In a recent Equity Guru piece, I presented the disconnect—the divergence—that exists between gold stocks and the underlying metal via a chart comparing GLD (the SPDR Gold Shares ETF) to the GDXJ (the Global Junior Gold Miners Index).

I suppose you can blame this price weakness on the summer doldrums—the volume has dried up in many of the stocks we follow resulting in increased volatility. Lousy investor sentiment exacerbates the selling pressure with weak hands rushing for the exit for no other reason than they just want the eff out.

But this extreme selling pressure—this disconnect between the metal and the shares—is a real anomaly. And it may represent an opportunity for a short-term snapback trade to a previous (higher) trading range. This is especially true for the real standouts in the sector—companies with significant assets on their books… companies on the radar of resource-hungry producers looking to bulk up their mineral inventory.

With an exhaustive list of supportive fundamentals underpinning the precious, base, and battery metals space, I’m convinced we’re in the very early innings of a bull run that will prove epic in scale… once the inevitable rotation into resources kicks back into gear.

A number of companies we follow here at Highballer dropped headlines in recent sessions. We’ll quickly run through them, starting with Forum.

Forum Energy Metals (FMC.V)

  • 159.63 million shares
  • $55.87M market cap based on its recent $0.35 close

Copper is rebounding, trading with conviction as I type this piece, breaking out from a downtrend line that’s been in force since mid-May.

With copper, uranium, nickel, cobalt, and palladium in its crosshairs, Forum provided shareholders with a mid-year review of the Company’s current exploration activities and exploration plans for the remainder of 2021.

Forum Provides Mid-Year Update and Plans for 2021

The majority of these projects are located in or just outside the prolific Athabasca Basin in north-central Saskatchewan.

Location of Forum’s Copper, Nickel/PGM and Uranium Projects (blue areas), processing facilities (red squares) and roads in the Athabasca Basin, Saskatchewan, Canada

Janice Lake Copper/Silver (Rio Tinto Option to Earn 80%)

Janice is Forum’s flagship, where Rio Tinto (RTEC) is earning up to 80% in the project by spending $30M.

Rio Tinto Exploration Canada (“RTEC”) continues drilling at the 2.6 km Rafuse target, the fourth target drilled by RTEC over a six-kilometer strike length. Four holes have been drilled to date following up on the nine-hole drill program completed this winter and drilling will continue through the summer. Field crews have been mapping and sampling for the past month in the area of the 3.8% copper boulder discovered in 2020.

RTEC’s involvement in Janice Lake speaks loudly. This mining giant is only interested in projects that offer world-class potential. If they didn’t believe a mammoth-sized ore body lurked somewhere in the subsurface stratum of these 38,250-hectares, they wouldn’t be here.

Love Lake Nickel/Copper/Palladium (100% Forum)

Largely unexplored, though two historic drill holes on the project returned 31.7 meters of 0.23% Cu and 36.6meters of 0.29% Cu, these 32,075 hectares offer significant discovery potential.

Forum has received results from the airborne electromagnetic survey announced May 10, 2021 over the Love Lake mafic/ultramafic complex. The Company is finalizing drill targets from the survey as well as targeting the surface copper/nickel/platinum/palladium showings. A 3,000 metre drill program is planned to commence in the first week of August.

The market will be watching this program closely.

Quartz Gulch Cobalt/Copper (100% Forum)

Located along the infrastructure-rich Idaho Cobalt Belt, Forum is planning a prospecting, mapping, and sampling campaign to commence in late August. This will be the first real work conducted on the property since Noranda, previous operators of the Blackbird cobalt mine, completed an exploration program that identified anomalous cobalt in stream sediment samples (the year was 1982).

Wollaston Uranium (100% Forum)

Wollaston is located roughly 10 kilometers south of Cameco’s Rabbit Lake uranium mill and immediately east of the all-weather road to Orano’s McClean Lake uranium processing plant.

A compilation of the geological, geophysical and drilling data on the property has been completed. A gravity survey announced April 7, 2021, was partially completed due to the early onset of spring. Gravity crews will complete the survey this autumn (gravity surveys identify areas of alteration associated with uranium mineralization).

Northwest Athabasca JV (39.5% Forum; 28% NexGen; 20% Cameco; 12.5% Orano)

This 10,161-hectare property, located in the Western Athabasca Basin, hosts the Maurice Bay deposit, a historical resource of 1.5 million pounds of U3O8 grading 0.6% at a depth of 50 meters (Saskatchewan Industry and Resources, Miscellaneous Report 2003-7)***.

Forum, as the Operator of the project, is proposing a drill program to the joint venture partners for the winter of 2022.

Forum drilled the property in 2012, 2013, and 2014 and identified a number of shallow zones of uranium mineralization grading up to 5.7% uranium over 8.5 meters. With over twenty drill targets identified, there’s potential for a fertile uranium mineralizing system on the property—further drilling is warranted.

Fir Island (Orano Canada Option to Earn 70%)

Located along the northeast edge of the Basin, Orano Canada can earn up to 70% in the project by spending up to $6 million. Ten holes for 3,051 meters were drilled across the southwest corner of the project last winter.

This July 20th update went on to state:

Forum completed ten holes on the Cathy target during the winter drill program and identified a strong boron halo strengthening to the north. Forum and joint venture partner, Orano will review the drill results with a view to planning a drill program in the winter of 2022.

Other Uranium Projects

Forum has drill-ready targets at the 100% owned Highrock, 75% owned Clearwater, and 65% owned Costigan projects. Rio Tinto, 60% owner of the Henday project (40% Forum) has no plans for the project in 2021/2022.

Multiple irons in the fire and wise use of the prospect generator business model increase the chances of tagging a significant new discovery on one or more of the Company’s highly prospective projects.

Prime Mining (PRYM.V)

  • 98.69 million shares outstanding
  • $384.91M market cap based on its recent $3.90 close

A recent headline…

Prime Mining Intercepts 36.1 Metres With 1.29 gpt Au and 60.7 gpt Ag at Noche Buena Deposit as New Drilling Continues Expansion

On July 12th, Prime reported additional results from ongoing drilling at Noche Buena, one of the eight known gold-silver deposits at the Company’s 13,800-hectare flagship Los Reyes project in the mining-friendly state of Sinaloa, Mexico (Los Reyes is in a low sulphidation epithermal setting with district-scale potential).


  • 1.29 gpt Au and 60.7 gpt Ag over 36.1 meters (28.9 m estimated true width “etw”) starting at 93.1 m downhole, including 5.74 gpt Au and 108.1 gpt Ag over 4.5 m (3.6 m etw) (21NB-06);
  • 2.89 gpt Au and 61.6 gpt Ag over 10.5 m (8.4 m etw) at 70.5 m downhole including 1.5 m (1.2 m etw) at 18.00 gpt Au and 209.3 gpt Ag (21NB-09);
  • 1.23 gpt Au and 28.0 gpt Ag over 11.1 m (8.9 m etw) at 32.4 m downhole including 1.1 m (0.9 m etw) at 6.08 gpt Au and 90.9 gpt Ag (21NB-08);
  • 0.70 gpt Au and 27.9 gpt Ag over 19.5 m (15.6 m etw) at 63.0 m downhole including 1.5 m (0.9 m etw) at 3.73 gpt Au and 109.5 gpt Ag (21NB-10);
  • 0.77 gpt Au and 48.3 gpt Ag over 4.5 m (2.9 m etw) starting at 117.5 m downhole including 2.67 gpt Au and 140.2 gpt Ag over 0.6 m (0.4 m etw) (21NB-05);
  • 1.00 gpt Au and 18.0 gpt Ag over 5.8 m (5.2 etw) starting at 76.5 m downhole (21NB-11);
  • 0.65 gpt Au and 20.7 gpt Ag over 11.6 m (10.4 etw) starting at 24.0 m downhole including 1.21 and 38.9 gpt Ag over 4.5 m (4.1 etw) (21NB-07).

These results confirm the expansion of mineralization at Noche Buena both down-dip and along strike, beyond the current (Inferred) resource boundary. Additionally, the drilling adds silver assay data to the resource base in areas where previous operators neglected to report it. Silver is expected to be a major by-product credit in any future mining scenario.

Adding to the ounce count

Noche Buena Expansion Drilling:

The initial drilling at Noche Buena primarily focused on step-out drilling to add new gold and silver resources and to upgrade confidence in the resource category of the previously reported Inferred category pit-constrained resource. Phase 1 drilling at Noche Buena is now complete with all eleven drill holes reported (see links for Table 2 drill summary and additional Figures 2-5 for graphics). Until Phase 2 begins in November, ongoing drilling is referred to as Expanded Phase 1 for reporting purposes, with 4 holes already drilled since the completion of Phase 1.

Drill holes 21NB-07 to 21NB-11 reported in this release: 1) focused on the western side of deposit; 2) targeted Inferred category resource areas; and 3) added critical data to areas where silver is completely missing from the block model.

Regarding resource expansion:

  • 21NB-05 is the most easterly hole;
  • Holes 21NB-06, 21NB-07, 21NB-09, and 21NB-11 all intersected mineralization at or just below the pit bottom;
  • 21NB-06 is significant being drilled near the current resource pit bottom and returning grades of 1.29 gpt Au and 60.7 gpt Ag over 36.1 meters (28.9 meters etw);
  • 21NB-05 intersected 0.77 g/t Au and 48.3 g/t g over 4.5 meters indicating that Noche Buena is still open beyond the eastern limit of the current pit-constrained resource. (See Figures 3 to 5).

Prime’s CEO, Daniel Kunz:

The Noche Buena deposit remains open at depth and further along strike. The April 2020 pit-constrained resource for Noche Buena includes Measured and Indicated category resources of 2.2 million tonnes containing 62,000 ounces Au at 0.86 gpt and 1.554 million ounces Ag at 21.6 gpt. Inferred category resources totalled 1.1 million tonnes containing 26,000 ounces Au at 0.73 gpt and 0.626 million ounces Ag at 17.3 gpt. These new drill results will have a meaningful impact on this resource and demonstrate that Noche Buena’s size and confidence categories are increasing. A more accessible area, Noche Buena is one of the deposits we are continuing to drill over the next four months during the rainy season.”

Project Update

  • To date, 78 holes have been drilled, 39 holes reported, and 39 remain to be reported;
  • Ongoing maintenance of certain access roads at the Los Reyes project allows for the operation of at least 2 diamond drill rigs through the rainy season;
  • Comprehensive planning is underway for the approximately 30,000-meter Phase 2 drill campaign which is anticipated to commence in November, after the current rainy season winds down;
  • Phase 2 will utilize a combination of 6 to 8 core and reverse circulation drill rigs;
  • Reverse circulation rigs will be used, where infrastructure permits, to accelerate the rate of in-fill drilling and resource definition;
  • Permitting activities to continue for the construction of Phase 2 roads and drill pads;
  • Field mapping is ongoing and results will be integrated into geologic modeling over the next several months.

Prime has experienced price weakness along with every other high-quality exploration/development play in the sector.

If you’ve been adding to your position during this rout, you’re in good company

Skeena Resources (SKE.T)

  • 62.09 million shares outstanding
  • $975.48M based on its recent $15.71 close

After multiple rounds of positive assay-related newsflow from the Company’s flagship project and a four to one share consolidation, Skeena released a highly anticipated PFS for Eskay Creek last week.

The July 22nd headline…

Skeena Completes PFS for Eskay Creek: After-Tax NPV(5%) of C$1.4B, 56% IRR and 1.4 Year Payback

This is a data-dense press release, but it’s worth a thorough read—the numbers at the top of the page spell out some rather compelling economics:

  • High-grade open-pit averaging 3.37 g/t Au, 94 g/t Ag (4.57 g/t AuEq) (diluted)
  • Proven and Probable Mineral Reserves of 3.88 Moz AuEq (26.4 Mt at 3.37 g/t Au and 94 g/t Ag).
  • After-tax NPV5% of C$1.4 billion, (US$1.1 billion) and 56% IRR at US$1,550/oz Au and US$22/oz Ag
  • After-tax payback period of 1.4 years
  • Pre-production capital expenditures (CAPEX) of C$488M (US$381M)
  • After-tax NPV:CAPEX Ratio of 2.9:1
  • Life of mine (“LOM”) average annual production of 249,000 oz Au, 7,222,000 oz Ag (352,000 oz AuEq) over a 9.8-year mine life
  • LOM all-in sustaining costs (“AISC”) of C$702/oz (US$548/oz) AuEq recovered
  • LOM cash costs of C$651/oz (US$509/oz) AuEq recovered
  • 7,945 tonne per day (“tpd”) mill and flotation plant producing saleable concentrate
  • LOM average greenhouse gas (“GHG”) emissions of 0.18 t CO2e/oz AuEq
    • Exchange Rate (US$/C$) of 0.78
    • Cash costs are inclusive of mining costs, processing costs, site G&A, treatment and refining charges and royalties
    • AISC includes cash costs plus estimated corporate G&A, sustaining capital and closure costs
    • t CO2e = tonnes of carbon dioxide equivalent

An after-tax NPV(5%) of C$1.4 billion and a 56% IRR based on a $1,550 Au price ($22/oz for Ag) PLUS a modest CapEx and a 1.4 year payback period—what’s not to like?


Walter Coles Jr., Skeena’s CEO:

“Eskay Creek has a rare combination of attributes: scale, impressive grade and location in a tier one mining jurisdiction with strong First Nations support. In the first 5 years of operation, it is anticipated that Eskay Creek will produce, on average, 450,000 gold equivalent ounces per year. We expect further increases to the annual production profile as we move to the Feasibility Study in Q1 of 2022, and beyond. Our goal is to create a mine producing 500,000 gold equivalent ounces per year for 10 years. The PFS is only based on the current open-pit resources. Skeena has a 35,000-metre exploration program underway at Eskay Creek to continue to grow the open-pit resources, and we have yet to focus on the considerable underground exploration potential.”

500k ounces of annual production would rank Eskay Creek among those rare Tier 1 deposits, the most highly sought-after asset in the mining arena.

When we first featured Skeena back in February of 2020 in a piece titled Skeena Resources (SKE.V) aggressively pushing Eskay Creek further along the development curve, the share price was $1.11 ($4.44 in post-consolidation terms). Today’s current $15.71 price represents a multi-bagger gain for those who appreciated the story back in the early days of this report.

Skeena boasts a current market cap just shy of $1B—$975.48M, to be precise. It’s taken on a life of its own. We’ll continue to track developments here, but I suspect the Company’s days are numbered (there are plenty of resource-hungry predators out there looking to bulk up their project pipelines).

Harfang Exploration (HAR.V)

  • 68.54 million shares outstanding
  • $19.53M market cap based on its recent $0.285 close

Harfang delivered additional drill results from a 2021 winter drill campaign at its 100% owned 28,565-hectare  Serpent Project located in the James Bay region of Quebec.

The July 13th headline…

Harfang intersects 3.61 g/t Au over 5.90 m and announces a second drill program at Serpent (Québec)


  • Up to 3.61 g/t Au over 5.90 m, including 8.87 g/t Au over 2.05 m (visible gold), in SER-21-017 (northern structure);
  • All drillholes located along the southern structure intersected gold intervals (up to 2.55 g/t Au over 4.00 m);
  • A 2,500 m summer drill program will test both gold-bearing structures and other first-priority targets (for instance Moby-Dick, 7.78 g/t Au over 6.15 m).

The Company states that these results better define the Stu structure and point to a potential (northern) parallel gold-bearing structure underneath the marshland.

Harfang is preparing with confidence the second drilling phase on the Property to start in August.”

Drilling strategy

Our first drilling campaign (4,336 m, 27 holes) was designed to test hypothetical near-surface gold mineralizations that could be the sources from which gold grains accumulated in great abundance in till and soil to form the large (>8 km2) gold-in-till anomaly. Drillholes were positioned 1) to test isolated first-priority targets, and 2) along a north-south fence oriented perpendicular to the main interpreted structures in the marshland. This press release discloses results from holes SER-21-014 to SER-21-027 (Figs. 2 and 3). Nine out of these 14 holes intersected gold intervals (Table 1; metal factor [g/t Au x metres] above 1). See press release dated on May 20, 2021 for initial drilling results (SER-21-001 to SER-21-013).

These weren’t the homerun hits we were hoping for, but the Company has yet to discover the source of a large gold-rich (>8 km2) gold-in-till anomaly.

A summer exploration program is currently underway, including a trenching campaign in the immediate vicinity of these drill holes.

“A recent structural interpretation arising from a new LiDAR survey flown over the Property is a valuable tool for our field crew in identifying potential mineralized lineaments. Additional prospecting and geochemical surveys (till and soil), which proved to be of great help in positioning drill holes, are also part of our program.

A second drill program (approximately 2,500 m) is planned for mid-August. It will be carried out using a heliportable rig that will test several first-priority targets, extend the kilometric gold-bearing structures intersected in drillholes and test additional gold-bearing lineaments at the property scale, including Moby-Dick.”


—Greg Nolan

Full disclosure: Forum Energy is a Highballer client.

*** The Maurice Bay historical resource estimate was completed prior to the implementation of National Instrument 43-101. Given the extensive exploration work completed by experienced mineral resource companies, and the quality of the historical work completed, the Company believes the historical estimate to be relevant and reliable. However, a qualified person has not completed sufficient work to verify and classify the historical estimate as a current mineral resource, and the Company is not treating the historical estimate as a current mineral resource. It should be noted that mineral resources, which are not mineral reserves, do not have demonstrated economic viability.

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