Economic Upheaval Gives Rise to Gold Prices
Gold for June delivery GCM20, the most-active contract on the Commodity Exchange (Comex), fell by USD 17 or approximately 1% on Monday, to trade at about USD 1,636 an ounce. Yet, prices for the April contract, which is still among the more active, had increased by 9.5% last week for the biggest weekly jump since September 2008, according to FactSet data. Overall, the projections for gold seem to be positive. With record deficit spending and interest rates at zero, the economic environment is appropriate for the Federal Reserve to keep interest rates below the level of inflation for the near future until the markets normalize after the pandemic. And this is the right environment for gold bullion, as gold is often considered a safe-haven asset amid times of political or economic uncertainties. Blue Lagoon Resources Inc. (OTC:BLAGF) (CNSX:BLLG.CN), K92 Mining Inc. (OTC:KNTNF) (TSXV:KNT.VN), New Gold Inc. (NYSE:NGD) (TSX:NGD.TO), Ivanhoe Mines Ltd. (OTC:IVPAF) (TSX:IVN.TO), Yamana Gold Inc. (NYSE:AUY) (TSX:YRI.TO)
The difference between the current crisis and the 2008 recession is that in this case, it is a government-mandated recession. The government had to take measures to close businesses in order to flatten the curve of the outbreak and as such, this will result in second-quarter GDP growth to be down double digits. However, if the measures implemented successfully reduce the number of new confirmed cases, the third-quarter GDP growth is expected to recover. In the meantime, according to a report by MarketWatch, Edward Moya, Senior Market Analyst at Oanda explained that "Gold's supply chain for the physical metal was disrupted over the last 10-days, but that has now settled and taken away any momentum for higher prices... outlook remains bullish as world adjusts to never-ending promises of monetary easing, but the next rally may be more of an escalator ride than elevator one."
Blue Lagoon Resources Inc. (OTCQB:BLAGF) (CNSX:BLLG.CN) announced breaking news, "that it has completed the acquisition of Metal Mountain Resources Inc. in exchange for 12,151,220 common shares of the Company (the "Transaction"). Concurrently with the Transaction, Blue Lagoon issued 1,372,000 common shares of the Company to acquire 27.44% of Gavin Mines Inc.
Following the transactions, the Company will hold, through its ownership of Metal Mountain, a 78.28% interest in Gavin Mines Inc. and a100% interest of Lloyd Minerals Inc. Gavin Mines owns the Dome Mountain mine, a high-grade gold project located in northwest British Columbia. Lloyd Minerals Inc. ("Lloyd Minerals"), holds the Big Onion property, a porphyry copper project also located in northwest British Columbia.
The Blue Lagoon shares issued pursuant to both transactions will be subject to an initial hold period of 12 months from closing, and thereafter the hold period will expire in installments over a period of 30 months.
"In a very short time, management's focus has lead Blue Lagoon from being a newly listed junior mining exploration company to one that just acquired a very promising high grade gold property in British Columbia that holds both a Mining Permit for up to 75,000 tonnes annually and an Environmental Management Act Permit," said Rana Vig, President and CEO of Blue Lagoon Resources.
Bill Cronk, the Company's chief geologist added, "This is a very exciting and pivotal moment for the company that will take it one step closer towards transforming into a development stage gold company in a time when gold is maintaining near 5 year highs during unprecedented times of economic turmoil."
The Company notes that no decision to proceed to production has been made at this time, and a future production decision will be based on a full technical and economic review of the project.
DOME MOUNTAIN PROJECT INFO & HISTORICAL ESTIMATES
The Dome Mountain Project is the subject of a NI 43-101 technical report entitled Technical Report on the Dome Mountain Gold-Silver Project dated April 2010, prepared by Gary Giroux, P. Eng., Giroux Consultants Ltd. for Gavin Mines. The technical report provides the following historical resource estimate for the Boulder Vein System based on 285 surface diamond drill holes and 37 underground diamond drill holes (the "2010 Historical Resource Estimate"):
Historical Indicated Resource within the Mineralized Veins
Au Tonnes > Grade>Cut-off Contained Metal Cut-off (g/t) Cut-off (tonnes) Au (g/t) Ag (g/t) Au (ozs) Ag (ozs) 5.00 138,000 15.10 73.93 67,000 328,000
Historical Inferred Resource within the Mineralized Veins
Au Cut-off (g/t) Tonnes > Cut-off (tonnes) Grade>Cut-off Contained Metal Au (g/t) Ag (g/t) Au (ozs) Ag (ozs) 5.00 154,000 13.42 60.63 66,500 300,200
This resource occurs principally at and above the 1290 level and has been adjusted to remove the volumes previously mined. The 2010 Historical Resource Estimate is considered historical in nature by the Company, is provided for background information purposes only, and is not a current resource estimate due to significant additional exploration work conducted subsequent to the date of the report. A qualified person (as defined in NI 43-101) has not done sufficient work to classify the historical estimate as a current mineral resource. The Company is not treating the historical estimate as a current mineral resource.
Subsequent to the 2010 Historical Resource Estimate, Gavin Mines conducted 7,210 meters of infill drilling in 2016 to upgrade the inferred resource. Four new veins were discovered within the Boulder Vein System during the 2016 drill program. The 2016 drilling program added 330 meters of strike length to the Boulder Vein which remains open along strike to the west, east and at depth.
Gavin Mines engaged Roughstock Mining Services LLC of Bozeman, MT to prepare an internal estimate based on the additional data from the 2016 drill program, as follows (the "2016 Historical Resource Estimate"):
Historical Dome Mountain Mine Indicated Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 2017
Tonnes Grade (g/t) Grams Ounces Boulder Vein 164,735 12.76 2,102,654 67,601 Boulder East Vein 8,736 22.22 194,137 6,241 TOTAL 173,471 13.24 2,296,791 73,843
Historical Dome Mountain Mine Inferred Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 3017
Tonnes Grade (g/t) Grams Ounces Boulder Vein 171,611 8.96 1,538,017 49,448 Boulder East Vein 166,852 8.17 1,362,590 43,808 Argillite Vein 75,486 12.97 979,050 31,477 Boulder HW Vein 46,079 7.62 351,222 11,292 TOTAL 480,028 9.20 4,230,879 136,025
The scientific and technical data contained in this news release was prepared and reviewed by William Cronk, P.Geo., a qualified person as defined in NI 43-101 and a consultant to the Company."
K92 Mining Inc. (OTCQX:KNTNF) (TSXV:KNT.VN) is engaged in the production of gold, copper and silver from the Kora and Kora North deposits of the Kainantu Gold Mine in the Eastern Highlands province of Papua New Guinea, as well as exploration and development of mineral deposits in the immediate vicinity of the mine. Earlier this year the company provided an update on its operations and Stage 2 Expansion at its producing underground Kainantu Gold Mine in Papua New Guinea. Completion of the plant expansion is in the final stages, with commissioning expected to begin in February 2019. The gravity circuit and gold room was installed in Q3 2019 and the new secondary crusher was installed in December 2019. The focus is on the installation of the flotation tanks, with foundations and tanks installed and piping and electrical installations underway.
New Gold Inc. (NYSE:NGD) (TSX:NGD.TO) reported on February 13th, results of the updated Life of Mine plans for the Rainy River and New Mines. A National Instrument 43-101 ("NI 43-101") Technical Report for each operation will be filed within 45 days. The Company is also providing updated Mineral Reserves and Resources as of December 31, 2019. The Rainy River is a gold-silver mine located in Ontario. Over the past year, the Company has undertaken a comprehensive mine optimization study for the Rainy River Mine that included a review of alternative open pit and underground mining scenarios with the overall objective of improving the return of investment to secure optimal profitability. "Over the past number of months we have evaluated numerous scenarios for the Rainy River Mine and are pleased to release an updated life of mine plan that delivers a solid open pit and underground mine plan that positions the operation for profitability and free cash flow generation beginning in Q4 2020 that continues over the balance of the mine life," said Renaud Adams, CEO.
Ivanhoe Mines Ltd. (OTCQX:IVPAF) (TSX:IVN.TO) Co-Chairmen Robert Friedland and Yufeng "Miles" Sun announced this January that the company's South African subsidiary, Ivanplats, is fast-tracking a feasibility study on a smaller-scale, early-stage development plan using Shaft 1 as a production shaft at its Platreef palladium, platinum, nickel, copper, gold and rhodium mining license, located on the Northern Limb of the Bushveld Complex in South Africa's Limpopo province. Palladium prices continue to surge to record highs, topping US$2,100 an ounce as stricter air-quality rules boost demand for the metal used in vehicle pollution-control devices. Platreef has an estimated 26.8 million ounces of palladium in current Indicated Mineral Resources, and an additional 43.0 million ounces in current Inferred Mineral Resources, at a 2.0 g/t 3PE+gold cut-off.
Yamana Gold Inc. (NYSE:AUY) (TSX:YRI.TO) announced last year exploration results for the El Peñón and Minera Florida mines. Completed a machine-learning study in mid-2019 with GoldSpot Discoveries Inc. ("GoldSpot") that generated numerous exploration targets that are advancing via systematic surface exploration. "The El Peñón mine entered production in 1999 with an estimated life of five years," said Henry Marsden, Senior Vice President of Exploration at Yamana. "That was 20 years ago, and the operation's mineral reserves are nearly the same today as they were then. Year after year, El Peñón recoups its mineral depletion and, based on the positive results that we are seeing, we believe this will continue for many years to come."
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