Silver and gold prices continued to grow strongly last week. The gold price closed on Friday at the striking mark of USD 1,900 an ounce, which is more than 5% higher than in the previous week. This means that the precious metal has worked very closely to the September 2011 record of around USD 1,921 per ounce. The bird, however, shot down silver, which gained more than 17% in the past week and thus rose to the highest level since September 2013.
The precious metals are currently benefiting from several developments! On the one hand, the continuing uncertainty surrounding the corona pandemic is leading investors into stable investments such as gold and silver, and on the other, the warning of rising inflation rates due to the sharp rise in public debt in many countries is driving investors in precious metals. Because gold and silver are popular protection against inflation! As a third point, the worldwide low interest rates are mentioned again and again, which also benefits interest-free investments such as precious metals.
Of course, this also benefits the raw material companies, especially those who keep drawing good news to themselves. There was also top news from the companies that we report on regularly. We have summarized the most important company news for you below!
Discovery Metals with sensational drilling results!
Discovery Metals (ISIN: CA25471U1003 / TSX-V: DSV) announced results from eight core holes drilled on the flagship Cordero project in Mexico. These wells are also part of the ongoing ‘Phase 1’ drilling program, which started in September 2019 and was recently expanded from 35,000 m to 55,000 m.
The primary goal of this program is to delineate a large-scale project with a high margin in order to get the greatest possible leverage on the silver price. And that works wonderfully! Because even with the most recent drilling, one came across top grades of, for example 1,907 grams per tonne of silver equivalent over 1.4 m, 1,119 g / t AgEq over 1.5 m and even 3,214 g / t AgEq over 0.8 m!
Hole C20-342, which was drilled under the mining area of a historic mine below the ‘Todos Santos’ vein, intersected another high-grade sulphide duct at a depth of approximately 140 m 700 g / t Ag, 0.74 g / t Au 16.1% Pb and 14.0% Zn over 1.4 m or 1.907 g / t AgEq. According to the current interpretation, the vein is currently 1.2 km long.
The ‘Parcionera’ vein has so far been traced over a strike length of 350 m and a depth of 255 m. Hole C20-338, which was drilled under the northeast trend of historical areas, intersected over 4.3m of high grade gangue at an average depth of 149.8m 365 g / t Ag, 0.55 g / t Au, 2.1% Pb and 4.0% Zn or 651 g / t AgEq, including 1.5 m with 489 g / t Ag, 0.82 g / t Au, 2.9% Pb and 11.1% Zn for 1,119 g / t AgEq.
Source: Discovery Metals
In addition, five of the eight holes were drilled northeast of the Pozo de Plata core zone in areas where previous holes had significant gaps. Four of these holes intersected several powerful zones. So also the hole C20-333, which was drilled 650 m northeast of ‘Pozo de Plata’ and 120.4 m with an average of 30 g / t Ag, 0.11 g / t Au, 0.3% Pb and 1.5% Zn, or 114 g / t AgEq delivered!
The C20-336 well, which was drilled 700 m northeast of ‘Pozo de Plata’, also delivered 134.6 m average 23 g / t Ag, 0.05 g / t Au, 0.5% Pb and 1.1% Zn, or 92 g / t AgEq! The hole C20-337 drilled along the ‘South Corridor’ delivered 44.8 m average 35 g / t Ag, 0.10 g / t Au, 0.7% Pb and 1.7% Zn, or 139 g / t AgEq and 23.6 m with average 82 g / t Ag , 0.09 g / t Au, 0.8% Pb and 1.7% Zn, or 186 g / t AgEq! Surprisingly, the lower section also encountered a previously unidentified ‘feeder’ passage that over 0.8 m average 1.992 g / t Ag, 0.79 g / t Au, 16.1% Pb and 14.2% Zn, or 3.214 g / t AgEq sunk.
The ‘South Corridor’, which is separated from the core zone ‘Pozo de Plata’ by the main fault ‘Cordero’, was drilled significantly less compared to the ‘North Corridor’, but this continued in the course of the ‘Phase 1’ drilling program will change and has been identified as a future focus.
Source: Discovery Metals
Taj Singh, President and CEO, made it clear:
“We continue to cut wide zones with mineralization with large tonnages along the northeastern extension on ‘Cordero’. In addition, our understanding of the previously overlooked high-grade vein trend on the property continues to develop.
Four of the eight holes encountered high grade feeder structures, including 1,907 g / t AgEq over 1.4 m in our first hole targeting the Todos Santos vein trend and 1,119 g / t AgEq over 1.5 m in the Parcionera vein trend . These two vein trends currently have a combined strike length of more than 1.5 km based on historical underground work. With a second drill that is now in operation, we look forward to testing both the strike length and depth continuity of this and other extensive feeder structures alongside our breccia targets with large tonnages. ”
And the next hammer!
As Discovery Metals announced on Friday, the world-famous commodity investor Eric Sprott once again invested in the company as part of a mediated institutional private placement with a volume of CAD 35,000,000. By purchasing 11,111,111 units, the 25,925,925 units issued, at a price of $ 1.35 per unit, the resource legend is investing another $ 15,000,000 in Discovery Metals! Upon completion of this transaction, the star investor will hold 27.1% of the issued and outstanding common shares on an undiluted basis.
Each unit consists of one Discovery ordinary share and half a common share purchase warrant. Each full warrant entitles the holder to purchase one additional share at a price of $ 1.75 within two years of completion.
The star investor Eric Sprott explains this further not inconsiderable investment, which he has now developed into the largest “silver investment”:
“Discovery offers unmatched leverage on a rising silver price and I am very encouraged to see how the Discovery team continues to implement its plans for the ‘Cordero’ project. I have continuously expanded my position in the company and it is now one of my biggest investments in the silver sector. ”
Taj Singh, President and CEO of Discovery Metals was also enthusiastic about the loyalty of the major shareholders and said:
“We are delighted to continue to support our largest shareholders, who recognize Cordero’s extraordinary potential for rising silver prices. The latest drilling results show that our 100% in-house project has all the key features such as grade, scope, significant organic growth opportunities and a good location in one of Mexico’s most important mining belts! ”
The current financing, which was offered at a premium over the market price, reflects the strong institutional demand! Upon completion of this round of financing, the company will have industry-leading liquidity of more than $ 75 million, which will be available for aggressive exploration, resource expansion and future development, Singh concludes!
The company’s latest news flow speaks a clear language. The company with a top project and strong financial investors is doing everything right and is developing into one of the hottest silver stories, even beyond Mexico’s borders!
OceanaGold with positive ‘PEA’ for its ‘Waihi’ project
OceanaGold (ISIN: CA6752221037 / TSX: OGC) was able to present the results of the ‘Preliminary Economic Assessment’ (‘PEA’) for ‘Waihi’ in New Zealand a few days ago. In the conservative ‘base case’ scenario, which is based on a gold price of USD 1,500 per gold ounce, the company achieves an initial internal rate of return ‘IRR’ after taxes of a high 51%. The initial net present value after tax (‘NPV’) at a 5% discount rate is $ 665 million. The mine, which would be operational by 2036, could generate post-tax cash flow of $ 1.1 billion. The total funding costs (‘all-in-sustaining costs’) are estimated at a low $ 627 per ounce.
The conservatively calculated preliminary economic efficiency assessment shows the considerable potential for a robust project with an extended mine life until 2036 of ‘Martha Underground’, ‘Wharekirauponga Underground’, the ‘Gladstone’ mine and a reduction in the existing ‘Martha’ open pit!
Mawson describes the mining history of the high-grade gold project ‘Redcastle’ in Victoria
The high-grade ‘Redcastle’ precious metal area was previously the absolute number one in Victoria, Australia! The first gold rush started there !!! And it is precisely in this area Mawson Resources (ISIN: CA57776G1063 / TSX: MAW) top areas secured!
For example, Mawson’s ‘Redcastle’ project is one of the most significant historic epizonal high grade gold fields in Victoria and the first of the three historic central Victorian gold mines mined. Mining in nearby Costerfield and Fosterville only started later in the 1860s and 1890s. Now Mawson wants to prove that ‘Redcastle’ is the most productive and high grade area in Victoria even now.
Mawson will therefore begin extensive geophysical surveys in the next few weeks. The resulting information in combination with historical data is used to better understand and interpret the geological system. The first drilling is scheduled to start in August.
Source: Mawson Resources
Mawson’s Redcastle option and joint venture
Mawson has the option in a joint venture up to 70% of the ‘Redcastle’ project from Nagambie Resources Ltd. (ASX: NAG). According to this, exploration expenses of AUD 100,000 in the first year, additional AUD 150,000 in the second year for a 25% share and AUD 250,000 in the third year must be paid in order to receive 50%. A further 500,000, – AUD investment up to the fifth year means that Mawson will receive 70% of the project.
Once Mawson has acquired 70% of the project, a joint venture will be established between the parties. Nagambie can then release its 30% stake for further exploration expenses.
If Nagambie’s stake is reduced to less than 5.0%, this is considered to be the abandonment of its stake in the joint venture in Mawson in exchange for a net smelter return license fee of 1.5% on the gold yield. If Nagambie is granted the ‘NSR’, Mawson has the right to purchase the ‘NSR’ for AUD 4,000,000. Mawson is also a major Nagambie shareholder, with 10% of the company owned by Mawson.
What makes the project so interesting?
As early as 1856 to 1865, the Welcome Group at a depth of up to 125 meters, over 20,000 ounces of gold with an average gold content of 254.6 g / t found! Around 30 years later, in 1895, Forbes and Murray described the 1.2 m mineralized zone with individual veins 5 to 35 cm wide. The quartz was described as very rich in gold at that time and in 1898 Forbes discovered a length of 53 m and a width of 20 to 40 cm in the range of 187 to 622 g / t gold, whereby the largest deposits are probably below the high-grade historical mining areas !!
The continuity of gold deposits and high grade veins beneath the mines in the ‘Redcastle’ area has never been checked by professional drilling. Only a few short holes with a depth of less than 40 m and very few holes that have penetrated into the 80 m area were drilled earlier.
The reason for the few wells is that there was no pump technology at the time to pump out below the water table. In addition, there was currently a permanent water shortage due to mine operations. With today’s new technology, it is no longer a problem to expand the confirmed high grade gold areas further down.
Based on current knowledge, it can be assumed that Mawson’s chances are more than excellent to encounter extremely high-grade gold grades and to build a low-cost mine.
As can be seen from the records, only three mines in this area have been surveyed by geologists. Mawson has hit the bull’s eye here, which only needs to be made visible. This is the task of the upcoming drilling programs.
‘Redcastle’ key data:
- ‘Redcastle’ in Victoria, Australia is one of the most important historical epizonal gold fields, which has high grades and often visible gold in combination with quartz (+/- stibnite).
- ‘Redcastle’ is also the first of the three historic gold fields in central Victoria, which was mined from around 1859. Mining in the nearby ‘Costerfield’ and ‘Fosterville’ fields only started later.
- Extremely high gold values were mined over an area of 4.5 x 7 square kilometers, which comprises more than 24 historical mining areas with a combined strike length of the high-grade veins of 17 kilometers.
Mawson will begin a detailed geophysics program in July, followed by a core drilling campaign on the ‘Sunday Creek and’ Redcastle ‘projects in Victoria starting in mid-August.
Mr. Hudson, Chairman and CEO, clarifies:
“The extremely high grade, free and visible gold, which is associated with quartz and stibnite in ‘Redcastle’ and occurs in a significant area, makes it one of the ‘Swan’ zone in ‘Fosterville’ and the ‘Costerfield’ mine most important high-grade epizonal gold fields in Victoria and lies directly in the south strike. It is astonishing that the project below the groundwater level, at a depth of around 50 m, is still unaudited. We will start geophysical work at ‘Redcastle’, followed by a core drilling program that will start in late August / early September. ”
During the 19th century, the average mining thickness for quartz veins with visible gold was approximately one meter (the individual reef thicknesses were less than 0.6 meters). The total length of the mining areas is 17 kilometers, with several ‘reef’ systems extending over several kilometers. According to the records, branches that branch off from the ‘Reef’ main system were removed over distances of 15 to 33 m. It is a characteristic of ‘Redcastle’ that the ‘reefs’ are close together. On the west side of the field, 14 ‘reefs’ were recorded over a distance of 900 m, which lie across the strike length.
The largest intrusion passage was mined to a depth of 27 m and was 11.5 m thick. The extracted 160 tons of material contained 25-120 g / t gold. This indicates that the intrusion passage may have been selectively dismantled, although the thickness of the intrusion passage leaves scope for a larger and lower-goal. Thicker zones in ore sticks (2.4 to 4.8 m wide) and breccia zones near ‘Beautiful Venus’ had a thickness of up to 20 m according to records.
After a variety of historical data and information that would go far too far to list them all, it is now time to explore these promising areas using modern exploration methods. A small start was made in 1985 at ‘Redcastle’ with a total of 270 very short backwashing holes (‘Reverse Circulation’) and ‘Rotary Airblast’ holes (‘RAB’). The deepest hole was just 81 m deep and the average depth of all holes was just 38 m.
Drill results from ‘Redcastle’ provided 10 m with 2.5 g / t gold at 22 m depth, 2 m with 10.7 g / t gold at 39 m depth and 2 m with 6.3 g / t gold at 26 m depth. No drilling data has been independently verified yet. The true thickness of the mineralized sections is not yet known at this stage. Significant soil, rock chip and trench samples were taken in the project area.
All of the mining areas are located in outcrop areas, but are approximately 50% of the property under a thin alluvial cover layer in extensive erosion channels.
Source: Mawson Resources
With the new exploration program, Mawson is taking a two-pronged approach to Redcastle. Initially, the company will systematically collect data covering the entire property in order to understand the powerful mineral system and to explore it under the significant alluvial cover.
This includes ground-based magnetic, gravitational and gradient array induced polarization measurements (‘induced polarization’) to check the entire ‘Redcastle’ mineralization system. The company also plans to begin drilling in late August 2020 to review areas under the high grade old mines.
A tight exploration program is launched on an absolutely exciting project. For us investors, this means a maximum amount of news that can be price-sensitive! Therefore Mawson Resources is currently an absolute ‘hotstock’ in the raw materials sector!
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