?? - Gold Tests $2300 Amid Fed Hawkishness
CEO.CA Presents the Chairman's Briefing - June 27th, 2024
“Central banks and finance ministries do not hold copper, aluminum, or steel supplies, yet they hold gold. The only explanation for central bank gold hoards is the obvious one – gold is money.”
–James Rickards
Metals/Crypto Price
In Partnership With
Kenorland announced its exploration programs at its 100% owned South Uchi, Western Wabigoon, Flora, Algoman, and Stormy Lake projects. This follows last month’s announcement of a 9.9% strategic investment by Centerra Gold, with Sumitomo Metal Mining Canada Ltd. maintaining their 10.1% investment in Kenorland.
Kenorland will be focusing on two significant gold-in-till anomalies at South Uchi in the Red Lake District of Ontario. Additionally, Kenorland recently reported further high-grade gold results from the Regnault gold deposit, where the company holds a 4% NSR Royalty and made the discovery with Sumitomo in 2020.
See full press release here.
In Today's Briefing
Gold
Gold is currently challenging critical support at $2300 on the heels of recent hawkish comments out of the Fed - Hawkish Fed and strong USD capping gold's potential gains, but PCE will provide direction – FX Empire's Ali.
Arslan Ali, currency and commodity analyst at FX Empire: “Fed Governor Michelle Bowman expressed a readiness to raise borrowing costs if inflation progress stalls, while Fed Governor Lisa Cook suggested that rate cuts might be appropriate eventually but emphasized the need for caution if inflation expectations rise. The persistent strength in the US economy supports this outlook, driving US Treasury yields higher and capping gold’s potential gains.”
Silver is also under pressure, printing wild swings in both directions. It's currently attempting to claw back the $29 level.
Markets are now turning their attention to final Q1 GDP on Thursday and the Personal Consumption Expenditures Price Index on Friday “to provide clearer signals on the Fed’s future policy decisions and their impact on the US Dollar and gold prices,” Ali said.
Across-the-Board Junior Sector Weakness
General market (seasonal) malaise aside, there was some nastiness in junior land last Friday, some very extreme nastiness, as dozens of names caught What-For, all at once, by design. It doesn't take much selling pressure to trigger volatility in this arena as there isn't much volume these days. But the selling appears to have been triggered by what some call a Rogue Algo. A few related comments from the Boardroom channel over at ceo.ca...
Another HL Pad 'Failure' Event
Events playing out at a heap leach facility north of Mayo, Yukon, have been the focal point of heightened tensions and investor speculation in recent sessions.
In a recent Briefing, we highlighted some of the jurisdictional risks junior mining investors face as they traverse this Wild West arena. But there are other risks that are far more difficult to pin down—risks that can be considered environmental yet distinct from those propagated by opportunistic lawmakers or overzealous conservationists. We're talking about Mother Nature here, and she can unleash a rapid sequence of destruction, leaving those exposed reeling, with little time to assess and react.
With the catastrophic failure of SSR Mining's heap leach pad in Turkey still fresh on people's minds, another (failure) event involving a similar 'ridge top' mining design unfolded earlier this week at Victoria Gold's (VGCX.TO) Eagle Gold Mine in Canada's Yukon Territory. Thankfully, the landslide resulted in no loss of life.
It all started with WTF-type speculation on the Victoria Gold channel over at ceo.ca. Investors wondered if what they were hearing was real.
Shortly after the flurry of social media speculation, the company halted trading and dropped the following headline - Victoria Gold: Eagle Gold Mine Heap Leach Pad Incident.
WHITEHORSE, Yukon, June 24, 2024 (GLOBE NEWSWIRE) -- Victoria Gold Corp. (TSX-VGCX) (“Victoria” or the “Company”) announces that, this morning, the heap leach pad (“HLP”) at the Eagle Gold Mine in Yukon experienced a failure. Operations are temporarily suspended while the site operations team along with management continue to assess the situation and gather information. At this early stage, it can be confirmed that there has been some damage to infrastructure and a portion of the failure has left containment. There have been no injuries to personnel associated with the incident. The Company will provide further information as it becomes available.
There's not a lot of information in this press release. Details are sketchy as the company and natural resource officers from the Yukon government investigate the cause of the failure. As I'm sure you're aware, failures involving heap leach facilities can wreak all kinds of havoc on the environment if concentrations of toxic substances, specifically the cyanide that dissolves the precious metal, breach the containment areas.
Mayo Yukon Mayor Trevor Ellis: "Now we just hope and pray that everything is OK environmentally, that, you know, a lot of this kind of toxic effluent didn't make it into a water course. And if it did, that they've been able to contain it and mitigate the damage to the environment."
The following slides, reflecting the lay of the site before and after the failure, circulated on social media in the immediate wake of the event.
Before:
After:
From the above photo, the impact on infrastructure—pad liners, conveyors, pumps, road access—appears significant. Catastrophic might be a better characterization.
Recent satellite images show a large slide—roughly 1,430 meters from crown to toe (along the landslide track) and up to 370 meters wide.
Dave Petley, a leader in landslide analysis, told the Northern Miner via email that rapid action is needed to secure the site, particularly ahead of any rainfall: There are a few worries now. The first is the potential for release of sediment or fluids beyond the mine boundary – a pollution incident. The second is the possibility of further mobilization of the landslide mass, in particular as flow failure. The third is the possibility of a further failure of the heap leach – the rear scarp of the main rotational landslide is very steep, so instability is possible.”
Emotions are running high as the extent of the damage, and the fate of the company hang in the balance. The CBC offered a ground-zero perspective via the following headline - Damage at Yukon's Eagle mine site could be 'worst-case scenario,' says local mayor.
The Eagle Mine is located entirely within the Traditional Territory of the First Nation of Na-Cho Ny?k Dun (FNNND). Their concerns re “potentially significant and far-reaching environmental impacts” were telegraphed in a statement on Facebook yesterday:
“This is a deeply serious incident and we are monitoring it closely, with our staff on the ground and with our partners in public government,” FNNND Chief Dawna Hope said. “Our first priority is to minimize the impacts on our lands, waters and wildlife as well as on FNNND and any other affected First Nations. We will then seek to understand how and why this occurred.”
Where Victoria Gold shareholders are concerned, the potentially catastrophic event stripped them of significant market cap. The chart tells the tale...
领英推荐
An overview of the Eagle Mine:
The Eagle Gold Mine lies within Victoria Gold's 100%-owned Dublin Gulch gold property in the central Yukon Territory. According to the company's website, the Eagle and Olive Deposits include Proven and Probable Reserves of 2.3 million ounces of gold from 114 million tonnes of ore with a grade of 0.63 g/t Au. The Mineral Resource for both deposits are estimated at 234 million tonnes averaging 0.59 grams g/t Au for 4.4 million ozs M&I, and a further 36 million tonnes averaging 0.63 grams g/t Au for 700k ozs Inferred.
With its first gold poured in 2019, the company was on track to produce 200k ozs annually. The mine produced 29,580 oz. of gold in the first quarter of this year, 166,730 ounces all told in 2023.
The Victoria Gold story was (is) considered one of the better examples of what a dedicated mining-savvy team can accomplish in this arena, aggressively pushing an exploration stage asset all the way along the development curve to production. For early, loyal shareholders, it ticked all their boxes.
This is a fluid situation. Expect numerous updates from the company going forward. And expect more of this: Kalloghlian Myers LLP: Potential Investor Class Action Against Victoria Gold Corp. (“VGCX”).
Meanwhile, the Yukon explorecos, as a group, are seeing selling pressure due to their address.
Shares of Banyan Gold (BYN.V), which some will argue has never been in a better position to create shareholder value having tabled a 7M oz resource earlier this year and recently stoking its treasury to the tune of $14M, suffered significant weakness on big ass volume.
Snowline Gold (SGD.V), who just delivered a maiden MRE north of seven million ozs for its Valley Gold Deposit located on its wholly owned Rogue Project in Canada's Yukon Territory, also saw its stock sell-off for no reason other than its Yukon postal code.
Osisko Gold Royalties (OR.TO) holds a weighty 5% NSR on the Eagle Gold Mine.? Its shares were also caught in the 'Sell Yukon' downdraft.
A Few Positive Developments on the Junior Front
Paladin Takes Out Fission
It's not all mayhem and misery in Junior Land. Australian miner Paladin Energy has taken a run at Fission Uranium (FCU.TO) in a deal valued at C$1.14 billion - Paladin Energy to acquire Fission Uranium creating a clean energy leader.
The prize in Paladin's eyes: Fission's Patterson Lake South (PLS) projects, specifically the Triple R deposit located in the prolific Athabasca Basin of Saskatchewan.
With this deal, Fission shareholders will receive 0.1076 shares of Paladin for each share held, which implies a value of C$1.30 per share, a 25.8% premium to its closing price of C$1.03 the previous Friday (a 30.0% premium to the 20-day Volume-Weighted Average Price).
To prompt a seamless transition, Paladin has applied for listing the Paladin Shares on the Toronto Stock Exchange concurrent with the transaction's completion so that Fission shareholders will receive TSX-listed Paladin (nice touch).
According to this June 24 press release, shareholders from both companies will extract the following benefits:
Fission president and CEO Ross McElroy: “This arrangement significantly de-risks the mine-building financing at Patterson Lake South projects (PLS), with the cash flow generation at Langer Heinrich and a strong balance sheet creating an opportunity to significantly fund the development of PLS.”
In the wake of this TO, a one-year price chart shows the stock now trading in line with recent highs, just short of its 52-week high.
Anticipating a pick up in U3O8 M&A activity, specifically where NexGen Energy (NXE.TO) is concerned - Hedge Fund Making 20% a Year For Last Decade Targets Uranium M&A.
Ramp Metals Tags High-Grade in Saskatchewan
We'd be remiss not to comment on the recent price action in Ramp Metals (RAMP.V), a recently listed entity that wasted no time mobilizing a drill rig to its Rottenstone SW Project in Saskatchewan.
The company completed a modest 1180-meter four-hole campaign back in mid-April and on June 17, dropped the following headline after a multi-day trading halt - Ramp Metals Announces New High-Grade Gold Discovery of 73.55 g/t Au over 7.5m at its Rottenstone SW Project.
The high-grade values highlighted in the text of the headline represent only partial assays for drill hole Ranger-01 (from 153.5 to 171.5 meters & from 174.5 to 314 meters). The market now eagerly awaits assay values from surface to 153.5 meters (and from the interval between 171.5 to 174.5 meters).
The stock has put on quite a show on the heels of this partial drill hole result. And despite its tight float and 40% insider ownership, the stock is churning out impressive volume.
A breakdown of the hole (Ranger-01) that triggered the trading flurry:
Ramp's CEO, Jordan Black: "We are thrilled to make a significant gold discovery in our first drill program on the property. These intercepts are in line with the highest-grade intercepts drilled in Saskatchewan. These drill results indicate a huge potential at Rottenstone SW and mark an exceptional milestone in Ramp Metals history."
Hits of the Week
Skeena Resources Limited (TSX:SKE)? is pleased to announce that it has secured a financing package totaling US$750 million (equivalent to over C$1 billion) with Orion Resource Partners for the development, construction, and general working capital required to advance the Company's 100%-owned Eskay Creek Gold-Silver Project - Skeena Resources Secures US$750 Million Project Financing Package
“Our own pension plans go and invea worst-case-scenario angle -st in natural resources outside of Canada. It's just shameful. It's a real problem… I'm hoping there will be a change in policy in this country because I would love to invest more in it, I just find it impossible to do so” - Kevin O'Leary blasts Canada's 'weak leadership' amid economic uncertainty
China’s Ganfeng and two of its subsidiaries in Mexico have initiated an arbitration case against the country’s government over a cancelled mining concession for an advance lithium project in the state of Sonora - Ganfeng sues Mexico over lithium permit cancellation
Japanese researchers have found more than 200 million tonnes of manganese nodules rich in battery metals in the Pacific Ocean, within the country’s exclusive economic zone. These metals-rich rocks are located at depths of about 5,500 metres and are thought to be very similar to the polymetallic nodules found in the Clarion-Clipperton zone in the Pacific, as they hold cobalt, nickel and copper in addition to manganese - Japan finds over 200 million tonnes of battery metals in seabed
Want to receive the Chairman's Briefing via email, before markets open?
Disclaimer:
CEO.CA Chairman’s Briefing content and associated news and securities are for educational and illustrative purposes only.?This content should never be considered a recommendation to buy or sell any security or other asset. The source of any third-party content, in which CEO.CA Technologies Ltd. may receive compensation, is clearly and notably identified here as “Sponsored by” or “Sponsored” or “In Partnership With”. The information may not be complete or accurate and is subject to change without notice. CEO.CA Technologies Ltd., its affiliates and clients of CEO.CA Technologies Ltd. or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions. Information regarding the likelihood of various investment outcomes are hypothetical, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not assurances of future results. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Always do your own research before making any investment decisions. Thank you for reading the Chairman’s Briefing.