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Base Metals Energy Junior Mining Precious Metals

Stillwater Critical Minerals Launches Expansion Drill Program

VANCOUVER, BC / ACCESSWIRE / July 20, 2023 / Stillwater Critical Minerals Corp. (TSX.V:PGE)(OTCQB:PGEZF) (the “Company” or “Stillwater”) is pleased to announce the start of 2023 expansion drilling at its flagship Stillwater West nickel-PGE-copper-cobalt and gold project in Montana, USA, in addition to providing an update on other initiatives including work already underway.

Highlights

  • Drilling will focus on expansion of the NI 43-101-compliant resources announced January 25, 2023 which demonstrated world-class grade and scale with 1.6 billion pounds of nickel, copper and cobalt and 3.8 million ounces of palladium, platinum, rhodium, and gold (“4E”) in a base case study totaling 255 million tonnes (“Mt”), with a high-grade component of 11.6 Mt grading 1.05% recovered nickel equivalent (as 0.56% Ni, 0.33% Cu, 0.03% Co,0.54 g/t Pd, 0.27 g/t Pt, 0.15 g/t Au and 0.019 g/t Rh).
  • Priority is on expansion of high-grade mineralization at the DR-Hybrid deposit at Chrome Mountain, including:
    • Drill hole CM2021-05, which returned 13.2 meters grading 2.89% Recovered Nickel Equivalent1 (“NiEq”) (2.31% Ni, 1.51 g/t 4E, 0.35% Cu, and 0.115% Co), starting at 37.6 meters. This high-grade mineralization, contained within 400.8 meters of continuous battery and precious metal mineralization, is of a type not previously identified in the Stillwater district and appears to be related to 8.5 meters of similar high-grade, high-tenor nickel sulphide returned in hole CM2020-04, approximately 125 meters downdip to the west. See news releases from May 03, 2022, and March 03, 2021.
  • Drilling is also expected to expand on high-grade targets at the CZ and HGR deposits at Iron Mountain, up to nine kilometers east of Chrome Mountain, as step-outs from the following intercepts:
    • Drill hole CZ2021-01, which returned 63.7 meters grading 0.86% NiEq (0.47% Ni, 0.42 g/t Pd, 0.27% Cu, and 0.04% Co as well as significant Pt and Au values), within 367.6 meters of continuous mineralization. This hole was a step-out from hole CZ2019-01 which returned 62.0 meters grading 0.56% NiEq and also 3.54 meters of 2.67% NiEq (as 1.53% Ni, 0.49% Cu, 0.099% Co, and 3.45 g/t 4E) within 399 meters of continuous mineralization, starting at surface. The CZ deposit benefits from a historic resource and positive preliminary metallurgical work completed by AMAX in the 1970s. See news releases from December 20, 2021, and January 21, 2020.
    • Drill hole IM2021-05 in the HGR deposit area returned 7.3 meters grading 0.70% NiEq (as 0.45% Ni, 0.51 g/t 4E, 0.17% Cu and 0.026% Co), and 2.4 meters 2.04% NiEq (as 1.55% Ni, 0.85 g/t 4E, 0.17% Cu, and 0.087% Co), within 379.2 meters of continuous battery and precious metal mineralization starting at surface. This hole was a step-out from hole IM2019-03 which returned 26.8 meters grading 0.85% NiEq (as 0.34% Ni, 0.15% Cu, 0.019% Co, and 1.24 g/t 4E) within 272.5 meters of continuous mineralization. See news releases from July 07, 2022, and December 18, 2019.
  • The 2023 campaign will be the first to apply updated geological models which incorporate similar geology from South Africa’s Platreef district under the direction of Dr. Danie Grobler, who joined the team in May of 2022 as Vice-President Exploration.
  • This campaign is funded by the recent 9.99% strategic equity investment by Glencore and is expected to consist of approximately 5,000 meters of diamond core drilling.

Michael Rowley, President and CEO of Stillwater Critical Minerals, stated, “We are very pleased to announce the arrival of equipment and crews for our 2023 drill campaign with a view to expanding our recent high-grade nickel and copper sulphide discoveries, enriched in cobalt and precious metals. Those intercepts included some of the widest and highest-grade intervals in their respective years and drove a robust and low-cost expansion of our previous mineral resource. We are focused on continuing that trend as we apply our new understanding of the geology of the Stillwater complex from the giant mines of South Africa. The broader fundamentals are stronger than ever for our sector, and the recent strategic investment by Glencore in Stillwater is an important validation of both the project and the underlying fundamentals of US critical mineral supply. We look forward to further announcements from this iconic and expanding American mining district, which has been producing high-grade critical minerals for over one hundred years.”

Dr. Danie Grobler, Vice-President of Exploration for Stillwater Critical Minerals, said “It’s exciting to be embarking on the 2023 drill campaign, which will be the first ever in the Stillwater Igneous Complex that incorporates detailed structural and stratigraphic models from very similar mineralization in South Africa’s Bushveld Igneous Complex. Field work, which commenced in June, includes a ground-based high resolution magnetic survey which has already provided a clear response to the high-grade massive sulphide zone identified in holes CM2021-05 and CM2020-04 holes noted above, further defining that target while also delineating stratigraphic and structural controls on mineralization. The world-class size and well-mineralized nature of the Stillwater complex, coupled with our new understanding of the structure and controls on mineralization, has provided us with a large number of targets to guide expansion of the existing resources while also leading us into exciting new areas”.

Metallurgy, US Geological Survey, and Other Initiatives

Sample collection for more detailed metallurgical testing is on-going as part of the expanding development of Stillwater West, with a view to including full metallurgical assessment in future studies. Preliminary metallurgical assessments by Stillwater returned strong nickel tenor in sulphides drilled by the Company to date. In addition, favorable historic bench-scale metallurgical results completed historically by AMAX at the Iron Mountain target area demonstrate the potential for effective nickel and copper sulphide flotation and PGE recovery.

2023 fieldwork surface programs including geophysical and geological prospecting and mapping surveys are also planned as part of the 2023 campaign. Some of these programs commenced earlier this year with a view to detailing priority drill targets.

In addition, the Company is pleased to report its continuing and expanding engagement with the US Geological Survey which includes new technical programs in addition to ongoing consultation and data sharing following multiple onsite meetings, with some programs eligible for funding under the Inflation Reduction Act and other government initiatives.

Carbon Capture

All five deposits in the 2023 Resource contain desirable nickel sulphide mineralization that has been shown to require a much lower environmental footprint in subsequent processing to nickel metal or nickel sulphate in comparison to the laterite nickel ores that dominate global production. As part of Stillwater’s commitment to global sustainability initiatives, the Company is also examining the potential for large-scale carbon sequestration with the objective of further reducing and possibly eliminating the carbon footprint of a potential mining operation at Stillwater West.

Carbon sequestration studies are ongoing in two channels as reported previously. The first, led by Dr. Greeshma Gadikota at Cornell University with funding by the Department of Energy under the Advanced Research Projects Agency-Energy program, is focused on novel hydrometallurgical techniques and carbon capture with the objective of increasing the extraction of critical minerals using reduced energy for a carbon negative mining future. The second is via ARCA Climate (formerly Carbin Minerals Inc) and the University of British Columbia with focus on investigating the potential to exploit the presence of certain ultramafic minerals that are known to have high capacity to bind carbon dioxide by a natural process known as mineral carbonation for carbon capture as part of a potential mining operation at Stillwater West.

This work strongly aligns with Stillwater’s Environmental, Social and Governance guidelines and principles, and the incorporation of carbon uptake may bring financial benefits via initiatives such as the 45Q Tax Credit for Carbon Oxide Sequestration that is now in place in the US.

About Stillwater Critical Minerals Corp.

Stillwater Critical Minerals (TSX.V: PGE | OTCQB: PGEZF) is a mineral exploration company focused on its flagship Stillwater West Ni-PGE-Cu-Co + Au project in the iconic and famously productive Stillwater mining district in Montana, USA. With the addition of two renowned Bushveld and Platreef geologists to the team and a strategic investment by Glencore, the Company is well positioned to advance the next phase of large-scale critical mineral supply from this world-class American district, building on past production of nickel, copper, and chromium, and the on-going production of platinum group and other metals by neighboring Sibanye-Stillwater. An expanded NI 43-101 mineral resource estimate, released January 2023, delineates a compelling suite of critical minerals contained within five Platreef-style nickel and copper sulphide deposits at Stillwater West, which host a total of 1.6 billion pounds of nickel, copper and cobalt, and 3.8 million ounces of palladium, platinum, rhodium, and gold, and remains open for expansion along trend and at depth.

Stillwater Critical Minerals also holds the high-grade Black Lake-Drayton Gold project adjacent to Treasury Metals’ development-stage Goliath Gold Complex in northwest Ontario, currently under an earn-in agreement with Heritage Mining, and the Kluane PGE-Ni-Cu-Co critical minerals project on trend with Nickel Creek Platinum‘s Wellgreen deposit in Canada‘s Yukon Territory.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Michael Rowley, President, CEO & Director – Stillwater Critical Minerals
Email: info@criticalminerals.com Phone: (604) 357 4790
Web: http://criticalminerals.com Toll Free: (888) 432 0075

Stillwater Critical Minerals, Thursday, July 20, 2023, Press release picture
Stillwater Critical Minerals, Thursday, July 20, 2023, Press release picture

1 – Recovered Nickel Equivalents (“NiEq”) are presented for comparative purposes using conservative long-term metal prices (all USD): $8.00/lb nickel (Ni), $4.00/lb copper (Cu), $24.00/lb cobalt (Co), $1,000/oz platinum (Pt), $2,200/oz palladium (Pd), $1,800/oz gold (Au), and $10,000/oz rhodium (Rh). NiEq is determined as follows: NiEq% = [Ni% x recovery] + [Cu% x recovery x Cu price/ Ni price] + [Co% x recovery x Co price / Ni price] + [Pt g/t x recovery / 31.103 x Pt price / Ni price / 2,204 x 100] + [Pd g/t x recovery / 31.103 x Pd price / Ni price / 2,204 x 100] + [Au g/t x recovery / 31.103 x Au price / Ni price / 2,204 x 100]. In the above calculations: 31.103 = grams per troy ounce, 2,204 = lbs per metric tonne, and 100 and 0.01 convert assay results reported in % and g/t. The following recoveries have been assumed for purposes of the above equivalent calculations: 85% for Ni and 90% for all other listed metals, based on recoveries at similar nearby operations.

Quality Control and Quality Assurance

Mr. Mike Ostenson, P.Geo., is the qualified person for the purposes of National Instrument 43-101, and he has reviewed and approved the technical disclosure contained in this news release.

Forward-Looking Statements

This news release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts including, without limitation, statements regarding potential mineralization, historic production, estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the company are forward-looking statements that involve various risks and uncertainties. Although Stillwater Critical Minerals believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include failure to obtain necessary approvals, unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, uninsured risks, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly, the actual events may differ materially from those projected in the forward-looking statements. For more information on Stillwater Critical Minerals and the risks and challenges of their businesses, investors should review their annual filings that are available at www.sedar.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.

SOURCE: Stillwater Critical Minerals

Categories
Base Metals Energy Exclusive Interviews Junior Mining Precious Metals

[VIDEO] Site Visit Terra Balcanica: Investment Highlights & Impressions

Terra Balcanica is conducting a Capital Raise for Accredited Investors (Closes This Week):

Terra Balcanica Closes Second Tranche of Financing and Starts Phase II Drilling at Brezani Porphyry Target in Bosnia


For further information, please contact Aleksandar Mišković at amiskovic@terrabresources.com, or visit our website at www.terrabresources.com.

Categories
Base Metals Energy

Supply-Demand Gap Ignites Uranium Rally

Reshoring of Nuclear Supply Chain Gains Momentum

The U3O8 uranium spot price gained 2.61% in June, increasing from US$54.59 to $56.02 per pound as of June 30, 2023. Uranium has posted a healthy 15.95% year-to-date return as of June 30, 2023, and continued to show strength and diversification relative to other commodities, which declined 10.04% in the first half (as measured by the BCOM Index). Over the longer term, uranium has demonstrated even greater resilience within the commodity space. For the five years ended June 30, 2023, U3O8 spot appreciated a cumulative 146.15%1 compared to 16.10% for the BCOM.

The U3O8 uranium spot price began rallying on May 31 after the U.S. Senate Environment and Public Works Committee (EPW) passed the bipartisan Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act. This Act along with the Prohibiting Russian Uranium Imports Act passed on May 24 indicate that it may be only a matter of time before the Russian nuclear fuel supply chain is cut off.

A highlight in June was the World Nuclear Fuel Market 49th Annual Meeting held in Slovenia on June 4-6. “Mind the Gap” was the meeting’s theme, which refers to the pressing need for increased uranium production as countries ramp up nuclear power capacity. Attendees addressed the positive momentum within the uranium industry, given the growing demand for uranium, amid supply constraints and the steadily improving sentiment toward nuclear power.

Looming sanctions on Russian uranium are likely to have serious consequences for utilities regarding the security of supplies. Both conversion and enrichment providers need significant term contracts to increase capacity. Market participants, especially in the West, have focused on this conversion bottleneck. In July, ConverDyn, a uranium conversion facility in the U.S., finally restarted after being shuttered since 2017, which represents an important step to reshoring the U.S. nuclear supply chain from Russia. Another key development in the reshoring process was made by Urenco, which announced in early July that it will expand the capacity of its New Mexico enrichment facility by 15%.8 We believe both of these developments will finally enable an industry shift to overfeeding, ultimately creating greater near-term demand for uranium.

Figure 1. Physical Uranium & Uranium Stocks Have Outperformed Other Asset Classes Over the Past Five Years (06/30/2018-06/30/2023)

Figure 1. Physical Uranium & Uranium Stocks Have Outperformed Other Asset Classes Over the Past Five Years (06/30/2018-06/30/2023)

Source: Bloomberg and Sprott Asset Management. Data as of 06/30/2023. Uranium Miners are measured by the Northshore Global Uranium Mining Index (URNMX index); U.S. Equities are measured by the S&P 500 TR Index; the U308 Spot Price is measured by a proprietary composite of U3O8 spot prices from TradeTech; U.S. Bonds are measured by the Bloomberg Barclays US Aggregate Bond Index (LBUSTRUU); Commodities are measured by the Bloomberg Commodity Index (LLCBCOM); and the U.S. Dollar is measured by DXY Curncy Index. Definitions of the indices are provided in the footnotes. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results. 

Uranium Miners Rise Above Macro Turbulence 

Uranium mining equities posted strong results in June, climbing 11.66%. The outperformance of mining equities over physical uranium was a reversal of prior months of underperformance, which we believed indicated market dislocation.

Uranium mining equities have been hurt by higher interest rates and macroeconomic headwinds that have impacted many capital-intensive sectors. However, in June uranium stocks were boosted by heightened supply chain concerns, given that the contracting cycle has started and the uranium spot price has been moving higher. While 2022 was the highest uranium contracting year in a decade, utilities are still not yet at the annual replacement rate. As a result, we expect the contracting cycle to accelerate as utilities become more concerned about the long-term security of supply. We believe this may likely lead to higher uranium prices, back to the levels last seen in April 2022 when uranium reached an 11-year high of ~$64.

It is worth noting that this year’s uranium term contracting cycle has been dominated by Central and Eastern European utilities that are clearly focused on shifting away from Russia. Surprisingly, U.S. utilities have been less active in 2023 and are contracted to buy less uranium in 2022 versus 2021 (40.5 million pounds U3O8 equivalent versus 46.7 million).9 While U.S. utilities have historically held lower uranium inventories than the rest of the world, its uncovered uranium requirements for the 2023-2032 decade stand at 179.2 million pounds. This is relatively unchanged from the prior year’s figure of 182.1 million pounds. To meet this need, we are seeing considerable supply being earmarked for future contract deliveries and a growing interest in the capacity of junior uranium miners.

Junior Uranium Miners Lead June’s Uranium Markets’ Rally 

Junior uranium miners appreciated 18.93% in June, outperforming large-cap miners considerably. As we have explored in past commentaries, difficult market conditions tend to impact junior uranium miners more significantly, given their lower levels of liquidity and higher volatility. However, as we witnessed in June, junior miners have the potential for greater upside when uranium prices move higher.

We believe the strong performance of uranium miners in June reflects the sector’s increasingly bullish fundamentals and the growing reality that future uranium supplies will have to come from mines restarting operations and new mines in development.

Nuclear Energy is Crucial to the Energy Transition

Looking beyond June’s performance, we believe the uranium bull market still has a long way to run and remains intact despite the uncertain macroeconomic environment. We believe conversion and enrichment services price increases have started to boost the uranium spot price. The long-awaited restart of the ConverDyn conversion facility in Illinois is likely to play a key role in the West’s transition away from Russian suppliers. Conversion has been the key bottleneck in the U.S. supply chain. This new capacity will enable the shift from underfeeding to overfeeding, likely increasing additional demand for U3O8.

The essential role of uranium and nuclear energy in fostering global energy security continues to grow in significance. Russia’s invasion of Ukraine sparked a global energy crisis that forced many countries to reimagine their energy supply chains. There has been an unprecedented number of announcements for nuclear power plant restarts, life extensions and new builds that will likely create incremental demand for uranium. The current uranium price, however, continues to remain below incentive levels to restart tier 2 production, let alone greenfield development.

In past years, Western countries’ energy policies have predominantly favored renewable energy to reduce reliance on fossil fuels. However, renewables often suffer from intermittency and low capacity and require offsets with baseload energy sources, such as coal, natural gas or nuclear power plants. As the world continues to add renewable capacity to grids, nuclear energy will have an important role to play, given that it can provide the highest capacity factor.

Figure 2. Uranium Bull Market Continues (1968-2023)

Please click here to see an enlarged chart.

Figure 2. Uranium Bull Market Continues (1968-2023)

Note: A “bull market” refers to a condition of financial markets where prices are generally rising. A “bear market” refers to a condition in financial markets where prices are generally falling.
Source: TradeTech. Data as of 6/30/2023.

1The U3O8 uranium spot price is measured by a proprietary composite of U3O8 spot prices from UxC, S&P Platts and Numerco.
2The North Shore Global Uranium Mining Index (URNMX) was created by North Shore Indices, Inc. (the “Index Provider”). The Index Provider developed the methodology for determining the securities to be included in the Index and is responsible for the ongoing maintenance of the Index. The Index is calculated by Indxx, LLC, which is not affiliated with the North Shore Global Uranium Miners Fund (“Existing Fund”), ALPS Advisors, Inc. (the “Sub-Adviser”) or Sprott Asset Management LP (the “Adviser”).
3The Nasdaq Sprott Junior Uranium Miners™ Index (NSURNJ™) was co-developed by Nasdaq® (the “Index Provider”) and Sprott Asset Management LP (the “Adviser”). The Index Provider and Adviser co-developed the methodology for determining the securities to be included in the Index and the Index Provider is responsible for the ongoing maintenance of the Index.
4The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index that tracks prices of futures contracts on physical commodities, and is designed to minimize concentration in any one commodity or sector. It currently has 23 commodity futures in six sectors.
5The S&P 500 or Standard & Poor’s 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies.
6The U.S. Dollar Index (USDX, DXY, DX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners’ currencies.
7Bloomberg Barclays US Aggregate Bond Index (LBUSTRUU) is the most widely followed broad market U.S. bond index. It measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.
8Source: World Nuclear News – Urenco to Expand U.S. Enrichment Plant.
9Source: U.S. Energy Information Administration – Uranium Purchases and Prices with Data for 2022.

Jacob White
Jacob White, CFA
ETF Product Manager, Sprott Asset Management LP

Sprott Physical Uranium Trust (TSX: U.UN)

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Past performance is no guarantee of future results. You cannot invest directly in an index. Investments, commentary and statements are that of the author and may not be reflective of investments and commentary in other strategies managed by Sprott Asset Management USA, Inc., Sprott Asset Management LP, Sprott Inc., or any other Sprott entity or affiliate. Opinions expressed in this commentary are those of the author and may vary widely from opinions of other Sprott affiliated Portfolio Managers or investment professionals.

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Precious Metals

Goldman’s profits plunged 58% in 2Q

Profits plunged at Goldman Sachs (GS) during the second quarter as the Wall Street giant struggled with its core businesses of dealmaking and trading while taking impairment charges on consumer and commercial real estate holdings.

Goldman’s investment banking revenue declined 20% from a year ago and trading dropped 12%. That helped drag earnings down 58%, to $1.2 billion.

The earnings drop was worse than analysts expected. It was the firm’s lowest quarterly profits since early 2020.

The results are likely to intensify the scrutiny of CEO David Solomon, who is wrestling with everything from partner unrest to concerns about strategy as he tries to put a costly consumer-banking experiment behind the company.

Goldman Sachs CEO David Solomon speaks during the Goldman Sachs Investor Day at Goldman Sachs Headquarters in New York City, U.S., February 28, 2023. REUTERS/Brendan McDermid
Goldman Sachs CEO David Solomon. REUTERS/Brendan McDermid

Goldman is the latest of several big banks to report a continued slowdown in investment banking and trading.

Revenues from those businesses dropped during the last quarter at Citigroup (C) and JPMorgan Chase (JPM) but were up at Bank of America (BAC). At Morgan Stanley (MS), investment banking was flat compared to a year ago while trading revenues were down.

Goldman’s drop in investment banking was the second-worst among its peers, behind Citigroup. Its trading decline put it in the middle of the pack, better than Citigroup and Morgan Stanley but worse than Bank of America and JPMorgan.

‘Green shoots?’

Following a boom in 2021, the global slowdown in dealmaking began last year causing firms across Wall Street to slash bonuses and staff. It continued in 2023 as worldwide investment banking revenues for the second quarter fell 52% from a year ago, according to Dealogic.

Goldman is among the firms on Wall Street that have made or announced cuts of roughly 12,000 jobs since the end of 2022.

Bank executives and analysts are still predicting “green shoots” ahead, citing an uptick in announced M&A deals over the second quarter which could mean an improvement during the back half of 2023.

Morgan Stanley’s Chief Financial Officer Sharon Yeshaya told analysts Tuesday that “sentiment and activity improved towards the end of the quarter, evidenced by green shoots that emerged across our businesses.”

JPMorgan Chief Financial Officer Jeremy Barnum said investment banking was better than expected in June, but cautioned analysts on Friday that it was “too early” to label it a trend.

“We will see,” he said. For overall capital markets, “July should be a good indicator for the remainder of the year.”

Retreat from Main Street

Goldman has challenges beyond Wall Street. It is also scaling back its one-time ambitions to become a major presence on Main Street, an effort that started with a savings account and personal loans in 2016 under former CEO Lloyd Blankfein.

The strategy deepened after Solomon became CEO in 2018, including a credit-card partnership with Apple in 2019 and the $2.2 billion purchase of buy-now-pay-later fintech lender GreenSky in 2021.

The effort has taken a toll on the firm. Solomon acknowledged earlier this year that that a chunk of its consumer business had lost $3 billion since 2020, saying that “we tried to do too much too quickly.” He also said it would try to sell GreenSky.

On Wednesday Goldman said it took a $504 million write down in the second quarter related to “consumer platforms.” It also took impairments of approximately $485 million related to consolidated real estate investments.

The Wall Street Journal has also reported Goldman is now trying to end its partnership with Apple.

Categories
Base Metals Energy

Peabody to Announce Results for the Quarter Ended June 30, 2023

ST. LOUIS, July 13, 2023 /PRNewswire/ — On Thursday, July 27, 2023, Peabody (NYSE: BTU) will announce results for the quarter ended June 30, 2023.  A conference call with management is scheduled for 10 a.m. CT on Thursday, July 27, 2023.

Instructions for the conference call participation and accessing a replay, as well as other investor data will be available at PeabodyEnergy.com prior to the call.

Participants may also access the call using the following phone numbers:

U.S. Toll Free                    1 833 816 1387
Canada Toll Free              1 866 284 3684
International Toll               1 412 317 0480

Peabody (NYSE: BTU) is a leading coal producer, providing essential products for the production of affordable, reliable energy and steel. Our commitment to sustainability underpins everything we do and shapes our strategy for the future. For further information, visit PeabodyEnergy.com.

Contact:
Karla Kimrey
314.342.7900

Categories
Uncategorized

Collective Mining Discovers Plutus, a New Major Porphyry Centre Located Five Hundred Metres East of the Apollo Porphyry System

  • Exploration fieldwork has discovered a new porphyry target located five hundred metres east of the high-grade Apollo Porphyry Deposit and referred to as the Plutus Porphyry Centre (“Plutus”).
  • To date, Plutus covers 1,000 metres by 720 metres in area and hosts multiple mineralization styles including porphyry veining, porphyry related breccia mineralization and late-stage carbonate base metal (‘CBM”) veins.
  • Within Plutus are two areas of interest:
  • Reconnaissance rock chip and shallow auger sampling of oxidized (leached) surface material at Plutus has yielded the following results:
  • Drilling is expected to commence at Plutus in August 2023. Four rigs are now operating at the project with eleven holes currently in the lab for analysis.  Additional assay results are expected in the near term from further drilling at Apollo and surrounding targets.

Ari Sussman, Executive Chairman commented: “The Guayabales project continues to demonstrate its remarkable geological endowment. Hard work by the technical team has outlined the Plutus Porphyry Centre, which is the largest target outlined to date at the project. Given the sheer scale of Plutus, three pads are being constructed ahead of drilling which is expected to commence in mid to late August. We will be aggressive in testing Plutus and are hopeful of making another discovery to rival the Apollo porphyry system.”

TORONTO, July 18, 2023 /CNW/ – Collective Mining Ltd. (TSXV: CNL) (OTCQX: CNLMF) (“Collective” or the “Company”) is pleased to announce assay results and field observations from recent reconnaissance exploration work undertaken in the new Plutus Porphyry Centre (“Plutus”), located 500 metres east of the Apollo porphyry system (“Apollo”) at the Guayabales project located in Caldas, Colombia.

Apollo is a high-grade, bulk tonnage copper-silver-gold system, which owes its excellent metal endowment to an older copper-silver and gold porphyry system being overprinted by younger precious metal rich, carbonate base metal vein systems (intermediate sulphidation porphyry veins) within a magmatic, hydrothermal inter-mineral breccia and diorite porphyry bodies currently measuring 455 metres x 395 metres x 915 metres and open for expansion.

To watch a short video of Richard Tosdal, renowned porphyry expert and Special Advisor to Collective Mining, review the Plutus discovery please click here.

Details (See Figures 1-3)

This press release outlines results from surface reconnaissance exploration work undertaken at the newly discovered Plutus Porphyry Centre (“Plutus”). Plutus is located 500 metres to the east of the Apollo Porphyry in an area with very sparse outcrop due to landslide and ash cover. Results and observations from Plutus are summarized below.

The Plutus porphyry centre measures 1,000 metres by 720 metres in area and is defined by a large porphyry intrusive in contact with breccia to its north-west. The intrusive body is outlined by soil anomalies of copper, molybdenum, gold, tungsten, tin and bismuth which are coincident with a magnetic susceptibility high. Soil copper values greater than 500 parts per million (“ppm”) and 30 ppm molybdenum with highest values up to 1,482 ppm copper and 127 ppm molybdenum define a 650-metre diameter area outlining the porphyry body. Surface geochemical soil, auger and rock sampling assay results from Plutus displays the following ranges of results:

Rock Chip

  • Gold rock chip values up to 4.90 g/t (range of 0.03 g/t to 4.90 g/t);
  • Silver rock chip values up to 100 g/t (range of 0.10 g/t to 100 g/t);
  • Copper rock chip values up to 1,290 ppm (56 ppm to 1,290 ppm);
  • Molybdenum rock chip values up to 102 ppm (0.2 ppm to 102 ppm).

Soil

  • Gold soil values up to 4.80 g/t (range of 0.03 g/t to 4.80 g/t);
  • Silver soil values up to 364 g/t (range of 0.10 g/t to 364 g/t);
  • Copper soil values up to 835 ppm (0.3 ppm to 835 ppm);
  • Molybdenum soil values up to 127 ppm (0.5 ppm to 127 ppm).

Auger

  • Gold auger values up to 3.72 g/t (range of 0.03 g/t to 3.72 g/t);
  • Silver auger values up to 56 g/t (range of 0.02 g/t to 56 g/t);
  • Copper auger values up to 1,482 ppm (69 ppm to 1,482 ppm);
  • Molybdenum auger values up to 113 ppm (1 ppm to 113 ppm).

The amount of rock and weathered exposures in the Plutus target area is limited to a few sparse outcrops due to vegetation, historical landslides, and volcanic ash cover.

Observations from surface mapping of the sparse outcrops and logging of auger drilling chips highlights the presence of porphyry-related mineralization, including magnetite veins as well as pyrite, chalcopyrite and molybdenite sulphide and quartz A, B, EB, and D type porphyry veins. The quartz diorite porphyry exhibits both potassic and sericite alteration.

A north-western breccia area with multiple outcrops is located contiguous with the porphyry intrusive body and includes the Donut Breccia discovery where previous drilling intercepts included 163 metres @ 1.3 g/t AuEq from surface in DOC-3 and 104 metres @ 1.3 g/t AuEq from surface in DOC-2 (see press release dated November 15, 2021 and October 18, 2021, respectfully). Follow up work in the breccia area has identified additional outcrops located to the west and east of the area previously drill tested with assay results pending from channel sampling of limited available exposures.

One rig will be mobilized to Plutus with drilling expected to commence in August 2023.

Apollo Drill Program Outline and Assay Update

The 2023 Phase II drilling program is advancing on schedule with 24 holes completed and results announced with an additional eleven holes awaiting assay results from the lab. The objective of the 2023 drilling program is to define high-grade near surface mineralization of the Apollo porphyry system, expand the size of the system through step-out and directional drilling and drill test multiple new targets generated through grassroots exploration. Since the announcement of the discovery hole at Apollo in June 2022, a total of 55 drill holes (approximately 23,907 metres) has been completed and assayed.

Figure 1: Location of Apollo and Plutus Porphyry Centres (CNW Group/Collective Mining Ltd.)
Figure 1: Location of Apollo and Plutus Porphyry Centres (CNW Group/Collective Mining Ltd.)
Figure 2A and 2B: Plutus Porphyry Centre as Outlined by Copper and Molybdenum in-Soil, Auger and Rock Chip Geochemistry, Superimposed on Magnetic Susceptibility Data - Copper (CNW Group/Collective Mining Ltd.)
Figure 2A and 2B: Plutus Porphyry Centre as Outlined by Copper and Molybdenum in-Soil, Auger and Rock Chip Geochemistry, Superimposed on Magnetic Susceptibility Data – Copper (CNW Group/Collective Mining Ltd.)
Figure 2A and 2B: Plutus Porphyry Centre as Outlined by Copper and Molybdenum in-Soil, Auger and Rock Chip Geochemistry, Superimposed on Magnetic Susceptibility Data - Molybdenum (CNW Group/Collective Mining Ltd.)
Figure 2A and 2B: Plutus Porphyry Centre as Outlined by Copper and Molybdenum in-Soil, Auger and Rock Chip Geochemistry, Superimposed on Magnetic Susceptibility Data – Molybdenum (CNW Group/Collective Mining Ltd.)
Figure 3: Plan View of the Guayabales Project Highlighting the Plutus Target (CNW Group/Collective Mining Ltd.)
Figure 3: Plan View of the Guayabales Project Highlighting the Plutus Target (CNW Group/Collective Mining Ltd.)

About Collective Mining Ltd.

To see our latest corporate presentation and related information, please visit www.collectivemining.com

Founded by the team that developed and sold Continental Gold Inc. to Zijin Mining for approximately $2 billion in enterprise value, Collective Mining is a copper, silver, and gold exploration company with projects in Caldas, Colombia. The Company has options to acquire 100% interests in two projects located directly within an established mining camp with ten fully permitted and operating mines.

The Company’s flagship project, Guayabales, is anchored by the Apollo target, which hosts the large-scale, bulk-tonnage and high-grade copper-silver-gold Apollo porphyry system. The Company’s near-term objective is to drill the shallow portion of the porphyry system, continue to expand the overall dimensions of the system through step out and direction drilling, which remains open in most directions and drill test multiple new targets generated through grassroots exploration.

Management, insiders and close family and friends own nearly 45% of the outstanding shares of the Company and as a result, are fully aligned with shareholders. The Company is listed on the TSXV under the trading symbol “CNL” and on the OTCQX under the trading symbol “CNLMF”.

Qualified Person (QP) and NI43-101 Disclosure

David J Reading is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same. Mr. Reading has an MSc in Economic Geology and is a Fellow of the Institute of Materials, Minerals and Mining and of the Society of Economic Geology (SEG).

Technical Information

Rock, soils and core samples have been prepared and analyzed at SGS laboratory facilities in Medellin, Colombia and Lima, Peru. Blanks, duplicates, and certified reference standards are inserted into the sample stream to monitor laboratory performance. Crush rejects and pulps are kept and stored in a secured storage facility for future assay verification. No capping has been applied to sample composites. The Company utilizes a rigorous, industry-standard QA/QC program.

Information Contact:

Follow Executive Chairman Ari Sussman (@Ariski73) and Collective Mining (@CollectiveMini1) on Twitter.

FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking statements, including, but not limited to, statements about the drill programs, including timing of results, and Collective’s future and intentions. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, Collective cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and Collective assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Collective Mining Ltd.

Categories
Base Metals Diamcor Mining Precious Metals

Diamcor Deploys Additional Heavy Equipment to Support Bulk Sampling and Targeted Increases in Processing Volumes

KELOWNA, BC / ACCESSWIRE / July 18, 2023 / Diamcor Mining Inc. (TSXV.DMI)(OTCQB-DMIFF)(FRA:DC3A), (“Diamcor” or the “Company”), a Canadian diamond mining company with a well-established proven history in the mining, exploration, and sale of rough diamonds, announced today that in addition to the previously announced recent completion of the reconfiguration of generator systems to mitigate the limitations of increased power outages, it has also added another new large excavator to its heavy equipment fleet at its Krone-Endora at Venetia diamond mine project (the “Project”).

The Company is pleased to announce it completed the repayment of its current Caterpillar equipment fleet in July of 2023, and this additional large excavator will now provide the Company with the potential for additional processing volume capacities, diamond recoveries, and associated revenues moving forward.

“We are very pleased to have completed the final payments on our existing heavy equipment,” stated Mr. Dean H. Taylor Chief Executive Officer of Diamcor. “The addition of another large excavator provides our Company with redundancy and added capacity as we begin efforts on the previously announced bulk sampling efforts over the greater areas of the Project”.

About Diamcor Mining Inc.

Diamcor Mining Inc. is a fully reporting publicly traded Canadian diamond mining company with a well-established proven history in the mining, exploration, and sale of rough diamonds. The Company’s primary focus is on the mining and development of its Krone-Endora at Venetia Project which is co-located and directly adjacent to De Beers’ Venetia Diamond Mine in South Africa. The Venetia diamond mine is recognized as one of the world’s top diamond-producing mines, and the deposits which occur on Krone-Endora have been identified as being the result of shift and subsequent erosion of an estimated 50M tonnes of material from the higher grounds of Venetia to the lower surrounding areas in the direction of Krone and Endora. The Company focuses on the acquisition and development of mid-tier projects with near-term production capabilities and growth potential and uses unique approaches to mining that involves the use of advanced technology and techniques to extract diamonds in a safe, efficient, and environmentally responsible manner. The Company has a strong commitment to social responsibility, including supporting local communities and protecting the environment.

About the Tiffany & Co. Alliance

The Company has established a long-term strategic alliance and first right of refusal with Tiffany & Co. Canada, a subsidiary of world-famous New York based Tiffany & Co., to purchase up to 100% of the future production of rough diamonds from the Krone-Endora at Venetia Project at market prices. In conjunction with this first right of refusal, Tiffany & Co. Canada also provided the Company with financing in an effort to advance the Project as quickly as possible. Tiffany & Co. is now owned by Moet Hennessy Louis Vuitton SE (LVMH), a publicly traded company which is listed on the Paris Stock Exchange (Euronext) under the symbol LVMH and on the OTC under the symbol LVMHF. For additional information on Tiffany & Co., please visit their website at www.tiffany.com.

About the Krone-Endora at Venetia Project

Diamcor acquired the Krone-Endora at Venetia Project from De Beers Consolidated Mines Limited, consisting of the prospecting rights over the farms Krone 104 and Endora 66, which represent a combined surface area of approximately 5,888 hectares directly adjacent to De Beers’ flagship Venetia Diamond Mine in South Africa. The Company subsequently announced that the South African Department of Mineral Resources had granted a Mining Right for the Krone-Endora at Venetia Project encompassing 657.71 hectares of the Project’s total area of 5,888 hectares. The Company has also submitted an application for a mining right over the remaining areas of the Project. The deposits which occur on the properties of Krone and Endora have been identified as a higher-grade “Alluvial” basal deposit which is covered by a lower-grade upper “Eluvial” deposit. These deposits are proposed to be the result of the direct-shift (in respect to the “Eluvial” deposit) and erosion (in respect to the “Alluvial” deposit) of an estimated 1,000 vertical meters of material from the higher grounds of the adjacent Venetia Kimberlite areas. The deposits on Krone-Endora occur with a maximum total depth of approximately 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation to be employed with the potential for near-term diamond production from a known high-quality source. Krone-Endora also benefits from the significant development of infrastructure and services already in place due to its location directly adjacent to the Venetia Mine, which is widely recognised as one of the top producing diamond mines in the world.

Qualified Person Statement:

Mr. James P. Hawkins (B.Sc., P.Geo.), is Manager of Exploration & Special Projects for Diamcor Mining Inc., and the Qualified Person in accordance with National Instrument 43-101 responsible for overseeing the execution of Diamcor’s exploration programmes and a Member of the Association of Professional Engineers and Geoscientists of Alberta (“APEGA”). Mr. Hawkins has reviewed this press release and approved of its contents.

On behalf of the Board of Directors:

Mr. Dean H. Taylor
President & CEO
Diamcor Mining Inc.
www.diamcormining.com

For further information contact:

Mr. Dean H. Taylor
Diamcor Mining Inc
DeanT@Diamcor.com
+1 250 862-3212

For Investor Relations contact:

Mr. Rich Matthews Mr. Neil Simon
Integrous Communications Investor Cubed Inc
rmatthews@integcom.us nsimon@investor3.ca
+1 (604) 355-7179 +1 (647) 258-3310

This press release contains certain forward-looking statements. While these forward-looking statements represent our best current judgement, they are subject to a variety of risks and uncertainties that are beyond the Company’s ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Further, the Company expressly disclaims any obligation to update any forward looking statements. Accordingly, readers should not place undue reliance on forward-looking statements.

WE SEEK SAFE HARBOUR

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Diamcor Mining Inc.

Categories
Base Metals Energy Junior Mining Precious Metals Project Generators

Riverside Resources Recaps Mid-Year Milestones and Provides Outlook for Rest of 2023

Vancouver, British Columbia–(Newsfile Corp. – July 18, 2023) – Riverside Resources Inc. (TSXV: RRI) (OTCQB: RVSDF) (FSE: 5YY) (“Riverside” or the “Company”), is pleased to provide a summary of its ongoing strategic activities over the past six months and an outlook for the second half of the year. During this time, the Company has actively expanded in Canada, acquiring new projects and conducting target definition exploration work across its Canadian portfolio. These steps taken in the past six months have strengthened the Company’s move beyond Mexico, which has been progressing for the past two years. Riverside anticipates numerous new Canadian catalysts in the next half-year. With a commitment to advancing its diverse portfolio of mineral assets and leveraging strategic partnerships. To that effect, Riverside has made significant progress in its exploration endeavors, diversifying its commodity mix and expanding into new jurisdictions. In the coming six months, the Company plans to expand its projects beyond precious and base metals, incorporating more critical metal assets and royalties. The key mid-year developments are outlined below:

  • Ontario Canada additional projects and expansion at Pichette with high grade gold drill results.
  • Geophysics exploration funded through Riverside is advancing projects to drill and partnering stage at Duc project with targets expanded in scale by more than 4X.
  • Property consolidation at the high-grade Union Project in Sonora, Mexico and delivering up to 1 oz/ton Au assays in the now controlled mine area.
  • Royalty on Tajitos gold asset, and funds have been received from Fresnillo, who is advancing the asset.
  • Progress toward catalysts now lined up for second half of 2023 with partner deals, exploration results, quality project acquisitions, having strong cash position.

Continued Expansion in Ontario’s Geraldton and Porcupine Mining Districts

Riverside Resources continued to expand and advance its Canadian portfolio during the first half of 2023 by acquiring additional claims at the Pichette Project west of the Hardrock Gold Mine complex of Equinox Gold near Geraldton, Ontario. The Company also acquired the Duc Project in the Porcupine Mining District of northwestern Ontario. The Duc Project, spanning over 600 hectares, is strategically positioned west of the past producing Agrium Ltd. carbonatite phosphate mine with critical metal concentrations and within the highly prospective Wawa Subprovince for Rare Earth Elements (REE) and gold deposits. Riverside’s generative exploration approach using historic data, proprietary databases, and field experience, coupled with personal historic knowledge of the area, aims to unlock the full potential of the Duc Project through additional exploration and joint-venture partnerships. The presence of rare earth element occurrences and orogenic gold deposits within the Wawa Subprovince further enhances the prospectivity of the region as Riverside continues the strategy of generating and owning quality projects in Canada.

Completing a Helicopter Magnetics Survey in Northwestern Ontario

Riverside Resources completed an airborne geophysical helicopter magnetics survey on the Duc Project in northwestern Ontario, which provided greater context for existing data Riverside already defined multi-kilometer structural target prospective for gold and REE -critical metals that can now be progressed during the second half of 2023. This survey employed SHA Geophysics’ Heli-3G technology, offering cost-effective and high-quality results. The magnetic data interpretation revealed two major parallel shears that traverse the central part of the Duc Project, providing important geological boundary information and identifying direct structural zones which are consistent with the style of feature that hosts major gold deposits.

Union District, Sonora, Mexico Consolidation and Advancement

In a strategic move to consolidate the Union Project area, Riverside Resources signed an Option Agreement to acquire the past-producing Union Mine, situated within the Union District of Sonora, Mexico. This district boasts a rich history of high-grade zinc, gold, and silver production from carbonate replacement mines. By securing a 100% undivided right, title, and interest in the Union Mine, Riverside expands its district wide mineral concession coverage and a foothold in the region and establishes a clear path towards advancing exploration targets within this prospective land package.

Rule Symposium July 24-27

Riverside has been selected by Mr. Rick Rule to participate in the Rule Resources Symposium convention in Boca Raton, Florida starting on July 24th, 2023. The Rule Symposium is a sector leading natural resource investing event and an exhibitor by invitation only conference that Riverside has been chosen for again this year. Riverside’s CEO and VP Corporate Communications will attend in person to give presentations and meet investors. To that effect, please view Dr. John-Mark Staude’s (our CEO) pre-conference interview with Rick Rule at the following link: https://www.youtube.com/watch?v=NDj43hCJwgo&t=117s

Looking Ahead: Riverside’s Plans for the Next Six Months

Building on the accomplishments of the past six months, Riverside Resources is progressing a targeted agenda for the remainder of 2023. The Company plans to have catalysts on the following key initiatives:

  • Expand the generative portfolio with a low cost but high value in British Columbia, Canada quality projects in precious and critical metals. Assay results, mineral claims, mineralization zones all to be progressed during coming half year.
  • Progress exploration in Ontario including work up targets in the field and completing technical reports and documentation of the value so far created and now moving toward transactions.
  • Exploration and Joint-Venture Partnerships: Riverside’s robust portfolio of mineral assets and royalties in North America presents significant opportunities for strategic partnerships. The Company continues developing and progressing joint-venture and spin-out collaborations to accelerate the advancement of multiple assets simultaneously, fostering a greater chance of discovery leading to added shareholder value.
  • Royalty assets engage in potential value catalyst steps with the portfolio and now with Fresnillo progressing their development of the Tajitos district toward future open pit heap leach gold mining where Riverside has the 2% NSR on Tajitos and Tejo mineral concessions.
  • Continued Financial Prudence and Value Generation: Riverside Resources remains financially strong, with well over $7 million in cash and zero debt. The Company’s prudent financial management ensures sustainable exploration programs and underscores its commitment to generating value for shareholders.
  • Investor Engagement and Communication: Riverside Resources recognizes the importance of transparent and effective communication with its valued shareholders and the investment community. The Company will continue to provide timely updates, reports, and engagement opportunities to foster a strong and supportive investor base.

Riverside Resources remains focused on its mission to generate value and continue work towards mineral discoveries while adhering to very thorough environmental standards and social responsibility. Riverside has a strong upcoming set of catalysts with results from Canada and Mexico. To that effect, with its current sector leading gold portfolio in Ontario and now expanding into strong projects in British Columbia, the Company believes that it’s on the right path in progressing towards an exciting second half of 2023.

About Riverside Resources Inc.:

Riverside is a well-funded exploration company driven by value generation and discovery. The Company has a strong cash position, no debt and less than 75M shares outstanding with a quality portfolio of gold-silver and copper assets, along with royalties in North America. Riverside has extensive experience and knowledge in operating in Canada and Mexico, while leveraging its large databases to generate a portfolio of prospective mineral properties. In addition to Riverside’s own exploration spending, the Company also strives to diversify risk by securing joint-venture and spin-out partnerships to advance multiple assets simultaneously and create more chances for discovery. Riverside has properties available for option, with information available on the Company’s website at www.rivres.com.

ON BEHALF OF RIVERSIDE RESOURCES INC.

“John-Mark Staude”

Dr. John-Mark Staude, President & CEO

For additional information contact:

John-Mark Staude
President, CEO
Riverside Resources Inc.
info@rivres.com
Phone: (778) 327-6671
Fax: (778) 327-6675
Web: www.rivres.com

Mehran Bagherzadeh
Corporate Communications
Riverside Resources Inc.
Phone: (778) 327-6671
TF: (877) RIV-RES1
Web: www.rivres.com

Certain statements in this press release may be considered forward-looking information. These statements can be identified by the use of forward-looking terminology (e.g., “expect”,” estimates”, “intends”, “anticipates”, “believes”, “plans”). Such information involves known and unknown risks — including the availability of funds, the results of financing and exploration activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other risks identified by Riverside in its public securities filings that may cause actual events to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

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.

Categories
Base Metals Junior Mining Precious Metals

Gold vs. Gold Stocks, An Unresolved Incongruity

Since 2000, the dawn of radical monetary policy, gold has outperformed the major asset classes, as depicted in Figure 1. In the first decade of the gold bull market, mining equities significantly outperformed bullion. However, following gold’s August 2011 peak, gold mining equities have significantly underperformed the metal’s price, as shown in Figure 2. There are several possible explanations for this incongruity, many of which are already reflected in the ultra-low valuations of gold mining stocks. These reasons will be reviewed and discussed in the following paragraphs.

Of the several reasons for underperformance, the most significant impediment to higher gold stock valuations, in our opinion, is the implicit consensus that gold priced in the current neighborhood of $2,000 per ounce is not sustainable. We believe the notion that gold mining stocks offer perpetual optionality and leverage to still higher gold prices is heavily discounted, even dismissed when weighing their pros and cons. Currently, physical gold is trading a few percentage points below its all-time highs (~$2,075 in August 2020). In our view, there is realistic potential for a mean reversion trade in which a small percentage gain in the gold price above its previous peak may lead to outsized returns for gold mining equities.

Figure 1. Gold’s Long-Term Outperformance vs. U.S. Stocks & Bonds, USD (2000-2023)

Figure 1. Gold’s Long-Term Outperformance vs. U.S. Stocks & Bonds, USD (2000-2023)

Source: Bloomberg. Period from 12/31/1999 to 6/30/2023. Gold is measured by GOLDS Comdty Spot Price;  S&P 500 TR is measured by the SPX; US Agg Bond Index is measured by the Bloomberg Barclays US Agg Total Return Value Unhedged USD (LBUSTRUU Index); and the U.S. Dollar is measured by DXY Curncy. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

Figure 2. Gold Mining Stocks Have Underperformed Physical Gold (2011-2023)

Figure 2. Gold Mining Stocks Have Underperformed Physical Gold (2011-2023)

Source: Bloomberg. Data as of 7/11/2023. Gold is measured by GOLDS Comdty Spot Price; Gold Equities are measured by VanEck Gold Miners ETF.1 Included for illustrative purposes only. Past performance is no guarantee of future results.

Gold Mining Equity Underperformance: Unpacking the Reasons

A. Dilution

In our opinion, share issuance is one of the major reasons for the disconnect between the gold price and mining equities. Share issuance has often been a necessary but justifiable evil to finance capital projects. However, in all too many instances, share issuance has resulted from poor capital discipline, ill-advised M&A (mergers and acquisitions) and disregard of per-share metrics concerning reserve and production ounces, cash flow and earnings. Few corporate websites or investor presentations display these per-share metrics, depriving investors of a clear and accessible method to analyze management performance. Although the impact of equity dilution is disclosed in financial statements and is routinely researched by the Sprott investment team, deciphering the debilitating effect of serial dilution is a laborious task that most generalist investors may be reluctant to undertake.

B. Subpar Return on Equity (ROE) or Misallocation of Capital

Figure 3 illustrates how the 2011 gold price peak triggered a CapEx (capital expenditures) surge in 2012 and 2013. The drop in the gold price after 2011 doomed the industry to subpar returns on capital for the next five years.

Following the 2012-2013 CapEx binge, the gold mining industry drastically cut expenditures from 2015 to 2021, in response to declining gold prices and profits. Although CapEx spending began to recover in 2022, the level (not inflation-adjusted) still fell far short of the peak 10 years prior, despite current global mine production being ~20% greater than a decade ago. We believe that this CapEx drought means that capacity added during the industry’s nuclear winter (2013-2020) translates into unrecognized scarcity value. In all probability, the replacement cost of existing capacity markedly exceeds the stated book value. The hurdle rate to build new mines will most likely require significantly higher metal prices.

Figure 3. Gold Miners CapEx Spending in US$ Billions (2007-2023)

Gold Miners Annual CapEx Spending

Source: Bloomberg. Data as of 6/30/2023. Based on the NYSE Arca Gold BUGS Index (HUI), a modified equal dollar-weighted index of companies involved in gold mining. Included for illustrative purposes only. Past performance is no guarantee of future results.

Figure 4. The Return on Invested Capital (ROIC) of Gold Producers (2005-2022)

Figure 4. The Return on Invested Capital (ROIC) of Gold Producers (2005-2022)

Source: BMO. Data as of 12/31/2022. Included for illustrative purposes only. Past performance is no guarantee of future results.

C. Jurisdictional Risk

The spread of resource nationalism to many developing countries, which host otherwise attractive gold deposits, has escalated the risk premium for large new capital projects. In our ongoing internal assessment of geopolitical risk, we’ve seen a significant contraction in the map of favorable jurisdictions over the past decade. We perceive the rule of law to be compromised in many jurisdictions across Latin American, Asian and African nations. Political risk has resulted in a difficult-to-overcome valuation discount for companies with production weighted to certain regions. To address this jurisdictional valuation handicap, many companies are acquiring assets in politically “safe” locales, mainly in North America and Australia. As a result, we’re seeing a rise in M&A activity driven by a desire to alter the geographical footprint.

D. A Decade of Margin Erosion

In 2013, the average AISC (all-in-sustaining costs) for gold production was $1,100 per ounce. Today, it stands at roughly $1,250, representing an increase of 13.6%. The yearly average gold price is shown in Figure 5. Using estimates from BMO Capital Markets, the AISC, including growth capital, has risen over the past decade from $1,484 to $1,612 per ounce. The potential for margin improvement, which started in 2019, has been overshadowed by the escalating cost of production and the capital expenditure required to replace existing capacity and reserves. However, we believe that the trend of margin-eroding cost inflation is beginning to plateau and may soon be a thing of the past. If bullion prices stabilize at current levels, the prospects for industry-wide margin expansion could be excellent.

Figure 5. Yearly Average Gold Price (2013-2022)

Figure 5. Yearly Average Gold Price (2013-2022)

Source: BMO Capital Markets; Company Reports. Data as of 12/31/2022. Included for illustrative purposes only. Past performance is no guarantee of future results.

E. CapEx Bloat/Timeline Stretch

The timeline for constructing new mining and processing capacity has lengthened over the last decade. One major reason for this is the increasingly stringent permitting requirements related to environmental and social factors. The time gap between the discovery of a significant new ore body and cash generation now easily exceeds 10 years compared to 6 years only a decade ago. This increased timeline translates into capital being tied up without returns for prolonged periods, leading to higher interest burdens and heightened susceptibility to various risks, including supply chain disruptions, weather events and political changes in host countries. Particularly vulnerable are mine developers with single or few assets, as they often face unavoidable and unanticipated dilutive financings.

Launch of GLD and other Gold Bullion ETFs

Prior to the launch of SPDR Gold Shares (GLD) in 2004, equity investors bullish on the gold price had no alternative but to invest in gold mining shares. The overwhelming success of GLD and other instruments backed by or closely tied to the physical metal has cannibalized demand for gold mining shares. In 2010, the aggregate market capitalization of gold mining equities stood at roughly $300 billion. By the end of 2022, this figure had dwindled to approximately $260 billion. In contrast, gold-backed ETFs had accumulated assets totaling nearly $180 billion by the end of 2022. Gold exposure for equity investors, once the exclusive realm of mining shares, is now shared with highly liquid gold surrogates traded worldwide. An obvious question arises: What role do gold mining stocks play in constructing investment strategy? The subsequent paragraphs will aim to provide an answer.

Mean Regression Ahead?

Gold mining stocks are inextricably connected to the price behavior of gold bullion. In our view, a bullish outlook for the metal far outweighs any other rationale for owning them. As we have seen, the response of gold mining equities to the bull market in bullion has been disappointing.

What appears to be lacking is a decisive bullion price breakout that leaves the psychological $2,000 per ounce threshold in the rearview mirror. We anticipate that such a breakout is on the horizon, potentially in the not-so-distant future. However, until it materializes, it remains a macroeconomic speculation entertained by few. Our speculative reasoning can be explored further in previous commentaries (Is My Money Safe?, Connecting a Few Dots and The Dollar, Safe Haven or Leaky Lifeboat?). Perhaps the gold price needs a period of further consolidation to digest its ~6% year-to-date gain and the ~60% increase since the August 2018 low. In our view, any further period of uncertainty regarding the potential upside in the gold price provides the last opportunity to allocate into this neglected sector at highly advantageous valuations.

Gold bullion has unequivocally demonstrated its long-term value as a risk diversifier. The notion that it deserves to be positioned as a defensive anchor in a balanced equity investment strategy (and perhaps in a more meaningful ratio than fixed income) is gaining traction. Yet, the broad acceptance of this notion has not sparked significant investment flows. Given escalating macroeconomic risks, the fact that gold remains under-owned appears as incongruous as the disconnect between the metal and its related mining shares this sector at highly advantageous valuations.

Figures 6A and 6B attest to the sparsity of gold ownership by investment managers in Western capital markets.

Figure 6A. Market Vane Sentiment Index & Gold Price (2006-2023)

Source: Bloomberg and Market Vane. Data as of 6/30/2023. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

Figure 6B.

Value of Gold ETF Holdings

Source: World Gold Council. Data as of 6/30/2023. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

Gold Acts as a Portfolio Risk Diversifier and Safe Haven Asset

The investment rationale for gold is easily summarized as a risk diversifier and a safe haven asset without parallel. The argument has been set forth in clinical and academic terms by many credible proponents. Convincing discussion of its benefits in terms of efficient frontier analysis can be found (see World Gold Council: The Case for a Strategic Allocation to Gold). More controversial and less clinical is the idea that gold mining stocks might add tactical investment performance that could far outsize investment performance benefits from the plain vanilla prospects for the metal.

The time for accumulation is now, not after the investment case becomes obvious based on a new gold price paradigm that $2,000 is the floor, not the ceiling. A major barrier to the mean reversion thesis for mining stocks is the confusion between nominal and inflation-adjusted prices. Based on recent history, the superficial view is that when the metal price approaches the magic number of $2,000 per ounce, the potential for further upside is exhausted and a signal to initiate short positions. On an inflation-adjusted basis, today’s $2,000 gold price is ~30% below the peak in 2011 and ~50% below the peak of $800 in 1980. Fixation on nominal prices ignores the fact that macroeconomic realities in favor of gold have improved significantly since previous peaks.

The total market cap of all precious metal mining equities traded on developed markets is ~$260 billion today, slightly more than the market cap of Bank of America. The total market cap of the combined five largest precious metal mining companies is nearly $150 billion, leaving a mere $120 billion for all remaining precious metal mining equities. Imagine the scramble if pension funds like CalPERS or Ontario Teachers were to decide to invest just 1% of their assets into precious metal equities. This is not an outlandish thought. Pension funds in developed markets like Canada are benchmarked against indices with higher weighting in precious metal miners than in the U.S.

Gold Stock Undervaluation

Gold mining stocks are undervalued on a relative and absolute basis. Gold mining equities are trading multiples lower than the S&P 500 Index and with greater profitability and lower leverage.

Figure 7. Gold Miners Present Attractive Relative Value and Fundamentals

Figure 7. Gold Miners Present Attractive Relative Value and Fundamentals

Source: Bloomberg as of 3/31/2023. Gold Miners (GDM) represents the NYSE Arca Gold Miners Index (GDM INDEX). EBITDA refers to earnings before interest, taxes, depreciation and amortization. S&P 500 is measured by the SPX Index. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

A decade of subpar investment returns has put a squeeze on exploration expenditures. We estimated that the cost of discovering new ounces has risen over 100% over the past decade. As already discussed, the barriers to building new mines have increased significantly due to geopolitical and permitting issues. These three factors suggest that the value of existing mines is extremely understated on industry balance sheets. The replacement cost of the current mining infrastructure is potentially 30% to 100% higher than that represented by financial statements and the amount of depreciation that has been added due to the age of the project in question.

Systematic Undervaluation of Mining Equities

The conventional valuation methodology for gold miners is based on discounted cash flow (DCF) analysis. The three inputs for the calculation are existing reserves, the cost of producing those reserves and the future gold price. After discounting future cash flows at a uniform time value of money, the DCF analysis arrives at a net asset value (NAV) and, when compared to the enterprise value of any given company, provides a premium or discount to NAV. Only the first factor is objective, while the second requires expert analysis of the particulars of a company’s producing assets. The third and most critical factor is the future gold price.

The conventional practice to model future cash flows, among almost all highly influential brokerage analysts, is to employ spot metal prices for the current and following year, after which a secular decline in the price is imposed. As noted by Michael Solomon, discounting the future gold price arbitrarily impairs valuation and contravenes gold’s historical annual appreciation rate of 8% in USD terms since 1971. Moreover, Solomon notes: “A DCF analysis of any typical company would value the first five to ten years of estimated free cash flows and would calculate a terminal value on the assumption that the business is a going concern.” One method would be to apply a multiple to the final year and discount that back to the present. Solomon goes on to say: “Yet, gold mining analysts assume no terminal value for a mining company. … The assumptions underlying the discounted cash flow analysis are far from realistic, and it becomes punitive.”

One could argue that even a flawed valuation methodology, if applied consistently, at least enables an effective ranking of different company fundamentals. To this we say that comparative analysis aside, the depiction of valuation through a negatively biased lens affects the appraisals and impressions of generalist investors who might be investigating the gold mining sector for the first time. It can be none other than off-putting.

In addition, the auto bearish framework corrupts the thinking of gold mining managements resulting in underinvestment. This can be seen in the already depicted secular decline of exploration expenditures and a long-term constriction on future global production. Given the ever-increasing lead times between discovery and new mine completion, further contraction in reserve-to-production ratios is inevitable. It can be seen in Figure 8 that global gold production is beginning to flatten out:

Figure 8. Annual Gold Production (2010-2022)

Figure 8. Annual Gold Production (2010-2022)

Source: World Gold Council, S&P Global Market Intelligence. Based on data available as of 3/31/2023. Included for illustrative purposes only. Past performance is no guarantee of future results.

A consequence of underinvestment in future gold production will be increased M&A activity when major producers have little alternative but to take out smaller producers at substantial premiums. As noted by Solomon, the growing wave of M&A within the gold mining industry can be seen as a “Darwinian response to extinction.”

The prioritization of discounted cash flow (DCF) models to evaluate projects by company managements and equities by investment analysts is harmful both to capital allocation decisions and the appraisal of company valuations. Seymour Schulich, founder of Franco-Nevada Mining Corporation and one of the keenest minds in the mining industry, explained this to me over 20 years ago during a site visit. At the June 15 RBC Capital Markets Global Mining & Materials Conference, mining impresario Robert Friedland describes DCF valuation methodology as “idiotic”: “The management of these banks that allow analysts to create these absurd models, they should just change their minds. Because the real-world value of a Tier 1 mine is much more than an NPV model, and NPV modeling is not the only way to model a mine.” DCF overvalues a dollar of cash generation today relative to the dollars generated 10 years in the future. Such Mr. Magoo-like near-sighted thinking also distorts analysis by managements and investment bankers of prospective M&A transactions.

Overweighting the consideration of near-term cash flows against the possibilities for game-changing future cash flows is, in many cases, just an indication of ground-hugging (CYA) risk adversity and a recipe for corporate shrinkage. Producers have little appetite to displease shareholders by acquiring non-producing assets. This has resulted in a wide disparity between large- and small-cap gold mining equity valuations.

Exploration and development stage gold mining companies routinely trade at extreme discounts to their producing counterparts. Speaking as experienced (and appropriately bruised) investors in precious metals mining equities, we have seen cycles like this play out before. Mid- to smaller-cap equities can be highly sensitive to the dynamic of value creation through the process of discovery and mine-building. On the other hand, that dynamic rarely moves the needle in the larger-cap sector. While the potential for mean regression exists across the sector, we believe the opportunity is greatest among mid- to small-cap securities.

Figure 9. Junior Miners Inexpensive Relative to Senior Miners (2001-2023)

Figure 9. Junior Miners Inexpensive Relative to Senior Miners (2001-2023)

Source: BMO Capital Markets, FactSet. Data as of 4/19/2023. “Junior” gold mining companies generally have market capitalizations under $500 million and are considered riskier than larger, “senior” gold mining companies, which generally have market capitalizations greater than $500 million. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

Potential for Mean Regression Trade

Gold is considered a safe haven asset; it may protect capital but does not provide investment opportunity. By contrast, gold mining stocks are not considered safe assets as they incorporate risk, but they offer the potential for building significant capital. Gold and related mining stocks are joined at the hip. One cannot invest in the latter without having a point of view on the former. The key judgment is whether the metal is correctly priced in nominal currency terms. That requires judgment on the quality of the currency in which it is priced. Gold has risen against all paper currencies, including the USD. We believe the notion that a strong U.S. dollar is negative for gold is laughable. While the U.S. dollar might look “strong” against other paper currencies from time to time, relative performance does not equate to inherent strength. The dollar has been persistently weak against gold since 1971. Since the last remnant of gold backing was removed by Nixon over 50 years ago, there has been no such thing as an inherently strong dollar on a sustained basis.

Gold mining equities have two things going for them. First, they have quietly become very cheap stocks, are seriously unloved and represent a contrarian’s delight. Second, they offer low-risk exposure to what we regard as the very likely prospect of the continuing and possibly accelerating downgrade of the USD. A reversion to inflation-adjusted 2011 levels would see the GDX and GDXJ rally over 110% and 300% respectively. Our expectation is for small and mid-cap companies to rally harder than their larger-cap peers.

Uncritical acceptance of the pricing of real assets in nominal dollars signifies the nearly universal brainwashing of establishment economists, investment thought leaders and policymakers. The Consumer Price Index (CPI) reported monthly is widely accepted as an accurate gauge of inflation and, by inference, the integrity of the U.S. dollar as a store of value. Since 1983, the Bureau of Labor Statistics, which oversees the calculation of the CPI index, has “updated” its methodology 25 times. (Grant’s 1/27/23-Inflation for the Long Run). In 21 out of 25 of those instances, the adjustments caused the reported level of inflation to be lower than previously stated. A sign of market distrust of the CPI inflation measure is the divergence between TIPS (Treasury Inflation-Protection Securities) and the price of gold. Between 2007 and 2021, the correlation between TIPS and the price of gold was 90%. The breakdown is depicted in Figure 10.

Figure 10. Gold vs. 10-YR U.S. Treasury Inflation-Protected Securities (TIPS) (2006-2023)

Source: U.S. Treasury and World Gold Council. You cannot invest directly in an index. Included for illustrative purposes only. Past performance is no guarantee of future results.

It is in the self-interest of the political and financial establishment to portray a sanguine economic picture. Years of “sly cheating” that “continues apace” by the makers of monetary and fiscal policy (Grant’s Interest Rate Observer, 6/2/23) condition the investment consensus into uncritical acceptance of an alternate reality. Economic indicators are routinely tweaked and massaged for mass consumption. For example, both Non-Farm Payrolls and retail sales reports, both widely followed and capable of moving markets, are frequently distorted, whenever necessary, by seasonal adjustment factors arbitrarily tweaked for cosmetic purposes. The line between propagators and consumers of misinformation is indistinguishable. Perpetuation of distorted information is mutually convenient.

Issuance of new rounds of government debt seems overly dependent on the suspension of critical thinking. With government activity now comprising 27% of GDP, the inability to finance would crush economic activity. Post the recent debt ceiling deal, as noted by Meridian Macro Research, “public debt soared more than $1 trillion, the biggest non-crisis debt monthly increase on record.” Trust that the U.S. dollar will remain a viable global reserve asset is vital. Absent this delusion, damage to U.S. credit would be irreparable.

It would seem that the gravitational limits of credulity are being probed. Based on our expectation for spreading skepticism, we believe that gold will break out to new all-time highs in inflation-adjusted terms. That would translate into a gain of roughly 30% in nominal dollars, or $2,500-$2,600, simply to square with the fundamental forces that have been gathering since the previous nominal peak of $1,920 a decade ago. Should gold do so, the death of the U.S. dollar as a safe asset would become manifest. Mean regression based on our analysis could equate to 50% to 150% upside for precious metals equities versus gold itself with smaller, more overlooked stocks having the potential to benefit by an even larger degree. Gold mining stocks might once again bask in the sunshine of a decade ago.

Original Source: https://sprott.com/insights/sprott-gold-report-gold-vs-gold-stocks-an-unresolved-incongruity/?_cldee=iyr6f9KTGvkvr-APWHu_PzciVLbyXE-q8uffffdzX8qQqQD5DGpCiLUoGb37nCmn&recipientid=lead-cb8b11b52df9ea11a815000d3a0c86a9-4f32f7c20e6d4785871888b923656bfb&esid=93097331-a724-ee11-9965-0022483d058c