Resource Sector Digest: Focus On Nevada - Corvus Gold Edition

|
About: Corvus Gold Inc. (CORVF), Includes: AGI, AGLDF, ALIAF, AU, AXU, CAHPF, CDE, CGOOF, ECSIF, EGO, GG, HCHDF, HRTFF, KERMF, MCCBF, MTAFF, NEM, NGQRF, NMGRF, PGLC, PIRGF, PSPGF, PVG, RNSGF, SAND, SGSVF, SZSMF, TRYRF, USAS, WDOFF
by: Itinerant
Summary

Corvus and the emerging Beatty district.

Evolution Mining is worth some consideration.

A flurry of news from Americas Silver.

(Source)

A company named after a blackbird may hold the key to an emerging gold mining district in Nevada. Welcome to this week's Resource Sector Digest.

(Vol. 129 - April 8, 2019)

Brought to you by Itinerant and The Investment Doctor.

In case you missed out on previous editions of this newsletter, simply click here, here, or here to catch up.

Setting The Scene

AngloGold Ashanti's (AU) CEO Mr. Kelvin Dushnisky would have put a smile on Mr. Pontius' face when he gave an interview at the recent BMO Global Metals and Mining Conference, mentioning the Silicon deposit in passing around the three-minute mark. To note: the term "deposit" implies economic value when used in the context of mineral exploration and thus is not used lightly by mining executives, a point Mr. Pontius was quick to make when we had the opportunity to sit down and talk with him last week.

Mr. Pontius is the CEO of Corvus Gold (OTCQX:CORVF), a junior exploration and development company which has recently published a PEA on its Mother Lode and North Bullfrog Project on the Walker Lane near Beatty in Western Nevada. The publication of this PEA concluded a highly successful 2018 for Corvus Gold during which the share price had doubled thanks to a constant flow of impressive drill results from the Mother Lode portion of the project.

This PEA outlines a highly attractive gold mining project, which (at least in our view) suffers from one notable challenge: the property boundaries around the Mother Lode deposit limit mining options and have led to some rather aggressive assumptions with regards to the Mother Lode pit slope in the PEA in order to keep the pit within Corvus lands.

But let's switch angle for a moment and consider the map below, taken from the presentation of a small project generator by the name of Renaissance Gold (OTCPK:RNSGF). The yellow outline containing the Mother Lode project is annotated; the blue outline indicates the property of next-door neighbor Coeur Mining (CDE), which acquired this piece of land surrounding the Mother Lode when it took over Northern Empire Resources (OTCPK:PSPGF) in a $90M deal late last year; and finally, the red outline shows the Silicon project, the subject of an earn-in agreement between Rennaissance and AngloGold and, incidentally, also the subject of the "deposit" remark mentioned earlier in the piece.

(Source)

Little information of AngloGold's activities on the Silicon project had been available in the public domain, except for the rather generous exploration budget the major was allocating to this project and some gossip one could pick up from the drill crews in the local, well, let's call them bars. Only recently, the word had been leaking out that AngloGold had made a significant discovery at Silicon, a rumor to which the CEO himself has now added fuel by calling Silicon a deposit, and a "very interesting" one at that. Our best guess, educated by said rumors, would be that AngloGold has discovered a high-grade underground vein system, on trend with the Mother Lode and perhaps with similarities to the historic Bullfrog mine which had been operated by Barrick Gold not far away.

At this point, it's worth noting that AngloGold already owns a 19.8% stake in Corvus and several members of Corvus' management have worked for AngloGold in the past. And while we are pointing out connections, we would also like to mention Coeur's Exploration Alliance with, you guessed it, Renaissance Gold (which will be up for renewal shortly).

Most certainly one could speculate whether Silicon and the Mother Lode are in actual fact only two manifestations of a much larger gold system, a line of thought that just got more credible with the latest drill results published by Corvus on April 3 reporting on the discovery of a North-trending deep intrusive related zone below the Mother Lode. If Corvus can follow this deep discovery northwards in coming months, then this may well represent the key to unlock the postulated district.

Coeur, on the other hand, has paid a high price for the land surrounding the Mother Lode and, consequently, expectations must also be high. At present, the small SNA deposit is Coeur's only gold occurrence in the vicinity of the Mother Lode. However, the Mother Lode deposit in its current constrained state already calls for cooperation between Corvus and Coeur, and Mr. Pontius confirmed informal talks between the companies to this regard. And if the Mother Lode mineralization continues to grow, then Coeur would by definitely become the third player in this emerging district as Coeur controls the stretch of land between the Mother Lode and Silicon.

Circling back to Corvus, we would also like to point to the North Bullfrog portion of the property. Exploration in these parts is picking up again, with several promising targets that have been developed in consideration of the Silicon discovery, most notably a suspected vein system below the Yellow Jacket deposit and the Jasperoid target where drills are currently moving to.

Mr. Pontius seemed pragmatic about his company's role in this emerging district. His stated goal is "to maximize the district potential" knowing fully well that such maximization will have to involve Corvus as well as AngloGold and quite probably also Coeur. The mentioned PEA already points the way of how this district could eventually be developed: with one central mill for the sulfides and higher grade oxide ore, plus local leach pads for the lower grade oxides. We submit that consolidation of the Beatty district will most likely take place at some stage, and Corvus will be in a key position when that happens; and we will continue to keep a close watch on this junior going forward as part of our Focus on Nevada.

Actionable Ideas

The Investment Doctor likes Evolution Mining (OTCPK:CAHPF), for good reasons.

News Release of the Week

News release of the week goes to Nouveau Monde Graphite (OTCQX:NMGRF) for attracting a strategic investor to join the junior's share registry, adding C$10.3M to the treasury.

Drill Result Summary

  • Kerr Mines (OTCQB:KERMF) caught our eye when it reported 12.2m at 11.7g/t gold from its resource expansion program at the Copperstone Mine in Arizona.
  • Continental Gold (OTCQX:CGOOF) headlined with 17.2m at 100.24g/t. Wow? Not! Accounting for the sub-interval of 0.6m at 2851.25g/t (presumably a beautiful shiny nugget) leaves us with a paltry remaining non-event of 16.6m at 0.8g/t.
  • NGEx Resources (OTCPK:NGQRF) reported results from 12 holes from reserve definition drilling at Josemaria in San Juan province, Argentina. 424m at 0.51% copper and 0.41g/t gold was only one of several long intercepts.
  • Wesdome Gold (OTCPK:WDOFF) may have found an up-plunge extension of the 300 and 7 zones at its Eagle mine in Ontario, Canada. Surface drilling will resume after spring break-up.

Wheelings and Dealings

We already knew that M2 Cobalt (OTCQB:MCCBF) and ASX-listed Jervois Mining were going to merge; and now it seems that eCobalt Solutions (OTCQX:ECSIF) is also joining this party. Here are the corresponding Itinerant Musings chat board quip.

Sabina Gold & Silver (OTCQX:SGSVF) has closed a C$5.2M flow-through placement and seems set for another drilling season at the company's Back River project in Nunavut.

Goldcorp (GG) shareholders have approved the proposed business combination with Newmont Mining (NEM), a decision welcomed by the latter. Close of the transaction is currently scheduled for Q2, with Newmont's shareholders voting on the deal this coming week on April 11.

Americas Silver (USAS) has closed the acquisition of Pershing Gold (PGLC) and wasted no time announcing a $42.5M financing package with Sandstorm Gold (SAND) to fund the construction of the Relief Canyon mine. Below is the corresponding snippet from the Itinerant Musings chat board.

In yet another deal, Americas Silver and Premier Gold Mines (OTCPK:PIRGF) have agreed on the latter optioning into the San Felipe property in Mexico for a consideration of $7M, plus $1.9M upon making a construction decision, plus $6M in ongoing option payments to Hochschild Mining (OTCPK:HCHDF). Americas Silver had acquired the project from Santacruz Silver (OTCPK:SZSMF) in 2017 for a consideration of $8M plus option payments to Hochschild. Premier finally seems like the logical owner of this piece of land as it offers synergies with the company's nearby Mercedes mine.

Alexco Resource (AXU) announced a C$3.5M flow-through financing in order to fund exploration at the Keno Hill silver property in the Yukon.

Alamos Gold (AGI) has sold a bundle of 18 royalties to Metalla Royalty & Streaming (OTCQX:MTAFF). According to Alamos, the price tag was $8M in Metalla shares and according to Metalla, those shares were worth $8.6M. A proud price tag in any case considering that none of the royalties is actually cash flowing.

Other News

Alacer Gold (OTCPK:ALIAF) has shifted priorities with regards to the oxide potential at its operations in the Cöpler district in Turkey. The previous front-runner Gediktepe had to cease the top spot to the Ardich deposit as the most likely next ore source for heap leaching. The fact that Alacer controls 80% of the Ardich deposit and only 50% of the Gediktepe might have played a role in this decision.

Harte Gold (OTCPK:HRTFF) put on a brave face in its latest news release after encountering operational issues at the start of the year; however, the market quickly cottoned on to the gravity of the situation. The company is in negotiations with its lenders and such talks rarely bode well for shareholders when the balance sheet is already stressed.

Chart Data by YCharts

Eldorado Gold (EGO) announced commercial production at its Lamaque mine at Val-d'Or in Quebec guiding for 100-110Koz of gold production in 2019. And in a separate news release, it announced the re-start of operations at Kisladaq in Turkey, with plans to produce 145-160Koz in 2019. Why Kisladaq should now deliver what it could not deliver previously is still not 100% clear to this scribe.

Pretium Resources (PVG) came out with two news releases in short succession (link, link). The headline of the first one reads re-assuring, but the actual news release contained a round-about warning that Q1 production will probably disappoint. Rude Otto had a small hissy-fit over the second one which provided a summary of the updated mine plan and the associated resource estimate and mineral reserve.

Austral Gold (OTC:AGLDF) is putting the Casposo mine on care and maintenance, citing a production shortfall and low metal prices as the causes for the decision. Austral Gold currently owns 70% of the mine and has passed on the option to acquire another 10% from minority owner Troy Resources (OTCPK:TRYRF) by March 31.

And this is where we pull the curtain and bid our farewell for this week, as always in great hope to see youse all next week, in time for the next issue of this newsletter.

Disclosure: I am/we are long SAND, NEM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.