??Gold Continues to Chop Sideways
CEO.CA Presents the Chairman's Briefing - January 25th,?2024
“Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgit are mere memories.”— Richard Russell
Metals/Crypto Prices
Archer Exploration ● Beyond Lithium ● Callinex Mines ● CanAlaska Uranium ● Cassiar Gold ● Dolly Varden Silver ● Faraday Copper ● Hot Chili ● Klondike Gold ● Palamina ● Standard Uranium ● StrikePoint Gold ● Sun Summit Minerals ● West Red Lake Gold
In Today's?Briefing?
Gold
As gold continues to chop sideways, in search of a potent catalyst that'll launch it on a trajectory towards all-time highs north of $2.1k, a number of analysts and hedge funds are betting it won't happen anytime soon with the current strength in the Dollar, recent hawkish comments out of the Fed, and shifting interest rate expectations (some analysts?believe the metal has already priced in Fed rate cuts) -?Hedge funds turning bearish on gold and silver as short bets continue to rise.
"The CFTC's disaggregated Commitments of Traders report for the week ending Jan. 16 showed money managers decreased their speculative gross long positions in Comex gold futures by 3,402 contracts to 130,931. At the same time, short positions increased by 1,828 contracts to 47,702 contracts."
In?last week's Briefing, we pointed to the breakdown in the senior gold producers, suggesting how the ugly reversal pattern printed on the GDX may prove a big-ass bear trap. It may indeed be a trap as the miners attempt to claw their way out of that steep rout - a rout initially triggered by multiple misses on the Barrick Gold earnings front.?
The miners were off to a stellar start early in Wednesday's session, on the cusp of closing said trap, then came under intense selling pressure when the metal (suddenly) got smacked amidst price action some characterize as "inexplicable" - Gold sells off; big futures player likely selling.
The senior producers have a lot of ground to reclaim to get back on a firm footing.
Uranium
U3O8 – the Wong and the White?
With spot uranium holding at the triple-digit line, expectations remain high for a continuation of a bull run that has richly rewarded those who positioned themselves early. Though volatility will undoubtedly make its masterpiece before the curtain on this drama closes (Bill Shakespeare reference), the bulls remain firm in their conviction that this act is far from over - Uranium miners posed to extend gains on supply crunch, Sprott says. ?
According to Sprott, U3O8-mining stocks are set to extend their run as supply constraints pressure the energy-dense metal even higher. In a report published last Wednesday, Sprott market strategist Paul Wong and ETF product manager Jacob White stated, “The long-term fundamentals for uranium are bullish, and price momentum is likely to continue into 2024.”
With 22 countries having pledged to triple nuclear capacity by 2050, Wong and White went on to add that “the era of inventory destocking, the primary source of secondary supplies, is over.”
Another bullish fundamental underpinning this reactive metal is the recent passage of the Prohibiting Russian Uranium Imports Act by the US House of Representatives, which could put the kibosh on deals between utilities and Russian firms. Also cited as a bullish underpinning: Kazakhstan's "chronic inability to meet production guidance" and the recent coup in Niger. "As these gain traction, uranium and uranium miners may be the ultimate beneficiaries, especially in light of the fundamental supply-demand deficit in the market," Sprott added. Clearly, there's no shortage of supportive fundamentals.
For now, some of the high fliers among the quality names are taking a breather after establishing a steep tilt on their price charts. Below is a snapshot of bellwhether Cameco Corp.
Nunavut Takes Control
Tomorrow (Jan. 25), Canadian Prime Minister Justin Trudeau and Nunavut Premier P.J. Akeeagok will put signatures to paper on a land transfer agreement—the largest in Canadian history—that will give Nunavut control over its reserves of gold, diamonds, iron, cobalt, and rare earth metals. Nunavut is the last of the three Canadian territories to wrest control of its resources from the federal gov't.
Significantly, the agreement transfers all mining royalty revenue from the Fed to the coffers of this high Arctic territory. It's been a long road to reach this point as talks were initiated in 2014 -?Canada to give mineral-rich Arctic region of Nunavut control over its resources. T
here are currently four operating mines in the territory, including Agnico Eagle's Meadowbank?operation near Baker Lake and its?Meliadine mine in the Kivalliq District. Incidently, Agnico recently?received a negative ruling?from the Nunavut Impact Review Board (NIRB) concerning the company's application to expand Meliadine with its proven and probable reserves pegged at 3.8 million ounces of Au (19.5 million tonnes grading 6.5 g/t gold).
This agreement could goose exploration and development in this vastly underexplored territory as the Nunavut government will undoubtedly want additional tax revenue. However, a lack of infrastructure and some of the harshest weather on the continent will challenge those companies looking to grow their production profiles in the region.
Bluestone Gets Approval For Cerro Blanco
Shares in Bluestone Resources (BSR.V) went on a serious high-volume tear after it dropped the following headline -?Bluestone Announces Approval of Environmental Permit Amendment for Cerro Blanco Project.
This environmental approval comes as new Guatemalan President Bernardo Arévalo, marked as an "anticorruption crusader," was sworn into office last week (Arévalo's opponents tried to use the courts to prevent him from taking office after his landslide victory last summer).
Bluestone envisions transitioning its?Cerro Blanco Project, with its 3.1 million (M&I) ounce count, from an underground to an open pit operation, citing improved economics and a safer production profile. According to a 2022 feasibility study, the deposit, located near the El Salvador border, will produce 2.7 million ozs gold and 10.2 million ozs of silver over its 14-year mine life. The study also shows an after-tax NPV (5%) of $1.1 billion and an IRR of 30%.
Though there appears to be local support for Cerro Blanco's (open pit) development, environmentalists contend the project will pollute the Güija lagoon and Lempa River, the primary source of H2O for San Salvador, the Salvadoran capital.
To mitigate concerns, the company's open-pit configuration for Cerro Blanco will include the use of dry stack tailings and an independently monitored water treatment plant.
Bluestones CEO Peter Hemstead: “The design for Cerro Blanco reflects safe and responsible mining practices and sustainable socio-environmental management that can contribute significant economic growth, infrastructure, training and job opportunities to Guatemala.”
The project, acquired from Goldcorp in 2017, is 26% owned by the Lundin family trust (Goldcorp drilled 43,000 meters and built 3.4 kilometers of underground works at Cerro Blanco back in the day).
Bluestar is currently conducting a strategic review of its assets, a review that may include the sale of individual projects, a merger, or an outright sale of the whole enchilada.
The serious high-volume tear noted above...
Iamgold Pushes Higher on C?té Progress
Earlier this week, Iamgold reported gold production of 465,000 ounces, which fell within the top end of guidance (410,000 to 470,000 ozs). The company also offered a brief update on progress at its?C?té Gold Project?in northeastern Ontario. -?IAMGOLD Reports Fourth Quarter 2023 Production Results and Commissioning Progress at C?té Gold.
Last month, the company reported that C?té project construction was over 92% complete and that eleven of its fourteen CAT793F autonomous haul trucks are busy stockpiling ore. This week, the company confirmed that initial production remains on track for March 2024.
C?té's Proven and Probable reserve base currently stands at 233 Mt grading 0.96 g/t Au for 7.17 million ozs (resources in all categories amount to 19 million ozs). Once it ramps up to full production, the mine—a joint venture between Iamgold (60%) and Sumitomo Metal Mining (40%)—will rank as the third-largest gold mine in Canada.
Average production over its sixteen to eighteen-year mine life is expected at 365,000 ozs a year (495,000 ozs for its first six years). A 2022 economic study shows an after-tax NPV (5%) of $1.1B and an IRR of 13.5%. Payback = five years.
President and CEO Renaud Adams: "At C?té Gold, pre-commissioning and commissioning activities are progressing well. Pre-commissioning of the primary crushing circuit is ongoing with full commissioning of the first mined rock delivered to the crusher via our autonomous haul trucks planned for later this week. Next steps include commissioning of the secondary crushing circuit, followed by the grinding and wet circuits towards our target of initial production towards the end of the quarter. This stage of iterative testing and project advancement is critical in order to position the project for a successful and steady ramp up of gold production through the year. C?té Gold is expected to be the third largest gold mine in Canada with an expected mine life exceeding 18 years, repositioning IAMGOLD with a strong foundation of gold production, lower cost profile and exceptional growth opportunities in Canada."
Steppe Steps Up in Mongolia
Steppe Gold (STGO.TO) recently announced its intention to acquire all of the issued and outstanding common shares of Boroo Gold LLC in an all-paper deal that will add over 4,000,000 AuEq ozs to its existing resource base - Steppe Gold to Acquire Boroo Gold to Create Mongolia's Leading Gold Producer.
Combining Boroo's 60,000 ozs of production with Steppe's modest 30,000 ozs will create the largest Au producing entity in Mongolia at 90,000 ozs per annum. Production is expected to rise to roughly 160,000 oz annually in 2026 as Steppe's ATO Gold Mine?expansion plans kick in (ATO's ounce count currently stands at 2.45 million AuEq ounces).
Bataa Tumur-Ochir, Chairman and CEO of Steppe Gold, stated: "The Boroo Gold acquisition will establish Steppe Gold as Mongolia's largest and leading gold producer. Our production is expected to triple over the next two years to 90,000 ounces and 160,000 ounces by 2026, increasing our financial strength to repay the non-dilutive US$150M project financing for the ATO Gold Mine Phase 2 Expansion and to advance our exploration portfolio. It also provides shareholders with improved optionality at our Tres Cruces gold project in Peru while maintaining our focus on growing our production profile in Mongolia."
Hits of the Week
The Globe and Mail had reported that Juana Barceló, president of Barrick's (GOLD) Pueblo Viejo operations in the Dominican Republic, was in Panama recently and met with First Quantum (OTCPK:FQVLF) officials, citing a former advisor with the Panamanian government as the source -?Barrick denies report it recently met with First Quantum in Panama - Globe & Mail
Endeavour Mining Plc is stripping its former Chief Executive Officer Sébastien de Montessus of US$29.1 million in renumeration after he was fired earlier this month for “serious misconduct.” Endeavour fired de Montessus earlier this month, citing serious misconduct over an alleged irregular payment instruction of US$5.9 million tied to an asset sale. De Montessus has since said he instructed a creditor of Endeavour to make the payment in 2021 to a security company to offset money owed for essential security equipment - Endeavor Mining Says Fired CEO to Lose $29.1 Million in Pay
In one instance, according to the indictment, Lewis told a girlfriend to invest in a biotech company in July 2019, before the results of a clinical trial by the company were made public. He then allegedly logged into her bank account himself and used $700,000 to invest into the company, eventually netting a profit of $849,000 - Billionaire Joe Lewis pleads guilty to insider trading
Chile's state-owned Codelco, the world's largest copper producer, submitted an environmental permit request on Thursday to modify its Chuquicamata Subterranea project at a cost of $720 million -?Chile's Codelco to invest $720 million more in Chuquicamata copper mine
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