Jim's Mining Letter - July 16, 2024

Alamos Gold (AGI AGI.TSX 0UGS.L 1AL.F) announced that it has entered into a gold sale prepayment agreement for total consideration of $116 million in exchange for the delivery of 49,384 ounces in 2025. The proceeds of the gold prepayment were used to eliminate gold forward purchase contracts, previously entered into by Argonaut Gold (AR.TSX 0UIK.L ARNGF A8U.F) totalling 179,417 ounces in 2024 and 2025 with an average price of $1,838 per ounce. The transaction has eliminated more than half of the Argonaut hedge book and associated mark-to-market liability, while providing significantly increased exposure to rising gold prices. As part of the recently closed acquisition of Argonaut, Alamos inherited Argonaut’s hedge book which included gold forward purchase contracts totaling 329,417 ounces between 2024 and 2027. The average forward prices on the contracts ranged between $1,821 and $1,860 per ounce. The transaction has closed out all of the 2024 and 2025 forward purchase contracts. To fund the closing out of the hedges, Alamos entered into a gold prepayment agreement on attractive terms given the strong forward gold price environment. Under the terms of the gold prepayment, Alamos received total consideration of $116 million in exchange for the delivery of 49,384 ounces in 2025, settled monthly, based on average forward curve prices of $2,524 per ounce. The remaining Argonaut hedge book, inherited by Alamos on the close of the acquisition, consists of forward purchase contracts totaling 150,000 ounces in 2026 and 2027. This is expected to account for less than 12% of total consolidated production over that time frame, however, Alamos will continue to review opportunities to unwind the remaining 2026 and 2027 forward purchase contracts…more

Calibre Mining (CXB.TSX CXBMF WCLA.F) announced a 100,000 metre resource expansion and discovery drill program at its 100% owned, fully funded Valentine Gold Mine located in the central region of Newfoundland & Labrador, Canada. The 100,000 metre diamond drilling program is in addition to the previously announced 50,000 metre ore control reverse circulation drill program at the Leprechaun and Marathon deposits and the 10,000 metre Winkie/RAB drilling program testing bedrock geology. The expanded program will include a geoscience initiative including a high-definition property wide LiDAR geophysical survey, till sampling and enhanced prospecting to assist with resource expansion and discovery drilling. This will be the largest pure exploration drilling campaign in Valentine’s history. The mine is said to currently host a +5 million ounce resource base across 8 kilometres of the 32 kilometre long main Valentine Lake Shear Zone which provides significant additional discovery opportunities from an prospective array of exploration targets with a similar geological setting to the prolific Val-d’Or and Timmins camps in the Abitibi gold belt. Between the two main shear zones, the VLSZ and the parallel Northwest Contact Shear Zone, there is a combined potential of up to 64 kilometres of high-value discovery opportunities.

Arras Minerals (ARK.V ARRKF 9RJ.F) announced that it has commenced a 100 hole, 5,000 metre KGK drill program to explore a 6.5 kilometres x 2.1 kilometres buried chargeability anomaly identified by a Soviet era induced polarization survey on the company’s 100% owned Tay exploration License. The anomaly is comparable to the chargeability high of the Bozshakol open pit copper-gold mine which was completed during the same era. The purpose of the KGK program is to sample the top of bed rock through the overburden to assess the geology and the cause for the chargeability high on the Tay license. Should the KGK drilling confirm the presence of a buried hydrothermal system or porphyry style alteration, the program will be followed up with a diamond drill program expected later in the year. The Tay licence is located 28 kilometres north of the Kaz Minerals Bozshakol mine, a significant copper-gold operation with over one billion tonnes of reserves, producing over 100,000 tonnes of copper annually…more

Foran Mining (FOM.TSX FMCXF 48M.F) announced a series of brokered and non-brokered strategic investments for up to C$315 Million, consisting of a brokered equity private placement for which the company has received indications of interest from several of its existing shareholders, including Fairfax Financial Holdings (FFH.TSX FRFHF 0KV5.L), and an equity private placement by Agnico Eagle Mines (AEM AEX:TSX 0R2J.L AE9.F). The company also announced that a term sheet has been signed with a fund managed by Sprott Resource Lending to upsize its existing $150 million senior secured project credit facility to $250 million, which will be used to advance construction at the McIlvenna Bay project. In conjunction with the comprehensive financing package announced, Foran’s board of directors has made the formal decision to proceed with the construction of the McIlvenna Bay project…more

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