?? We Live By The Golden Rule
CEO.CA Presents the Chairman's Briefing - September 7th, 2023
“We live by the Golden Rule. Those who have the gold, make the rules” ~Buzzie Bavasi
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Sienna Secures Option To Acquire 100% of Elko Lithium Project Near Surge Battery Metals
Sienna Resources (TSXV: SIE) has closed an option agreement to acquire a 100% interest in the "Elko Lithium Project" in Elko County, Nevada. This project consists of 79 claims consisting of approximately 1200 contiguous acres directly bordering Surge Battery Metals' "Nevada North Lithium Project" in Elko County, Nevada.
This project now makes Sienna one of the largest landholders in this new lithium district that borders Surge Battery Metals (NILI).
Plans are being formulated immediately for the first phase of work on this project.
The current brouhaha on social media concerns the Non-Farm Jobs numbers reported by the Bureau of Labor Statistics. Every single month in 2023 has been revised lower, and in some cases, dramatically lower (the Jobs Report is a particularly potent data event that has been known to trigger wild swings in the market).
So why the revisions? Inside Today's Disastrous Jobs Report: 670K Full-Time Jobs Lost In 2 Months Vs 1 Million Part-Time Surge; Worst Unadjusted August Payrolls Since Great Recession.
One theory: "So that the White House can take credit for a strong number (one which also sparks algorithmic buying in the market) only to quietly revise it lower one and two months later when nobody is looking to ease the glideslope for the coming recession."
Lithium
In an era where the push to electrify on wheels is finding a whole new gear, the demand for battery metals is set to ramp up dramatically—supply shortages are inevitable. According to?S&P Global Commodity Insights, EV sales are expected to surpass 30 million by 2030, from roughly 13.8 million this year.
Corinne Blanchard, Deutsche Bank’s director of lithium and clean tech equity research: “We do fundamentally believe in a shortage for the lithium industry. We forecast supply growth of course, but demand is set to grow at a much faster pace.”
Blanchard anticipates a “modest deficit” of around 40,000 to 60,000 tonnes of lithium carbonate equivalent by the end of 2025 but sees a broader deficit of 768,000 tonnes by the end of 2030.
And there's an appetite to secure supply as resource-hungry predators are scouring the landscape to bulk up their project pipelines.
Albemarle Bumps Up Bid For Liontown By 20%?
After an earlier unsuccessful attempt to acquire ASX-listed Liontown Resources and its two major lithium assets in Western Australia, US-based Albemarle appears to have sealed the deal with a superior bid representing a 20% increase over its?A$2.50?salvo last March -?Lithium Giant Albemarle Increases Liontown Bid to $4.3 Billion.
The prize in Albemarle's eyes is Liontown's soon-to-be-producing?Kathleen Valley Project, which ranks among the largest and highest-grade hard rock lithium deposits on the planet— 156Mt at 1.4% Li2O and 130ppm Ta2O5 in the Measured and Indicated categories (Liontown also has supply deals with Ford, Tesla, and South Korea's LG Chem).
Liontown held out for a fatter offer from the lithium mining giant, and the wait appears to have paid off.
Albemarle's pursuit to lock down Liotown's asset base sends a clear, positive signal to the market, and to resource-rich juniors pushing their assets along the development curve. M&A activity in this arena may also be on the verge of finding a whole new gear.
Citigroup: "We see the offer as bullish for lithium, signalling that the largest producer is keen to secure more supply at a premium, or has a bullish view on long-term price with low jurisdictional risk."
Wilsons Advisory analysts Sam Catalano and James Karakatsanis: “This bid should provide evidence that the fundamentals underpinning the lithium sector remain sound, and recent share price weakness across the sector presents a number of buying opportunities.”
Jurisdictional Risk
Twitchy, opportunistic governments without a fair set of values, those lacking an established and demonstrable track record of support, can wreak all kinds of havoc on a junior's trek along the exploration, permitting, and development curve. Out of the blue, they might decide to revise their mining codes, first leading an unsuspecting company down the garden path—encouraging the outlay of millions on exploration—and then suddenly raise the (tax) bar during the development phase. Or they might bully their way in for a (larger) piece of the action—or worse... expropriate the project outright.
When sizing up risk versus reward in this Wild West arena, the Fraser Institute's?Annual Survey of Mining Companies?offers a good read on this kind of (jurisdictional) risk.
Country Risk - Burkina Faso Edition
Microcap exploreco, Sarama Resources, recently announced that Burkina Faso's Ministry of Mines has pulled the rug out from under its Tankoro 2 Exploration Permit, part of its Sanutura Project located along the prolific?Houndé Belt?-?Sarama Resources Provides Update on Status of Exploration Permit.
PEA-stage Tankoro hosts a resource of 600k ozs Au (Indicated) and 1.9 million ozs (Inferred). When the company's Bondi deposit is factored in, the project's regional Inferred ounce count gets bumped up to 2.3 million ozs.
A Tankoro PEA was due for completion and set to be released imminently, but the company has suspended its publication in the wake of this action.
In this Sep. 5 press release, the company states: Sarama has been active on the Permit for 12 years and its mineral tenure was most recently confirmed with the granting of the Permit on November 24, 2021 by the then Minister of Energy, Mines and Quarries, Minister Dr Bachir Ouédraogo and the subsequent payment of the prescribed issuance fees within the requisite timeframe, on November 29, 2021 (refer news release December 1, 2021).
Burkina Faso is ranked 31 out of 62 in the Fraser Institute's most recent Investment Attractiveness Index.
Country Risk - Mexico Edition
We've been following recent events at Mexico's biggest gold mine (Penasquito), Newmont's third-largest by sales, since the mining behemoth shuttered operations in early June when 2,000 unionized workers walked off the job over a profit-sharing dispute and alleged contract breaches. We now know what it's costing the company -?Strike at Mexico Gold Mine Costs Newmont $3.7 Million a Day.
According to a statement posted to the mine's Facebook page, Newmont pegs the financial impact of the strike action at roughly $1 million a day in maintenance costs and $2.7 million a day in lost revenue.
Determined to carry the day, the strikers apparently have a “resistance fund” to prolong the strike action and are thought to have backup support from associated members should those funds run out.
In a statement released Tuesday, Newmont said: “The company reiterates its interest in finding a solution that allows for the end of the strike, benefiting all parties involved. The company invites the union to engage in constructive dialogue and provides authorities with all requested information.”
Mexico is ranked 37 out of 62 in the Fraser Institute's most recent Investment Attractiveness Index.
Country Risk - Panama Edition
After hashing out a deal with the Panamanian government that allowed the resumption of operations after an extended shutdown, there's still controversy swirling around First Quantum's?Cobre Panama?copper mine -?Protests cast doubt on approval of First Quantum's contract in Panama.
The arrangement, which will put US$375 million in the country's coffers each year, allows Cobre Panama to operate for twenty years and possibly extend operations for another twenty. But Panamanian social and environmentalist organizations don't like the deal and have called for a national march to demand legislators kill it.
A demonstration, organized by the Alianza Pueblo Unido por la Vida (People United for Life Alliance), followed protests and street clashes as Panama’s national assembly began debating the contract prior to discussion in the full session of Congress.
Environmentalists and neighbouring communities to the copper mine also say the contract involves concessions to a foreign company that will affect not only the area where Cobre Panama is located, but almost half of the national territory.
Cobre Panama operations, which contributes roughly 5% to Panama’s GDP, began producing and shipping copper concentrates in June 2019. Ranked as one of the top copper mines in Latin America, it produced 350,438 tonnes of copper last year. Ore reserves are pegged at 3.14 billion tonnes (Proven and Probable) grading 0.38% copper, 59.38ppm moly, 0.07ppm gold, and 1.27ppm silver).
(Panama isn't ranked in the Fraser Institute's most recent survey)
The Taliban Targets Its Subsurface Mineral Wealth
Afghanistan, believed to hold the world's largest copper deposit, may prove to be one of the richest untapped sources of mineral wealth remaining on the planet, and the Taliban is eager to put this subsurface bounty in play -?The Taliban say they have signed mining contracts worth $6.5 billion in Afghanistan.
The seven contracts are with locally based companies, many of whom have foreign partners in countries including China, Iran, and Turkey. They include the extraction and processing of iron ore, lead, zinc and gold in four provinces: Herat, Ghor, Logar and Takhar.
The Taliban say they have inked seven mining contracts valued at $6.5 billion in investment, the biggest deals since they seized power two years ago. Apparently, they've been courting foreign investment ever since they took over.
Few details were revealed, but Deputy Prime Minister for Economic Affairs Abdul Ghani Baradar said the deals would create thousands of jobs and significantly improve the economic situation of the country.
Javed Noorani, an expert in Afghanistan’s mining sector told The Associated Press: “The Taliban know Afghanistan has minerals and this is cash, but it’s not easy cash. Mineral mining is an incredibly complicated operation. It requires a proper framework, strategies, institutions and infrastructure. You open up the sector slowly and start with low-hanging fruit.”
Still Mired in the Muck, But Signs of Life
In?previous Briefing's, we highlighted a half dozen companies—micro-cap explorecos—that have seen their share price rip substantially higher on the heels of an apparent discovery. I use the word 'apparent' as much of this excitement has been generated vis-à-vis visual observations—visual indications of potentially significant mineralization i.e. copper sulfides—of the core they're pulling. These high-volume bursts of upside trajectory show that there are still pockets of interest in this beleaguered sector. If you believe we're on the cusp of a resource bull market that will prove epic in scale, now might be an opportune time to start nibbling away at some of the higher-quality names grinding away at the low end of their long-term trading ranges (asset-rich entities that a bigger, resource-hungry predator might be interested in acquiring).
Adding to the growing list of juniors dropping titillating assay-related headlines, Mawson (MAW.V) recently generated a flurry of high-volume excitement when its 51% owned subsidiary (ASX-listed Southern Cross Gold (SXG)) dropped the following headline, announcing what the company calls 'a spectacularly wide and high-grade intersection of gold-antimony mineralization' from their?Sunday Creek Project?in Victoria, Australia -?Mawson's Subsidiary SXG Drills 404 m @ 5.1 g/t Gold (Uncut) Traversing 13 High-Grade Veins 7 Intersections >100 g/t Gold, up to 2,670 g/t Gold Assays Pending on 100 m Step-Out Hole Intersecting Multiple Zones of Visible Gold.
According to this Sep. 6 press release: SDDSC077B drilled 404.4 m @ 5.6 g/t AuEq (5.1 g/t Au, 0.3 %Sb) from 374.0 m (uncut), and traverses 13 individual high-grade vein sets. Seven intervals have >100 g/t Au (up to 2,670 g/t Au), 20 intervals at >15 g/t Au and 20 intervals have >5% Sb (up to 55.8% Sb). It is the best hole drilled to date on the project, a spectacularly wide and high-grade intersection of gold-antimony mineralization.
With four rigs currently turning on site, assay-related newsflow will continue over the next few months.
Hits of the Week
Canadian housing is spiraling back to reality, after reaching unsustainable highs. Residential investment fell 2.0% to $133.1 billion in Q2 2023, representing a 13.8% drop from last year -Canadian Housing Investment Is Correcting At The Fastest Rate Since The 80s Bubble Pop
A succession of scandals has shaken metals markets and reawakened concerns about the fragility of warehousing and shipping networks that play a critical role in the industrial economy. The latest incidents ensnared some of the world’s most prestigious trading houses and revealed shortcomings in the oversight of warehouses connected to the London Metal Exchange — the world’s benchmark futures market for base metals -?What’s Behind a String of Scandals in Metals Trading?
Nigeria plans to set up the Nigerian Solid Minerals Corporation, a state-backed company to help attract investments into the extraction of gold, coal, iron-ore, bitumen, lead, limestone and baryte, a minister said on Sunday - Nigeria to set up solid minerals corporation to attract investment
Hemp. Maybe it's not all free-hippy-love-shit after all...
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