Jim's Mining Letter - July 21, 2024

SolGold (SOLG.L SOLG.TSX SLGGF S8F.F) announced that it has entered into a syndicated gold stream agreement with Franco-Nevada (FNV 0QYZ.L 3FO.F) and Osisko (OR OM4.F) for the provision of $750 million in project advancement funding and a proportion of development funding in exchange for a percentage of the gold produced from the Cascabel project. The deposit comprises two funding segments, of which Franco-Nevada and Osisko will contribute 70% and 30%, respectively. The initial deposit of $100 million is to be paid over three tranches, a third of which is expected to be received later today, and is allocated towards de-risking, permitting, completion of the development funding package and completion of the feasibility study on the project to take it to a final development investment decision. The construction deposit of $650 million is to be contributed to funding the construction of the project. In exchange for the deposit and ongoing payments to SolGold equivalent to 20% of the spot gold price at the time, the syndicate will receive an amount in reference to 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided, after which the percentage will reduce to 12% for the life of the mine. At a time when global demand for copper is expected to surge, the agreement, which involves gold only, preserves the revenue streams from the significant copper, silver, and a large portion of the gold resources at Cascabel for SolGold and its shareholders, while also fulfilling SolGold's commitment to royalty holders, the Ecuadorian Government, and stakeholders to advance the project…more

Madison Metals (GREN.CSE MMTLF 4EF0.F) announced that the Ministry of Mines and Energy of Namibia has granted a licence for base and rare metals, industrial minerals, and nuclear fuels for Exclusive Prospecting Licence 8905, which lies at Madison West within Mining Licence 86A, the same licence area that hosts the Khan Copper Mine. This is said to be an important development, signifying a major milestone for Madison as the company continues to build its portfolio and capitalize on the growth opportunities in the uranium mining sector. Madison is earning a 90% interest in ML-86A and EPL-8905 through cash payments, while 10% carried is held by the company’s Namibian partners. The new licence expands Madison’s scope of exploration and development to include uranium, copper, gold, silver, and other precious metals. This aligns with Madison’s commitment to advancing uranium production and exploring high-value base and rare metals opportunities. The addition of copper exploration on the Namibian licence, alongside that of uranium, expands Madison’s potential for producing more of the in-demand critical metals.

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Alamos Gold (AGI AGI.TSX 0UGS.L 1AL.F) announced completion of the previously announced acquisition of all the issued and outstanding common shares of Argonaut Gold (AR.TSX 0UIK.L ARNGF A8U.F) not already held by Alamos. As part of the transaction, Alamos acquired Argonaut’s Magino mine, located adjacent to the Alamos’ Island Gold mine in Ontario, Canada. Argonaut’s assets in the United States and Mexico have been spun out as a newly created junior gold producer named Florida Canyon Gold (FCGV.V), which will commence trading on the TSX Venture Exchange at
the opening on Tuesday, July 16, 2024. Under the terms of the transaction, shareholders of Argonaut will be entitled to receive 0.0185 of a Class A common share of Alamos and 0.1 of a common share of Florida Canyon Gold in exchange for each issued and outstanding common share of Argonaut. Subsequently, Alamos Gold 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 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 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, under the terms of which 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 more than 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. Subsequently, Foran announced that it has entered into an amending agreement with Eight Capital, as co-lead agent and joint bookrunner with BMO Capital Markets and National Bank Financial, to increase the size of the offering from $222,000,008 to $260,891,830. The offering will now consist of 57,010,327 common shares of the company at an issue price of $4.05 per share for gross proceeds of $230,891,824 plus 4,501,874 common shares to be issued as flow-through shares with 2,906,977 of these shares to be issued at a price of $6.88 per share and 1,594,897 of these shares to be issued at a price of $6.27 per share for gross proceeds of $30,000,006. Additionally, the company intends to amend its existing subscription agreement with Agnico Eagle Mines, pursuant to which that company will agree to acquire up to 24,472,052 common shares at an issue price of $4.05 per share for gross proceeds of up to $99,111,811. The revised subscription is expected to result in Agnico Eagle maintaining a 9.9% interest in the company on a pro forma basic voting basis as originally contemplated. The net proceeds of the offerings will be used for exploration and development of the company’s mineral projects in Saskatchewan, and for working capital and general corporate purposes…more

Marimaca Copper (MARI.TSX MARIF E2E1.F) announced a C$68 million equity investment in the company by Assore International Holdings. The investment consists of the acquisition of 9,417,210 common shares of Marimaca by AIH from an affiliate of Tembo Capital Mining at a price of C$4.50 per share for gross proceeds to Tembo Capital of C$42,377,445; and the issuance of 5,725,000 units of the company to AIH by way of a non-brokered private placement for gross proceeds of C$25,762,500. Each unit consists of one common share and one half of one common share purchase at a price of C$4.50 per unit. Each warrant will entitle AIH to purchase one additional common share at an exercise price of C$5.85 for a period of 18 months. Following completion of the investment and additional private placement, AIH will own approximately 14.99% of the issued and outstanding common shares on a non-diluted basis and 18.07% on a partially diluted basis. In addition, another investor will subscribe for 1,000,000 units by way of private placement on the same pricing terms as AIH for gross proceeds of C$4,500,000. Proceeds will be used to advance the development of the company’s Marimaca copper project located in the Antofagasta region, Chile and for exploration work programs at key targets within the company’s regional land package.

Brixton Metals (BBB.V BBBXF 8BX1.F)announced that it has entered into a definitive option agreement with Eldorado Gold (EGO ELD.TSX ELO1.F) whereby Eldorado has been granted the option to acquire 100%-ownership of Brixton’s Atlin Goldfields project. The project is a road accessible, 579 square kilometer mineral claim group located near the town of Atlin, British Columbia. During the 5-year option period, Eldorado will fund C$1,000,000 in exploration expenditures per year beginning September 30, 2024, for an aggregate spend of C$5,350,000, including an additional minimum commitment to fund C$350,000 of exploration expenditures on or before September 30, 2024. Eldorado will make cash payments to Brixton of C$250,000 per year for aggregate payments of C$1,100,000 during the option period, including an additional minimum payment of C$100,000 within 10 days of signing the agreement. At the end of the option period, Eldorado will have the right to exercise the option to acquire 100% ownership of the project by making a cash payment to Brixton in the amount of C$7,000,000, in respect of which Brixton, at its election, may receive up to 50% of such payment in the form of common shares of Eldorado. Upon exercise of the option by Eldorado, Brixton will be granted a 1.0% net smelter return royalty, with Eldorado retaining an option to purchase half of Brixton’s royalty for $2,000,000 prior to the commencement of commercial production at the project.

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