Global Gold Snapshot: Eight companies to watch – The Northern Miner

Posted: March 23, 2020 at 8:42 am

Given the market volatility from the spread of COVID-19, the outlook for gold remains uncertain. Nevertheless, gold exploration and mine development remain important drivers of mining activity. Here are eight companies with exposure to gold and precious metals.

Bear Creek Mining

Bear Creek Minings Corani silver-lead-zinc project in southern Peru. Credit: Bear Creek Mining.

Bear Creek Mining (TSXV: BCM; US-OTC: BCEKF) wholly owns the 57-sq.-km Corani silver-lead-zinc deposit in Perus Andes mountains, 160 km from Cusco.

In November, the company released an updated feasibility study for a potential 27,000 tonne per day open-pit operation, extracting ore from the Este, Minas and Main pits. The study envisioned a mine that would produce an average of 9.6 million oz. of silver, 98 million lb. of lead and 69 million lb. of zinc annually over a 15-year life. With life of mine all-in sustaining costs of US$4.55 per oz. of silver produced and US$579 million in initial capital, the associated projects net present value estimate, at an 8% discount rate, comes in at US$369 million.

Separate zinc and lead concentrates would be produced on site, with additional contained silver for trucking to the Matarani port, located 632 km away.

The latest study includes a contractor mining scenario, with a third-party in charge of ore and waste haulage as well as equipment maintenance. Bear Creek has key permits in place for the shovel-ready project.

The latest study was an update of a report previously completed in 2017. Modifications included a redesign of haul roads, rerouted construction access, a reduced footprint of the process plant and increased throughputs of 27,000 tonnes per day, up from the previous 22,500 tonnes per day.

The total reserve statement for the project is unchanged at 139.1 million tonnes grading 50.3 grams silver per tonne, 0.9% lead, and 0.59% zinc for a total of 225 million oz. silver, 2.7 billion lb. lead and 1.8 billion lb. zinc. Additional measured and indicated resources stand at 96.7 million tonnes grading 27.9 grams silver, 0.38% lead and 0.26% zinc with a further 39.9 million tonnes at 37.2 grams silver, 0.58% lead and 0.4% zinc inferred.

Bear Creek plans to engage in discussions with potential project finance participants to allow its board to make a construction decision. In February, the company closed a $16.6-million bought deal financing.

Bear Creek Mining has a $115.7-million market capitalization.

GoGold Resources

GoGold Resources (TSX: GGD) holds the Parral tailings and Los Ricos projects in Mexico.

The producing Parral project in Chihuahua state features 21.3 million tonnes of tailings from historical mining operations near an urban area. Due to sub-optimal historic recovery flowsheets, significant amounts of both silver and gold remain in this material. A 2013 pre-feasibility study outlined a reserve of 20.3 million tonnes grading 38.4 grams silver per tonne and 0.31 gram gold per tonne for a total of 35 million oz. silver-equivalent.

After an 18-month financing and construction period, GoGold started production activities at the site in June 2014. Subsequently, in February 2015, the company acquired the nearby Esmeralda tailings property, adding measured and indicated resources of 5.8 million tonnes of 49 grams silver and 0.26 gram gold for a further 12.6 million silver-equivalent ounces.

In the fourth quarter of 2019, Parral produced 584,988 silver-equivalent oz. at all-in sustaining costs of US$14.59 per oz. and GoGold expects to maintain this level of output throughout 2020.

In January, the company commissioned a sulphidization-acidification-recycling-thickening (SART) plant at Parral to regenerate the cyanide and produce a copper sulphide product. The SART technology allows companies to manage and recycle process cyanide.

In March of last year, GoGold entered into an option agreement to acquire the 225-sq.-km Los Ricos project in Jalisco state from private owners. In August, the company accelerated the acquisition by paying a total of US$7.1 million for the acquisition in cash and shares over a 24-month period.

Los Ricos features extensive historic underground development with epithermal mineralization. Last year the company completed 17,400 metres of diamond drilling at the site, mostly around historic mining areas.

Latest drill highlights from the site included 21 metres of 219 grams silver-equivalent from the Los Ricos quartz vein within the San Juan area, as well as 10.7 metres of 235 grams silver-equivalent from a shallow hole testing the el Abra outcrop.

Two main exploration efforts are underway at Los Ricos: the South project that includes the Main site area with drilling around historical mines and new targets, and the North project, which includes four targets.

In February, the company closed a $25 million bought deal with proceeds intended for exploration at Los Ricos as well as for corporate purposes.

GoGold has a market capitalization of $86.6 million.

Mako Mining

Mako Mining (TSXV: MKO) is developing the San Albino gold project in Nicaragua, located 173 km north of the capital city of Managua.

The proposed San Albino open pit is high-grade. A 2015 resource estimate and preliminary economic assessment for the project outlined in-pit indicated resources of 656,000 tonnes grading 7.13 grams gold per tonne for a total of 150,400 oz. with additional inferred resources of 880,000 tonnes of 6.78 grams gold totaling 192,000 ounces. A total of 148,600 of these ounces are in oxides with a further, predominantly sulphide, 2.2 million inferred tonnes grading 8.47 grams gold for a total of 595,800 oz. out of pit.

The PEA outlined a 500 tonne per day staged open pit to underground operation at an initial capital cost of $21.1 million, average annual payable gold-equivalent production of 41,300 oz. and all-in gold-equivalent sustaining costs of $395 per ounce. The associated net present value estimate for the project, at a 5% discount rate, came in at US$173.9 million, with a 1.7-year payback period.

In July of last year, the company closed a $27 million rights offering with Wexford Capital, a U.S.-based investment firm and Makos controlling shareholder with a 50.9% stake, to start construction at San Albino. In addition, in February of this year, Mako also closed a US$15.5 million unsecured term loan with Wexford.

Mako provided a mine construction update in November last year. At that time, the company had just purchased a 1,000 tonne per day crusher and was looking at available second-hand mills. Mako started pre-stripping waste at the future San Albino pit in February and said it will start mining of mineralized material this month.

Mako is currently targeting completion of the process plant construction by this summer with a first gold pour expected in late summer.

In September 2017, the company received a permit to construct and operate a mine at the site with throughputs of up to 500 tonnes per day.

San Albino is located within the companys 150-sq.-km land package, which covers a 23-km strike of the Corona de Oro gold belt. The existing deposit remains open both on strike and at depth. In March, Mako released drill results from the Bayacun zone at the Las Conchitas area, about 2.5 km south of the San Albino construction site. Highlight intercepts included 3.1 metres of 32.73 grams gold and 3.4 metres of 30.61 grams gold. Drilling at Las Conchitas this year is aimed at defining near-surface, high-grade mineralization to delineate a resource with additional work planned for high-grade targets within the companys land package.

Mako Mining has a $189.7-million market capitalization.

Minera Alamos

Minera Alamos Santana gold project in Sonora state, Mexico. Credit: Minera Alamos.

Minera Alamos (TSXV: MAI) is developing the wholly owned Santana open-pit heap leach gold project in Mexicos Sonora state, with additional upside from the pre-development La Fortuna asset in the state of Durango.

In January, the company announced that it had started construction activity at the 85 sq. km project, which is estimated to take about six to eight months to complete. This initial operation is forecast to generate approximately 25,000 oz. to 30,000 oz. of gold annually. Minera Alamos currently estimates the capital cost for construction of the heap leach project at approximately $10 million.

The planned Santana mine would have a 5,000 tonne per day to 6,000 tonne per day design capacity. At the end of January, the company entered into a purchase agreement for a crushing, screening and agglomeration system for the mine for staged payments totaling $1.2 million.

In the first quarter, Minera Alamos started preparing for construction of the leach pads and holding ponds. To date, the company has mined about 50,000 tonnes on a trial basis with recovered gold grades at over 0.67 gram gold per tonne.

In December 2019, the company announced a $14 million combined royalty and equity financing package with Osisko Gold Royalties (TSX: OR). The financing included a $6 million private placement, a $5 million sale of a perpetual 3% net smelter return (NSR) royalty on Santana, with a further $3 million available in financing from Osisko during construction and start-up of Santana. Osisko Royalties currently holds 18.7% of the companys shares.

In September 2019, surface rock sampling at the project identified additional gold-silver surface anomalies: the Gold Ridge zone, which has been traced for about 1,000 metres of strike and over widths of 200 metres. This discovery is roughly 2-3 km away from the planned heap leach facilities. In addition to Gold Ridge, exploration targets include the Divisadero, Benjamin and Zata zones where rock samples have also returned anomalous gold values. Drilling is ongoing with plans for approximately 2,500 metres to 3,000 metres in each quarter of this year.

Minera Alamos also holds the 62-sq.-km La Fortuna project in Durango state. A preliminary economic assessment (PEA) from 2018 outlined an open-pit operation producing an average of 50,000 gold-equivalent oz. annually over a five-year mine life. With all-in sustaining costs pegged at US$440 per oz. and a pre-production capital outlay of US$26.9 million, the associated projects net present value estimate, at a 7.5% discount rate, came in at US$69.8 million.

Permitting for La Fortuna is underway with an estimated 12-month build period. Minera Alamos envisions development of this asset once construction at Santana is complete. The company has also identified additional zones of mineralization at the project.

Minera Alamos has a $87.4-million market capitalization.

OceanaGold

A truck exits a portal at OceanaGolds Waihi gold mine on New Zealands North Island. Credit: OceanaGold.

OceanaGold (TSX: OGC) holds three operating gold mines in New Zealand and the U.S. as well as the Didipio gold-copper mine in the Philippines, which suspended processing operations in October.

In 2020, the company expects to produce 360,000 oz. to 380,000 oz. of gold at all-in sustaining costs of US$1,075 to US$1,125 per oz.

The Haile open pit in South Carolina is currently the companys largest production contributor, expected to churn out 180,000 oz. to 190,000 oz. of gold this year at AISCs of US$1,080 to US$1,130 per oz. The mine, which started pouring gold in 2017, has an estimated mine life reaching out to 2033. In the near term, the company is also working towards upping open pit operations through accelerating mining activities, increasing productivities, updating mine plans and deploying a larger mining fleet.

OceanaGold is also completing optimization work on an underground mine plan for the Horseshoe underground with an expansion at Haile in mind. It plans to provide details of these studies in the second half of this year.

The Macraes underground and open pit operations in New Zealand are forecast to contribute 160,000 oz. to 170,000 oz. this year. The complex has been producing for over 29 years and the company is currently targeting a mine life extension at the project through ongoing exploration and planning work. A pre-feasibility study for the Golden Point underground project at the site is underway, expected in the second half of the year.

The companys Waihi underground mine, also in New Zealand, is forecast to produce 18,000 oz. to 20,000 oz. in 2020. Last year, OceanaGold received the go-ahead to develop the Martha Underground within the Waihi district, below the past-producing Martha pit and accessible through existing underground infrastructure, which would extend the life of this mine by at least ten years. First production is expected in the second quarter of next year, and anticipated to ramp up to the 90,000 oz. to 100,000 oz. per year level. Additional exploration is underway at the WKP past-producing project, located 10 km from the Waihi plant; drill results there have included 25.4 metres of 38.7 grams gold per tonne and 8.7 metres of 24.5 grams gold.

At Didipio, governed by a Financial or Technical Assistance Agreement (FTAA) with the Philippine government, the office of the president is currently reviewing the FTAA renewal application, with a notice of renewal submitted in March 2018, but has not issued a decision timeline. The FTAA became renewable for a 25-year term in June 2019. The mine remains in a state of operational readiness. Last year it produced 83,913 oz. of gold and 10,255 tonnes of copper.

OceanaGold has a $777.9-million market capitalization.

Roxgold

The processing plant at Roxgolds Yaramoko gold mine in Burkina Faso. Credit: Roxgold.

Roxgold (TSX: ROXG) is an Africa-focused gold producer and developer with assets in Burkina Faso and Cote dIvoire.

The companys 1,100 tonne per day Yaramoko operation in Burkina Faso, 200 km southwest of Ouagadougou, features the 55 Zone and Bagassi South underground mines. This year, the two operations are expected to produce a total of 120,000 oz. to 130,000 oz. of gold at AISCs of US$930 to US$990 per oz. with similar anticipated production at lower AISCs, in the range of US$750 to US$850 per oz., expected in the two following years.

Yaramokos total reserves are at 2.5 million tonnes grading 8.24 grams gold per tonne for a total of 658,000 ounces. The majority of these are contained within the 55 Zone, an area with a history of resource replacement, where high-grade, dipping shoots have been traced down to a depth of 1.2 vertical kilometres. In the second half of this year, Roxgold plans to complete a 14,000-metre infill program from underground at this site to drill resource extensions at depth and test parallel structures.

In April 2019, Roxgold acquired the Seguela project in Cote dIvoire, 240 km northwest of Yamoussoukro. Current indicated resources for the project are at 7.1 million tonnes grading 2.3 grams gold for a total of 529,000 oz. with and an additional 5.2 million inferred tonnes at 2.8 grams gold containing 471,000 ounces.

Roxgold envisions development of the Antenna deposit at the site with additional contributions from satellite pits situated along the main structures of the Boulder-Agouti trend. In April of last year, the company started a 24,000 metre drill program testing six potential target areas, five of which returned meaningful gold intercepts. Overall, there are 28 targets identified within the Seguela holdings.

Infill and step-out drilling completed at Antenna since the January 2020 resource update has confirmed a high-grade core with extensions to this mineralization at depth and along strike. Highlight intercepts included 11 metres of 3.3 grams gold as well as 28 metres of 1.7 grams gold; both of these start at surface. The results will be incorporated into an upcoming preliminary economic assessment for Seguela, expected in the second quarter of 2020.

On the exploration front, the companys Boussoura project in Burkina Faso, 180 km south of Yaramoko, lies within the Houde gold belt. Boussoura permits cover an area of 250 sq. km with a further 250 sq. km covered by earn-in agreements. Main targets at the site are Fofora in the north and Galgouli in the south: the former hosts artisanal workings over an area of 9 sq. km with over nine veins identified whereas the latter features 1 km of artisanal workings over a primary target vein. Two rigs are currently working at Boussoura.

Roxgold has a $263.8-million market capitalization.

Wesdome Gold Mines

The Kiena mine site in Val DOr, Quebec. Credit: Wesdome Gold Mines.

Wesdome Gold Mines (TSX: WDO) operates the Eagle River complex nearby Wawa in Ontario and also holds the Kiena project in Quebec.

This year, its guidance is for 90,000 oz. to 100,000 oz. of gold at all-in sustaining costs of US$985 to US$1,049 per ounce.

The majority of this production is expected to come from the Eagle River underground mine with a minor contribution from the Mishi open pit at the Eagle River complex.

The Eagle River underground operation and Mishi pit feed a central 850 tonne per day mill at Eagle River with additional exploration underway to extend existing zones of mineralization and identify new lenses.

In February, the company announced exploration results from the Ontario asset, with drilling extending the Falcon zone as well as the 303 Lens. The latter is a potential source of short to medium-term mill feed. Intercepts of note included 3 metres of 49.4 grams gold per tonne from Falcon as well as 6.4 metres of 49.1 grams gold from the 303 Lens.

The Kiena complex in Val dOr has been on care and maintenance since 2013 and contains a permitted, 2,000 tonne per day mill, a 930 metre shaft, and a ramp system that extends to 1,050 metres depth. Total measured and indicated resources at the property are at 2.8 million tonnes grading 8.67 grams gold for a total of 788,100 oz. with further inferred resources of 2.9 million tonnes at 8.51 grams gold for 798,100 oz.; approximately half of these resources are contained within the higher-grade Kiena Deep A zone.

This year, the companys $19.8-million exploration budget is allocated towards 85,000 metres of drilling at Kiena and a total of 152,500 metres at Eagle River.

A preliminary economic assessment is underway evaluating a restart of Kiena, which is expected in the second quarter. In February, Wesdome also released drill results from this project, which extended the Deep A zone down plunge. Highlights from step out work included 10 metres of 114.8 grams gold and 17.2 metres of 25.3 grams gold.

The company also holds the Moss Lake property, covering 36 km of strike along the Shebandowan greenstone belt, 100 km west of Thunder Bay in Ontario. The property hosts measured and indicated resources of 1.4 million oz., with additional inferred resources of 1.8 million ounces. Current resources grade 1.1 grams gold.

Wesdome has a $852.8-million market capitalization.

Yamana Gold

Pit activity at Agnico Eagle Mines and Yamana Golds Canadian Malartic gold mine in Quebec. Credit: Yamana Gold.

Yamana Gold (TSX: YRI; NYSE: AUY) is a gold and silver producer with operations in Canada and South America. This year it expects to generate 990,000 gold-equivalent oz. on a company-wide basis.

The companys largest gold contributor is the Canadian Malartic open-pit mine in Quebec, which is expected to churn out 330,000 oz. of gold this year for Yamana at all-in sustaining costs of US$820 to US$850 per gold-equivalent ounce. Yamana has a 50% stake in the asset with Agnico Eagle Mines (TSX, NYSE: AEM ) also at a 50% ownership. The two companies operate the mine through a partnership. Exploration is also underway at this asset to evaluate additional deposits and prospective areas.

In Chile, Yamana owns the El Penon gold-silver underground mine, which is expected to contribute 162,000 oz. of gold and 4 million oz. of silver in 2020 at AISCs of US$930 to US$960 per gold-equivalent ounce. Earlier this year, the company was able to increase its gold and silver reserves for the asset, net of mining depletion, and also up its gold measured and indicated resources by 66%.

The companys Jacobina complex of underground mines in Brazil is forecast to generate a further 162,000 oz. of gold this year at AISCs of US$860 to US$890 per oz. A two-phase expansion is underway for this project, with the first phase increasing output to the 170,000 oz. per year range and the second, pending approval, potentially ramping the asset up to the 225,000 oz. per year rate. A pre-feasibility study is underway to assess optimal expansion scenarios.

In Argentina, Yamanas Cerro Moro complex is forecast to produce 117,000 gold oz. this year with a further 7.5 million oz. of silver at AISCs of US$970 to US$1,000 per oz. The Minera Florida underground mine in Chile is anticipated to generate 86,000 oz. of gold in 2020 at AISCs of US$1,130 to US$1,160 per oz.

In addition to its producing mineral assets, Yamana holds the Agua Rica copper-gold-silver-molybdenum deposit in Argentina with a feasibility study expected by the end of this year. The company is evaluating strategic options and partnerships to maximize the value from this asset.

Yamana also holds an 8.75% stake in Equinox Gold (TSX: EQX; NYSE: EQX), a company with six producing gold mines, and in, February, the company sold its royalty portfolio to Nomad Royalty (TSXV: GV) for a total of US$65 million.

In March, the company announced a partial temporary demobilization of its workforce at Cerro Moro in Argentina due to the COVID-19 virus. As of presstime, the company was not expecting this ramp-down to have a meaningful impact on its production guidance for the year.

Yamana Gold has a $3.6-billion market capitalization.

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Global Gold Snapshot: Eight companies to watch - The Northern Miner

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