Jim's Mining Letter - July 4, 2024

Steppe Gold (STGO.TSX STPGF 2J9.F) announced an update on the pending transaction to acquire all of the issued and outstanding common shares of Boroo Gold. Shareholders have approved the acquisition of Boroo Gold and the sale of the Tres Cruces oxide project to Boroo Singapore for approximately C$12 million cash. Upon completion of the transaction, Steppe Gold will be the largest primary gold producer in Mongolia. The all-share deal combines Steppe Gold’s ATO gold mine with the established Boroo gold mine, with total production expected to reach over 150,000 ounces of gold annually by 2026. The transaction is expected to close on or about July 16, 2024 and will provide immediate and strong cash flows to Steppe Gold. In 2023, Boroo Gold had revenue of $132 million on production of 67,315 oz of gold, at an average achieved gold price of $1,957 per ounce. 2024 production is expected to be at a similar level to 2023. The transaction expands Steppe Gold’s exploration opportunities near its existing mines, offering promising opportunities for future discoveries and by divesting the Tres Cruces project, the company can concentrate resources on its Mongolian assets…more

Ivanhoe Mines (IVN.TSX IVPAF IYAA.F) announced the completion of construction and the restart of the historic ultra-high-grade Kipushi zinc-copper-lead-germanium mine in the Democratic Republic of the Congo, 100 years after it first operated, and 31 years since it was placed on care and maintenance. First feed of ore into the new concentrator was achieved on May 31, 2024, with first concentrate subsequently produced on June 14, 2024. Off-take agreements for Kipushi’s zinc concentrate have been signed with CITIC Metal of Hong Kong and Trafigura Asia Trading of Singapore. Further off-take agreements are expected to be signed in the coming months. In addition, financing facilities totaling $170 million provided by CITIC Metal, Trafigura and First Bank DRC of Kinshasa have been arranged, with $50 million drawn to date. Kipushi Corporation is 68% owned by Kipushi Holding, a wholly owned subsidiary of Ivanhoe Mines, with the remaining 32% of owned by Gécamines, which will acquire an increasing percentage of the share capital and voting rights in Kipushi Corporation over time, subject to completing conditions precedent. 2024 production guidance is set at between 100,000 and 140,000 tonnes of zinc in concentrate, with the aim to average 278,000 tonnes per annum over first five years, making Kipushi the fourth-largest zinc mine globally…more

Arras Minerals (ARK.V ARRKF 9RJ.F) announced that it has commenced an induced polarization survey on its 531 km2 Elemes project in northeastern Kazakhstan, to help further define the most prospective drill targets. The commencement of the survey works follows the recent closing of an upsized financing in which the company successfully raised C$5.2 million to support ongoing exploration activities on the company’s copper-gold projects in Kazakhstan. The survey will cover the Berezski copper anomaly, associated with highly altered diorites, that displays similar geological and structural characteristics to the Bozshakol copper-gold mine located approximately 60 km northwest…more

Emerita Resources (EMO.V EMOTF LLJA.F) announced that it has intersected additional significant mineralization in drilling at the El Cura deposit area, part of Emerita’s wholly owned Iberian Belt West project. IBW hosts three previously identified volcanogenic massive sulfide deposits: La Infanta, La Romanera and El Cura. All three deposits are open for expansion along strike and at depth. Drill hole EC014 intersected 11.4 m of massive sulfide and assay results are pending. This is the deepest and thickest intercept to date on the El Cura area at approximately 350 m vertical depth. Drill hole EC014 is located along section 9750E, which shows a series of 5 holes, all of which have intersected mineralization from near-surface to approximately 350 m vertical depth. Drill hole EC014 indicates the massive mineralized zone is likely becoming thicker. The zone remains open at depth. Intercepts in section 9750E are more than 600 m west of the historic El Cura mine workings. Emerita has added a second drill rig and plans an additional 15 drill holes to delineate the new El Cura mineralization…more

West African Resources (WAF.ASX WFRSF W25.F) announced that it has received firm commitments from institutional and sophisticated investors for a placement of approximately 109.5 million new fully paid ordinary shares at an issue price of A$1.37 to raise approximately A$150 million before costs. There was said to be strong support from both domestic and offshore institutions. The placement will support development activities at the Kiaka gold project, which West African expects to be a long-life, low-cost project averaging 234,000 ounces per annum for 20 years, at an all-in sustaining cost of $1,196/ounce. Placement proceeds will be primarily used to purchase owner mining fleet, establish owner mining workshop facilities and purchase exploration drill rigs, utilising mining pre-production capital at Kiaka. With an estimated pre-production capital cost of $447 million (excluding owner-mining), West African expects that the combination of existing cash at bank and unsold bullion (A$484 million as at 20 June 2024), placement proceeds, finalisation of equipment finance facilities and ongoing Sanbrado cashflows will provide sufficient financial flexibility to fund project construction and ramp-up, supporting the pathway to commencement of gold production, expected in Q3 2025…more

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