Optimum Entry Point for Gold and Silver Stocks

Source: Clive Maund for Streetwise Reports   01/11/2018

Technical analyst Clive Maund discusses why he believes a massive new sector bull market is about to begin in gold and silver.

When you are following the markets closely day after day it can be easy to lose sight of the big picture. So with the “everything bubble” getting closer to bursting, leading to universal mess and mayhem, there could not be a better time to look at the long-term picture for gold and silver, in order to see whether they are going to salute and go down with the ship, as they did in 2008, or constitute a lifeboat and a profitable means of escape for more fortunate investors.

I am therefore pleased to be able to report that it will almost certainly be the latter, for reasons that we will now elucidate on the respective long-term charts for gold, then silver.

On gold’s latest 18-year chart—a time period selected to show the prior 2000’s bull market in its entirety—we can readily see that a potential Head-and-Shoulders bottom has been forming since 2013, and the probability that this is the genuine article, the “real deal” is vastly improved by the dramatic increase in upside volume over the past two years as this base pattern has approached completion, which has driven volume indicators strongly higher over the past year, such that, rather incredibly, the Accum-Distrib line is already close to making new highs, which is a very bullish indication indeed.

It’s pretty much the same story for silver, with two key differences—silver’s Head-and-Shoulders bottom is downsloping and the volume indicators are not quite as strong. However, these manifestations are not negative, for it is normal for silver to underperform gold towards the end of a sector bear market and during the early stages of a bull market.

Are there any precious metals stocks showing similar bottoming patterns? There certainly are—loads of them, and we will have a look at two examples here, one for a larger gold stock and one for a larger silver stock, to illustrate the point, so that you will understand that this is not just an academic exercise—and that you are currently being showered in opportunities to make big money in this sector.

The long-term chart for Gold Resource Corp. (GORO:NYSE.MKT) shows that it is completing a giant Head-and-Shoulders bottom that parallels the one in gold itself, and since the price is still quite close to the low of the Right Shoulder low of the pattern, it is at a good entry point.

The long-term chart for Alexco Resource Corp. (AXU:NYSE.MKT; AXR:TSX) shows that it is completing a fine giant Head-and-Shoulders bottom that parallels the one in silver itself, although it is not downsloping, and since the price is also still quite close to the low of the Right Shoulder low of the pattern, it too is at a good entry point.

Gold and silver have not done well in recent years, having been completely overshadowed by the broad stock market and more glamorous sectors like Biotech, Cannabis, Cryptocurrencies and the FANGS, etc. If they go roaring up, then it means that something else is going to have to go down, and that probably means most everything else in a market crash, which is already being predicated by action in the bond market and other factors, and all the easy money momentum chasers who are now almost everywhere are going to wind up being slaughtered en masse like Pilot Whales on a Faroes beach. We are not going to let that happen to us.

Clive Maund has been president of http://www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

( Companies Mentioned: AXU:NYSE.MKT; AXR:TSX,
GORO:NYSE.MKT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/11/optimum-entry-point-for-gold-and-silver-stocks.html

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Mine’s Updated Mineral Resource Contains Higher Grades

Source: Streetwise Reports   01/11/2018

Euro Pacific Capital reviewed the new estimated resource released by this company for its Peruvian mine.

In a Dec. 21 research note, Euro Pacific Capital analyst Bhakti Pavani reported that Great Panther Silver Limited (GPR:TSX; GPL:NYSE.MKT) released an updated mineral resource estimate for its Coricancha mine, which it had acquired from Nyrstar in June 2017. “We believe the overall mineral resource update at Coricancha is positive,” Pavani commented.

In the updated version, the Measured and Indicated (M&I) resource totals 752,759 tons. The M&I silver equivalent is higher, having increased to 24.2 million ounces from 21.96, Pavani highlighted. However, Inferred silver equivalent are lower, having decreased to ~0.9 million tons from 4.9, primarily due to the difference in methodologies used to calculate the resource.

Most noteworthy about the estimate, Pavani noted, is the metal grades “are comparatively higher than” those in the previous estimate. Comparison of the grades in the newly calculated resource to those initially determined showed 200 versus 174.6 grams per ton (200 vs. 174.6 g/t) gold, 5.8 vs. 5.04 g/t silver, 2.06 vs. 1.97% lead, 3.26 vs. 3.11% zinc and 0.53 vs. 0.42% copper, respectively.

For the resource update, Great Panther used the results from its own drilling of 33 diamond holes, (~6,000 meters) on the property along with the data Nyrstar had amassed and used in the historical resource in 2012.

The miner aims to complete and announce the results of optimization and technical studies on Coricancha by Q2/18, Pavani reported, with production likely starting there sometime in 2020. Euro Pacific believes Great Panther has sufficient cash to advance the project to that point.

Euro Pacific has increased its valuation on Coricancha to $85 million from $74 million based on the updated, NI-43-101-compliant resource estimate and “assuming the recovery of 80% of the M&I resource and 64% of the Inferred resource,” Pavani explained.

Regarding an update at the company’s Topia mine, Pavani indicated that in a “significantly positive development,” Great Panther now holds all of the required permits to build and run the new phase 2 tailings storage facility there, and plans to start construction immediately. The analyst added that the company has “sufficient capacity remaining at phase 1 to allow uninterrupted mining operations at the Topia mine and expects a seamless transition to deposition at [the] phase 2 tailings storage facility.”

Euro Pacific has a Buy rating and a CA$2.90 per share target price on Great Panther Silver, whose stock is currently trading at around CA$1.70 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Great Panther Silver. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclosures from Euro Pacific Capital Inc., Great Panther Silver, Company Update, Dec. 21, 2017

Euro Pacific expects to receive or intends to seek compensation for investment banking services from all companies under research coverage within the next three months. Euro Pacific or its officers, employees or affiliates may execute transactions in securities mentioned in this report that may not be consistent with the report’s conclusions.

Regulation Analyst Certification (“Reg AC”) — Bhakti Pavani. The views expressed in this report (which include the actual rating assigned to the company as well as the analytical substance and tone of the report) accurately reflect the personal views of the analyst(s) covering the subject securities. An analyst’s sector is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to a particular stock represents solely the analyst’s view of how that stock will perform over the next 12 months relative to the analyst’s sector average.

No part of the compensation of the analyst preparing this report was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such analyst in this report.

Additional disclosures about the sources cited in this article

( Companies Mentioned: GPR:TSX; GPL:NYSE.MKT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/11/mines-updated-mineral-resource-contains-higher-grades.html

Stick with Our Fab Four for Continued Outperformance

Source: Fincom Investment Partners for Streetwise Reports   01/11/2018

While miners have bounced off their December lows, what is in store for 2018? Fincom Investment Partners profiles a handful of companies it believes have an opportunity to double in 2018.

December’s annual tax ritual provided a number of opportunities. While miners have bounced off the December lows, the year is just getting started, so now what? Going forward, we prefer shares offering fundamental value improvement, which may increase share price in both a rising gold environment, and, if it so happens, another flat or soft year. These stocks have an opportunity to double in 2018 even if the mining sector remains flat.

Silvercorp Metals Inc. (SVM:TSX; SVM:NYSE). Bet you did not know that in the last (available) quarter (Q317), Silvercorp earned more money than Helca, Coeur Mining, First Majestic Silver, SSR (formerly Silver Standard), Tahoe, Endeavour Silver and Klondex COMBINED. A Canadian company, its high-grade silver mines in China produce a strong zinc/lead by-product, thus earnings have been excellent. We have the company at about an 8X current year PE. With $100 million in cash and no debt, SVM’s $438 million market cap easily makes it the best value in silver mining.

In terms of China operations, by now, all skeptical doubts are finished. We believe there is less risk as a tax-paying operator in China, than about anywhere in Latin America, Africa, etc. Following the company for several years now, we have found management solid and conservative. We cannot say the shares are this cheap entirely because of poor investor communication, as there is almost no investor communication. We have also spoken with a former, highly experienced and well-regarded senior mining exec who visited the properties in depth and offered a highly favorable opinion, calling it “one of the best properties I’ve ever seen.” In addition, Silvercorp now owns 32% of New Pacific Metals; already with nearly a billion ounces, this Bolivian silver developer has company-maker potential.

Marathon Gold Corp. (MOZ:TSX; MGDPF:OTC.MKTS) did not have much of a tax loss season as shares were up 125% in 2017, although consolidating for the past 11 months. We think that is a “tell” and great set-up; as shares outperforming the indexes, combined with heavy insider buying, confirms our view that this Newfoundland project is not only going to be a very profitable gold mine, but still a relative value. Already at nearly 3 million gold ounces, ongoing drilling is hitting consistently; initial PEA underway for Q2. Proven, serious and highly skilled management team has done it before, from grass roots exploration to ultimate sale. Well financed, without over-issuing warrants. Something we like. The good news is that management does very little to promote the shares, so you are not buying a lot of fluff. The bad news is there isn’t much of any promotion; you may have to sit with shares during consolidation periods, although we think one just ended. Our opinion is that Marathon will be bought—that is management’s plan also—for a nice payday between $3 and $4. About as sure as it gets for mine explorers/developers.

Wesdome Gold Mines Ltd. (WDO:TSX; WDOFF:OTC.MKTS). We were fortunate to buy shares in St. Andrew Goldfields right before the Kirkland Lake buyout in 2015, and while the KL trade continues to work, we think Duncan Middlemiss’ new job, as CEO of Wesdome, has a much better chance of doubling your money in 2018. The driver here is the exciting high-grade gold discovery at the Kiena complex. Very few high-grade opportunities are left in Canada and with a market valuation only CA$286 million, we are surprised the company is still “single.” Besides the obvious tax-loss selling, another factor throughout 2017 helped push the price extra low: a tiny investment fund—but a 20% Wesdome share owner—consistently sold shares. We don’t know what the real story was and we don’t especially care. Dumb things happen in mining; big shareholders telegraphing intentions allow investors to sell out ahead, driving prices lower, becoming a self-fulfilling prophecy, when, for a mere 7%, plenty of investment bankers would have placed the whole block, at what would have been much higher prices. That mistake is your gift. Wesdome should fundamentally improve over the coming year as the Kiena project matures; we see both value and opportunity for outsized returns.

Atlantic Gold Corp. (AGB:TSX.V; SPVEF:OTC.MKTS), had a good 2017, up nearly 100%. We first invested back in 2016—liking management, 35% insider ownership, production economics, and Nova Scotia location. Management has delivered; all is working well at Canada’s newest gold mine. Efforts are now underway to expand mine life, which would significantly increase value. The company did it right—start small, then expand. Although you can fairly argue share structure is a bit blown out, with 42 million warrants/debentures still out at a $0.60 strike, and they are no longer the screaming buy of 2016, we note shares have now been consolidating for nearly nine months, allowing value to catch up. Mitigating factor: Atlantic should be included into the GDXJ ETF during 2018, which would add massive buying—such inclusion led to a sharp, nearly 75% spike in Wesdome last year. We think that is a decent bet for 2018 and are willing to sit since (probably) 10 million shares of new, net buying on a stock averaging 200,000 daily traded shares will have impact.

Honorable Mention:

Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE) doesn’t quite fit with the others and had rough year due to bunches of both bad luck and inept market communication. Who gets hit by lightning twice? Endeavour did. However, the bad news seems priced in and the company is on track to repair damages. Plus it is building several new mines, taking the company to around 15 million silver ounces, a number big enough to attract attention; even to work its way into the much larger GDX ETF. Endeavour has the balance sheet to get there. Although, like most silver miners, Endeavour needs higher prices to make decent money and we also have very low expectations for the upcoming fourth quarter numbers. Thus we view Endeavour as more of a second half story—yet we own shares now, feeling comfortable in the low $2s—in a strong metal environment, of which we are optimistic—ETF buying alone can really move these small, U.S.-listed miners—possibly even back to the 2016 highs of $6. Further, while CEO Brad Cooke may not be quite the glib, Vancouver smoothie, he is a mining professional and Endeavour has both cut costs and is growing production faster than peers. Any evidence management can deliver promised improvements should help the beaten down shares exponentially.

Frederick Lacy, president of California-based Fincom Investment Partners, began as a Chicago commodity broker in 1984, before heading west in 1987, joining Bateman Eichler, Hill Richards. Ultimately “retiring” in 2000 as a licensed Securities Principal and Managing Director of Investment Banking, he has been involved in numerous successful investments, including raising the institutional start-up capital for what became PetroHawk, subsequently purchased by BHP in 2011 for $15 billion. Fincom IP was one of the very few correctly calling both sides of oil’s 2003-2014 bull market, repeatedly advising clients, months before the 2014 top, of a “100% chance of a bloodbath in oil.” The firm also has a long-time involvement with technology, such as mobile payments in India; leading an early $13 million VC financing for a “ledger” software (a sector now commonly known as “blockchain”); other investments include 3D holographic display technology along with early mobile applications. Fincom’s long-time clients are enormously successful investors. Some helped found/director of LNG pioneer Cheniere Energy; others founded Upfront Ventures, the #1 performing venture capital fund last decade. In 1989, Mr. Lacy hosted “The Venture Capitalist,” which aired on (now) CNBC and he was invited to Beijing in 2006 to advise Chinese companies on entering the U.S. financial markets. Fincom Investment Partners is not accepting new clients and does not sell any subscription services.

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Disclosure:
1) Frederick Lacy: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Silvercorp, Marathon Gold, Wesdome, Atlantic Gold and Endeavour Silver. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Klondex Mines. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

( Companies Mentioned: AGB:TSX.V,
EDR:TSX; EXK:NYSE; EJD:FSE,
MOZ:TSX; MGDPF:OTC.MKTS ,
SVM:TSX; SVM:NYSE,
WDO:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/11/stick-with-our-fab-four-for-continued-outperformance.html

Gold in Bulgaria? Drilling Says ‘Yes’

Source: Streetwise Reports   01/11/2018

It’s been full speed ahead for this TSX.V-listed gold explorer in Bulgaria, and the drill bit is showing results.

Velocity Minerals Ltd. (VLC:TSX.V) began drilling its Rozino gold project in southeastern Bulgaria in August, and has now drilled more than 7,000 meters. The company’s most recently released drill results show diamond drill hole RDD-040 returning “144.7m grading 1.52g/t gold, including 24.0m grading 4.05 g/t gold.”

“This is the thickest continuous drill intersection ever returned from the property averaging greater than 1.0g/t gold,” the company noted. Assay results have expanded the near-surface mineralization beyond the Main Zone to the East and North Zones.

“Velocity’s shares look set to turn higher soon.” – Clive Maund

Keith Henderson, Velocity’s president and CEO, stated, “Exploration at East Zone has been particularly successful with hole RDD-040 intersecting continuous high-grade gold mineralization from surface over a 144-meter drill intersection. The most recently completed drilling at Rozino has stepped beyond Main Zone, seeking to define additional zones of near-surface mineralization at North Zone and East Zone.”

Henderson also noted that “since closing the acquisition of Bulgarian assets in late July 2017, Velocity has rapidly advanced the project and based on positive results added a second rig in October to complete more than 7,000m in total. Our stated aim has been to define potentially open-pittable epithermal gold mineralization and the program has clearly met that objective.”

The Rozino project is located about 20 kilometers from Ada Tepa, which Dundee Precious Metals is developing.

“With 7,000m of drilling completed, we anticipate conducting another 7,000 to 10,000m of drilling, which will enable us to release a preliminary economic assessment (PEA). Our option agreement grants us 70% of the project upon delivery of the PEA, which we hope to complete by late summer,” Henderson told Streetwise Reports.

“Velocity closed a successful financing at the end of September.” – Clive Maund

“We are delivering on what we’ve said we were going to do,” Henderson said. “We’ve drilled and have gotten really good results. The results at Rozino point to near-surface gold mineralization, which makes the project potentially open-pittable. We will continue to release drill results as we receive them.”

Technical analyst Clive Maund charted Velocity Minerals on CliveMaund.com on Jan. 10 and noted “the stock looks cheap here, as it looks set to reverse to the upside soon.” Another positive factor to take into consideration, Maund stated, “is that the company closed a successful financing at the end of September, making it less likely that there will be another one soon.”

Maund concluded that “Velocity Minerals is close to a cyclical low and looks set to turn higher soon.” The stock, he said, is ‘completely ‘off the radar’ so the emphasis is on quiet accumulation without the expectation that it will go roaring up 2 days after we buy it. Nevertheless, once the trend reverses it could make good percentage gains from here.”

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Velocity Minerals.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Velocity Minerals, a company mentioned in this article.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Mr. Maund does not own shares of Velocity Minerals.

( Companies Mentioned: VLC:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/11/gold-in-bulgaria-drilling-says-yes.html

Gold Project Could Be One of the ‘Top Five Producing Mines in Australia’

Source: Streetwise Reports   01/09/2018

As this gold explorer continues to test its Australian property, an updated preliminary feasibility study is expected this quarter.

Vista Gold Corp.’s (VGZ:NYSE.MKT; VGZ:TSX) principal asset is the Mt. Todd gold project in Australia’s Northern Territory, where the company is undertaking metallurgical testing. At the end of November, Vista Gold announced that its test work has led to improved gold recoveries; automated sorting and a two-stage grinding circuit would “enable the project to achieve a finer grind size, higher gold recoveries/higher gold production, and lower processing costs with no material increase in project capital.”

Heiko Ihle, an analyst with H.C. Wainwright & Co., noted in a Nov. 28 update on Vista Gold that his firm expects “a reduction in grinding, leaching, and tailings handling costs due to lower volume of material processed, and reiterate[s] the potential for these changes to reduce the above costs by around 10%.”

“We expect the improvement in recoveries to translate to greater production and profitability at Mt Todd,” Ihle wrote.

The company is now updating the preliminary feasibility study (PFS), which it plans to release this quarter. “We continue to expect an updated PFS for Mt Todd to be completed in 1Q18 and expect the study to reflect a project that can provide value to shareholders at the current gold price, rather than a potentially higher price in the future,” Ihle noted.

Fund manager Adrian Day of Adrian Day Asset Management, wrote in Global Analyst on Nov. 20 that “the updated study should be strong, with CEO Fred Earnest telling investors ‘to expect improved recovery, sorting, power savings, and an improved currency exchange rate,’ which will combine to produce ‘a compelling rate of return at today’s gold price.'”

“This is significant,” Day noted, “because Mt Todd has a reputation as a deposit that requires a higher gold price to be economic. Earnest said Vista is ‘no longer just a call option on the price of gold, but owners of a large-scale, economically viable gold project.’ Indeed, Mt Todd is the largest undeveloped gold project in Australia and the third-largest reserve package in that country. It could be among the top five producing mines in Australia, with costs in the lowest quartile.”

Adrian Day included Vista Gold in his short list of Best Buys on Dec. 19.

Analyst Ihle also discussed the Vista’s valuation: “We view the current share price as a buying opportunity and believe that recent metallurgical testing should meaningfully improve the economics of the project. In our opinion, the Vista Gold share price thus far has not reflected these improvements.”

“We continue to expect an updated PFS for Mt Todd to be completed in 1Q18 and expect the study to reflect a project that can provide value to shareholders at the current gold price, rather than a potentially higher price in the future,” Ihle concluded.

Adrian Day shared the sentiment in his Nov. 20 report. “Despite the progress and very optimistic comments about the upcoming revised PFS, the stock hardly moved. For various reasons, it seems to be a “show-me” story. The updated PFS, however, if it confirms the optimistic assessment, should finally make the stock move, giving us an opportunity now to buy the stock (and Mt Todd) at a bargain level. Once the PFS is out, we suspect the company (or the deposit) will be a most attractive target. Vista is a strong buy,” Day commented.

H.C. Wainwright & Co. has a Buy rating on Vista Gold and a target price of US$2.25. The shares are currently trading at around US$0.72.

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Vista Gold. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Vista Gold, a company mentioned in this article.

Additional disclosures

Disclosures from H.C. Wainwright & Co., Vista Gold Corp., Company Update, Nov. 28, 2017

I, Heiko F. Ihle, CFA and Matthew Barry, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of Vista Gold Corp. (including, without limitation, any option, right, warrant, future, long or short position).

As of October 31, 2017, neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Vista Gold Corp.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did receive compensation from Vista Gold Corp. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Vista Gold Corp. during the past 12 months.

The Firm does not make a market in Vista Gold Corp. as of the date of this research report.

Disclosures from Global Analyst, Nov. 20, 2017 and Dec. 19, 2017

Disclosures for Vista Gold:

Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Vista Gold.

( Companies Mentioned: VGZ:NYSE.MKT; VGZ:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/09/gold-project-could-be-one-of-the-top-five-producing-mines-in-australia.html

Brownfield Leverage and Blue-Sky Greenfield Zinc Exploration in British Columbia

Source: The Critical Investor for Streetwise Reports   01/09/2018

As zinc continues to rise, The Critical Investor profiles an explorer consolidating claims in southeastern British Columbia.

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Kootenay Arc; Jersey Emerald Project

1. Introduction

Every now and then certain junior mining companies succeed in consolidating a large group of claims or even multiple projects on very favorable terms, often creating very interesting continuous land packages with ongoing areas of exploration potential, greenfield and/or brownfield. This kind of transactions are usually out of the realm of larger, well-known parties, as prices shoot up the second their involvement becomes apparent.

One of these junior mining companies is Margaux Resources Ltd. (MRL:TSX.V), a relatively new player on the zinc front. The company consolidated a lot of land and historic mines in an area called the Kootenay Arc, and set out to look not only for zinc, but also for tungsten and gold. This year has already seen quite a bit of exploration activities on various projects, so it is time to discuss the current status of the company and its projects.

All presented tables are my own material, unless stated otherwise.
All pictures are company material, unless stated otherwise.
All currencies are in U.S. dollars, unless stated otherwise.

2. The Company

Margaux Resources is a mineral acquisition and exploration company focused on zinc, gold and tungsten resources in the richly mineralized Kootenay Arc region of southeastern British Columbia (B.C.), Canada. The company has quietly consolidated a portfolio of previously producing properties in the last three years with excellent exploration potential, five projects containing 24,635 hectares in total claims, that include the Jersey-Emerald mine, which at one point was the second largest historic zinc-lead mine in B.C. and the second largest tungsten mine in North America.

The projects are located in the richly mineralized zinc/lead/silver Kootenay Arc belt in the southern part of B.C. which extends over 300km, in hilly/moderately mountainous terrain. British Columbia is a very familiar mining jurisdiction, and has a solid ranking on the Policy Perception Index according to the last Fraser Survey of Mining Companies, coming in at #41 out of 104 jurisdictions worldwide.


Kootenay Arc; projects

The infrastructure is excellent as the area is a mining hotspot, with power dams nearby, and the company also identified a few nearby opportunities to eventually mill and process ore in the future. These are the Kettle River gold mill owned by Kinross in Washington, the Pend Oreille Mill belonging to Teck in the same state, and Teck’s Trial smelter complex in B.C., one of the world’s largest fully integrated zinc and lead smelting and refining complexes.

Margaux Resources has laid out a clear strategy from the get-go: it wanted to identify high-yield, past-producing and long-time inactive mines; it wants to apply modern geoscience and technology in order to research current potential at low cost, and identify economic potential previously discarded due to old mining/processing technology. It seems that they acquired the right projects in the Kootenay Arc.

The flagship Jersey-Emerald project, which hosted once one of the largest zinc-lead-tungsten producers in British Columbia, has a 2010 NI-43-101-compliant resource on it, containing 1.9Mt @4.1% Zn, 1.96% Pb Indicated, and 4.98Mt @3.37% Zn, 1.95% Pb Inferred at an unofficial 3.5% “Zn+Pb” cut-off grade, at a time where zinc and lead were roughly priced the same (about US$1/lb). As zinc has appreciated more since 2010 (US$1.54/lb vs lead US$1.12/lb at the moment), the ZnEq cut-off grade will probably come closer to 3%. This assumes an underground mining scenario, similar to the historical operation. There is potential to extract the mineralization by open-pit mining. For an open-pit scenario, the 2010 NI-43-101-compliant resource is 5.3 Mt @ 2.6% Zn, 1% Pb Indicated and 17.0 Mt @ 2.2% Zn and 1% Pb Inferred, using a cut-off grade of 1.5% “Zn+Pb.”

The company is basically controlled by a family of miners, to be more specific, the Letwins. IAMGold President and CEO Steve Letwin and his family own about 10% of Margaux, he is an advisor and is involved in marketing; his brother James Letwin is chairman; and his brother-in-law Doug Foster is a director. Letwin provides mid-tier producer experience, but also access to capital, as Margaux raised over C$10.6 million in the last year and a half. Margaux is headed by President and CEO Tyler Rice, CPA, who is a successful and versatile young entrepreneur in many industries, including oil & gas, real estate, health care and mining. He already has a few rewarding exits to his name, invested over C$500,000 into Margaux equity, and relocated to Nelson especially for being in touch with the projects, and build relationships with local communities. The exploration team is headed by VP Exploration Linda Caron who has extensive experience in the region where Margaux’s projects are located. Another familiar name can be found on the advisory board: Chris Stewart, president and CEO of Treasury Metals.

Some basic information on share structure and financials: Margaux Resources has a tight 59.984 million shares outstanding. The fully diluted share count stands at 84.4 million shares, as there are 4.8 million options and 19.3 million warrants (8.1 million are out of the money @C$0.40 expiring March & December 2019). In December the company closed a C$3.25 million financing, and the company has no debt. The current share price is C$0.28, resulting in a current tiny market cap of C$16.8 million. This is tiny, as almost every zinc junior that has something of a resource has a market cap of at least C$20–30 millin (see my peer comparison in my latest Tinka Resources article).

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Share price 1-year timeframe; Source: tmxmoney.com

The stock has been relatively stable all year, on a low average volume of 81,249 traded daily, which has been skewed by a few large trades a few months ago, I would say trading comes closer to 40,000 daily now. This is caused partly by the stock being hold tightly as mentioned; insiders and management hold about 15%, which means a lot of skin in the game.

Let’s have a look first at the main base metals Margaux is after, zinc and tungsten. I will not discuss precious metal gold as I view this as a metal without solid market fundamentals that can’t be analyzed properly. There are countless people who try to work with sentiment drivers like negative real interest but results remain inconsistent as gold prices are determined by futures traders who play sentiment speculation to perfection, which has nothing to do with real supply/demand.

3. Zinc & Tungsten

Zinc

I discussed zinc recently in earlier articles, so if you are familiar with those than you can skip this, of course.

A chronic shortage of supply of zinc is well underway now. The coincidental closure of major zinc mines (Brunswick, Perseverance, Century, Lisheen, Skorpion) through depletion, taking 500kt per annum off the table, and this, coupled with a very limited number of new zinc mines in the near-term development pipeline set to come on-line, is expected to lead to a robust zinc price for the next few years. The price of zinc already ran up from US$0.67 to a recent US$1.54/lb, and is forecasted to go up even more:

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The zinc market has been in deficit for a long time (since 2012), but only since the end of 2015 did the zinc price start to appreciate, probably due to covert stockpiles that finally seem to be depleted. So, despite the current modest correction, the long-term zinc case looks pretty convincing in my view, and playing into the hands of Margaux Resources.

Here is a chart from Kitco.com, indicating long-term weakness in LME inventories, but only since the end of 2015 coinciding with factors like production going off line:

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It seems like the stocks are heading for new lows, and recently broke through the 200,000t levels, and dropped below the 10-day supply threshold that is deemed critical. Following up on supply constraints, cutbacks like the ones executed by Glencore, as well as decreases expected for Kazakhstan and Peru, have tightened supply further and deepened the concentrate deficit. Interestingly, China had also shut down 26 mines in August 2016 due to safety and environmental concerns, which was a serious gesture. The latest development is Glencore bringing back online another 100,000t, but this is not believed to have much of an impact, and my guess is, looking at this very modest increase, that Glencore will do anything to maintain and support much higher pricing for a long time.

Analysts believe that the zinc price could appreciate further, to $2.00/lb levels or more, as a new critical deficit could be looming for 2018. Biggest risk factor in all this remains main producer and consumer China (like it is with almost every other metal).

On a side note: an interesting phenomenon in zinc production are the treatment charges (TC). These are the charges paid by zinc miners to the smelters, for refining their zinc concentrates into zinc ingots. These TCs are often quite substantial, often to the amount of $200/t Zn for long term contracts. Besides LT contracts there are also spot TCs for smaller quantities, and those have gone down a lot lately, going from $100–120/t to $40/t, as smelters are having a hard time getting zinc concentrates to process. As this chart shows, the interesting part of this is that spot TCs go down first as an indicator, before zinc prices start rising:

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Zinc prices and TCs; source RBC zinc report Jan 2017

The funny part is that the long-term contract TC prices don’t go down first with shortages, but only go up when the zinc price really starts to take off. So apparently there are two different TC pricing mechanisms at work at the same time with smelters.

Smelters have a dominant position in the zinc business, as they can set the TC terms. These terms are so one-sided, that zinc concentrates usually need significant by-products, or miners need to have a lead concentrate as well in order to be profitable. This was an important reason for BHP and Rio Tinto to exit the zinc business. Usual by-products are lead, silver, gold, and copper, but sometimes iron ore, molybdenum and even indium are recovered and paid for.

When analyzing a few economic studies of zinc juniors, I came across several TCs, and I gathered them in this table, to get an impression:

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Besides TCs, there are also penalties for deleterious elements or impurities, which, if present above certain limits, can have a negative impact for smelters regarding toxicity or obstructing the smelting process. Those limits can vary per smelter, as they buy different batches of concentrates, each with different impurities, resulting in different mixed smelter feeds. If there is too much of certain impurities, the entire concentrate can even become unsalable. As far as this wasn’t already clear to investors, now it is.

Again, I created a table based on the penalty terms for Canadian Zinc and Zincore, which appeared to be a very global industry guideline as there was very limited data available in most studies:

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The $12.6/t penalty for Arizona is a total as provided by management, and not a price per grade percentage. Etc., which can be found in the footnote of the table. As can be seen, for Zincore a 1.3% manganese content wouldn’t even result in a penalty, as the term I used for this table was coming from the Zincore 2013 PFS study. It has to be noted that this term was quoted for the fume case (roasting), and for the refined zinc con scenario there wasn’t even a manganese term mentioned. A distinction was made between Chinese and non-Chinese smelters so this could make a difference. The study was done by AMEC, which I hold in very high regard, so I don’t expect sloppy work there. In general, a 1% Mn percentage is considered a threshold for a good zinc concentrate, although cost-wise a multiple of this wouldn’t make much of an impact. However, smelters are able to dictate what they want, and are the reason several large mining companies divested their zinc assets.

It will be clear by now that zinc isn’t as straightforward as for example copper, but has a lot of moving parts, and the outlook for even higher prices is bright.

Tungsten

Tungsten (symbol W) is an extremely hard, heavy, steel-gray metal that is one of the heaviest of all the elements, amazing for its strong physical properties and vast uses. It has the highest melting point of all the non-alloyed metals (3,410°C), the lowest vapor pressure and the highest tensile strength (19.3 gms/cc).

Tungsten does not occur naturally in its pure metallic state; rather, it is found in several ores, including wolframite and scheelite. Most of the world’s reserves are located in China, which supplies more than 80% of the world’s demand. Tungsten is also found in Australia, Bolivia, USA, Russia, Portugal and Korea. Tungsten is a metal with unique properties making it an essential component in many industrial applications. Critical properties include —very high melting point, very high density, hardness close to diamond, thermally and chemically stable, excellent conductor, and environmentally benign.

The most important use is as tungsten carbide in hard metals, used mainly for industrial drilling and cutting tools. Secondary uses are in electronics and specialist steels. China accounts for over 80% of world tungsten mine production as mentioned; Western world supply is very limited. The U.S., Europe and Japan consume ~55% of world tungsten, but produce only ~5%. Chinese domestic demand has increased, and China has moved from a net exporter to net importer of tungsten concentrates. This extensive control over production and world supply hasn’t resulted in continuing higher pricing for the metal, but during the summer tungsten appreciated a lot in a very short period of time, without a clear cause for it, as can be seen in this chart of Metal Pages:

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It seems tungsten has been playing catch up with lots of other metals, and the world economy in general. Concerns over security of supply of tungsten concentrates to western processors and industry end-users resulted in the EU categorizing tungsten as a “critical raw material.” Tungsten demand is forecasted to grow by 5–8% annually. Growth markets for tungsten are still being identified, such as nickel-tungsten alloys that could replace chrome plating and nickel-tungsten alloys that could replace gold-nickel plating. Tungsten, with essential applications in industry, aerospace and military, is a strategic commodity. The U.S., Russia, China and Japan have indicated that they have or intend to build stockpiles.

So far for zinc and tungsten, let’s continue with the projects of Margaux Resources.

4. Projects

The Kootenay Arc Project consists of five smaller projects, all located in the southern part of British Columbia.

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The flagship Jersey-Emerald project is a past-producing lead-zinc, and tungsten mine. Some 50 years ago, Jersey-Emerald was the third largest zinc-lead producer in British Columbia, as well as the second largest tungsten producer in North America. As can be seen below, there are extensive underground workings present and accessible:

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Jersey Mine; Jersey-Emerald Project; room & pillar mining

There is actually over 30km of underground workings in place, of which 14km is accessible, and 16km requires dewatering. The 2010 NI-43-101 resource estimate contains a small 1.9 MT at 4.1% Zn and 1.96% Pb Indicated, plus 4.98 Mt at 3.37% Zn and 1.95% Pb Inferred for zinc/lead, and a tungsten resource: 3.07 Mt at .34% WO3 M&I, and 5.48 Mt at .27% WO3 Inferred. However, the resource doesn’t have to be of usual economic size, as it doesn’t have to be a standalone project. The earlier discussed Pend Oreille mill is relatively close by, just like the Trial smelter complex, and mill feeder ore could be trucked, just like the concentrate to the smelter afterwards. This type of operation also limits the permitting process, as a mill, plant and tailings facilities are no longer necessary. The geometry of the Zn-Pb resource is such that it could, potentially, be mined as an open pit. As mentioned earlier, assuming a reasonable open-pit cut-off grade, the 2010 NI-43-101 resource estimate is 5.3 Mt @ 2.6% Zn, 1% Pb Indicated and 17.0 Mt @ 2.2% Zn and 1% Pb Inferred. This is an interesting scenario, as an open-pit operation like this could produce, annually, as much as five times the Zn concentrate that Teck currently produces from its Pend Oreille mine in Washington.

Jersey-Emerald also contains the Canex tungsten tailings project, and Margaux is busy with lab scale sampling, testing grades and recoveries.

The Bayonne property historically produced a small amount of 42koz @16.0 g/t gold and 120.7koz @45.9 g/t silver from a single quartz vein. The property has a historic resource of 12.3koz @ 12.8 g/t gold M&I and 45.7koz @ 14.9 g/t gold Inferred.

The Jackpot property is located approximately 2 kilometers north of Margaux’s Jersey-Emerald property. The property consists of mineral claims and crown grants, covering 1,643 hectares, and is prospective for zinc, lead and silver. This project has seen a lot of drilling in the past, and the company has compiled all data into a 3D Model:

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If this could in fact be a more or less continuous mineralized zone at good grades (4-5% ZnEq open pit [0-200m], 8-10%ZnEq underground), things could get interesting for Margaux, as at a gravity of 2.6-2.7 the size of this mineralized zone could get to an estimated 50–60Mt. The same concept for Jersey Emerald would work here again: existing underground workings, nearby mill and smelter would save on capex and permitting time. There is also the Big Zinc target, located 3km north of Jackpot East. Samples of very high-grade zinc oxide (up to 54%Zn) have been collected, and usually in these situations the oxide is at surface and the sulphides are located at depth (below 50-100m). The company is looking for the sulphides as the oxides are much harder to recover, although oxides grading over 20% Zn and near surface are economic anyway when the resource would be of economic size, of course.

The Sheep Creek property consists of mineral and crown grants, covering 3,744 hectares, and is prospective for gold and silver. The property has a historic resource of more than 68,000 tonnes grading more than 15 g/t gold. Historic production from the Sheep Creek camp is 785,000 oz Au (plus Pb, Zn, Ag) at an average grade of 14.4 g/t Au. The majority of the gold production was during the periods 1899–1916 and 1928–1951, with historic mining from 34 separate high-grade gold-bearing quartz veins. Veins in the Sheep Creek camp are orogenic gold veins, which are considered analogous to the Barkerville District in age and style. The gold potential for this property is considered significant by management, and a soil anomaly program was completed, with an average of 2.95 g/t gold for 48 soil samples, which is pretty convincing.

The Ore Hill property is adjacent to Margaux’s Jersey-Emerald and Sheep Creek properties. The property consists of mineral claims covering 338 hectares, and is prospective for gold, silver, zinc and lead.

All projects are subject to option agreements towards a 100% ownership, with the most expensive project being flagship Jersey-Emerald:

As can be seen in the footnote, the remaining balance for cash obligations stands at C$3.5M at the moment, most of which has to be paid before 2021, which contributes to an estimated average annual obligation of C$600–700k, which isn’t negligible but doable at its current estimated cash position of C$3M. The share components are small compared to the outstanding share count of 59.98 million at the moment.

5. The 2017 exploration program

The company has been busy this year, performing exploration on all projects. I will discuss all projects individually.

Jersey-Emerald:

Margaux Resources set out this year sampling and drilling for gold and zinc. In the recent past one significant high-grade intercept was encountered by coincidence (10.2m @24.98 g/t Au in 2014 at the King Alfred Gold Zone). Of the 23 stream sediment samples for gold, 14 had highly anomalous results and a few returned high-grade gold samples (ranging from 3.71 g/t to 18.1 g/t). The 2017 drill program was a six-hole program. Two holes were drilled at the King Alfred Gold Zone and didn’t return very spectacular results. The remaining holes were exploration holes to the west and south of the historic mine, and the highlight was a 1.46m @ 2.70% Zn intercept, which was based on a 0.45m @7.17% Zn high grade part. No gold was reported except a “broad interval of elevated gold validating the mineralizing model and confirming the gold potential,” although no intercept was mentioned, so the intercepted mineralization is likely not economic. So the drilling at Jersey-Emerald wasn’t very successful so far, and the sampling returned promising results, although there is no direct correlation between sampling and actual underlying economic mineralization, it is an indication at best.

The 1.4Mt Canex tungsten tailings project is part of the Jersey-Emerald project, and has seen 3,500kg sampling by partner Cronimet Mining, of which Margaux is awaiting results soon. The company is preparing a 10,000t pilot project for summer-fall 2018.

Sheep Creek:

Extensive sampling returned high grade gold-silver-lead-zinc mineralization including 36.4 g/t Au, 1,021 g/t Ag, 33.68% Pb & 13.62% Zn and grab samples contained gold grades of 71.5 g/t & 17.75 g/t. An independent NI 43-101 report was filed which concluded that the property was “…an important orogenic gold vein system that has considerable merit” and as such warranted further exploration. Rock samples forming part of the report included 58.63 g/t Au & 21.80 g/t Au. A large, strong gold soil anomaly (450 x 100m) was identified from 48 samples, grading up to 13.5 g/t Au, and having an average grade of 2.95 g/t Au, which is impressive.

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The company is wrapping up its fall 2017 drill program, and expects to report results in January 2018. Management is apparently pleased with what they see so far, and are expecting to do a lot more drilling, as they are already mapping out new drill targets for next year.

Bayonne:

The company sampled along 900m of strike on the Main Vein, and even extended it slightly to a system strike length of 1,000m now. Grab sample results include 27.5, 23.3, 18.1, 15.0 and 10.6 g/t Au, which is high and in line with the historically mined average grade of 16g/t Au on this location. Chip samples were collected of 24.6 g/t Au over 1m & 43.6 g/t Au from a 0.5 to 0.75m wide vein. High gold values were confirmed from the narrow Bayonne West vein including 9.3 g/t Au. High-grade gold rock samples including 51.6 g/t Au & 46.6 g/t Au were found at the Maggie Aikens target. Overall the sampling at Bayonne can be considered successful, and warranted drilling. A 13 hole, 2,089m drill program was executed, an overview can be seen here:

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The drill program delivered interesting first results on the explored high grade, steeply dipping orogenic quartz veins:

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The mining of underground quartz veins requires a minimum width of 1m at an average grade of about 7-10 g/t Au as it is more labor-intensive, and a minimum width of 2m @5-6 g/t when using more efficient mining methods. This also implies continuous minimum width, whereas with narrow veins the width often varies to much smaller dimensions, resulting in additional dilution of mill feed grade, as more waste has to be mined as well. So the first results are promising, but not yet indicating economic mineralization.

Ore Hill:

A sampling program returned numerous grab samples with high-grade gold values, including 119 g/t and 105 g/t Au, which are very high. High grades weren’t confined to just gold, as high-grade silver grab samples up to 496 g/t & 195 g/t Ag and very high zinc grades of 22.8% & 17.5% Zn came in as well.

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Collected over an area of 950m x 150m, indicated mineralization seems to be widespread. Of course, grab samples are selective and have no direct connection with eventual underlying mineralization as mentioned, but nevertheless these results indeed look very promising.

Jackpot:

The sampling program generated numerous high-grade zinc samples, up to even 54.3% Zn, at the Big Zinc target, although as mentioned these consist of zinc oxide (which is economic at roughly 10% ZnEq open pit and 20% ZnEq underground, about double the sulphide zinc grades needed). Detected elevated gold values of 0.36 g/t Au on average could provide for byproducts, which would be the equivalent of roughly 1% Zn. The exploration work outlined a broad continuous zone of limestone/dolomite host unit, 600m long, containing multiple zones of PbZn mineralization, of which the limestone could probably be recognized by readers of my newsletter as it is the source for the Ayawilca ZnPb mineralization of Tinka Resources as well. In the case of Jackpot, the mentioned gold seems to be present in a broad zone of stockwork quartz veinlets cutting the zinc-mineralized limestone. Gold has always been overlooked at the Margaux projects historically, and provides potential upside for economics.

The initial nine-hole 1,400m drill program generated encouraging results as almost all holes hit zinc mineralization, although the current intercepts do not represent very economic grades yet (as a reminder 4-5% ZnEq open pit (0-200m), 8-10% ZnEq underground):

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It looks like the first two holes into the Jackpot East target (see 3D model in chapter 4), JP17-07 and JP17-08, did confirm mineralization, but when interpreting these first holes, the large implied envelope seems to consist of several stacked, thin mineralized layers, of which just a few are amendable for mining (at least about 5m thickness laterally). So the zinc is there, but a lot of drilling has to take place before an economic deposit can be proven up in my opinion.

This goes for all projects, of course, as Margaux Resources is in the early stages of exploration and drilling. So far, mineralization seems to be present at all projects, with mostly (very) high-grade sampling results and consistent but not very economic drill results yet. However, for a first round of drilling, the successful sampling and considering the size of the area that is still unexplored, the company seems to have scratched the surface in a good way. It is up to management now to define economic mineralization in 2018, and for now I am particularly interested in the pending outcomes of the Ore Hill and Sheep Creek drill programs.

6. Conclusion

Margaux Resources finished exploration for 2017, has generated varying but also promising results, and defined lots of interesting drill targets for 2018. There seems to be mineralization everywhere the company looks, and chances of hitting economic mineralization could still be very much alive going into the second phase of exploration, in my view. The upcoming assays for Ore Hill and Sheep Creek could surprise, and the sampling results for the Canex tungsten tailings project should provide more insight in the feasibility of bringing it into production. Margaux only has to hit at one project to have lots of upside at a current market cap of just C$16.7 million; I like the odds so far.

http://margauxresources.com/wp-content/uploads/2017/04/Jackpot_bg-1.jpg
Jackpot/Oxide Project

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at http://www.criticalinvestor.eu/, in order to get an email notice of my new articles soon after they are published.

Disclaimer:

The author is not a registered investment advisor, and has a long position in this stock. Margaux Resources is a sponsoring company. All facts are to be checked by the reader. For more information go to http://www.margauxresources.com and read the company’s profile and official documents on http://www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

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1) The Critical Investor’s disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Charts and graphics provided by the author.

( Companies Mentioned: MRL:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/09/brownfield-leverage-and-blue-sky-greenfield-zinc-exploration-in-british-columbia.html

Jack Chan’s Weekly Precious Metals Update

Source: Jack Chan for Streetwise Reports   01/08/2018

Technical analyst Jack Chan charts the latest movements in the gold and silver markets, noting a falling dollar is supportive for metal prices.

Our proprietary cycle indicator is up.

Gold sector is on a long-term buy signal.

Long-term signals can last for months and years and are more suitable for investors holding for long term.

Gold sector is on a short-term buy signal. Short-term signals can last for days and weeks, and are more suitable for traders.

Speculation is in bull market values.

USD: a falling dollar is supportive for metal prices.

Silver is on a long-term buy signal.

SLV is on a short-term buy signal, and short-term signals can last for days to weeks, more suitable for traders.

Speculative longs are bouncing back sharply from the lowest level in years.

Summary
Precious metals sector is on major buy signal.

Cycle is up, suggesting that the multi-month correction is now complete.

COT data is supportive for overall higher metal prices.

We are holding gold related ETFs for long-term gain.

Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011.

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Disclosure:
1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) Jack Chan: We do not offer predictions or forecasts for the markets. What you see here is our simple trading model, which provides us the signals and set-ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
3) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Charts courtesy of Jack Chan

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/01/08/jack-chans-weekly-precious-metals-update-10.html