it takes fewer dollars to buy that same gold ounce – vice versa.)
And this trend of heavy central bank buying doesn’t seem like it will be slowing down anytime soon.
Therefore – we see that during large market drops – the price of gold increases enough to offset any losses.
So – here’s the bigger question. . .
Is all this central bank gold buying signaling trouble in the global economy?
I think so.
“Gold is key for risk reduction’
Having a certain amount of gold in a portfolio works well to protect against sudden market drops – as I’ve shown previously (read here).
As I wrote then – “Just look at the average price of gold during times when the S&P 500 fell more than 15% over the last 20 years. . . You can see that during times when markets collapse more than 15%, gold positions would do very well. The gold mining equities and warrants do even better. . .”
Therefore – we see that during large market drops – the price of gold increases enough to offset any losses.
But that’s not all. . .
Having gold also improves a portfolio’s Sharpe Ratio.
For those of you that don’t know – the Sharpe Ratio is a popular metric that helps investors understand the return of an investment compared to its risks. Meaning it measures a portfolio’s risk-adjusted returns relative to peers based on a ‘standard deviation’ (a black swan event).
Thus the higher the ratio – the better the risk adjusted returns. . .
And as New Frontier Advisors and U.S. Global Investors discovered – an institutional portfolio with at least a 6% weighting in gold has a significantly higher Sharpe Ratio compared to portfolio’s that didn’t have any gold at all.
What this means is – gold in a portfolio greatly reduces volatility without hurting overall returns. . .
Now that we know this – It’s not hard to see why Hungary’s Central Bank Governor increased gold holdings tenfold.
This also helps explain why other central bankers worldwide are opting for gold as well.
That’s because of Balance Sheet Theory – coined by Michael Pettis (one of my favorite economists).
Balance Sheet Theory basically means that investors – during a crunch period – look at governments and central banks as if they are looking at a corporate balance sheet.
The better the assets are against the liabilities – the more robust things are. . .
But the worst the assets are against growing liabilities – the more fragile things are. . .
And as we watch the Emerging Markets get slaughtered this year in 2018 – it’s not hard to see why. They have horrid balance sheets with mounting liabilities against diminishing assets.
So keep all this in mind when you ask yourself, ‘why are central banks buying so much gold since 2008?’
They are doing it to protect themselves. .
David’s Commentary:
Remember, just because I am discussing gold does not mean that I have forgotten about silver. You can sum it all up in one sentence: Silver is gold on steroids. Silver will move up, along with gold, but it will outperform it. In this century, gold moved from a low of $252 to a high of $1890 in 2011, a gain of 750%. Meanwhile silver went from $6 in 2001 to a high of $54.53 in 2011, a gain of more than 900%.
I still own a lot of gold, but I own much more silver. I have been adding silver to my portfolio using proceeds from the gold I have sold.
If you are wealthy, gold is insurance to protect your dollar-based wealth.
If you are not, then gold is a sure fire way to end up wealthy. As Richard Russell used to say, “There is no bull market like a gold bull market.” Markets are moved by fear and greed. But when it comes to gold, both fear AND greed are the motivation. When the stock market finally craters, fear and greed will abound. Gold will set new all-time records and silver will do better yet. More people will be able to afford it. The average person may have difficulty spending thousands of dollars for a single ounce of gold, but $100 or $150 for an ounce of silver is doable.
One last piece of advice. What I have done in the past is to invest 10% of the dollars I have in physical gold and silver into mining shares. They will outperform the physical metals. After they have made a significant up move, I sell them and use the proceeds to increase my ounces in physical gold. I get more gold and silver for free!
Here are a few worthwhile comments from our friend and colleague Bill Holter
As I alluded to a couple of days ago, “look around, what do you see?” People who own precious metals are quaking in their boots at EXACTLY THE PRECISE TIME they should be comfortable. We have gotten many “scared” e-mails recently, some from people I would have never guessed. Even a $10 move down in gold has sparked fearful e-mails…but why?
It should be clear to you now, the “unwind” has begun. Jim and I tried to tell you this a couple of months back, now there is absolute evidence. Look at real estate in many parts of the world. Australia, China, London, Vancouver, New York and now even San Francisco. The most important thing to look at is “volume”, as price always follows. Pricing, as it did back in 2006 has gotten to unaffordable levels…and banks have begun to pull back on lending. Ask yourself this simple question, where would pricing be if everyone had to pay cash for new purchases? I am not sure the answer but it would surely be less than 50% of current pricing. “Credit” is the reason real estate attained the values they did, lack of credit is now reducing sales volume…and thus pricing.
Then we can look at autos all over the world. Asia, Europe and North America, all markets are soft and the build up in “sub prime” auto loans has exploded. Any discussion of credit and sub prime in the same sentence should certainly not leave out “student loans”. This sector is now well over $1 trillion. Yes, for a good cause I suppose you could say, but we now have an entire generation in hock before they even leave the starting gate? Not to mention, college grads today are not exactly what their parents expected when they first wrote their checks, rather they tend to melt under pressure. Is this a “solid credit”?
Vancouver, British Columbia, November 7, 2018 (Globe Newswire) – Irving Resources Inc. (CSE:IRV) (“Irving” or the “Company”) is pleased to announce that it has voluntarily filed a technical report prepared pursuant to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) for its Omu gold-silver project in Hokkaido, Japan.The independent technical report, entitled “Independent Technical Report on the Omu Property, Hokkaido, Japan” (the “Omu Technical Report”), with an effective date of November 6, 2018, was prepared for Irving by Christopher Mark Barrett, (MSc., CGeol) of London, UK, and others.Mr. Barrett is a “qualified person” as defined under NI 43-101.The Omu Technical Report will be available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) website at www.sedar.com and on the Company’s website at https://irvresources.com/projects/japan/technical-reports. About Irving Resources Inc.:
Irving is a junior exploration company with a focus on gold in Japan. Irving also holds, through a subsidiary, Project Venture Agreements with Japan Oil, Gas and Metals National Corporation (JOGMEC) for joint regional exploration programs in the United Republic of Tanzania, the Republic of Malawi and the Republic of Madagascar.JOGMEC is a government organization established under the law of Japan, administrated by the Ministry of Economy, Trade and Industry of Japan, and is responsible for stable supply of various resources to Japan through the discovery of sizable economic deposits of base, precious and rare metals.
Additional information can be found on the Company’s website: www.IRVresources.com. Akiko Levinson,
President & Director
For further information, please contact:
Tel: (604) 682-3234 Toll free: 1 (888) 242-3234 Fax: (604) 641-1214 info@IRVresources.com THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
Vancouver, British Columbia: Calibre Mining Corp. (TSX-V: CXB) (the “Company” or “Calibre”) is pleased to announce the appointment of two seasoned mining professionals to the Calibre Board of Directors. Effectively immediately, Russell Ball has been appointed Executive Chair and Raymond Threlkeld joins the Board as a Director. Concurrent with these appointments, John Reynolds has stepped down from the Calibre Board and will be continuing with the Company as a member of the new Strategic Advisory Board. Mr. Darren Hall has also joined the Company as a member of the Strategic Advisory Board.
Douglas Forster, Director of Calibre stated: “We are very pleased to welcome Russell Ball and Raymond Threlkeld to the Board. Both have long and successful track records in value creation in the mining sector and extensive experience in mergers and acquisitions, mine permitting, mine building and operations.”
“The Board of Directors would like to thank John Reynolds for his significant contributions to the growth of Calibre and we look forward to working with him as a member of the Strategic Advisory Board. Having worked with Darren Hall when he was Chief Operating Officer at Newmarket Gold, I am very pleased to welcome Darren to the Calibre team as a member of the Strategic Advisory Board. As Chief Operating Officer of Newmarket, Darren was instrumental in optimizing our gold operations which ultimately led to the $1.0 billion merger with Kirkland Lake Gold in 2016.”
Russell Ball, Executive Chair of Calibre stated: “I am excited to join the Calibre team and look forward to helping grow the business. With over two million ounces of defined gold equivalent resources, two mid-tier gold partners in IAMGOLD and Centerra Gold, and an experienced management team and Board, Calibre has an excellent foundation upon which to grow the business through strategic and value-accretive acquisitions.” Russell Ball, Executive Chair
Mr. Ball joined Goldcorp in May 2013, as Executive Vice-President of Projects and Capital Management, and in December 2014 was appointed Executive Vice-President of Corporate Development and Capital Projects. He served as Chief Financial Officer and Executive Vice-President of Corporate Development from March 2016 to October 2017. Prior to joining Goldcorp, Mr. Ball served as Executive Vice-president and Chief Financial Officer of Newmont. Over his 19 years with Newmont, Mr. Ball worked in internal audit, finance, treasury, operations/project and investor relations before joining the executive team as Chief Financial Officer. Prior to Newmont, Mr. Ball was a manager with PricewaterhouseCoopers in Durban, South Africa. He qualified as a chartered accountant from the Institute of Chartered Accountants of South Africa and as a certified public accountant in Colorado. Raymond Threlkeld, Director
Mr. Threlkeld has over 32 years’ experience in the mineral exploration, mine operations and construction and executive management. Most recently, Mr. Threlkeld was President and CEO of New Gold Inc., a NYSE listed mid-tier gold producer, and was a member of the New Gold Board of Directors from 2009 to 2018. Prior to his leadership at New Gold, Mr. Threlkeld was President and CEO of Rainy River Resources until 2013 when Rainy River was acquired by New Gold. Raymond was also a director of Northern Empire Resources Corp. from March 2017 until Northern Empire was acquired by Coeur Mining Inc. in October 2018. Mr. Threlkeld was Executive Chairman of Newmarket Gold Inc. from July 2015 to November 2016 when the company was merged with Kirkland Lake Gold in a $1.0 billion transaction. From 1996 to 2005 Mr. Threlkeld held a variety of senior executive positions with Barrick Gold Corporation rising to the position of Vice President, Project Development. During his tenure at Barrick he was responsible for placing more than 30 million ounces of gold resources into production including the development of the Pierina and Lagunas Norte Mines in Peru, the Bulyanhulu Mine in Tanzania, the Veladero Mine in Argentina and the Cowell Mine in Australia. Mr. Threlkeld holds a B.Sc. Degree in Geology from the University of Nevada. Darren Hall, Member – Strategic Advisory Board
Darren Hall has over 30 years of experience in the mining industry and has a proven to be a successful and trusted leader through his operational accomplishments. He has a proven track record of increasing production, reducing operating costs, improving capital effectiveness and promoting health, safety and business excellence. Darren joined Newmarket Gold in 2015 and was responsible for maintaining a strong foundation of quality gold production, yielding record operational results. Newmarket Gold was merged with Kirkland Lake Gold in a $1.0 billion transaction in 2016. Prior to joining Newmarket Gold, Darren worked for Newmont Mining Corporation where he held roles of increasing responsibility throughout the organization for almost 30 years. Under his leadership as Group Executive Operations for Newmont Asia Pacific, Darren managed a team of 14,000 employees producing 1.8 million ounces of gold annually from six operating mines across three countries. He also worked with Newmont in Peru, Indonesia and the United States and in Australia as General Manager of the Boddington Gold Mine where he led a team of 1,800 employees producing 750,000 ounces of gold annually. Darren graduated with a Bachelor of Mining Engineering (Hons) from the Western Australia School of Mines in Kalgoorlie. Mr. Hall currently serves as Principal of Hall Mining Services.
Following the Board changes, the Board of Directors now consists of eight members:
Russell Ball
Executive Chair
Greg Smith
President & CEO, Director
Douglas Forster
Director
Blayne Johnson
Director
Douglas Hurst
Director
Raymond Threlkeld
Director
George Salamis
Director
Edward Farrauto
Director
The Strategic Advisory Board consists of two members:
John Reynolds
Darren Hall
Calibre has granted 1,400,000 stock options to directors, officers, employees and consultants of the Company at a price of $0.45 for a period of five years. These options are subject to regulatory approval and are granted under the company’s stock option plan. Following the completion of the Company’s recent financing Calibre has approximately $4.7 million in working capital, no debt and 42.8 million shares issued and outstanding. About Calibre Mining Corp.
Calibre owns a 100% interest in over 413 km2 of mineral concessions in the Mining Triangle of Northeast Nicaragua, including the Primavera Gold-Copper Project and Santa Maria Gold Project. Additionally, the Company has optioned to IAMGOLD (176 km2) and Centerra Gold (253 km2) concessions covering an aggregate area of 429 km2 and is party to a joint venture on the 33.6 km2 Rosita D gold-copper-silver project with Rosita Mining Corporation and Century Mining. Major shareholders of Calibre include gold producer B2Gold Corp, Lukas Lundin and management. Calibre Mining Corp. Greg Smith, P.Geo. President and CEO
For further information contact:
Ryan King
604 628-1012 www.calibremining.com Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Cautionary Note Regarding Forward Looking Statements This news release contains certain forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate” “plans”, “estimates” or “intends” or stating that certain actions, events or results “ may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available. Except for the statements of historical fact contained herein, the information presented constitutes “forward-looking statements”. Such forward-looking statements including but not limited to those with respect to the price of gold, potential mineralization, reserve and resource determination, exploration results, and future plans and objectives of the Company involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Calibre to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
VANCOUVER, British Columbia (AP) _ NexGen Energy Ltd. (NXE) on Tuesday reported a loss of $14.7 million in its third quarter.
The Vancouver, British Columbia-based company said it had a loss of 5 cents per share.
The company’s shares closed at $2.34. A year ago, they were trading at $1.96.
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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NXE at https://www.zacks.com/ap/NXE
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