Jim's Mining Letter - July 7, 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 ounces 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.

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% 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 the first five years, making Kipushi the fourth-largest zinc mine globally.

Arras Minerals (ARK.V ARRKF 9RJ.F) announced that it has commenced an induced polarization survey on its 531 square kilometre 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 kilometres northwest.

Sitka Gold (SIG.V SITKF 1RF.F) announced that it has expanded the planned 2024 exploration program at its contiguous, 431 square kilometre RC Gold project in Yukon to include diamond drilling and additional soil geochemistry surveys, geological mapping, prospecting and data integration and analysis on its newly acquired Clear Creek property claims that complete the consolidation of the Clear Creek intrusive complex. The newly consolidated project includes four high-priority areas that have had previous reverse circulation and/or diamond drilling which require additional drilling. These areas are the Rhosgobel Intrusion where historical drilling intersected up to 1.03 grammes/tonne gold over 67.1 metres, the Contact Zone with drill results up to 20.3 grammes/tonne gold over 10.7 metres, the Bear Paw Breccia which intersected up to 1.87 grammes/tonne gold over 42.6 metres and the Pukelman Intrusion with results of 1.20 grammes/tonne gold over 10.0 metres. The first target area to be tested is the Rhosgobel Intrusion where shallow historical drilling in 1995 by Kennecott outlined a large area of intrusion related gold mineralization. Previous drilling at Rhosgobel was limited to a vertical depth of approximately 60 metres. The company is currently diamond drilling at RC Gold in conjunction with a planned 15,000 metre drilling program for 2024.

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 metres 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 metres 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 metres vertical depth and indicates the massive mineralized zone is likely becoming thicker. The zone remains open at depth. Intercepts in section 9750E are more than 600 metres 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.

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 is 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.

Centaurus Metals (CTM.ASX CTTZF) announced the completion of a positive feasibility study for the development of its 100%-owned Jaguar Nickel Sulphide project in the Carajás mineral province of northern Brazil, which highlights strong economics from an initial concentrate-only project delivering a long-life production profile at first quartile operating costs. The Jaguar project is said to represent a cornerstone asset for Centaurus that will underpin the company’s ambition to build a diversified Brazilian critical minerals business. The outcomes of the Jaguar feasibility study are stated to demonstrate the potential for Jaguar to become a sustainable, long-term and low-cost producer of low-emission nickel for global markets, generating strong financial returns. Jaguar is currently one of the largest undeveloped nickel sulphide projects globally and a strategic potential source of unencumbered nickel concentrate product, particularly for the EV battery supply chain. The feasibility study only considers open pit nickel sulphide ore over an initial 18-year mine life, delivering nickel sulphide feed to a 3.5 million tonnes per annum conventional nickel flotation plant to produce approximately 18,700 tonnes of recovered nickel metal per year at a low life-of-mine C1 operating cost of $2.30/pound and an all-in sustaining cost of $3.57/pound, on a contained nickel basis. Post tax NPV8 is said to be A$997 million, with an internal rate of return of 31% per annum.

Endeavour Mining (EDV.L EDV.TSX EDVMF 6E2.F) announced that the first gold pour from the Lafigué mine in Côte d’Ivoire was achieved on 28 June 2024, marking the successful delivery of the project construction on budget and a quarter ahead of schedule. Since the start of wet commissioning on 30 May 2024, approximately 77,000 tonnes of ore has been processed through the Lafigué processing plant, with all circuits operating in line with expectations. The first gold pour included gold from both the gravity and CIL circuits, and yielded approximately 380 ounces of gold. The Lafigué mine is expected to achieve commercial production and ramp up to its nameplate capacity of 4 million tonnes per annum in Q3 2024. Lafigué is expected to produce between 90,000-110,000 ounces of gold at an all-in sustaining cost of between $900-975/ounce in full year 2024, with production increasing to approximately 200,000 ounces in full year 2025.

Walkabout Resources (WKT.ASX WLKBF N6D.F) announced that a maiden shipment of graphite concentrate from the Lindi Jumbo Graphite Mine is imminent and set for departure to Europe in early July. In addition, pilot orders of between 20-80 tonnes are being received on a regular basis and will be fulfilled from concentrate produced during the commissioning and ramp up phase. Plant throughput is being increased as part of the ramp-up plan to achieve at least one-third of the nameplate production capacity by the end of July. At full production, Lindi Jumbo will be the highest margin producing graphite mine globally. Per the company, it has successfully unlocked a new graphite mining jurisdiction in Tanzania to meet global demand. Set to be the highest margin producing graphite mine globally at full production, at current estimated operating costs it is currently one of the lowest cost producing mines in the world with one of the highest basket prices globally.

Rainbow Rare Earths (RBW.L RBWRF RR1.F) announced that it has entered into a binding agreement with Ecora Resources (ECOR.L ECOR.TSX ECRAF HGR.F) whereby Ecora will purchase a 0.85% gross revenue royalty on future rare earths production from the company's Phalaborwa project in South Africa, plus any other saleable products, for a cash consideration of $8.5 million. Rainbow has also agreed to issue 10,442,427 new ordinary shares in the company at a price of 11.3652p (based on a 20 day volume weighted average price) to Ecora to raise an additional $1.5 million via an equity subscription. The total of $10 million, on terms that are less dilutive than conventional equity funding, will be used to deliver completion of the definitive feasibility study on the Phalaborwa project in H1 2025 and cover all other company financing requirements up to June 2025.

Bradda Head Lithium (BHL.L BHLI.V BHLIF 8CD1.F) announced a new mineral resource estimate at the company's 100% owned Basin project in Arizona. The new MRE consists of 99,000 tonnes of of lithium carbonate equivalent at an average grade of 929 parts per million lithium in the measured classification, 560,000 tonnes of LCE at 860 parts per million lithium in the indicated classification and 2,175,000 tonnes of LCE at 808 parts per million lithium in the inferred classification following the completion of drilling, reception and analysis of geochemical results, and new modeling of the Basin project. As per the gross overriding royalty agreement with the Lithium Royalty Corporation (LIRC.TSX LITRF X1Q.F), the new contained LCE tonnage surpassed the contracted threshold of 2.5 million tonnes and has enabled Bradda Head to trigger the payment of $3 million from LRC to the company. Bradda Head therefore expects to be well funded for the future, including its drilling plans at San Domingo Arizona, the near surface Spodumene bearing pegmatite opportunity.

Lion One Metals (LIO.V LLO.ASX LOMLF LY1.F) reported record preliminary gold production at Tuvatu for the month of June, a significant expansion of the surface gold-in-soil anomaly to the south of Tuvatu and an increase in the planned mill expansion to 600-700 tonnes per day. Gold production at Tuvatu has steadily increased since the completion of mill commissioning in December 2023/January 2024 and a step change in production occurred in June following the commencement of mechanized production. The total gold recovered for the month of June up to and including June 24 is approximately 1,370 ounces of gold, with projected gold recovered of approximately 1,700 ounces for the month. Soil sampling to the south of Tuvatu has revealed a 650 metre extension of anomalous gold at surface. High-grade gold in soil results were recovered along a north-south corridor directly south of and along strike from the known deposit at Tuvatu. The gold anomaly is coincident with wider arsenic, lead, and zinc anomalies, which are known pathfinders for gold, thereby widening the potential footprint of the gold mineralization. The Tuvatu deposit has a north-south strike length of approximately 950 metres and the southern soil extension represents a potential 70% increase in the overall strike length. These soil results are a significant discovery at Tuvatu and represent a prime target for near-mine exploration and resource expansion, highlighting the potential for more discovery both near-mine at Tuvatu and regionally throughout the Navilawa Caldera.

CleanTech Lithium (CTL.L CTLHF T2N.F) announced it has secured commitments from a number of investors to raise gross proceeds of approximately A$4 million (approximately £2.1 million) through the issue of loan notes. In addition, the company announced that it has terminated the £1 million convertible loan notes announced in April. The new loan notes are for an aggregate amount of A$3,995,000, have been denominated in both Australian Dollars and Pounds Sterling and carry an entitlement to warrants.  Each A$0.9126 of AUD loan notes subscribed and/or each £0.48 of GBP loan notes subscribed will carry an entitlement to one warrant. Each warrant grants the holder the right to subscribe for one new ordinary share at a price of either A$0.456 or £0.24, a 71.4% premium to the company's closing share price on 28 June 2024. The funds raised through the issue of the loan notes will provide Clean Tech with immediate liquidity and will enable the company to maintain its current activities and work programmes while it prepares for the planned dual-listing on the Australian Securities Exchange.

Thesis Gold (TAU.V THSGF 0110.F) announced that it has mobilized for the 2024 exploration season at its 100% owned Lawyers-Ranch project in the Toodoggone mining district of northern British Columbia. The company is planning an updated preliminary economic assessment scheduled for release in Q3 2024, consequently this summer’s field program will focus on geological, engineering, and environmental baseline studies, aimed at further de-risking the project, unlocking its broader potential, and preparing Thesis to commence a pre-feasibility study in 2025. Work includes 10,000+ metres of drilling, preliminary mapping and prospecting at new claims, geochemical sampling, geotechnical drilling and metallurgical studies.

Peel Mining (PEX.ASX W5E.F) announced that it has entered into a heads of agreement with Red Hill Minerals (RHI.ASX) for Red Hill to farm into and earn a 75% interest in the Curnamona project through spending A$6.5 million on exploration over a period of up to 5 years. The project comprises the Curnamona tenements in New South Wales and the Anabama tenement in South Australia. Following the completion of the farm-in period the companies will form a joint venture. The Curnamona tenements, host to the Wilyama Supergroup and occurrences of interpreted Broken Hill Type mineralisation, are considered prospective for Tier 1 zinc-lead-silver deposits. The Anabama tenement is located within the Boucaut Volcanics of the Adelaide Fold-thrust Belt and contains the Anabama prospect, which is an outcropping Cu (Au, Co) deposit. Red Hill Minerals may earn a 75% interest in the Curnamona project by spending A$6.5 million on exploration over the farm-in period of up to five years and has committed to spend a minimum A$1.5 million within the first two years, prior to withdrawal, subject to satisfaction of conditions precedent. Upon earning a 75% interest in the project, a 75% RHI:25% PEX JV will be formed. The project tenements cover over 1,460 km2.

These are opinions only of the individual author. The contents of this piece do not contain investment advice and the information provided is for educational purposes only and no discussions constitute an offer to sell or the solicitation of an offer to buy any securities of any company. All content is purely subjective and you should do your own due diligence. No representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in the piece is made. Any assumptions, opinions and estimates expressed in the piece constitute judgments of the author as of the date thereof and are subject to change without notice. Any projections contained in the information are based on a number of assumptions and there can be no guarantee that any projected outcomes will be achieved. No liability is accepted for any direct, consequential or other loss arising from reliance on the contents of this piece. The author is not acting as your financial, legal, accounting, tax or other adviser or in any fiduciary capacity.