Precious Metals Snapshot: Eight companies to watch

Well-known as a store of value, precious metals are a particularly appealing investment during times of uncertainty. This appeal, combined with recent upward price moves, makes companies in this space an appealing investment. Below, we profile eight explorers and developers with exposure to gold and other precious metals.

Kore Mining

Kore Mining (TSXV: KORE; US-OTC: KOREF) holds the Long Valley and Imperial gold projects in California, in Mono and Imperial counties.

A September 2020 preliminary economic assessment for Long Valley defined a seven-year heap leach operation, producing an average of 102,000 gold oz. annually at all-in sustaining costs (AISCs) of US$732 per ounce. With a pre-production capital cost estimate of US$161 million, the after-tax net present value estimate for the project comes in at US$273 million with a 48% internal rate of return, at a 5% discount rate and based on US$1,600 per oz. gold.

In December 2020, Kore staked an additional 57 sq. km at Long Valley, increasing its land position by 750% to 64.6 sq. kilometers. The staking was based on prospecting results that traced additional gold targets around the property boundaries. Drill permitting is now underway.

An April 2020 PEA for the Imperial oxide deposit also outlined a heap leach operation, with an eight-year mine life and average annual production of 146,000 gold ounces. With AISCs pegged at US$852 per oz., and a pre-production capital cost estimate of US$143 million, the net present value estimate for the project, at a 5% discount rate, stands at $343 million with a 44% internal rate of return. The study used a gold price of US$1,450 per ounce.

Sampling and mapping results, announced in December, from the Mesquite-Imperial-Picacho district within the 106.5-sq.-km Imperial project, suggest gold in dry stream beds between Imperial and Equinox Gold’s (TSX: EQX; NYSE: EQX) Mesquite gold mine, 14.5 km to the southeast. Highlight samples returned 0.5 gram to 1.4 grams gold per tonne and further validated the company’s thesis of fault structures, running from Mesquite to Imperial, as potential hosts of gold discoveries. The company is now permitting a drill program with over 140 pads through a Plan of Operations process with the local office of the Bureau of Land Management. Permits are expected by mid-year.

In January, Kore closed an arrangement agreement, announced in December, for the spin-out of Kore’s Canadian assets to Karus Gold. Kore shareholders received one half of a Karus share for each Kore stock held. The new company, with over 1,000 sq. km of ground in B.C.’s Cariboo gold district, will initially operate as a reporting issuer in two provinces with a rights offering planned for 2021, which would be followed by a public stock exchange listing.

Kore Mining has a $118.8 million market capitalization.

Kuya Silver

Kuya Silver’s (CNSX: KUYA) flagship asset is the Bethania silver project in central Peru, 316 km from Lima. The company closed its acquisition of this project in December 2020 from a Peruvian company for a total of US$4.8 million in cash and the issue of 3.9 million common shares.

The Santa Elena mining concession is the company’s focus within the road-accessible, 17.5-sq.-km property and includes the past-producing Bethania silver mine. The mine started up in 1977 and operated until 2016; the mined material was toll milled at plants in the area. Past throughputs reached 100 tonnes per day.

In November, Kuya announced that it retained consultants to complete a detailed design for underground mining at the site and a preliminary economic assessment on an expansion of Bethania to 350 tonnes per day. In order for the consultants to execute the second part of this scope, Kuya will need to complete an initial drill program and a compliant resource estimate. The junior plans to complete a 5,000-metre drill program at the site, to generate the NI 43-101 compliant estimate and test extensions of known veins.

In August, Kuya received approval from the regional government for an environmental impact study for the Bethania processing plant. The approval covers a design for a 350 tonne per day circuit, a tailings storage facility and required infrastructure.

Also in December, the company entered into a letter of intent (LOI) with First Cobalt (TSXV: FCC; US-OTC: FTSSF) to purchase a portion of First Cobalt’s silver exploration assets in the Cobalt mining camp in northeastern Ontario and to form a joint venture on the remainder of the silver assets in the area. The LOI terms include a $4 million payment on closing for a 100% stake in certain properties, payable in cash and shares. Within six months of this acquisition, Kuya can provide a notice of intention to exercise an option to earn up to a 70% stake in First Cobalt’s remaining assets in the Cobalt camp once $1 million is paid in cash or shares.

Once an initial resource with at least 10 million oz. of silver-equivalent is competed for these remaining assets, Kuya will need to make a $2.5 million milestone payment, increasing to $5 million if the resource exceeds 25 million silver-equivalent ounces.

Kuya Silver has a $74.1 million market capitalization.

Maple Gold Mines

Maple Gold Mines’ (TSXV: MGM; US-OTC: MGMLF) flagship asset is the 357-sq.-km Douay gold project in Quebec, 200 km north of Val d’Or, which covers 55 km of the Casa Berardi deformation zone.

In October, Maple announced a 50-50 joint venture partnership with Agnico Eagle Mines (TSX: AEM; NYSE: AEM), combining the Douay project with Agnico Eagles’ adjacent and past-producing 39-sq.-km Joutel property into a consolidated package. At the same time, Agnico also invested $6.2 million into Maple and currently has a 12.1% interest in the junior. The transaction closed in early February.

The deal terms include a four-year, $18-million exploration funding commitment solely from Agnico. The two companies will jointly fund an additional $500,000 of volcanogenic massive sulphide (VMS) exploration in the western portion of Douay. With the JV formation, Maple and Agnico will each receive a 2% net smelter return (NSR) royalty on the property contributed to the joint-venture.

The Eagle-Telbel camp within the Joutel project produced 1.2 million gold oz. between 1974 and 1993 from material with a head grade of 6.5 grams gold per tonne.

Indicated mineral resources at Douay stand at 8.6 million tonnes grading 1.52 grams gold per tonne for a total of 422,000 gold ounces, with 71.2 million inferred tonnes grading 1.03 grams gold containing 2.4 million gold ounces. This inventory includes 5.4 million inferred tonnes at 1.75 grams gold in the underground mining category. Maple  sees potential for resource expansion laterally, regionally and at depth.

In February, Maple reported initial assay results from the first two holes drilled at the 2-km long Northeast IP target, 4 km northeast of the current resource, which indicate “the presence of a new sulfide-rich hydrothermal system.” Intercepts include 1 metre of 2.52 grams gold and 0.8 metres of 1.29 grams gold. Drilling is ongoing, as part of a 10,000-metre winter 2021 program.

The company has also started a geophysical survey covering 15 sq. km over the northern edge of the Douay resource.

In November, Maple announced that an artificial intelligence study and an airborne survey over the eastern portion of Douay defined over 10 new regional targets. The company also announced that the results from a geophysical survey traced a new target area south of the existing resource at Douay – the P8 target – over an area of 1.2 sq. km and starting 0.7 km south of the Porphyry zone.

In December, Maple closed a $10-million bought deal financing.

Maple Gold Mines has a $99.5 million market capitalization.

Osisko Development

Osisko Development (TSXV: ODV) is a spin out of Osisko Gold Royalties (TSX: OR; NYSE: OR) and started trading on the TSX Venture in December. The new development company holds the Cariboo and Bonanza Ledge II gold projects in central B.C., which are part of the 2,071-sq.-km Cariboo property, as well as the San Antonio project in Sonora, Mexico. Within Cariboo, Osisko also holds the permitted QR mill, 120 km by road from Wells, where circuits are going through start-up.

Development-stage Bonanza Ledge II is expected to start producing gold in the second quarter of 2021, with an estimated 62,000 gold oz. anticipated in its first two years of operation.

Osisko Development has purchased a comminution circuit for Cariboo, and a continuous miner has also been delivered to site. The company is working on a feasibility study for the greater project, expected in the second half of 2021. Permitting is underway for a 4,750 tonne per day underground operation with an environmental assessment certificate expected in the third quarter of 2022. The company has also applied for a 10,000-tonne bulk sample permit.

A 2019 preliminary economic assessment for Cariboo defined an 11-year, 4,000 tonne per day mine, producing an average of 185,000 gold oz. annually at all-in sustaining costs of US$796 per ounce.

Measured and indicated resources at Bonanza Ledge II total 1.9 million tonnes grading 4.4 grams gold per tonne with 2.4 million inferred tonnes at 3.1 grams gold per tonne. Cariboo includes 19.5 million measured and indicated tonnes grading 4.7 grams gold and 19.3 million inferred tonnes at 4 grams gold. Existing resources are defined to an average depth of 350 metres and over 3.8 km of strike. The Cariboo holdings cover two mineralized trends over 83 km of strike, which are 0.5 km to 2 km wide and over 1 km deep.

A two-year drill program, with up to 14 rigs, targeting resource extensions and new discoveries, started at Cariboo in January. Drill results for six holes, reported in February, from the Proserpine target at Cariboo include 9 metres of 7.96 grams gold; 2.3 metres of 6.81 grams gold and 1.7 metres of 8.06 grams gold. The drilling defined a 1.5-km trend of anomalous mineralization at the greenfield target, six kilometres south-east of the existing Cariboo deposits.

At San Antonio, Osisko Development is targeting initial production of 50,000 to 70,000 oz. a year from heap leach processing of a mineralized stockpile.

As of mid-January, Osisko Development held approximately $200 million in cash and $125 million in marketable securities. In February, the company announced a $30-million flow-through private placement.

Osisko Development has a $1 billion market capitalization.

SilverCrest Metals

SilverCrest Metals (TSX: SIL; NYSE: SILV) is focused on developing the high-grade Las Chispas project in Sonora state, Mexico.

In February, the company released a feasibility study on a 1,250 tonne per day underground mine at the site and, with the study results, SilverCrest announced that its board formally approved mine construction.

The engineering study outlined an 8.5-year operation, producing an average of 5.2 million silver oz. and 56,000 gold oz. annually (10 million silver-equivalent oz.) at all-in sustaining costs of US$7.07 per silver-equivalent ounce. With initial capital costs pegged at US$137.7 million and US$123.9 million budgeted for sustaining capital, the after-tax net present value estimate is US$486.3 million, based on US$19 per oz. silver and US$1,500 per oz. gold and using a 5% discount rate, with a 52% internal rate of return.

Together with the engineering work in January, the company entered into a US$76.5 million engineering, procurement and construction (EPC) contract for the build of a 1,250 tonne per day process plant at Las Chispas. The start-up is targeted for the second quarter of 2022 ahead of a plant ramp-up scheduled for the second half of 2022. Underground development and mining are expected to ramp up through 2022 and 2023.

Together with the study, SilverCrest announced an initial reserve for the site. Proven and probable reserves total 3.4 million tonnes grading 461 grams silver and 4.81 grams gold (879 grams silver-equivalent) for a total of 94.7 million silver-equivalent ounces.

SilverCrest has identified 45 veins at Las Chispas and drilled 21 to a level supporting resource definition (15 are included in the reserve estimate). There are several exploration targets close to planned underground development – the Babi Vista splay is within 350 metres from current workings and features an inferred resource of 211,400 tonnes at 2,039 grams silver-equivalent.

Surface exploration work and initial drill testing has also traced an additional 30 km of potential prospective vein strike for follow-up exploration.

In February, SilverCrest announced a US$120-million bought deal financing. At the end of January, SilverCrest had US$125 million in cash and US$90 million available under its US$120 million secured financing facility.

The 14-sq.-km site produced approximately 100 million oz. silver and 200,000 oz. gold between 1880 and 1930.

SilverCrest Metals has a $1.6 billion market capitalization.

Stratabound Minerals

Stratabound Minerals (TSXV: SB) holds the Golden Culvert project in southeastern Yukon as well as the McIntyre Brook gold property in New Brunswick. The property is 25 km north of Seabridge Gold’s (TSX: SEA; NYSE: SA) 3 Aces project.

Golden Culvert lies in the Hyland gold belt; soil sampling at this site has defined a 3 km long by 250-metre-wide gold-in-soil anomaly, with gold grades in excess of 30 parts per billion. An all-season road passes through this claim group.

Sample program results released in November defined a 1-km long by 100-metre wide boulder field of surface float-trains (pieces not connected to an outcrop) which, based on 93 samples, average 13.27 grams gold. Sample highlights included 320 grams gold and 155 grams gold. According to the release, these float-trains link up with and connect gold mineralization exposed in prior trenching.

In February, Stratabound announced results for the first six holes from second-phase, 17-hole diamond drill program at the site, completed in the fall of 2020. These intercepts were completed directly underneath the float-trains and underneath portions of the gold-in-soil anomaly. Drill highlights included 7.5 metres of 2.47 grams gold starting at 98 metres; 9.1 metres of 1.1 grams gold from 84.9 metres; and 1.5 metres of 4.83 grams gold starting at 292.5 metres. Prior drilling and trenching defined a 970-metre long by 130-metre wide vein corridor.

In January, the company completed an option agreement to acquire a 100% interest in an additional 15.7-sq.-km of claims adjacent to and along strike with Golden Culvert. Stratabound now controls 99.1 sq. km along 28 km of strike within the Hyland trend.

In New Brunswick, the company holds the 59.5-sq.-km McIntyre Brook gold project, 85 km west of Bathurst. The Main showing at McIntyre Brook has returned 40 grab and trench samples between 0.25 gram gold and 43.1 grams gold along 300 metres of strike.

Also in New Brunswick, Stratabound holds a 100% interest in the Captain copper-cobalt deposit, in the Bathurst camp. Measured and indicated resources total 1 million tonnes grading 1.03% copper, 0.2 gram gold per tonne and 0.051% cobalt, with additional inferred resources of 960,000 tonnes, at 0.64% copper, 0.12 gram gold and 0.039% cobalt.

Stratabound Minerals has a $20.3 million market capitalization.

Renforth Resources

Renforth Resources (CNSX: RFR; US-OTC: RFHRF) is a Quebec-focused exploration company. Its Parbec project, which includes a gold deposit, is adjacent to and on strike with the Canadian Malartic open pit mine, held by Agnico Eagle Mines (TSX: AEM; NYSE: AEM) and Yamana Gold (TSX: YRI; NYSE: AUY; LSE: AUY).

A May 2020 resource estimate defined a pit-constrained resource of 1.8 million indicated tonnes at 1.77 grams gold per tonne for 101,400 gold oz., with an additional 2 million pit-constrained inferred tonnes grading 1.56 grams gold for a further 100,300 ounces. Out-of-pit resources add 40,000 tonnes of indicated resources at 2.38 grams gold and 1.1 million inferred tonnes grading 2.13 grams gold.

Last fall’s 9,640-metre drill program at the site included 27 holes – the majority of these were infill intercepts, with additional down-dip extension holes. Renforth is targeting at least 15,000 metres of drilling at Parbec before updating the resource estimate. There are three main areas of mineralization at the project.

Drill plans for 2021 include additional infill work, as well as the twinning of historical drilling to include past assays in an updated resource (the May estimate only used data from 2007 onwards).

In January, Renforth reported assay results for three Parbec drillholes. Highlights included 5.8 metres of 1.23 grams gold starting at 7.2 metres and 13 metres of 1.72 grams gold from 53 metres. According to a news release, the host lithologies also suggest a prospective gold-bearing package at Parbec within sediments, outside of the Cadillac Break, for additional follow-up.

Additional Parbec assays, reported in December, included 6.6 metres of 1.48 grams gold starting at 245.5 metres and 13.2 metres of 1.09 grams gold from 7.8 metres.

Also in Quebec and adjacent to Canadian Malartic, the company holds the 215-sq.-km Surimeau battery metals prospect, south of the Cadillac Break. The site includes two geophysical features, which cover over 50 km of strike. An initial drill program, completed by Renforth in 2020, hit polymetallic mineralization in both volcanogenic massive sulphides and in sedimentary host rock. Assays are pending.

The company’s 53-sq.-km Malartic West copper-silver project is also adjacent to the western border of Canadian Malartic. In 2019, Renforth discovered copper-silver mineralization at surface in a shear system at this site.

Renforth Resources has a $13.6 million market capitalization.

Wallbridge Mining

Wallbridge Mining’s (TSX: WM) flagship asset is the 85.6-sq.-km Fenelon gold project, 75 km from Matagami in Quebec.

In January, the company’s board approved a $79 million exploration plan for 2021 that includes 170,000 metres of drilling and 4,800 metres of underground development at Fenelon.

There are four gold zones defined at Fenelon thus far: Gabbro, Tabasco-Cayenne, Area 51 and Ripley-Reaper. These cover approximately 1.8 km of strike. Wallbridge acquired Fenelon in 2016 and discovered three of these.

The Gabbro area, known by the prior owners, includes underground infrastructure and previously yielded a bulk sample of 33,500 tonnes grading 18.5 grams gold per tonne. The high-grade shear zones within Gabbro have only been tested down to a depth of 250 metres.

The Tabasco-Cayenne zones have been traced over 800 metres of strike and to a depth of 1,000 metres, with thicknesses averaging 12 to 15 metres. Area 51 is a network of veins within the unit known as the Jeremie diorite that starts at surface in the western part of the property and plunges to the northeast, towards the Tabasco-Cayenne zones at depth; 700 to 800 metres of strike has been tested along Area 51.

Expansion drill results released mid-February suggest additional potential for resource growth in the eastern part of the Fenelon system and at depth. Highlights from the East Extension of Fenelon include 6 metres of 5.17 grams gold; 49.4 metres of 1.73 grams gold and 3 metres of 9.52 grams gold. An additional deep drillhole also hit Area 51-style veins at vertical depths of 1,500 to 1,600 metres, 400 to 600 metres below the previously recodgnized depth extents of Fenelon – assays are pending.

In January, Wallbridge announced results from definition drilling within the Tabasco-Cayenne shear system. Notable intercepts included 54 metres of 3.48 grams gold per tonne  and 18.8 metres of 2.59 grams gold per tonne.

An initial resource for Fenelon is expected in the third quarter of this year. Wallbridge drilled 102,000 metres at the site last year.

The company also holds the Grasset nickel deposit, 90 km east of Detour Lake, with indicated resources of 3.5 million tonnes grading 1.79% nickel-equivalent and inferred resources of at 91,100 tonnes grading 1.19% nickel-equivalent.

Wallbridge Mining has a $528.3 million market capitalization.