Check back later this morning for today’s BMR Morning Market Musings.
1. Gold has traded between $1,261 and $1,267 so far today…as of 7:00 am Pacific, the yellow metal is down $1 an ounce at $1,263…updated Gold chart in today’s Morning Musings…solid support exists in the $1,260’s, but the Fib. $1,235 level could certainly be tested given a breakdown below a short-term uptrend line…the broader picture for Gold remains positive, however…holdings of SPDR Gold Trust, the world’s largest Gold-backed ETF, fell 0.69% to 854.25 tonnes yesterday after 6 tonnes of inflows the previous 2 sessions…
2. An opinion poll released yesterday has put British Columbia’s socialist NDP in a commanding 10-point lead over Christy Clark’s free enterprise coalition Liberal Party ahead of tonight’s critical televised leaders’ debate…the poll represents the first “breakout” in the campaign…there’s a reason the NDP in B.C. haven’t held power for 16 years – they ran the province’s economy into the ditch in the 1990’s with an anti-resource, tax-regulate-and-spend agenda, and their far left policy platform is even more radical today now that it’s wrapped in climate change fanaticism after 8 years of Obama…the problem is that for current voters under the age of 35, the world didn’t really begin until Facebook in 2004…going back even earlier, the NDP had an equally disastrous but shorter governing stint in B.C. in the early 1970’s and an angry electorate quickly got buyer’s remorse and banished the dreamy eyed socialists to the political wilderness for 16 years (memories fade after 16 years?)…B.C. voters at the moment appear to be taking the fastest growing economy in Canada, supported by low taxes and budget surpluses, for granted…however, it’s important to keep in mind that the NDP held a significant lead in the polls going into election night 2013 and the Liberals still pulled off a majority government…it’s not too late for Clark and her team to sound the alarm and rally the free enterprise troops – the business community needs to stand up – but they must pull together immediately with the election set for Tuesday, May 9…the province’s entire economy, including the all-important resource sector, is at stake as an NDP government has the proven ability to destroy wealth at the speed of a tweet…
3. President Trump today plans to propose steep cuts in corporate taxes and repatriated offshore corporate profits as the administration continues to work toward creating a more business-friendly economic climate in the United States (somehow, Canada at provincial and federal levels will have to learn to compete)…Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn are set to conduct a joint news conference around 10:30 am Pacific from the White House Briefing Room, but Mnuchin commented this morning that the proposal would be “the biggest tax cut and the largest tax reform in the history of our country”…
4. The NASDAQ briefly touched a new all-time high this morning of 6,037 before pulling back slightly…it has gained 115 points or 1.9% the last 2 sessions on the strength of corporate earnings and word of the Trump tax plan…the Dow is up 26 points through the first 30 minutes…the TSX is off 6 points while the Venture is flat at 805 after falling 21 points or 2.5% the last 2 sessions…the Venture broke below a short-term uptrend line but has deep support between 780 and 800…
5. The news is flowing furiously from Barkerville Gold Mines (BGM, TSX-V), which means the company could be looking at raising more money soon…this morning BGM reported a new discovery in its continuing 130,000-m Phase 2 Island Mountain drill program at its flagship Cariboo Gold Project…the company is currently exploring and delineating the Valley Zone with 4 drill rigs…located at a vertical depth of 280 m below surface, drill hole IM-17–081 intersected a new veining occurrence averaging 23.3 g/t Au over 7.8 m…this veining occurs in the largely untested area between the former Aurum and Mosquito Creek mines…further downhole, at a vertical depth of 400 m, a second vein set grading 7.4 g/t Au over 2 m was also intersected…the 2 occurrences are open for expansion given a lack of drilling at this depth…meanwhile, drilling has also extended the Shaft Zone as a series of veins averaging 13.6 g/t Au over 14.5 m was intersected at a vertical depth of 250 m…the interval occurs 45 m along vein strike of previously reported drill hole IM-17–036 which graded 16.9 g/t Au over 5.1 m…BGM is up 4 pennies at 93 cents as of 7:00 am Pacific…
6. Eskay Mining (ESK, TSX-V) was halted 2 hours before market open, pending news…the last significant news from the company came February 2 when it announced that St. Andrew Goldfields Ltd., a wholly-owned subsidiary of Kirkland Lake Gold (KL, TSX), which holds a 20% undivided interest in ESK’s SIB property, waived its right of first refusal and Eskay was therefore proceeding to negotiate the terms of a formal agreement for the option of up to a 60% undivided interest in the SIB to Silver Standard Resources (SSO, TSX)…we’re convinced, and so are some highly respected geologists, that there is another Eskay Creek (perhaps more than one) at SIB given all that’s now understood about this amazing property after more than $30 million in exploration expenditures since the 1980’s…the rocks and stratigraphy at SIB match Eskay Creek and there’s now a solid theory on where to find the “motherlode” – hence the return to the district of Silver Standard…
7. First Mining Finance (FFC, TSX-V) released encouraging assay results this morning from the first 12 holes of a 106-hole, 28,500-m diamond drill infill program at its 100%-owned Goldlund Gold Project located near the town of Sioux Lookout in Northwestern Ontario…highlights included 52 m @ 2.21 g/t Au (GL-17–017) and 26 m grading 2.14 g/t Au (GL-17–044)…good results, but not worthy of a trading halt…the most intriguing part of the news release was the following comment from First Mining Chairman Keith Neumeyer: “We also wanted to take this opportunity to comment on recent trading activity in the junior Gold market. In December of last year, First Mining was added to the VanEck Vectors Junior Gold Miners Exchange Traded Fund (GDXJ), a well-known exchange-traded fund that invests in junior Gold companies. According to their most recent public filings, the GDXJ holds over 15% of the outstanding shares of First Mining. The GDXJ recently announced a change in their investment criteria in order to allow a larger number of companies into their portfolio so that they could distribute their capital over a larger pool of companies. These changes mean that the GDXJ will be required to significantly rebalance its portfolio. We believe that this announcement has contributed to the recent declines in the share price of First Mining, along with a number of other junior Gold companies. We wanted to let investors know that it is business as usual at First Mining. We are making good progress with our exploration programs at our projects and expect to release further drill results from our Goldlund Project over the next few weeks. I remain as convinced as ever that the fundamentals for gold remain strong and that the volatility we are seeing is only a temporary distortion.”
The most popular recent BMR articles…
A 50,000-m Drill Program? The Explorer That’s Punching Way Above Its Weight Class!
jUST NOTICED THAT COBALT STOCKS WAKING UP TODAY??? STM & CUZ. THAT’S A GOOD START FOR CSR AND CPO NEXT?! JON?
Comment by STEVEN1 — April 26, 2017 @ 7:25 am
http://oilprice.com/Energy/Energy-General/Cobalt-Prices-To-Rocket-As-Tesla-And-Apple-Scramble-For-Supplies.html
Comment by STEVEN1 — April 26, 2017 @ 7:26 am
STM & CUZ moving ‘up’ today! CSR/CPO next!
Comment by STEVEN1 — April 26, 2017 @ 7:26 am
MTS. Kyba, as in Kyba Red Lines and Wetherup join advisory bd.
Comment by david — April 26, 2017 @ 7:33 am
My prediction, Steven1, is that there’s going to be some shock and awe when CSR lays out its cards shortly on the Castle and the Beaver and what’s developing on the tech side…CPO is attractive too as they have a great chance for an important Cobalt discovery at the Smith…speculation will build around that drill program…
Comment by Jon - BMR — April 26, 2017 @ 7:44 am
GTT – now has $5MM in kitty , already topped up for phase II drilling, as they get close to starting phase I
Comment by david — April 26, 2017 @ 7:44 am
STM (COBALT) traded over 1M shares already today!
Comment by STEVEN1 — April 26, 2017 @ 8:02 am
ESK. halted. but suggestions that SSO finally got on board. still waiting for news to confirm. more good news for the Triangle
Comment by david — April 26, 2017 @ 8:26 am
Another deal that demonstrates how undervalued so many juniors currently are…
MARL up 65 cents at $1.68 as of 8:54 am Pacific on Sandstorm takeover news…
Mr. Nolan Watson of Sandstorm reports
SANDSTORM AND MARIANA ANNOUNCE RECOMMENDED COMBINATION TO CREATE LEADING MID-TIER STREAMING COMPANY
The board of directors of Sandstorm Gold Ltd. and the independent directors of Mariana Resources Ltd. have reached an agreement on the terms of a recommended share and cash acquisition by which the entire issued ordinary share capital of Mariana (that Sandstorm does not already own) will be acquired by Sandstorm by means of a court-sanctioned scheme of arrangement under Part 8 of the Companies (Guernsey) Law.
Highlights of the combination:
The combination is expected to create a leading mid-tier stream and royalty company, delivering significant benefits to shareholders of Mariana and Sandstorm. The combined group will have:
The group will have a diversified portfolio of 155 streams and royalties including 20 producing, 23 development-stage, 26 advanced-exploration-stage and 86 exploration-stage assets. Of the projects that make up the stream and royalty portfolio, 63 per cent are located in North America, 19 per cent in South America, 12 per cent in Asia, 3 per cent in Africa and 3 per cent in Australia.
The group will have a 30-per-cent incorporated joint venture interest (JV) in the high-grade, gold-copper, development-stage Hot Maden project in northeast Turkey. Sandstorm intends to move from the current position of equity participation in the JV to converting the combined group’s interest into a gold stream, providing the potential to more than double attributable gold equivalent production once in full operation. At present the combined group has not begun soliciting interest in a conversion transaction and intends to conduct such solicitation in the future after Hot Maden has undergone several derisking and value-creating milestones:
Hot Maden is expected to be a straightforward, low-capital-cost project with estimated initial construction capital requirements of $169-million (U.S.) ($51-million(U.S.) attributed to the 30-per-cent JV interest). The high-grade nature of the orebody and its wide mineralized zones provide the potential for a low-cost mining operation, with estimated all-in sustaining costs of less than $400 (U.S.) per ounce gold equivalent, which, if achieved, would lead to significant cash flow generation from the project.
Hot Maden will continue to be managed by Turkish company Lidya Madencilik Sanayi ve Ticaret AS, the 70-per-cent JV partner at Hot Maden. Lidya is an experienced Turkish company and is part of Calik Holding, a Turkish conglomerate with several business lines including energy, telecommunication, finance, construction, textiles and mining. Lidya is currently partnered with Alacer Gold Corp. on the producing Copler mine and the development-stage Gediktepe and Kartaltepe projects in Turkey. The group will have an interest in the remaining exploration properties of Mariana with a focus on gold, silver and associated metals in Ivory Coast, Turkey and
Argentina. Following completion of the combination, Sandstorm intends to spin out the exploration properties into a separate company with the combined group retaining royalty interests over the exploration properties and equity in the SpinCo.
Following the combination, the combined group will maintain a strong balance sheet with significant available liquidity from its $110-million (U.S.) revolving credit facility and strong cash flow from operations to finance Sandstorm’s continuing strategy of future stream and royalty acquisitions. The combined group will also have a portfolio of equity and debt investments in other mining companies which is intended to be monetized to support the combined group’s continuing acquisition strategy in due course.
Cash currently remaining in the Mariana Group of approximately $5-million (U.S.) as at April 25, 2017, being the last business day before the date of this announcement, which is expected to be sufficient to finance Mariana’s continuing pro rata share of development programmes and cash calls for the Hot Maden JV until January, 2018, as well as furthering exploration as prioritized in Mariana’s area of focus.
Superior market liquidity for Mariana shareholders: Over the last 15 months, the daily dollar trading volume of Sandstorm has averaged approximately $10-million (U.S.) between the NYSE MKT and TSX.
Experienced management team which has completed more than $2-billion (U.S.) in stream and royalty transactions. On completion of the combination, Nolan Watson will be president and chief executive officer of the combined group and Glen Parsons will continue to manage the exploration properties furthering the advancement up the development curve.
Commenting on today’s announcement, Nolan Watson, president and chief executive officer of Sandstorm, said: “We believe that, by combining Mariana and Sandstorm and converting the Hot Maden JV interest into a gold stream, we can unlock the inherent value of Hot Maden and deliver the optimal outcome for shareholders without incurring further equity dilution to finance the interest in Hot Maden. We believe that Hot Maden is a unique asset with a robust cash flow profile and will be an anchor gold stream asset that has the potential to more than double Sandstorm’s attributable gold equivalent production once in full operation. We are confident in Lidya as the operating partner at Hot Maden and we look forward to watching the project advance towards production and the mineralization expand through continued exploration.
“The combination is expected to transform the combined group into a leading mid-tier streaming and royalty company and our focus will be growth by acquisition with the primary objective being to add streams and royalties on quality projects with exploration upside, with the balance of Mariana’s exploration portfolio contributing to this. We believe that we are well positioned to continue to execute on our growth plans with significant available liquidity from our $110-million (U.S.) revolving credit facility and a portfolio of equity and debt investments in other mining companies that we plan to monetize.”
Commenting on today’s announcement, John Horsburgh, non-executive chairman of Mariana, said: “The independent directors recommend that Mariana shareholders approve this combination. The combination with a company such as Sandstorm not only derisks Mariana’s exposure as a single development/production asset company but provides a stronger diverse platform and ability to finance the development of the 30-per-cent-owned high-grade gold-copper discovery at Hot Maden in Turkey. The terms of the combination represent a significant and attractive premium to the market price of Mariana shares. The consideration includes a cash consideration amount and a new Sandstorm share consideration amount component that provides an opportunity for Mariana shareholders to participate in the upside of Hot Maden, as it advances to production, as well as exposure to the existing Mariana exploration properties and the combined group’s streaming and royalty portfolio. The independent directors have also taken into account the high liquidity of Sandstorm shares in arriving at this recommendation.”
Terms of the combination
Under the terms of the combination, Mariana shareholders will receive 28.75 pence in cash and 0.2573 of a Sandstorm share for each one Mariana share held. The combination values Mariana at approximately 110 pence per Mariana share based on the closing price of $4.04 (U.S.) per Sandstorm share on the NYSE MKT and a currency exchange rate of 0.7788 British pound per U.S. dollar, on April 25, 2017.
The terms of the combination represent a premium of approximately 84 per cent to the closing price of 59.50 pence per Mariana share on April 25, 2017, and a premium of approximately 88 per cent to the 20-day VWAP (volume-weighted average price) per Mariana share.
If successful, the combination will result in Mariana shareholders, together, owning approximately 19.0 per cent of the ordinary share capital of the combined group.
Sandstorm holds 8,980,243 Mariana shares, representing approximately 7.0 per cent of the issued ordinary share capital of Mariana, and Mariana warrants over a further 4,490,122 Mariana shares.
Comment by BMR — April 26, 2017 @ 8:54 am
Liking the news from MTS this morning
Starting to get exciting with summer getting closer Heart of gold camp going to really heat up with all of these companies being active… Jon when is the report coming out? Soon I hope?
Comment by Greg — April 26, 2017 @ 9:23 am
Looks like CPO now bid 10! The warrants expire on May 1st so they must be getting close to done and giving the company more money for Cobalt!
Comment by STEVEN1 — April 26, 2017 @ 10:11 am
News just out on ESK, completion of deal with SSO as expected. A very telling sentence: “At Silver Standard, we remain disciplined with our greenfields exploration activities and this agreement demonstrates we are ready to act when an extraordinary opportunity arises.”
Mr. Mac Balkam of Eskay reports
ESKAY SIGNS AGREEMENT WITH SILVER STANDARD TO OPTION UP TO A 60% INTEREST IN PART OF SIB PROPERTY
Eskay Mining Corp., further to its press release dated Feb. 13, 2017, has signed an option agreement with Silver Standard Resources Inc. pursuant to which Silver Standard may acquire up to a 60-per-cent undivided interest in part of Eskay’s SIB property, located in northwestern British Columbia, Canada.
Highlights:
Underexplored, high grade gold-silver base metal target in a prolific district.
Numerous gold-silver occurrences over 4 kilometers, within the same volcanic rocks that host the precious metal enriched volcanogenic massive sulphide (“PME-VMS”) deposits mined at the Eskay Creek mine.
Historic drill results at the Lulu zone on the SIB project include 14.3 meters at a grade of 14.4 g/t gold and 1060 g/t silver, and 24.8 meters at a grade of 10.8 g/t gold and 766 g/t silver. 1, 2
Potential at depth for PME-VMS deposits below a regional, gently easterly-dipping fault confirmed by previous drilling, which intersected prospective volcanic rocks with encouraging gold-silver grades.
Historic drill results from a footwall setting include 25.4 meters at a grade of 2.12 g/t gold, 4.0 g/t silver, 0.17% zinc and 0.13% lead at 488 meters depth, 30 meters below the fault. 3
Silver Standard has an in-house technical expertise to optimize Mineral Resources discovery potential.
Carl Edmunds, Chief Geologist at Silver Standard said, “The SIB project is a very exciting exploration target in Northern Canada due to its higher grade drill results, the fact that these types of PME-VMS deposits often occur in clusters and this property is 4 kilometers along strike from the prolific Eskay Creek mine, which produced over 3 million ounces of gold and nearly 160 million ounces of silver between 1994 and 2008. 4 Previous work from the 1990’s discovered PME-VMS at the Lulu zone, on SIB, near surface, and later attempts for further exploration were hindered by the presence of a fault potentially displacing the extension to mineralization. Subsequent work by Eskay Mining discovered the extension of the Lulu and Eskay Creek host felsic volcanic rocks below this fault, opening a large area for exploration by drilling. At Silver Standard, we remain disciplined with our greenfields exploration activities and this agreement demonstrates we are ready to act when an extraordinary opportunity arises.”
Summary Terms of the Agreement
The SIB project comprises a land package of approximately 4,400 hectares land package containing 30 mining claims. The project forms a small part of Eskay’s property, which is jointly controlled by Eskay Mining and St Andrew Goldfields Ltd. (“St Andrew”), a wholly-owned subsidiary of Kirkland Lake Gold Ltd., who hold an 80% and 20% undivided interest, respectively. Under the terms of the Agreement, Silver Standard will explore the SIB project during a three-year option period. To earn a 51% undivided interest in the SIB project from Eskay Mining, Silver Standard is required to complete a $300,000 private placement (the “Private Placement”) in the Company, and spend an aggregate of $11.7 million in exploration expenditures over the three years, including $3.7 million in the first year and $4 million in each of the following two years of the option period, subject to certain gold price thresholds in each option year. Once a 51% undivided interest is earned, Silver Standard can either proceed to form a joint venture with Eskay Mining and St Andrew to advance the project, or exercise a second option to earn a further 9% undivided interest for an aggregate of 60% undivided interest by either delivering a preliminary economic assessment or completing 23,000 meters of diamond drilling (including any drilling completed in order to exercise the first option) on the SIB project. The details of the option were announced by the Company in its news release dated February 13, 2017. After completing the private placement and spending a minimum of $3.7 million, Silver Standard can terminate the Agreement at any time.
The Private Placement has been completed with the issuance of 1,290,322 common shares of the Company at a price of $0.2325 per share. The securities issued are subject to a hold period expiring on August 26, 2017.
About the SIB Project
The SIB project is located 4 kilometers south-southwest from Barrick Gold Corporation’s (“Barrick”) past-producing Eskay Creek mine, which was one of Canada’s richest precious metals mines, with total production of 3.3 million ounces of gold and 159 million ounces of silver from 2.18 million tonnes of ore between 1994 and 2008, as previously reported by Barrick. 4 The mineralization and resources previously reported for the Eskay Creek Mine are not necessarily indicative of the mineralization, if any, hosted on the Company’s property. The gold-silver deposits at Eskay Creek occur either in rhyolite or within overlying sedimentary mudstone rocks. Hydrothermal fluids related to the rhyolite are integral in the formation of the deposits. The only other occurrence of VMS in the district is at the Lulu zone on the SIB project, and that mineralization has characteristics similar to Eskay Creek. At the Lulu zone, which is part of the SIB project, mudstone hosts a small PME-VMS deposit occurring within a rhyolite flow that is displaced by the Coulter Creek fault 100 meters down dip. As reported by the Company, a number of drillholes completed in 2002, 2008 and 2010, over an area of 350 meters by 200 meters, explored below this structure for the extension of the package and confirmed that felsic volcanic rocks, similar to those that host the Lulu and Eskay Creek deposits, are present between 400 meters and 500 meters below surface. Encouragingly, the volcanic rocks are mineralized with polymetallic stockwork veining returning in one drillhole 25.2 meters at a grade of 2.13 g/t gold, 4.0 g/t silver, 0.174% zinc and 0.124% lead. 3
The SIB project was extensively explored to shallow depths during the 1990’s. While the fault offset nature of the Lulu mineralization was recognized at that time, it was the Company’s drilling programs in 2002, 2008 and 2010 that defined the potential for a deposit similar to Eskay Creek, located somewhere below the fault. 3 Silver Standard plans to systematically explore the prospective volcanic package beneath the fault by drilling widely-spaced, deeper holes from surface. This work will be supported by down-hole geophysics to detect proximal PME-VMS and by litho-geochemistry to map the distinctive alteration patterns common to volcanogenic massive sulphide deposits.
Next Steps
Eskay Mining has completed the permitting process allowing helicopter-supported diamond drilling. Silver Standard has budgeted $3.7 million in 2017 for a drill program to complete 6,000 meters to 9,000 meters of drilling with two drill rigs. Silver Standard expects to begin mobilization in early June 2017 or as soon as weather conditions permit.
Qualified Person
Charles J. Greig, P. Geo., a member of the Company’s Advisory Team, is a Qualified Person under the definition of National Instrument 43-101. Mr. Greig has reviewed and approved the technical information in this press release.
For further information regarding the SIB Property, see the companies press releases of October 17, 2016, August 8, 2016, May 9, 2016 and January 23, 2013.
About Eskay Mining Corp:
Eskay Mining Corp (TSX-V:ESK) is a TSX Venture Exchange listed company, headquartered in Toronto, Ontario. Eskay is an exploration company focused on the exploration and development of precious and base metals in British Columbia in a highly prolific, poly metallic area known as the Eskay Rift Belt located in the “Golden Triangle”, 70km northwest of Stewart, BC. The Company currently holds mineral tenures in this area comprised of 177 claims (130,000 acres).
We seek Safe Harbor.
© 2017 Canjex Publishing Ltd. All rights reserved.
Comment by Jon - BMR — April 26, 2017 @ 12:29 pm