Jim's Mining Letter - June 3, 2024

Caledonia Mining (CMCL CMCL.L 9CD1.F) announced that the company will shortly be filing a preliminary economic assessment for a single-phase development of the Bilboes sulphide gold project. Publication will follow the company's decision to advance the project to the execution stage in a single-phase development instead of multiple phases. The project is to yield approximately 1.5 million ounces of gold (based on measured and indicated mineral resources) over an initial 10-year life of mine at an all-in sustaining cost of $968 per ounce. Payback period is just 1.9 years at a gold price of $1,884 per ounce. Funding solutions are being progressed in tandem with work on the new feasibility study. The company believes that a significant proportion of the funding requirement for the single-phase development option may be provided by one or more lenders.

Vulcan Energy Resources (VUL.AX VUL.F) announced a total of €40 million (~A$65 million) in investments by CIMIC Group (€25 million for 10 million shares), Hancock Prospecting (€12.5 million for 5 million shares) and Victor Smorgon Group (€2.5 million for 1 million shares) via private placements. The investments support the construction of Phase One of Vulcan’s integrated renewable energy and zero carbon lithium project in Germany. CIMIC is an engineering-led construction, mining, services and public private partnerships leader and HPPL is Australia’s most successful private company. The price of €2.50 per share (A$4.08 per share) is a 9% discount to Vulcan’s 30-day volume weighted average price of shares trading on the ASX prior to the date of announcement.

Orosur Mining (OMI.V OMI.L UR2.F) announced an update on the status of the company's flagship Anzá project in Colombia. The project is the subject of an exploration agreement with venture option with Colombian company Minera Monte Águila, which is itself a 50/50 joint venture between Newmont (NEM) and Agnico Eagle Mines (AEM AEM.TO AE9.F) and is the Colombian vehicle by which these two companies jointly exercise their rights and obligations under the exploration agreement in respect of the project. Minera Monte Águila is the current operator of the project. On March 25, 2024, Orosur entered into a non-binding letter of intent with Minera Monte Águila and affiliates of Newmont and Agnico, that provided for the acquisition of Minera Monte Águila, resulting in Orosur acquiring, directly or indirectly, a 100% legal and beneficial ownership of the project. The proposed consideration for the acquisition is a 1.5% net smelter royalty and deferred cash payments which are all wholly contingent on future production. Discussions are progressing and negotiations and the finalisation of definitive documentation will extend into June. While final negotiations continue, Orosur's technical and commercial teams have been undertaking the necessary planning and consultation to allow it to reassume operatorship of the project as quickly as possible after completion of the acquisition.

Gold Royalty (GROY 6LS0.F) announced updated guidance for 2024 based upon the expected completion of the acquisition of a copper stream in respect of the Vares silver project, located in Bosnia and Herzegovina and operated by a subsidiary of Adriatic Metals (ADT.AX 3FN.F). Upon completion of the acquisition, GROY forecasts between approximately 6,500 and 7,000 gold equivalent ounces in 2024 which equates to between approximately $13 million to $14 million in total revenue, land agreement proceeds and interest at a gold price of $2,000 per ounce, representing a midpoint increase in forecasted 2024 total revenue of approximately 27% from the prior outlook announced by the company on March 28, 2024 and a 160% increase relative to 2023.

St George Mining (SGQ.AX S0G.F) announced the acceleration of exploration at C1, a high-priority target for potential mineralised carbonatite, at the Destiny project located in the Eastern Goldfields region of Western Australia. C1 is a large circular magnetic feature, 2.1km in diameter and has been prioritised for further exploration. A recent gravity survey over C1 has confirmed a high gravity signature in the core of the feature, consistent with a dense body and supporting the potential for the target to represent a carbonatite or mafic intrusion. C1 has geophysical characteristics similar to known mineralised carbonatites in Western Australia, including the Mt Weld project of Lynas Rare Earths (LYC.AX LYI.F) and the Luni carbonatite of WA1 Resources (WA1.AX), which hosts a significant niobium-REE discovery. C1 similarly has prominent magnetic/high gravity features and is situated adjacent to the Ida Fault, a regional scale crustal structure. A closed-spaced gravity survey is to be completed at C1 next month ahead of the finalisation of drill targets. The large scale of C1 is said to support the potential for a significant greenfields discovery and the company looks forward to drilling this target soon.

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