Jim's Mining Letter - October 15, 2024

Founders Metals (FDR.V FDMIF 9DL0.F) announced that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets including Paradigm Capital and Clarus Securities, under which the underwriters have agreed to buy on a bought deal basis by way of private placement, 8,340,000 common shares of the company at a price of C$2.40 per share for gross proceeds of approximately C$20 million. In addition, Founders has entered into an agreement with B2Gold (BTO.TSX BTG 5BG.F) for a C$12.1 million investment at a price of C$2.75 per common share. Together with the bought deal private placement, the company will raise a total of C$32.1 million, fully funding the planned 2025 budget. Upon completion of the strategic investment and the brokered offering, B2Gold will own 5.0% of the company's issued and outstanding common shares on a non-diluted basis. Founders Metals is focused on advancing the Antino gold project located in Suriname. The project comprises 20,000 hectares and has produced over 500,000 ounces of gold from surface and alluvial mining to date…more

NexGold Mining (NEXG.V NXGCF TRC.F) and Signal Gold (SGNL.TSX SGNLF Y8B.F) announced that they have entered into a definitive arrangement agreement to combine the two companies and create a top near-term gold developer advancing NexGold’s Goliath gold complex project in Northern Ontario and Signal’s Goldboro gold project in Nova Scotia. The projects have environmental assessment approvals in place and a plan to attain production of over 200,000 ounces per year, with a combined 4.7 million gold ounces of measured and indicated mineral resources and 1.3 million gold ounces of inferred mineral resources between both companies. There is a concurrent non-brokered private placement financing for up to C$11.5 million with the NexGold board and management to subscribe for up to C$1.0 million in the financing. In addition, current greater than 10% NexGold shareholder, Frank Giustra, says he will be participating in a meaningful way. The concurrent financing, proposed debt restructuring and available cash resources are said to provide significant funding to advance both projects towards a construction decision while deleveraging the combined entity.

Thesis Gold (TAU.V THSGF 0110.F) announced successful completion of the 2024 exploration season at its 100% owned Lawyers-Ranch project in northern British Columbia. This season’s comprehensive fieldwork is said to have provided critical geological, engineering, and environmental data, further supporting ongoing permitting efforts and positioning the company for a smooth transition into a pre-feasibility study. Per the company, the Lawyers-Ranch project continues to emerge as a standout, advanced-stage asset with substantial near-term production potential and exploration upside. A total of 9,510 metres was drilled and the release of initial drill results over the coming months provides a near-term catalyst…more

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

Coeur Mining (CDE CDM1.F) and SilverCrest Metals (SIL.TSX SILV S0C.F) announced that they have entered into a definitive agreement whereby a wholly-owned subsidiary of Coeur will acquire all of the issued and outstanding shares of SilverCrest, whose shareholders will receive 1.6022 Coeur common shares for each SilverCrest common share. Together with Coeur’s growing silver production from its recently expanded Rochester mine in Nevada and its Palmarejo underground mine in northern Mexico, the addition of SilverCrest’s Las Chispas mine is expected to generate peer-leading 2025 silver production of approximately 21 million ounces from 5 North American operations, with approximately 56% of revenue generated from US based mines and approximately 40% of revenue from silver. The combined company is also expected to produce approximately 432,000 ounces of gold next year. There is said to be a significant revaluation opportunity given positioning of the combined company as a leading silver mining company and the expected near-term impacts from the recently completed expansion of the Rochester silver and gold operation in Nevada…more

Hummingbird Resources (HUM.L HUMRF 2HM.F) noted recent developments from Pasofino Gold (VEIN.V EFRGF N07A.F), which has announced a non-brokered private placement of up to 4,806,767 units of the company at C$0.70 ($0.52) per unit for gross proceeds of up to C$3,364,737 ($2,500,000). Each unit will consist of one common share of the company and one half of one common share purchase warrant entitling the holder to purchase one common share at a price of C$0.90 for a period of 18 months following the issue date of the units. The securities issued will be subject to a hold period in Canada expiring four months and one day from the closing date of the offering. Securing this funding will support the further advancement of the Dugbe gold project in Liberia and provide working capital. Hummingbird will retain a majority shareholding in Pasofino and, therefore a controlling stake in what is described as a potential world class development project…more…more

Thor Explorations (THX.V THX.L THXPF T2X.F) announced the first set of results from an initial drilling programme that targets the down-plunge potential beneath the current open pit extents at the Segilola gold mine in Nigeria. Significant results received to date include 3.0 metres grading 11.24 grammes per tonne gold from 294 metres in drillhole SNMDD011 and 1.5 metres grading 3.22 grammes per tonne gold from 269 metres in drillhole SNMDD012. These are the initial results received from the first two holes drilled out of an ongoing 12 hole drilling programme of which five holes have been drilled. The company says additional drilling results will be published in due course. Per Segun Lawson, President & CEO, intersecting high-grade gold mineralisation 50 metres below the current pit design is an encouraging start to the proof-of-concept drilling programme, which has returned positive intersections in the projected locations below the current open pit design and is the first demonstration since the company started mining that there is further potentially achievable underground mining below the designed Segilola pit. The target is to both upgrade parts of the remaining inferred resource and to increase the size overall of the underground resource with the objective of increasing the life of mine at Segilola…more

Osisko Development (ODV ODV.V 3OZ0.F) announced that it has closed the final tranche of the non-brokered private placement of units of the company, pursuant to which Osisko has issued an aggregate of 19,163,410 units at a price of $1.80 per unit for an overall offering size of approximately $34.5 million. Each unit consists of one common share and one common share purchase warrant entitling the holder to purchase one additional common share at a price of $3.00. Osisko intends to use the net proceeds of the offering towards the advancement of its Cariboo gold project and Tintic project, and for general corporate purposes. All securities issued under the offering will be subject to a hold period expiring four months and one day from the date of issue. The company is focused on past-producing mining camps located in mining friendly jurisdictions with district scale potential and its objective is to become an intermediate gold producer by advancing its 100%-owned Cariboo gold project, located in central B.C., Canada, the Tintic project in the historic East Tintic mining district in Utah, United States and the San Antonio gold project in Sonora, Mexico…more

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