Jim's Mining Letter - June 9, 2024

News from and relevant to: Caledonia Mining (CMCL CMCL.L 9CD1.F), Vulcan Energy Resources (VUL.AX VUL.F), Orosur Mining (OMI.V OMI.L UR2.F), Newmont (NEM), Agnico Eagle Mines (AEM AEM.TO AE9.F), Gold Royalty (GROY 6LS0.F), Adriatic Metals (ADT.AX 3FN.F), St George Mining (SGQ.AX S0G.F), Lynas Rare Earths (LYC.AX LYI.F),WA1 Resources (WA1.AX), Hummingbird Resources (HUM.L HUMRF 2HM.F), Pasofino Gold (VEIN.V EFRGF N07A.F), Antipa Minerals (AZY.AX), Kincora Copper (KCC.AX KCC.V), AngloGold Ashanti (AU HT3.F), S2 Resources (S2R.AX), Oriole Resources (ORR.L S1Y.F), Polymetals Resources (POL.AX), Metals Acquisition (MTAL MAC.AX 7OI.F), Thesis Gold (TAU.V THSGF 0110.F), SolGold (SOLG.L SOLG.TO SLGGF S8F.F), Mandalay Resources (MND.TO MNDJF R7X2.F), Arras Minerals (ARK.V ARRKF 9RJ.F), Teck Resources (TECK TECK-A.TO TECK-B.TO TPT.F).

First, latest metals prices:

Precious (per Troy Ounce)

Gold 2,293.38

Palladium 914.00

Platinum 966.50

Silver 29.16

Industrial (per Ton)

Aluminium 2,578.00

Lead 2,178.75

Iron Ore 108.48

Copper 9,840.00

Nickel 17,945.00

Zinc 2,703.90

Tin 32,103.50

On to the news:

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.

Hummingbird Resources (HUM.L HUMRF 2HM.F) noted the recent announcement by Pasofino Gold (VEIN.V EFRGF N07A.F) regarding the completion of its diamond core drilling programme at the Bukon Jedeh gold camp, part of the company's Dugbe Gold project in Liberia. Hummingbird holds a 53% shareholding in Pasofino following the conversion of its controlling interest in Dugbe into a controlling interest in Pasofino, and an additional $2 million investment earlier this year. Several of the holes contain multi metre wide intervals of pyroxene gneiss with sulphide minerals, which is said to be encouraging as gold at the nearby Tuzon and Dugbe F deposits is hosted by a similar lithology. Of particular interest is an apparent trend in the east of the area, now referred as the SPMC-99 Steps trend, a 1.5 km long east-west zone potentially linking two of the most important pits in the area, not drilled before. Sampling is currently 50% complete, with the first batch of samples set to be sent to the laboratory by Pasofino in early June. Results of this first batch are expected during July 2024, and will be reported as they become available. According to the 2022 definitive feasibility study, Dugbe has total resources of 4.01 million ounces of gold and total reserves of 2.76 million ounces of gold. The work at Bukon Jedeh is aimed at increasing those numbers.

Antipa Minerals (AZY.AX) announced that its GEO-01 gold mineralisation strike has doubled following additional results from 2024 Phase 1 drilling at its 100%-owned Minyari Dome Gold-Copper project in the Paterson Province of Western Australia. Assay results returned from 13 further holes have identified new zones of near-surface gold mineralisation. The first six holes returned thick zones of near-surface, potentially open pittable, high-grade gold mineralisation and the current round of results has increased the main zone of GEO-01 mineralisation to 500m along strike (previously 250m) and up to 190m across strike (previously 150m). The Phase 1 programme has been expanded to a total of 81 holes, a direct result of the positive outcomes from the assay results received to date (19 holes). Per the company, GEO-01 mineralisation remains open in most directions, presenting a significant potential maiden resource opportunity.

Kincora Copper (KCC.AX KCC.V) announced that it has been granted the Wongarbon project located on the interpreted northern, under cover extension of the Macquarie Arc, in central New South Wales, Australia, offering new major, completely unexplored porphyry complex and drill targets. The new exploration license is interpreted to host one of the last remaining untested and large intrusive complexes of the Macquarie Arc and presents a globally significant exploration opportunity, evidenced by, among others, AngloGold Ashanti (AU HT3.F) and S2 Resources (S2R.AX) having secured over 10,000 km2 of exploration ground in the last 12 months via four earn-in and joint venture agreements supporting potentially over A$200m in exploration expenditure. Also in the Arc over this period, Cadia and Northparkes, Australia’s largest and second largest porphyry mines, have been the focus of change of control acquisitions.

Oriole Resources (ORR.L S1Y.F) announced an exploration update for its 80%-owned Mbe gold project in the Adamawa region of Cameroon, where BCM International is currently funding up to $4 million in exploration expenditure. Mbe is one of five licences within the company's broader package of contiguous exploration licences, which covers 2,266 km2 of gold prospective ground. Infill soil sampling has significantly improved the definition of previous regional gold-in-soil anomalism, with results from 4,537 samples delivering up to 8,174 parts per billion gold. A trenching programme has commenced and the results, which are anticipated in Q3 2024, will help to define drilling targets for the 2024/25 field season. Results from initial metallurgical analysis of 18 representative pit samples suggests that the near-surface, oxidised material, is non-refractory and should be amenable to conventional leaching extraction methods.

Polymetals Resources (POL.AX) announced that it has received firm commitments for a placement to raise $6.2 million (before issue costs) by issuing 22 million new shares at $0.28. Metals Acquisition (MTAL MAC.AX 7OI.F) has committed to participate in the placement to maintain its current 4.3% shareholding. The company is now well-funded with a pro forma cash position of ~$8.7 million following the equity raising and a recent cash receipt of $2.5 million from MTAL, which has also committed to a further $2.5 million conditional equity payment. Funds will be applied to complete geotechnical drilling, the Endeavor Mine restart optimisation, further exploration and commencement of refurbishment activities. In addition to the placement, $1.4 million of the unsecured loan facility provided by Executive Chairman, David Sproule, will separately be converted into equity at the offer price of $0.28 per new share.

Thesis Gold (TAU.V THSGF 0110.F) announced the successful completion of preliminary metallurgical testing at the company’s 100% owned Lawyers-Ranch project. The testing aims to assess the economics of an expanded project that integrates high-grade feed from Lawyers-Ranch and higher-grade underground material to a processing site. The project is road-accessible and forms a contiguous, 495 km2 land package in the Toodoggone Mining District in northern British Columbia. Laboratory full circuit evaluation demonstrated a recovery range of 93% to 96% for gold and 86% to 96% for silver. This included producing a primary precious metal flotation concentrate with gold grades exceeding 160 g/t, indicating a marketable precious metal concentrate with favorable payables. The metallurgical results will be used as part of an updated preliminary economic assessment of the project, scheduled for Q3 2024.

SolGold (SOLG.L SOLG.TO SLGGF S8F.F) announced the signing of the exploitation contract for the Cascabel project, its flagship copper-gold project in Ecuador. This follows successful contractual negotiations and approval of the term sheet by the Government of Ecuador in July 2023. Per Scott Caldwell, CEO and President, the signing is a landmark achievement for SolGold and its stakeholders. The company embarked on a exploration journey at Cascabel in 2012, leading to the discovery hole at Alpala in early 2014 and the subsequent discovery of the Tandayama-Ameríca deposit in later drill programs. SolGold has since drilled over 300,000 metres of cored exploration, resource definition, and geotechnical drill holes and has conducted numerous resource, mining, metallurgical, environmental and social studies, transforming the project into one of the world's largest undeveloped copper-gold porphyry deposits, with the potential to serve as a blueprint for the exploration and discovery of other resources on SolGold's extensive regional targets throughout Ecuador.

Mandalay Resources (MND.TO MNDJF R7X2.F) announced successful results from its regional target testing drill campaigns approximately 6 km to the southwest of the Björkdal Mine, Sweden. The company drilled 26 holes with 6,295 meters of diamond drilling to test high priority regional targets near the mine. High-grade gold was intercepted in multiple holes at Lapptjärn including one long interval, encouraging results and a high-grade gold assay was returned from Granholm and semi-massive sulphide was identified within Tarsnäs with elevated zinc and copper assays. The results will be followed up with targeted geophysical surveys at Lapptjärn and Tarsnäs, including induced polarization and electromagnetic surveys.

Arras Minerals (ARK.V ARRKF 9RJ.F) announced that it has closed its non-brokered private placement for an aggregate of 20,268,662 units of the company at a price per unit of C$0.26 for aggregate gross proceeds of approximately C$5.3 million. Teck Resources (TECK TECK-A.TO TECK-B.TO TPT.F) acquired 1,141,000 units and, following closing, holds approximately 9.3% of the issued and outstanding common shares of the company on a partially diluted basis. Each unit is comprised of one common share and one-half of one non-transferable common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one additional common share at a price of C$0.40 for a period of three years from the closing of the offering. In the event the volume weighted average trading price of the common shares on the TSX Venture Exchange meets or exceeds C$0.60 for fifteen consecutive trading days at any time after four months and one day following closing of the offering, the company shall have the option at any time thereafter to accelerate the expiry date to a date that is thirty days following the date of issuance of a news release by the company announcing the acceleration. The securities issued pursuant to the offering are subject to a four-month hold period in Canada and are subject to U.S. resale restrictions under U.S. securities laws as applicable. The net proceeds of the offering will be used to advance exploration activities at the company’s projects in northeastern Kazakhstan and for general corporate purposes.

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