Ximen Mining: Kenville 257-Stollen ready for production in a monthThe probably most underrated gold stock makes up more and more ground.
This is the starting shot! Ximen Mining Corp. has begun construction on its Kenville underground mine in southern British Columbia, Canada. Today’s news, including the latest calculations and comparisons, shows how much the stock can still rise and that Ximen shareholders can expect a golden, profitable future.
The press release just released provides what we did not expect shareholders to to such an extent that our expectations were again exceeded:
• After the maintenance work on the existing main portal of the Kenville underground mine, you will immediately have access to the existing tunnel called “257 Level”. This work should be completed next month!
• As became known for the first time today, you only have to remove 5 m of rock to get to the “measured” resource (already proven in 2009 with drilling): 3,312 t of ore with an average grade of 31.72 g / t gold.
• These are 3,377 ounces of gold! At the current gold price of $ 2,350 CAD, this corresponds to sales revenue of $ 7.9 million CAD.
• With an initial mining rate of only 50 t / day, these 3,312 t ore would be completely mined after 66 days. However, Ximen is aiming for a production rate of 100 t / day, but it could take several weeks to achieve this, so that initially 50 t / day are more realistic.
• After this small but extremely high-grade “measured” resource has been mined, the next resource can be taken straight away: the “indicated” resource (also confirmed by drilling), which is only 25 meters away from the entrance of the 257 level: 21,312 t ore with an average grade of 18.84 g / t gold.
• these are 12,912 ounces of gold! At the current gold price, this corresponds to sales revenue of $ 30.3 million CAD.
• With a mining rate of 100 t / day, this resource would be completely mined after 7 months.
• Then continue to the “inferred” resource, which is between 25 and 50 m behind the 257 gallery entrance: 101,992 t of ore grading 28.1 g / t gold, in which 92,143 ounces of gold with a current sales value of $ 217 million CAD lie. This ore could be completely mined in less than 3 years (at 100 t / day).
Then that’s it?
Not even close! Because there are extensions of the gold veins in and above the 257 gallery that have already been drilled into an “inferred” resource: 420,329 t of ore grading 21.77 g / t gold, in which overall 264,806 ounces of gold with an equivalent of $ 622 million CAD and can be mined within 12 years (at 100 t / day). However, you can expect a much higher production rate much earlier, because once a few million dollars have been earned, you will be able to finance an expansion of the mine performance from the cash flow.
The resources listed above are based only on drilling in the 257 gallery in 2009, which was followed by further drilling programs and discovered new gold veins deep in the west and south of the existing gallery. These “new” resources, most of which have already been confirmed with drilling, are to be mined with a new tunnel that has yet to be built and will be several hundred meters long in order to reach these resources. However, there should also be gold-rich zones on the way there, which can be mined with bulk samples during the tunnel construction. The construction of the new gallery should begin after the main portal has been repaired.
The graphic published today impressively shows how easy it is to mine the 2009 resource with the existing 257 gallery and how the new tunnel to be built (“new decline”) shows the new gold deposits in the west (“New Target West Area”) and south (“New Target South Area”):
Gold can be mined with the new gallery, for which there is no official resource yet, but more ounces of gold are suspected there than the 373,238 ounces of gold that have already been identified in the 257 gallery. That means that Ximen is well and happy to more than 1 million ounces of gold can target.
So far we have not expected shareholders! We expected a much smaller resource and speculated that it would take much longer to access gold.
This is highly enjoyable or positively surprising news that was published today. As a result, a strong upward trend in the stock should come as no surprise.
Today’s news has shown for the first time how easily and quickly 373,238 ounces of gold can be mined with the existing 257 gallery once the access has been established in a month. As it became known today, Ximen also wants to start building the new gallery immediately in order to be able to mine a much larger gold deposit.
All in all, this new information released today is surprisingly positive and should give the stock new impetus.
Share comparatively cheap
For comparison: the one active in Mexico Minera Alamos Inc. (TSX.V: MAY) has a current market cap of $ 190 million CAD and the stock has tripled since March. The special feature: This company has so far not published an official resource estimate, but has only proven gold that can be mined by drilling. Mine construction began in January and costs approximately $ 10 million. The mine is expected to be operational by early 2021 and is expected to produce between 25,000 and 30,000 ounces of gold per year.
Ximen currently has a market capitalization of $ 37 million CAD, which shows where the journey will go for us shareholders. As calculated last month in Rockstone Report # 24, Ximen can initially 18,068 ounces of gold a year produce – but with a delivery rate of only 100 tons of ore per day.
But Ximen does not have to build a completely new mine, but has the advantage of only having to repair his Kenville underground mine and driving a new tunnel into the rock. In addition, Ximen does not have to build a new processing plant to process the ore into gold bars. Ximen’s CEO, Chris Anderson, is also the CEO of Golden Dawn Minerals Inc., which owns the greenwood processing plant where Ximen plans to process the Kenville ore. This processing plant can process 212 tons of ore per day, with the capacity on 424 t / day can be doubled. This means that the Kenville mine can be increased to a capacity of up to 424 t / day, which is about 76,608 ounces of gold per year can produce – 2.5 to 3 times as much as Minera Alamos wants to produce.
Already in May it was shown how “extremely undervalued” the Ximen share is and that it has to rise to $ 5.95 in order to get a P / E ratio like 446 companies listed in Canada that make profits, i.e. the Ximen share would have to 9-fold increase from the current price level. Such a high stock price is only possible because Ximen currently only has 56 million shares issued on the market. For comparison: Minera Alamos currently has 408 million shares in the market and is trading at $ 0.48. Just to have a market capitalization comparable to that of Minera Alamos, the Ximen share would have to increase five-fold, whereby, as already mentioned, Ximen offers much more potential.
Conclusion & outlook
In summary, it can be said that Ximen as a prospective producer is obviously one of the undervalued gold stocks in the market. Today’s news underlines this very clearly, so it should come as no surprise if the share continues to rise sharply. More and more investors are recognizing this. On top of that, the gold price in Canadian dollars is sometimes the fastest growing worldwide, while the USD gold price is still below its all-time high of 2011:
With the projected production cost of the Kenville gold mine of $ 900 CAD / ounce, this results in a sizeable profit margin. Technical perspective
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: $ 0.66 CAD (06/11/2020)
Market capitalization: $ 37 million CAD
Germany Abbreviation / WKN (Tradegate): 1XMA / A2JBKL
Current Price: € 0.427 EUR (06/11/2020)
Market capitalization: € 24 million
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 Personal-Financial.com 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 Personal-Financial.com, would benefit from stock price increases at Ximen Mining Corp. benefit. The author also owns securities from Ximen Mining Corp., as well as Golden Dawn Minerals Inc. and Zimtu Personal-Financial.com Corp., and would therefore also benefit from share price increases. Ximen Mining Corp. paid Zimtu Personal-Financial.com Corp. for the creation and distribution of reports and company news. The usage rights from the cover picture were acquired by Olivier Le Moal.
Note: PERSONAL-FINANCIAL.COM publishes analyzes, columns and news from various sources in this section. PERSONAL-FINANCIAL.COM AG is not responsible for content that has been posted by third parties in the “News” area of this website and does not adopt it as its own. This content is particularly recognizable by a corresponding “von” label below the article heading and / or by the link “To read the full article, please click here.”; the named third party is solely responsible for this content.