Jim's Mining Letter - October 10, 2024

Serabi Gold (SRB.L SBI.TSX SRBIF B9O2.F) announced the results of an updated preliminary economic assessment for its currently producing, 100%-owned Coringa gold project located in Para State, Brazil. The company commenced development of Coringa in June 2021 and first gold was produced in July 2022. Since then, 18,458 ounces have been produced. The current operations have materially improved the understanding of the geology, and in particular, the amenability of the deposit to ore-sorting technology. This has allowed management to adopt a plan utilising the existing process plant capacity at Palito Complex in preference to the construction of a full stand-alone process plant at Coringa, which is significantly cheaper on initial capital, carries less operational risk and does not compromise the mine development plan or production rates of Coringa. Annual production is now estimated at 28,000 ounces in 2025 and then averages 36,000 ounces per year between 2026 and 2031 with an 11-year mine life until 2034. All-In sustaining cost is $1,241/ounce including royalties and refining costs using the base case gold price. This base case uses an average gold price of $2,100/ounce and calculates an NPV10 of $145 million. Per Mike Hodgson, CEO. looking at a scenario using the average 6-month gold price of $2,280/ounce, the NPV10 improves to $170 million, and using the spot gold price of $2,600/ounce the NPV10 is a stand-out $211 million. The total sustaining capital requirement for the development of the project in 2025, including further mine development, is estimated at approximately $14 million. This and all future sustaining and development capital projected in the updated preliminary economic assessment will be funded from the company’s operational cash flow.

AusQuest (AQD.ASX AUQSF) announced that it will undertake a 2 for 5 non renounceable pro-rata rights offer to the company’s eligible shareholders at a price of A$0.008 per new share, plus one free attaching new option exercisable at A$0.012 for every two new shares subscribed for, to raise approximately A$2.6 million before costs. The proceeds will help fund drilling of large-scale copper prospects defined by the company’s exploration activities in Peru. Per AusQuest’s Managing Director, Graeme Drew, this offers eligible shareholders the opportunity to be part of the initial drilling program that will test exciting and newly discovered large scale copper prospects in Peru that are 100% owned by the company, at a time when the demand for copper continues to grow. AusQuest’s largest shareholder, Chrysalis Investments, an entity controlled by non-executive director, Chris Ellis, which has a 22.24% holding in the company, and Managing Director, Graeme Drew, both intend to subscribe for their full entitlements under the rights offer.

Robex Resources (RBX.V RSRBF RB4A.F) announced a project development update for its Kiniero gold project in Guinea. First gold pour is on track for Q4 2025, with key long lead items procured. The project development team has been appointed, led by Chief Development Officer, Dimitrios Felekis, engineering for doubling the plant capacity to 6 million tonnes per annum was awarded to Primero Engineering and is currently 24% complete, the additional ball mill has been awarded and is scheduled for shipment in May 2025, the SAG mill is on track for Q1 2025, the power station has been awarded with delivery from May 2025, the inferred resource drilling program for Mansounia is nearing completion with more than 32,000 metres of RC and more than 2,600 meters of DD completed and the updated feasibility study for Kiniero is on track for Q1 2025, led by AMC. The expanded project has nearly doubled the previous plant size and with the recent capital raise the company has been able to advance the schedule to leverage Kiniero’s potential to be one of the largest and lowest cost gold producing mines in Guinea…more

Brazilian Rare Earths (BRE.ASX X84.F) announced high-grade tantalum assays from the hard rock ultra-high grade REE-Nb-Sc-U mineralisation at the Monte Alto project in Bahia, Brazil. High-grade tantalum assays of up to 880 parts per million were returned, with a weighted average tantalum grade of 305 parts per million. Tantalum is recognised as a critical mineral by both the USA and EU, essential for semiconductors, capacitors, super-alloys and medical devices. Monte Alto has recorded exceptional rare earth grades of up to 39.1% TREO, with key elements up to 68,341 parts per million NdPr, 2,837 parts per million dysprosium, 544 parts per million terbium, 15,031 parts per million niobium, 352 parts per million scandium, 880 parts per million tantalum and 5,191 parts per million uranium. Of the 50 critical minerals identified by the United States as vital to economic and national security, 18 are found in high concentrations in the ultra-high-grade hard rock mineralisation. The maiden JORC-compliant inferred resource estimate for the Monte Alto monazite sand deposit stands at 25.2 million tonnes at 1% total rare earth oxides. Notably, says the company, this includes a very high-grade monazite zone containing 4.1 million tonnes at 3.2% total rare earth oxides.

Novo Resources (NVO.TSX NVO.ASX NSRPF 1NO.F) announced a progress update on exploration activities at the Egina gold project with De Grey Mining (DEG.ASX DGMLF DGD.F). De Grey has continued an aggressive exploration program at the Becher project, with drilling at the Heckmair, Irvine, Lowe and Whillans prospects. Egina is located southwest of and in close proximity to De Grey’s 12.7 million ounce Hemi gold project. Novo’s Egina tenements are considered by De Grey and Novo to be highly prospective for significant intrusion-related gold deposits and share similar attributes to the Hemi deposit. In addition to Novo’s approximately 60,000 metres of AC and RC drilling completed in 2023, De Grey has completed 34,180 metres of AC drilling and 9,129 metres of RC drilling to date across the four main prospects, testing prospective intrusions and regional structures, as well as a drone magnetic survey. Anomalous gold results during the initial expenditure period include 6 metres @ 1.2 grammes per tonne gold in MSRC0068 at Heckmair, 4 metres @ 2.1 grammes per tonne gold in MSAC0989 at Irvine and 8 metres @ 4.7 grammes per tonne gold in MSRC0031 at Lowe. De Grey has now satisfied its initial A$7 million minimum expenditure commitment over a 15-month period on exploration at the Egina gold project and now has the right to earn a 50% joint venture interest in the Egina tenements by spending an additional A$18 million through to June 30, 2027, at which time a joint venture will be formed with customary funding and dilution rights applied to both De Grey and Novo. The combined Egina gold project and De Grey’s tenure forms a strategically significant land position in the Mallina Basin covering approximately 2,500 square kilometres. Forward programs by De Grey in 2024 will include follow-up targeted RC and diamond drilling…more

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