The Highballer shortlist generated a fair number of headlines last week. There’ll be no preamble today. Let’s get right to it.
Banyan Gold (BYN.V)
- 134.24 million shares outstanding
- $34.23M market cap based on its recent close at $0.255
Between its two Yukon based projects—AurMac and Hyland—the company holds over 1.4 million ounces in the Indicated and Inferred categories (Hyland’s 524,000 ounces are AuEq).
The July 8, 2020 headline:
Banyan Announces $4.3 M Financing, Begins Phase 2 AurMac Exploration Program
With 12,500,000 Charity Flow Through shares priced at $0.28, 2,000,000 regular Flow Through shares priced at $0.25, and 1,500,000 hard dollar shares priced at $0.20, the company is looking to raise up to $4.3M.
Significantly, no dilutive bells and whistles accompany this raise (no warrants).
This press releases states that Alexco (AXU.T), Victoria (VGCX.T), and Osisko (OR.T) will participate (pro rata) along with other strategic and current shareholders.
These funds will be used to push the company’s AurMac project further along the curve with a phase II exploration campaign, one that will include additional diamond drilling, geotechnical drilling, metallurgical test work, environmental baseline data studies, and a round of community consultation.
Tara Christie, Banyan CEO:
“Our current significant shareholders and new strategic shareholders participating in this financing are a strong endorsement of the growth potential of AurMac and confidence in our team. With a strong treasury, we are now well positioned to advance this project to the next level through 2020 and 2021. Banyan is taking this opportunity in finance at a time when there is strong interest in road accessible, near surface gold projects in an enviable jurisdiction, adjacent to two operating mines.”
Banyan began drilling AurMac on June 2nd. Initial assays from this phase one campaign could drop at any time.
Coral Gold (CLH.V)
- 46.17 million shares outstanding
- $34.62M market cap based on its recent $0.75 close
Coral Gold is one of my top three picks for 2020. It was given top-shelf status, not for its capacity to kick out regular assay-related headlines via the drill bit, but for the latent value underpinning its sliding scale royalty asset.
In a rising gold price environment, such as the one we’re currently enjoying, this royalty/exploration play could begin attracting a much broader audience… and a fatter valuation.
This uncapped sliding scale NSR (1% to 2.25%) covers over 2.7 million ounces at Nevada Gold Mines (NGM) Robertson Property located along the prolific Cortez Gold Trend of northern Nevada.
Robertson is a joint venture between mining behemoths Barrick (61.5%) and Newmont-Goldcorp (38.5%).
Note Robertson’s proximity to Pipeline, Cortez Hills, and Goldrush—three of the largest Carlin-type gold deposits on the planet. They make up NGM’s lowest-cost assets with over 26.8 million ounces of gold reserves & resources.
It’s important to note that Robertson’s ounces are now considered part of the mineral resource base at the Cortes Mine Complex.
The July 7th headline:
Coral Gold Provides Q1 Report on Nevada Gold Mines’ Progress at Robertson Project in Nevada
NGM recently delivered a summary of work completed at Robertson in Q1 of 2020.
NGM reported that 2,026 meters of geotechnical and metallurgical drilling was completed during the quarter, as well as 821 meters of resource drilling.
“NGM is also progressing the evaluation and other pre-development activities at Robertson including updating the geological models based on Q1 2020 drill data, continuing ongoing baseline study work, such as waste/ore characterization work and biological baseline work.”
Importantly, and this may represent a significant future catalyst for Coral common shares in 2020, NGM has confirmed that the Robertson pre-feasibility study process remains in-progress.
A PFS will give us a much better indication of what this current 2.00% NSR is worth.
“As announced in Coral’s news release dated March 16, 2020, Barrick recently disclosed an inferred mineral resource at the Robertson Project in their 2019 fourth quarter report and news release dated February 11, 2020, and while the details of the new resource estimate have not yet been made public, they indicate the Robertson property is now considered part of the mineral resource base for the Cortez Mine complex.”
“Coral Gold Management is encouraged by the progress on the Robertson Project, especially that a new mine design was created, and work progresses towards development of this property.”
Also, importantly, NGM geologists are looking for a ‘Meikle-style’ discovery on the Robertson property—a rich feeder deposit, the source of the 2.7 million ounces of near surface gold. I submit that such a discovery could blow the doors off this one.
Defense Metals (DEFN.V)
- 45.69 million shares outstanding
- $7.08M market cap based on its recent $0.155 close.
Defense is advancing its 1,708-hectare Wicheeda Rare Earth Element (REE) Project in mining-friendly British Columbia.
Wicheeda holds the following REE resource in its subsurface layers:
- 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements) in the Indicated category;
- 12,100,000 tonnes averaging 2.52% LREE in the Inferred category;
I covered the following July 8th news release over at Chris Parry’s Equity Guru recently. The following is an excerpt from that article.
These baselines studies are a critical step in paving the path to production. Here, they’re initiating surface water assessment studies comprised of field-based hydrology and water quality data collection.
Highlights:
• Defense Metals has engaged Prince George based EDI (Environmental Dynamics Inc.) to initiate baseline surface water quality assessment at the Wicheeda REE Project;
• Completed Stream and lake water quality samples collected at total of seven unique sites in the vicinity of the of the Wicheeda REE Deposit and analytical results are pending;
• Completed Spring freshet manual stream flow measurements collected at five unique sites;
• Completed assessment of eight stream sites in anticipation of the installation of continuous water level logging hydrometric stations for long term monitoring.
Craig Taylor, Defense Metals CEO:
“Defense Metals has reviewed a proposal from EDI comprising surface water, groundwater, meteorological and wildlife baseline assessments to support a potential future Wicheeda REE Deposit BC mines permit application. With the initiation of this multi-year program of baseline surface water hydrology and water quality assessment we continue to be forward-looking with respect to advancement of the Wicheeda REE Project.”
In order to evaluate potential mine effects on surface water, a total of eight hydrology stations will be established within the deposit area. Discharge data from these stations will be collected over a two-year period to determine baseline conditions.
Very technical. Very necessary. And once again, an important step in the company’s relentless push along the development curve.
HighGold Mining (HIGH.V)
- 40.79 million shares outstanding
- $73.83M market cap based on its recent $1.81 close
A highly anticipated phase one, 7,000 to 10,000 meter multiple rig diamond drilling campaign at the company’s Johnson Tract (JT) project, is the main event here.
As a reminder, the JT deposit hosts an Indicated resource of 750k ounces at 10.93 g/t AuEq, and an Inferred resource of 134,000 ounces at 7.16 g/t AuEq.
The exploration upside at JT is considerable. Sandstorm’s (SSL.T) Hod Maden deposit—9.1 million tonnes at an average grade of 8.9 g/t gold and 1.4% copper—is the analog. Of interest, Sandstorm recently tagged 85.3 metres of 84.3 g/t gold and 6.8% copper at Hod Maden (drop the mic). I’m not suggesting that HighGold will deliver similar success with the drill bit, but there are geological similarities one can draw between the two deposits. And what JT has delivered to date will certainly stand on its own.
- 108.6 meters grading 10.4 g/t Au, 7.6% Zn, 0.7% Cu, 2.0% Pb and 8 g/t Ag (JT82-004 Original Discovery);
- 71.4 meters grading 20.9 g/t Au, 9.8% Zn, 0.9% Cu, 1.6% Pb and 9 g/t Ag (JT88-034);
- 137.7 meters grading 11.3 g/t Au, 2.4% Zn, 0.5% Cu, 0.5% Pb and 4 g/t Ag (JT93-067);
- 107.8 metres grading 12.4 g/t Au, 7.1% Zn, 0.9% Cu, 1.6% Pb and 9 g/t Ag (JT19-082);
- 59.2 metres grading 8.2 g/t Au, 8.8% Zn, 0.4% Cu, 0.1% Pb and 5 g/t Ag (JT19-085);
- 75.1 meters grading 10.0 g/t Au, 9.4% Zn, 0.6% Cu, 1.1% Pb and 6 g/t Ag (JT19-090).
All of the above hits are worthy of a mic drop. JT is a big system.
The company also controls three highly prospective projects in the world-class Timmins Gold Camp of Ontario—Munro-Croesus, Golden Mile, and Golden Perimeter.
The Munro-Croesus land package includes a past-producing mine that yielded some of the highest-grade gold ever mined in Ontario.
The July 9th headline:
HighGold Mining Consolidates Munro-Croesus Land Position Near Timmins, Ontario
Here, the company announced that it has entered into three separate agreements to acquire an aggregate of 38 patented mining claims, three single-cell mining claims, one boundary-cell mining claim, and four mining leases covering a total area of approximately eight square kilometers (792 hectares). This brings Munro-Croesus to roughly 12 square kilometers (1,181 hectares) of highly prospective terra firma.
Though these hectares in the Timmins camp may not measure up against JT’s ultimate potential—what project can?—Munro-Croesus could emerge as a top-shelf (flagship) project in its own right.
This is a significant acquisition.
“Due to fragmented land ownership dating back to the early to mid-1900s when the Croesus Mine was in production, most of the Property has never been explored by modern or systematic exploration methods. The Company’s Ontario exploration team has already commenced preliminary surface exploration on the consolidated land package with the plan to resume the 2020 drill program in the fall.”
These Timmins assets will also generate significant newsflow during the winter months when the exploration window in Alaska slams shut.
A buoyant gold price, a high-spirited market, and year-round newsflow from projects demonstrating high-grade subsurface potential… this is a solid set-up.
Darwin Green, HighGold CEO:
“Munro-Croesus is renowned for its high-grade historic gold mineralization and is the crown jewel of HighGold’s Timmins area properties. With these acquisitions, the Company has now consolidated a sizable land package of highly prospective ground along the Pipestone Break within the Timmins Gold Camp.”
This just in…
HighGold Mining Announces Exercise of Participation Right by Strategic Shareholder
HighGold is pleased to announce that, in connection with the Company’s recently announced C$12 million bought deal private placement (see two releases dated July 6, 2020) an existing strategic shareholder of the Company has elected to exercise its participation right under an investor rights agreement with the Company dated September 19, 2019. The strategic shareholder is a senior North American gold mining company.
Cool beans.
Pure Gold Mining (PGM.V)
- 383.57 million shares outstanding
- $851.53M market cap based on its recent $2.22 close
Pure Gold is our high-grade Red Lake play rapidly ramping up to production.
A few weeks back we observed the following project highlights:
- Procurement of major equipment is now 94% complete;
- Total of 1,285 metres of underground mine development completed. Advance rate 60% better than mine plan (editors note: wow);
- Initial access development to longhole stopes commenced;
- Installed alimak in existing shaft to support dewatering and shaft rehabilitation;
- Process plant prepared for installation of new equipment, with removal of legacy piping, pumps, motors, ball mill, gold room and pre-leach thickener;
- Steel and concrete work modifications inside process plant for new ball mill, gravity circuit and construction of hydraulic backfill plant commenced;
- Installed and occupied new buildings including administration, warehouse, and mine dry;
- Recruited key operational team members including safety, mining, milling, and technical services, with bulk of operational management team now in place;
- More than 145,000 hours without a lost time incident.
Management was targeting five meters of underground development per day—they’re getting eight.
We also pointed to a June 24th webinar—Pure Gold Amvest Capital webinar—that delivered a ‘big picture’ dynamic that could come into play, one that eclipses the fundamentals captured in a robust (independent) feasibility study delivered back in February of 2019.
Just last week, on July 7th, the company dropped the following headline:
Underground Drilling at the PureGold Red Lake Mine Intersects 46.7 g/t Gold Over 7.0 Metres
It’s a beautiful thing when a company can push a deposit aggressively along the development curve while simultaneously pressing ahead with a multiple rig drilling campaign.
Here, the company announces high-grade gold intercepts from both infill and step-out drill holes representing 875 meters.
“Drilling has extended gold mineralization out from planned stopes, has discovered new gold zones that will be integrated into the mine plan, and has confirmed stopes scheduled for near term production.”
Drilling hole highlights:
- 46.7 g/t gold over 7.0 meters from drill hole PGU-0118, including
193.5 g/t gold over 1.0 meter; - 57.0 g/t gold over 1.0 meter from drill hole PGU-0121;
- 15.8 g/t gold over 2.3 meters from drill hole PGU-0117;
- 7.2 g/t gold over 5.0 meters from drill hole PGU-0113, including
22.3 g/t gold over 1.0 meter.
This is an ongoing underground drilling campaign.
In addition to this underground activity, two surface rigs have commenced drilling at the Wedge zone, located three kilometers from the PureGold milling facility. The company states that this is one of the key growth areas outside of the phase one mine plan. Previous drilling in this area includes 33.3 g/t gold over 8.3 meters and 21.3 g/t gold over 10.3 meters.
“Exploration drilling is expected to continue into 2021, with over 30,000 meters of drilling planned through early 2021. The goal of the 2020 exploration program is to expedite the growth of our mineral resources and aggressively expand new high-grade discoveries.”
Darin Labrenz, CEO of PureGold:
“Over the last several years our team has developed a tremendous understanding of the PureGold mine deposit. We have established the scale of this gold system, with fantastic continuity along a seven kilometre trend, and we are building a mine that will be one of the highest grade mines in the world.2 Our 30,000 metre exploration program is designed to firmly establish growth and scalability beyond our initial phase 1 mine plan. But even within the footprint of our phase 1 mine, the deposit continues to exceed our expectations with broad, high-grade intercepts that demonstrate opportunities for near term growth. New drill results demonstrate that extensions of existing stopes and possible expansions of the mine plan occur very close to existing or planned development and as such, have the potential to impact near term mine cash flow.”
Skeena Resources (SKE.V)
- 171.33 million shares outstanding
- $448.88M market cap based on its recent $2.62 close
The significance of Skeena’s Eskay Creek open-pittable resource—some four million ounces grading 4.4 g/t AuEq—is apparent, even to the novice investor.
This is a resource that is destined to grow, perhaps significantly so (this resource does NOT include results from roughly 15,000 meters of resource upgrade and expansion drilling carried out last year).
After announcing the commencement of a PFS to follow-up on a robust PEA, the company embarked on an aggressive 24,000-meter phase one drilling campaign designed to upgrade Inferred ounces to the higher confidence Indicated category.
This program is also aimed at drilling off highly prospective areas in the near-mine environment to expand the current resource and add to the ounce count (the company is permitting some 137,000 meters of exploratory drilling to test both brownfield and greenfield targets).
Skeena is firing on all cylinders, but the one question that remained unanswered, until very recently, was the back-in right held by Barrick Gold (ABX.T), and how it might play out.
This watershed headline dropped on July 7th:
Skeena to Acquire 100% of Eskay Creek
Here, Skeena signed a binding agreement with Barrick Gold defining the terms pursuant to which Skeena will exercise its option to acquire 100% of Eskay Creek.
In addition, Barrick has agreed to waive its back-in right. As a result of this transaction, Barrick will become a significant shareholder in Skeena.
Under the terms of this agreement, Skeena will acquire a 100% ownership interest in Eskay Creek in consideration for:
- The issuance to Barrick of 22.5 million units, with each unit comprised of one common share of Skeena and a non-transferrable half warrant. The exercise price of the non-transferrable full warrant of C$2.70 is approximately a 60% premium to the 20-day VWAP and a 35% premium to the closing price of the shares on July 3, 2020;
- The grant of a 1% NSR royalty on the entire Eskay Creek land package. Half of that royalty may be repurchased from Barrick during the 24-month period after closing, at a cost of C$17.5 million;
- A contingent payment, payable if Skeena sells more than a 50% interest in Eskay Creek during the 24-month period after closing, of C$15 million.
Walter Coles Jr., Skeena’s CEO:
“Skeena is honoured to have Barrick as a significant shareholder as we endeavor to revitalize Eskay Creek, the former highest-grade, past-producing gold mine in the world. The recent improvements to infrastructure in the Golden Triangle offer us an opportunity to potentially reopen closed mines and contribute to the economic development of communities in northern Canada. Gaining 100% ownership and operatorship of Eskay Creek is an important milestone in the evolution of our Company. Skeena is well financed with almost C$50 million of cash and we continue to believe there are meaningful opportunities to increase the grade and size of this project with aggressive exploration drilling.”
The market approved of this transaction, pushing Skeena common to yet another multi-year high…
END
—Greg Nolan
Full disclosure: Of the companies featured above, only Defense Metals is a Highballer marketing client. The author owns Defense Metals shares and may initiate purchases of the remaining companies featured in the coming days/weeks.
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