Jim's Mining Letter - June 22, 2024

B2Gold (BTO.TO BTG 5BG.F) announced an initial Inferred mineral resource estimate for the Springbok Zone, the southernmost shoot of the recently discovered Antelope deposit, located approximately three kilometers south of the Otjikoto Phase 5 open pit at the Otjikoto Mine in Namibia. The Antelope deposit, comprised of the Springbok Zone, the Oryx Zone, and a possible third structure, Impala, subject to confirmatory drilling, was discovered in 2022 following deep drill testing by B2Gold exploration personnel on three-dimensional models of airborne magnetic data. Over 36,000 meters have been drilled into the Springbok Zone to date, with 33 holes totaling 16,950 meters completed in 2024, to establish the 50 x 50 meter spacing that informs the initial Inferred mineral resource estimate of 1.75 million tonnes grading 6.91 grams per tonne gold for a total of 390,000 ounces of gold. Ongoing exploration drilling on the Oryx Zone, which appears to represent a second shoot northeast of and stacked stratigraphically above the Springbok Zone, has returned high-grade intervals that demonstrate the potential to increase the mineral resource estimate. Subject to receipt of a positive PEA study and permit, mining of the Springbok Zone, coupled with the exploration potential of the greater Antelope deposit, could begin to contribute to gold production at Otjikoto in 2026, where there is further potential to supplement the processing of low-grade stockpiles at the Otjikoto Mine through 2031, with the goal of increasing gold production levels to over 100,000 ounces per year from 2026 through 2031. Recent drilling at the Springbok Zone remains open southward, indicating additional exploration potential beyond the currently defined resource. News earlier in the week was results of a positive preliminary economic assessment on the company’s 100% owned Gramalote gold project located in the Department of Antioquia, Colombia. The project has a significant gold production profile with a low-cost structure and favorable metallurgical characteristics. Life of project gold production is estimated at approximately 2.3 million ounces with an average gold recovery of 95.9% from conventional milling, flotation and cyanide leach of the flotation concentrate. Average annual gold production is estimated at approximately 234,000 ounces per year for the first five years of production, with an average annual gold production of approximately 185,000 ounces per year over the life of project. Projected lowest quartile all-in sustaining costs are $886 per gold ounce over the life of project, with an annual processing rate of 6 million tonnes per annum. Life of project after-tax free cash flow is $1.38 billion and the estimated pre-production capital cost is $807 million, including approximately $93 million for mining equipment and $63 million for contingency. At a discount rate of 5%, net present value after-tax is $778 million, generating an after-tax internal rate of return of 20.6%, with a project payback on pre-production capital of 3.1 years. A robust amount of historical drilling and engineering studies have been completed on Gramalote, which significantly de-risks future project development. B2Gold now is to commence feasibility work with the goal of completing a feasibility study by mid-2025.

Agnico Eagle Mines (AEM AEM.TO AE9.F) announced an update on the Detour Lake mine, Ontario. The company has recently completed an updated mineral reserve and mineral resource estimate and an updated life of mine plan, which updates the open pit mine production profile and incorporates updated costing. The company has also completed a preliminary economic assessment which contemplates the concurrent operation of the open pit and a proposed underground mining project, combined with mill throughput optimization to 29 million tonnes per annum. This demonstrates that the underground project and the mill optimization have the potential to increase the Detour Lake mine's overall production to an average of approximately one million ounces of gold per year over a 14 year period, starting in 2030. The average total cash costs for the underground project, combined with the mill optimization, are expected to be $690 per ounce. Development capital expenditures are forecast to be approximately $731 million. Sustaining capital expenditures are forecast to be approximately $631 million over the life of the underground project, or between $40 million to $45 million per year from 2030 to 2043. After-tax internal rate of return is approximately 18% using a gold price assumption of $1,900 per ounce and a C$/US$ foreign exchange rate of 1.34. At current gold prices of approximately $2,300 per ounce and a C$/US$ foreign exchange rate of 1.34, the underground project and mill throughput optimization are expected to generate an after-tax IRR of approximately 25%. The Detour Lake mine is forecast to generate strong free cash flow through the construction phase of the underground project…more

Blackrock Silver (BRC.V BKRRF AHZ0.F) announced the return of drills to the company’s Tonopah West project located immediately adjacent to Tonopah, Nevada, within the Walker Lane gold and silver mineral trend. Blackrock has commenced the preparation of drill sites on Tonopah West for a 20,000 metre, fully-funded drill program set to commence in July 2024. Tonopah West is said to be one of the highest-grade undeveloped large silver projects globally with 100 million silver equivalent inferred ounces grading 508.5 grams per tonne. The Merten and Bermuda vein systems located at the southern edge of the DPB deposit will be the focal point for the resource conversion program as they represent the shallowest targets and would be the first structures encountered based on the conceptual underground mining plan. Expansion drilling will focus on the 1 kilometre vein corridor between the DPB and NW Step-out deposits, aiming to connect the entire 4 kilometre silver-gold system and unlock substantial tonnage potential. Major long lead project de-risking initiatives have been underway at Tonopah West since the start of the year and are expected to generate news over the coming months across such areas as engineering, hydrologic and environmental studies. Advanced metallurgical test work is well underway with results anticipated in August of this year. The multifaceted work program is claimed to be the most pivotal one yet in terms of demonstrating Tonopah West’s potential. The reverse circulation drill is expected to complete fifty pre-collar holes ranging from 50 metres to 300 metres deep. The core drills will use the pre-collars holes to finish core tails to the target depth. The core tails will range from 80 metres to 450 metres below the pre-collar depth. The first objective is to convert approximately one million tonnes of high-grade silver and gold from the inferred resource category to the measured and indicated resource category. The program will target high grades within the Bermuda and Merten vein systems which are located at the southern end of the DPB area where the veins are at their shallowest depth below the surface. Drilling will be on 25 metre centers within an area that is 270 metres in an EastWest direction by 550 metres in a NorthSouth direction. The resource conversion focus of the Tonopah West drill program is expected to consist of 41 pre-collar holes with corresponding core tails. The combined drillholes will range from 200 to 380 metres in total length. A total of 12,000 metres of combined RC and core drilling is planned for this portion of the program. The second objective will be to connect the DPB zone to the NW target area which is approximately 1,000 metres NW of DPB. Eleven holes are planned with nine new pre-collars being completed and two existing pre-collars being used for the resource expansion portion of the Tonopah West drill program. A total of 8,000 metres of drilling is planned on widely spaced drillholes for this portion of the drill program. The company has engaged Kappes, Cassidy & Associates to complete additional metallurgical test work on the Tonopah West vein material. A total of nine additional composites were delivered to KCA in April 2024. This material along with the twelve original composites will be used to provide additional information to refine the estimated metallurgical recoveries by zone, assist in recommending a processing plant flowsheet, processing parameters and processing capital expenditures, and operating expenditures, with the aim of helping to de-risk Tonopah West. The results from the metallurgical test work are expected in August 2024.

Robex Resources (RBX.V RSRBF RB4A.F) announced a strategic plan, subject to a successful equity financing, designed to allow it to realize its goal of becoming a leading gold producer in West Africa. The plan includes an equity financing of C$55 million, an extension of the company’s $35 million bridge loan with Taurus Mining Finance to April 22, 2025, the board of directors of Robex being refreshed with the appointment of James Askew, as incoming Chairman, and the appointment of Matthew Wilcox, as Managing Director and Chief Executive Officer, the sale of all the company’s Malian assets, and an intention to explore a listing on the Australian Stock Exchange for Robex’s shares. Conditional upon the successful closing of the planned equity financing, the company will become a new Guinean pureplay in order to accelerate the development of the Kiniero Gold Project with expected first gold poured in Q4 2025. The ASX listing process is anticipated to take up to six months. Subsequently, the company announced that is has increased the size of its previously announced best efforts public offering, which has been upsized to 50,691,200 units of the company at a price of C$2.17 per unit for gross proceeds increasing to C$109,999,904. Each unit will be comprised of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one common share of the company at an exercise price of C$2.55 per common share, until two years following the closing date of the offering, provided that in the event the common shares trade at a volume weighted average price of C$3.50 or higher over a period of 10 consecutive trading days, the company can accelerate the exercise of the warrants. The agents have been granted an over-allotment option to purchase from the company up to an additional number of units as is equal to 15% of the number of the units issued pursuant to the offering. Robex intends to use all the net proceeds from the equity financing for the development of the Kiniero Project, partial payment to Taurus of $15 million under the $35 million bridge loan facility, infilling the Mansounia project and other exploration expenditures, funding the Kiniero updated feasibility study to include the Mansounia property and further pit and process optimization, plus general and administrative as well as working capital.

Collective Mining (CNL.TO CNLMF GG1.F) announced that a comprehensive airborne geophysical survey covering the company’s Guayabales Project in Caldas, Colombia will commence in the coming days. The company is fully funded for its 2024 budget with $23.6 million in its treasury as of May 16, 2024. Additionally, a sixth drill rig is being mobilized to the Guayabales Project as part of its fully funded 40,000 metres drill program for 2024. Drill rigs are currently operating at the Apollo, Box, Olympus and Trap targets with the sixth rig to commence drilling for the first time at the grassroot generated X target located in the southern portion of the project area. Drill cores from multiple holes are currently being assayed at ALS Laboratory in Lima, Peru with results expected soon. The airborne geophysical program will be undertaken by Geotech and will cover a total area of 74 km2 with 1,449 flight line kilometres with 100 metre line spacing. This includes helicopter borne Versatile Time-domain Electromagnetic and Z-Axis Tipper Electromagnetic system surveys. The primary objective of the program is to detect conductive sulphide bearing ore bodies, similar to the Apollo system, at depths beginning directly below the surficial cover to up to 2,000 metres depth. The company’s exploration team has recently completed petrophysical measurements on 13 kilometres of drill core from the Apollo system, which highlights a strong and distinctive conductivity signature related to the sulphide minerals and associated alteration. The airborne surveys will be completed in July 2024 with processing of data and interpretation expected before the end of Q3 2024. Drilling on new targets generated from the survey could commence as early as Q4, 2024…more

Japan Gold (JG.V JGLDF) announced the advancement of the Mizobe, Ebino, Togi and Hakuryu projects in Japan currently under the Barrick Alliance Second Evaluation Phase. The four projects have been prioritised and are being advanced to testing through drilling. The two remaining projects that will not proceed under the Barrick Alliance will be included in Japan Gold's portfolio of assets and the company will continue to advance these two projects independently. The Mizobe and Ebino projects are located within the Hokusatsu region of the Southern Kyushu Epithermal Gold Province, Japan's largest gold producing region with a recorded production of over 12 million ounces, including the world-class Hishikari deposit, which has produced approximately 8.5 million ounces with an average grade exceeding 30 g/t. At the Mizobe project, exploration completed to date has defined an extensive and largely concealed, multi-phase hydrothermal system, with current dimensions of approximately 2.5km by 1.5km, with evidence of multiple alteration and mineralization events. The Ebino project is centred on a series of hydrothermal alteration zones located approximately 10km north of the Hishikari deposit. Target generation work is presently underway comprising geological mapping, soil sampling and ground magnetics across multiple alteration zones to rapidly advance drill targeting. The Hakuryu project is located at the southern end of the 18km long Konomai epithermal gold district. Japan's third largest past producing gold mine, the Konomai Mine, produced 2.35 million ounces of gold at an average grade of 6.4 g/t, between 1915 and 1973. Within the Hakuryu project, area mapping has identified an underexplored area of epithermal quartz veins. Planned work programs include a magnetic survey, and four drill holes later in 2024, pending permits. The Togi project is located in the central west part of Honshu Island on the Noto Peninsula, centred on the historic Togi goldfield. A similarly oriented graben-gravity feature and Miocene host rocks are noted 160km along strike to the northeast on Sado Island, which hosted Japan's second largest gold mine, the Sado Mine, which produced 2.5 million ounces of gold until its closure in 1974. CSAMT geophysical survey and detailed mapping has identified a series of epithermal drill targets which will be advanced in Q3, 2024. Japan Gold has an alliance with Barrick Gold (GOLD ABX.TO ABR.DE) to jointly explore, develop and mine certain gold mineral properties and mining projects with the potential to host Tier 1 or Tier 2 gold ore bodies in Japan.

Founders Metals Inc. (FDR.V FDMIF 9DL0.F) announced preliminary metallurgical testing results from the Froyo zone at the Antino Gold project in southeastern Suriname. Four fresh rock samples and one saprolite sample totalling over 400 kilograms with head grades ranging from 1.55 grams per tonne gold up to 20.22 grams per tonne gold were collected from across the Froyo zone as representative samples. Baseline metallurgical testing began with a whole-ore leach process using sodium cyanide and a 48-hour leach period at a 75-micron grind for each sample. Gold recoveries ranged from 90.9% to 96.2% with no indication of preg-robbing, refractory gold or deleterious elements. The company views the initial metallurgical results as extremely positive and in agreement with its expectations based on the mineralogy and geology the team has observed, providing additional confidence on the project as it continues exploration.  Further metallurgical testing at Antino on the historical tailings is ongoing, which has the potential for a low-cost mining scenario in the future. The next stage of testing will involve a stepwise approach to optimizing the grind size, reagent consumption and leaching kinetics to further improve recovery and optimize cost. Antino is 20,000 hectares and has produced over 500,000 ounces of gold from surface and alluvial mining to date. The Company drilled 10,000 metres in 2023 and says it is fully financed for drilling in 2024.

Kavango Resources (KAV.L KVGOF) announced that the company has commenced drilling its first high priority targets at the Karakubis Copper project in Botswana's Kalahari Copper Belt. Kavango has identified 15 high priority targets for its first phase of drilling; drill holes have been designed to check favourable trap sites modelled from geophysical data, confirm stratigraphy, and assess the potential to host large scale copper-silver mineralisation. The company's high priority targets are all located above interpreted, doubly-plunging fold structures over gravity highs where associated faulting is thought to be favourable for trap site development. The first phase of drilling, totalling approximately 5,000 m, will test relatively shallow targets between 150 m and 350 m below surface. The driller is set up on site and prepared to begin drilling this week. Further priority targets are anticipated as data processing and interpretation are completed for survey results from Survey Blocks 1A and 1B. The company has also commenced follow up discovery drilling at its Prospect 2 target in the Hillside Gold Project, Zimbabwe.

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