Strategically important: Ximen can start gold production much faster

Ximen Mining Corp. (TSX.V: XIM; WKN: A2JBKL) has just released a news that shows that the prospective gold producer recognizes the signs of the times and is doing everything possible to build a golden future early in southern British Columbia in Canada.

With all that Ximen has to offer, yesterday’s share price reset is a particularly attractive buying opportunity that can be used. Because the upward trend should now gain traction again, as more and more investors recognize how extremely undervalued the stock is, as Rockstone calculated last week.

Right next to its Kenville gold underground mine, Ximen was now able to tackle large property packages (1,600 hectares) with known gold deposits and previously producing gold mines. Ximen has been making acquisitions in the area for the past few months. In total, Ximen now owns 16,495 hectares of land in the Nelson mining district and has become the undisputed top dog.

What is particularly interesting about today’s news is that Ximen Wilcox mine bought. This was a small but extremely high grade gold mine that was in operation until 1940 and mined a total of 14,555 tons of ore. During the mining, only the high-grade gold ore was concentrated. A resource study conducted in 2005 found that there are still 1230 ounces of gold with an average grade of 3.09 g / t. Practically, however, not hidden in the mountain, but directly on the surface of the earth as a so-called overburden.

These “tailings” collected on the heap are left over after the gold production and can immediately be transported to the Greenwood processing plant with an excavator and truck and converted into gold bars. Metallurgical tests showed that 80% of the gold is extractable. So 984 ounces can be extracted from the 1230 ounces of gold, which at the current gold price of $ 2310 CAD has a retail value of $ 2.3 million.

The approval process to remove this resource that has already been mined and is on the surface of the earth is very simple and quick. Ximen should receive approval within 2-3 months at the latest. Fortunately, Ximen already has access to a modern processing facility where this ore can be processed.

In addition, Ximen announced today the purchase of several other previously producing gold mines. The list from the news shows that these are high-grade gold mines:

As the map published in the news shows, Ximen now has very large properties near the city of Nelson (above in yellow):

It is also important that you now have a large total package of properties that are directly connected to each other. Because as soon as ore is transported Right of way of great importance.

These acquisitions are strategically important when you consider that Ximen will soon become a gold producer with its main project (Kenville). A gold producer with no growth prospects is doomed to fail. Not only the big gold mining companies know that, but also investors.

The race for gold has started worldwide, especially in safe regions. Most gold has already been discovered and it is becoming increasingly difficult to discover new gold deposits.

The big gold producers know this problem all too well and are increasingly looking for promising exploration companies. Acquisitions, M&A, mergers and strategic partnerships are currently growing rapidly in the gold market. At the beginning of a new gold bull market, this is a typical procedure to prepare for the next few years.

With this in mind, Ximen is doing everything right to secure the best gold in the area before the Kenville Mine begins production. On the other hand, as of today, Ximen has the opportunity to go into production even faster, since around 1,000 ounces of gold can be processed into gold bars in the Greenwood facility quite easily and quickly in order to generate more than $ 2 million in revenue. The production costs are estimated to be extremely low, since basically you only have transportation costs. Excerpt from the Rockstone Report of May 29:

While the large mining companies produce gold faster than they find new ounces in the ground, 2020 will probably be the “peak gold” year, which means that less and less gold will come from the mines:

The global gold reserves of senior producers have been on the descending path for several years:

The problem is that no significant gold discoveries have been made worldwide since 2007:

The result is that the major gold mining companies are going on a “shopping tour” at an increased pace and are increasingly focusing on acquisitions, M&A and strategic partnerships, as INN recently emphasized in the readable article “Gold Producers Leveraging Investments and Acquisitions”.

In it, Mickey Fulp, known as the “Mercenary Geologist”, said that it is the junior and mid-tier gold producers who are responsible for most of the “new” gold supply. The major mining companies such as Barrick, Newmont and Newcrest are all experiencing a decline in their gold grades and reserves, which is why they are “hunting” for new ounces, especially at the beginning of a new gold bull market as we are currently experiencing it, which according to the new one “In Gold We Trust” report is said to continue for the whole decade.

Ryan Hanley, an analyst at Laurentian Bank Securities, said in the INN article: “Given the long time it takes to explore, discover, demarcate, approve, fund and build a new mine, a merger and acquisition is a lot faster way to replace reserves. “

The INN article added: “One way for large gold producers to replenish their project pipeline with economic ounces is to take over, invest, or partner with junior gold companies that are more likely to take on the high risks and costs of exploration , which house large deposits with excellent grades and simple metallurgy, are ideal, especially those that are close to existing mining operations in mining legislation. “

Ximen showed impressive last week, an extraordinary one simple metallurgy to have: A gold recovery rate of 99% could be achieved. Not even the 5 highest grade underground gold mines in the world have such a high recovery rate:

Source: Mining .com / Gold recovery rates come from company reports

In addition, the average gold grades in the Kenville underground gold mine are extremely high. However, the 17.1 g / t gold grade of Ximen listed in the table above is not the average grade of the existing resource, but rather a mixture of high and low grade ore from Kenville, just to remain conservative:

The total 373,238 ounces of gold of the 2009 resource have a current sales value of CAD at the current CAD gold price ($ 2,360) $ 881 million CAD. With a projected production cost of just $ 900 CAD / ounce, the profit margin is highly respectable, making Ximen one of the cheapest gold mines in North America. In addition, the Kenville recommissioning will create an environmentally conscious “green” gold mine that will become Canada’s flagship project to demonstrate that high profit margins can be achieved in harmony with nature.

The fact that there are many more ounces of gold in Kenville than in the 2009 resource estimate listed above was demonstrated by drilling in the years after numerous new gold zones were discovered that are similarly high grade and can be reached with the new mine. This new gallery is to be built after the 257 level has been repaired.

So it is all the more helpful to want to use an available processing plant with a capacity of up to 424 t / day, since you don’t have to finance (dilute), build and approve (time-consuming) the construction of a new plant.

Conclusion: The general conditions for Ximen can be classified as perfect, especially since the stock is still heavily undervalued. So all in all an exceptionally lucrative and clean affair, especially for shareholders. Technical perspective

Company details

Ximen Mining Corp.
888 Dunsmuir Street – Suite 888
Vancouver, BC, Canada V6C 3K4

Market shares: 56,145,451

Canada symbol (TSX.V): XIM
Current Price: $ 0.56 CAD (06/04/2020)
Market capitalization: $ 31 million CAD

Germany Abbreviation / WKN (Tradegate): 1XMA / A2JBKL
Current Price: € 0.3958 EUR (06/04/2020)
Market capitalization: € 22 million

Rockstone Research
Stephan Bogner (Dipl. Kfm.)
8260 Stein am Rhein, Switzerland

Disclaimer: Please read the full disclaimer in the full Research Report as a PDF from the Rockstone Research website as fundamental risks and conflicts of interest prevail. The author, Stephan Bogner, is owned by Zimtu Corp. paid, with part of the author’s job being to research and write about companies in which Zimtu is invested. While the author may not have been paid for and commissioned directly by the company that is being analyzed, the author’s employer, Zimtu, would benefit from stock price increases at Ximen Mining Corp. benefit. The author also owns securities from Ximen Mining Corp. and Zimtu Corp., and would therefore also benefit from share price increases. Ximen Mining Corp. paid Zimtu Corp. for the creation and distribution of reports and company news. Bjoern Wylezich acquired the rights to use the (modified) cover picture.

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