Aurania Provides Update on Drilling at Tsenken and Tiria-Shimpia Targets

 

Toronto, Ontario, August 19, 2021 – Aurania Resources Ltd. (TSXV: ARU) (OTCQB: AUIAF) (Frankfurt: 20Q) (“Aurania” or the “Company”) reports that drilling at the Tsenken N1 target has intersected sediment-hosted copper mineralization visible over approximately 2 metres (“m”) and has also intersected salt, a key element of sediment-hosted copper mineralized systems.  Scout drilling continues for sediment-hosted copper at Tsenken N1 and for silver-zinc at Tiria-Shimpia in the Company’s Lost Cities – Cutucu Project (“Project”) in southeastern Ecuador.

Aurania’s Chairman and CEO, Dr. Keith Barron commented, “We recognized early on that the copper-silver within the Project is of Kupferschiefer style, and this was confirmed by Professor Gregor Borg, an international expert on the subject.  Essentially, what we have are multiple levels of sandstone with organic plant material which is now carbon in the Jurassic-aged Chapiza Formation.  This geological formation is mostly comprised of “red bed” sediments and is analogous to the Rotliegendes (in German “underlying red”) found beneath the Kupferschiefer in Poland and Germany.  The carbon in the Chapiza has acted as a chemical reductant, causing the dissolved copper to fall out of solution where oxidized, copper-charged groundwaters come in contact with the carbon.  At this point we still do not know the grade and thickness of these copper and silver mineralized carbon beds, nor how many individual stacked beds occur on our concessions.  We do know through mapping that we are dealing with multiple beds. A presentation of key concepts will be made available shortly on Aurania’s website at www.aurania.com.”

Tsenken N1

Drill hole TSN1-007, which is still underway, intersected approximately 2m of bleached sandstone, composed of volcanic fragments, that contains disseminated copper mineralization in the form of green malachite (Cu₂CO₃(OH)₂) and black tenorite (CuO).  The volcanic sandstone contains carbonized plant fragments similar to the mineralized sandstone found at surface.  The mineralized interval has been sampled and the samples have been delivered to the lab in Cuenca in central Ecuador for preparation before despatch to Vancouver for analysis.  The intercept is at 157m down-hole and approximately 80m below surface (Figure 1).

Drill hole TSN1-006 ended in salt, which was intersected at a depth down-hole of about 600m, a little higher in the geological profile than anticipated (see Figure 2 in press release dated July 21, 2021).

Six drill holes have been completed for a total of 1859m and hole TSN1-007 is currently at a depth of approximately 350m.

Figure 1.  Vertical profile interpretation through the Tsenken N1 area showing the location of drill holes 1, 2 and 3 that tested for sediment-hosted copper-silver in red-beds beneath a lava seal.  Hole TSN1-006 intersected salt and hole TSN1-007 is testing for expected sediment-hosted copper in a similar position in the sedimentary layering as the silver-zinc mineralization at Tiria-Shimpia is located.  The fault system shown in red is suspected to have fed copper into the sediments in a similar way that it did zinc-silver into the Tiria-Shimpia area.  (Evap. is evaporite (salt) and Int. is intrusive such as a porphyry). 

Drilling at Tiria-Shimpia

Two drill holes have been completed at Tiria-Shimpia for a total of 762m, and hole SH-003 is underway at approximately 300m depth.  Weak silver-zinc mineralization was intersected in 7 sedimentary layers in hole SH-001 and results are awaited from hole 2.

Qualified Person

The geological information contained in this news release has been verified and approved by Jean-Paul Pallier, MSc.  Mr. Pallier is a designated EurGeol by the European Federation of Geologists and a Qualified Person as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.

About Aurania

Aurania is a mineral exploration company engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper in South America.  Its flagship asset, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador.

Information on Aurania and technical reports are available at www.aurania.com and www.sedar.com, as well as on Facebook at https://www.facebook.com/auranialtd/, Twitter at  https://twitter.com/auranialtd, and LinkedIn at https://www.linkedin.com/company/aurania-resources-ltd-.

For further information, please contact:

Carolyn Muir VP Investor Relations Aurania Resources Ltd. (416) 367-3200 carolyn.muir@aurania.com

Dr. Richard Spencer President Aurania Resources Ltd. (416) 367-3200 richard.spencer@aurania.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Aurania. Forward-looking statements include estimates and statements that describe Aurania’s future plans, objectives or goals, including words to the effect that Aurania or its management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to Aurania, Aurania provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to Aurania’s objectives, goals or future plans, statements, exploration results, potential mineralization, the corporation’s portfolio, treasury, management team and enhanced capital markets profile, the estimation of mineral resources, exploration, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, regulatory, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, the effects of COVID-19 on the business of the Company including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restrictions on labour and international travel and supply chains, and those risks set out in Aurania’s public documents filed on SEDAR. Although Aurania believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Aurania disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Thursday, August 19, 2021

Ely Gold Royalties (ELYGF)(ELY:CA)
Shareholders Overwhelmingly Approve Combination with Gold Royalty Corp.

As of April 24, 2020, Noble Capital Markets research on Ely Gold Royalties is published under ticker symbols (ELYGF and ELY:CA). The price target is in USD and based on ticker symbol ELYGF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target. Ely Gold Royalties Inc is an emerging royalty company with producing and development assets focused in Nevada and the Western US. It offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term gold royalties.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Business combination approved. During a special meeting on August 17, Ely Gold shareholders approved a special resolution authorizing a business combination by way of statutory plan of arrangement between Ely Gold Royalties and Gold Royalty Corp. (NYSE American, GROY). The resolution was approved by 99.52% of the votes cast by Ely shareholders present in person or by proxy, and by 99.47% of the votes cast excluding votes cast by interested parties. Total votes cast for the arrangement resolution represented approximately 49.02% of Ely’s total issued and outstanding common shares.


Share election outcomes.  Based on elections received from Ely shareholders and after pro-rationing and adjustments, for those shareholders that elected to receive Gold Royalty Corp. shares, each Ely Gold share is expected to be exchanged for 0.2450 of a Gold Royalty share plus $0.0001 in cash. For those that elected to receive cash, each Ely Gold share is expected to be exchanged for $0.869053 in …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Wednesday, August 18, 2021

Palladium One Mining Inc. (NKORF)(PDM:CA)
No Shortage of Stock Catalysts on the Horizon

Palladium One Mining Inc is a palladium dominant, PGE, nickel, copper exploration and development company. Its assets consist of the Lantinen Koillismaa and Kostonjarvi PGE-Cu-Ni projects, located in north-central Finland and the Tyko Ni-Cu-PGE and Disraeli PGE-Ni-Cu properties in Ontario, Canada. LK is targeting disseminated sulphide along 38 kilometers of favorable basal contact. The KS project is targeting massive sulphide within a 20,000-hectare land package covering a regional scale gravity and magnetic geophysical anomaly. Tyko is a 13,000-hectare project targeting disseminated and massive sulphide in a highly metamorphosed Archean terrain. Disraeli is a 2,500-hectare project targeting PGE-rich disseminated and massive sulphide in a highly productive Proterozoic mid-continent rift.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Corporate update. Palladium One provided an update on exploration progress at its LK PGE-Cu-Ni project in Finland and Tyko Cu-Ni project in Ontario, Canada, along with expected milestones during the next several months. In its most recent corporate presentation, the company has laid out its objectives and milestones through 2026.


Updated resource estimates and PEA.  At the LK project, resource definition drilling at Kaukua and the western part of Kaukua South is expected to wrap up in mid-September. Management expects to complete updated NI 43-101 compliant resource estimates for the Haukiaho zone during the third quarter, and for the Greater Kaukua area in December 2021/January 2022. A preliminary economic assessment is …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Palladium One Corporate Update

 

August 17, 2021 – Toronto, Ontario –Palladium One Mining (“Palladium One” or the “Company”) (TSXV: PDM, FRA: 7N11, OTC: NKORF) is pleased to provide this corporate update which highlights the current exploration status of our two primary projects, namely the LK PGE-Cu-Ni Project in Finland and the Tyko Copper-Nickel Project in Ontario, Canada. In addition, we are pleased to provide the key objectives of the Company over the coming months.

“With a cash balance of $15 million (unaudited) as at July 31, 2021, the Company is well funded to advance planned activities for the foreseeable future.” said Derrick Weyrauch, President and CEO.

Key Objectives (Milestones)

LK Platinum Group Element-Copper-Nickel Project, Finland

1. Resource definition drilling at Kaukua and the western portion of Kaukua South (“Kaukua Areas”) is scheduled for completion mid-September 2021. (Figure 1)
2. A NI43-101 compliant resource estimate for the Haukiaho zone, located 10 kilometers south of Kaukua, is scheduled for completion in Q3 2021.
3. Phase II metallurgical testing of the Kaukau Areas is underway and scheduled for completion before year end.
4. An updated NI43-101 compliant resource for the Kaukua Areas is scheduled for completion at year end (December 2021/January 2022).
5. A Preliminary Economic Assessment (“PEA”) is planned for mid-2022.
6. Step out drilling targeting the recently announced Induced Polarization (IP) anomaly to the west of Kaukua is scheduled to be drill tested starting September 2021. (Figure 1) (see news release dated July 7, 2021).
7. Assay labs continue to struggle with timely delivery of results due to an industry wide high volume of activity.
8. Assay results for 38 drill holes remain outstanding, while results have been released for 78 drill holes.

Tyko Copper-Nickel Project, Ontario, Canada

1. Drilling has resumed on the Smoke Lake zone, following a major drill breakdown and early spring thaw.
   1. Four holes have been completed from a planned seven-hole program.
   2. The objective is to find the source of the high-grade mineralization which produced intersections up to 9.9% Ni_Eq over 3.8 metres at surface (8.2 % Ni, 2.9 % Cu, 0.1 % Co, 0.6 g/t Pd, 0.5 g/t Pt), (see press release January 19, 2021)
   3. Previously, 28 drill holes defined a shallow 350-meter mineralized strike length at the Smoke Lake zone.
   4. Exploration drilling is targeting:
      1. Down plunge extensions of known mineralization.
      2. A large inverted magnetic high located below the Smoke Lake zone (Figure 2) will be tested by a 900-meter geophysics platform hole. The magnetic high may represent a significant accumulation of ultramafic rocks, potentially representing the source of remobilized / injected massive sulphides found at surface.
      3. After completion of the 900-meter deep hole, a Borehole Electromagnetics (“BHEM”) survey is planned to help determine the possible presents of massive sulphide mineralization at depth.
2. A 3,100-line kilometer VTEM geophysics survey has been completed over the entire Tyko property, the results of which are expected shortly.
3. The summer field program is well underway, crews are on their second rotation and beginning to explore the newly expanded Tyko Property (see news release July 27, 2021).
   1. To date over 1,300 soil samples have been collected for analysis, while results are pending.

Figure 1. Historic and current drilling in the Kaukua and Western portion of the Kaukau South area. Background is IP Chargeability.

Figure 2. Isometric view of the Smoke Lake zone area looking north-northwest showing 2020 drill holes and inverted drone based high-resolution magnetics.

Qualified Person

The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo., Vice President of Exploration and a director of the Company and the Qualified Person as defined by National Instrument 43-101.

About Palladium One

Palladium One Mining Inc. is an exploration company targeting district scale, platinum-group-element (PGE)-copper-nickel deposits in Finland and Canada. Its flagship project is the Läntinen Koillismaa or LK Project, a palladium-dominant platinum group element-copper-nickel project in north-central Finland, ranked by the Fraser Institute as one of the world’s top countries for mineral exploration and development. Exploration at LK is focused on targeting disseminated sulfides along 38 kilometers of favorable basal contact and building on an established NI 43-101 open pit resource.

ON BEHALF OF THE BOARD
“Derrick Weyrauch”
President & CEO, Director

For further information contact:
Derrick Weyrauch, President & CEO
Email: info@palladiumoneinc.com

Neither the TSX Venture Exchange nor its Market Regulator (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States of America. The common shares of Palladium One Mining Inc. have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Information set forth in this press release may contain forward-looking statements. Forward-looking statements are statements that relate to future, not past events. In this context, forward-looking statements often address a company’s expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in palladium and other commodity prices; title matters; environmental liability claims and insurance; reliance on key personnel; the absence of dividends; competition; dilution; the volatility of our common share price and volume; and tax consequences to Canadian and U.S. Shareholders. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

Tuesday, August 17, 2021

Sierra Metals (SMTS)(SMT:CA)
Updated PEA Reflects Enhanced Economics Supporting Bolivar Expansion

As of April 24, 2020, Noble Capital Markets research on Sierra Metals is published under ticker symbols (SMTS and SMT:CA). The price target is in USD and based on ticker symbol SMTS. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico. Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. Bolivar is a copper-silver-zinc-gold underground mine using room-and-pillar mining method. The majority of the revenue is earned by selling of the mineral concentrates to its customers in Peru.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Updated Bolivar preliminary economic assessment. Sierra Metals released results from an updated preliminary economic assessment (PEA) for the company’s Bolivar Mine that reflects both an increase in production capacity from 5,000 tonnes per day to 10,000 tonnes per day in 2024, and the incremental benefit of iron ore concentrate production. Both the updated PEA and a previous study, dated October 19, 2020, contemplated a mine life of 14 years. The full technical report will be available within 45 days.


Favorable comparison.  Compared to the prior PEA which also contemplated an increase in production capacity to 10,000 tonnes per day, net after-tax present value increased to US$361 million, compared to US$283 million based on an 8% discount rate. Net after-tax cash flow is expected to increase to US$650 million from US$521 million, with life of mine and sustaining capital cost increasing a modest …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Palladium One Corporate Update

 

August 17, 2021 – Toronto, Ontario –Palladium One Mining (“Palladium One” or the “Company”) (TSXV: PDM, FRA: 7N11, OTC: NKORF) is pleased to provide this corporate update which highlights the current exploration status of our two primary projects, namely the LK PGE-Cu-Ni Project in Finland and the Tyko Copper-Nickel Project in Ontario, Canada. In addition, we are pleased to provide the key objectives of the Company over the coming months.

“With a cash balance of $15 million (unaudited) as at July 31, 2021, the Company is well funded to advance planned activities for the foreseeable future.” said Derrick Weyrauch, President and CEO.

Key Objectives (Milestones)

LK Platinum Group Element-Copper-Nickel Project, Finland

1. Resource definition drilling at Kaukua and the western portion of Kaukua South (“Kaukua Areas”) is scheduled for completion mid-September 2021. (Figure 1)
2. A NI43-101 compliant resource estimate for the Haukiaho zone, located 10 kilometers south of Kaukua, is scheduled for completion in Q3 2021.
3. Phase II metallurgical testing of the Kaukau Areas is underway and scheduled for completion before year end.
4. An updated NI43-101 compliant resource for the Kaukua Areas is scheduled for completion at year end (December 2021/January 2022).
5. A Preliminary Economic Assessment (“PEA”) is planned for mid-2022.
6. Step out drilling targeting the recently announced Induced Polarization (IP) anomaly to the west of Kaukua is scheduled to be drill tested starting September 2021. (Figure 1) (see news release dated July 7, 2021).
7. Assay labs continue to struggle with timely delivery of results due to an industry wide high volume of activity.
8. Assay results for 38 drill holes remain outstanding, while results have been released for 78 drill holes.

Tyko Copper-Nickel Project, Ontario, Canada

1. Drilling has resumed on the Smoke Lake zone, following a major drill breakdown and early spring thaw.
   1. Four holes have been completed from a planned seven-hole program.
   2. The objective is to find the source of the high-grade mineralization which produced intersections up to 9.9% Ni_Eq over 3.8 metres at surface (8.2 % Ni, 2.9 % Cu, 0.1 % Co, 0.6 g/t Pd, 0.5 g/t Pt), (see press release January 19, 2021)
   3. Previously, 28 drill holes defined a shallow 350-meter mineralized strike length at the Smoke Lake zone.
   4. Exploration drilling is targeting:
      1. Down plunge extensions of known mineralization.
      2. A large inverted magnetic high located below the Smoke Lake zone (Figure 2) will be tested by a 900-meter geophysics platform hole. The magnetic high may represent a significant accumulation of ultramafic rocks, potentially representing the source of remobilized / injected massive sulphides found at surface.
      3. After completion of the 900-meter deep hole, a Borehole Electromagnetics (“BHEM”) survey is planned to help determine the possible presents of massive sulphide mineralization at depth.
2. A 3,100-line kilometer VTEM geophysics survey has been completed over the entire Tyko property, the results of which are expected shortly.
3. The summer field program is well underway, crews are on their second rotation and beginning to explore the newly expanded Tyko Property (see news release July 27, 2021).
   1. To date over 1,300 soil samples have been collected for analysis, while results are pending.

Figure 1. Historic and current drilling in the Kaukua and Western portion of the Kaukau South area. Background is IP Chargeability.

Figure 2. Isometric view of the Smoke Lake zone area looking north-northwest showing 2020 drill holes and inverted drone based high-resolution magnetics.

Qualified Person

The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo., Vice President of Exploration and a director of the Company and the Qualified Person as defined by National Instrument 43-101.

About Palladium One

Palladium One Mining Inc. is an exploration company targeting district scale, platinum-group-element (PGE)-copper-nickel deposits in Finland and Canada. Its flagship project is the Läntinen Koillismaa or LK Project, a palladium-dominant platinum group element-copper-nickel project in north-central Finland, ranked by the Fraser Institute as one of the world’s top countries for mineral exploration and development. Exploration at LK is focused on targeting disseminated sulfides along 38 kilometers of favorable basal contact and building on an established NI 43-101 open pit resource.

ON BEHALF OF THE BOARD
“Derrick Weyrauch”
President & CEO, Director

For further information contact:
Derrick Weyrauch, President & CEO
Email: info@palladiumoneinc.com

Neither the TSX Venture Exchange nor its Market Regulator (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States of America. The common shares of Palladium One Mining Inc. have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Information set forth in this press release may contain forward-looking statements. Forward-looking statements are statements that relate to future, not past events. In this context, forward-looking statements often address a company’s expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in palladium and other commodity prices; title matters; environmental liability claims and insurance; reliance on key personnel; the absence of dividends; competition; dilution; the volatility of our common share price and volume; and tax consequences to Canadian and U.S. Shareholders. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

Tuesday, August 17, 2021

Sierra Metals (SMTS)(SMT:CA)
Updated PEA Reflects Enhanced Economics Supporting Bolivar Expansion

As of April 24, 2020, Noble Capital Markets research on Sierra Metals is published under ticker symbols (SMTS and SMT:CA). The price target is in USD and based on ticker symbol SMTS. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico. Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. Bolivar is a copper-silver-zinc-gold underground mine using room-and-pillar mining method. The majority of the revenue is earned by selling of the mineral concentrates to its customers in Peru.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Updated Bolivar preliminary economic assessment. Sierra Metals released results from an updated preliminary economic assessment (PEA) for the company’s Bolivar Mine that reflects both an increase in production capacity from 5,000 tonnes per day to 10,000 tonnes per day in 2024, and the incremental benefit of iron ore concentrate production. Both the updated PEA and a previous study, dated October 19, 2020, contemplated a mine life of 14 years. The full technical report will be available within 45 days.


Favorable comparison.  Compared to the prior PEA which also contemplated an increase in production capacity to 10,000 tonnes per day, net after-tax present value increased to US$361 million, compared to US$283 million based on an 8% discount rate. Net after-tax cash flow is expected to increase to US$650 million from US$521 million, with life of mine and sustaining capital cost increasing a modest …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Sierra Metals Announces Update Of 10,000 Tonnes Per Day Positive Preliminary Economic Assessment Results To Now Include Iron Ore Production At Its Bolivar Mine In Mexico

 

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) is pleased to report the results of an updated Preliminary Economic Assessment (“PEA”) regarding the Company’s Bolivar Mine, located in Chihuahua State, Mexico to now include iron ore concentrate production.

This PEA report was prepared as a National Instrument 43-101 Technical Report for Sierra Metals Inc. (“Sierra Metals”) by SRK Consulting (Canada) Inc. (“SRK”). The full technical report will be filed on SEDAR within 45 days of this news release.

Highlights of the PEA include:

• Updated After-tax Net Present Value (NPV): US$361 Million vs. US$283 Million previously at an 8% discount rate
• The incremental benefit includes iron ore production and increasing production to 10,000 TPD from 5,000 TPD is now estimated to have an after-tax NPV (@8%) of US$78.2 million, an IRR of 69.0% vs. an NPV of US$57.4 million, and an IRR of 27.9% previously reported
• Net After-tax Cash Flow: US$650 Million vs. US$521 Million previously
• Life of Mine & Sustaining Capital Cost: US$345 Million
• Total Operating Unit Cost: US$25.62/tonne and US$1.50/lb copper equivalent
• Average LOM Copper Grade 0.72%
• Average LOM Iron Ore Grade 13.5% from ROM ore, 15% from long term residues stockpile
• Copper Price Assumption US$3.05/lb
• Iron Ore Concentrate Price Assumption for 62% Fines US$75.90/DMT
• MineLife: 14 years based on existing Mineral Resource Estimate
• Life of Mine Copper Payable Production: 551 million pounds

Luis Marchese, CEO of Sierra Metals commented: “I am very encouraged by the results of this updated PEA now including iron ore production. As mentioned in the previous PEA published in October 2020, the value could be further increased by the potential sale of magnetite (iron ore) as a by-product. Today we are happy to report that we are confirming enhanced economics and improving the value of the Bolivar Mine. The economics in this PEA confirms the rationale for approving this project in April of this year, which is proceeding on a fast track basis.

Additional to the iron ore project, the plan is to profitably develop and grow the Bolivar Mine through accelerating staged increases to a production rate of 10,000 TPD in 2024 from today’s capacity of 5,000 TPD, based on current analysts consensus metal price estimates.

We are continuing with our strategy to increase the value of the Company on a per-share basis. This builds upon the demonstrated success we have shown with increases in our mineral resource base and working to improve the throughput at all mines. At the same time, we continue to use best practices to deal with the daily effects of COVID-19 on our workforce and communities. We expect these positive developments to improve profitability further and cash flow for the Company and all shareholders this coming year as well as in the future.”

Mineral Resource Estimate

The property is located in the Piedras Verdes District of Chihuahua State, Mexico, located approximately 250 kilometers southwest of the city of Chihuahua and consists of 14 mineral concessions (6,800 hectares). The Bolivar deposit is a Cu-Zn skarn and is one of many precious and base metal deposits of the Sierra Madre belt, which trends north-northwest across the states of Chihuahua, Durango, and Sonora in northwestern Mexico (Meinert, 2007). Mineralization exhibits strong stratigraphic control, and two stratigraphic horizons host the bulk of the mineralization: an upper calcic horizon, which predominantly hosts Zn-rich mineralization, and a lower dolomitic horizon, which predominantly hosts Cu-rich mineralization. In both cases, the highest grades are developed where structures and associated breccia zones cross these favorable horizons near skarn-marble contacts.

This PEA considers depleted measured, indicated, and inferred resources reported in 2019 by SRK and effective as of December 31, 2019. The results of this PEA shown in Table 1-1 are indicative of conceptual potential and are not definitive.

Table 1-1: Summary of Mineral Resources estimate as reported by SRK,2020(EffectiveDecember 31, 2019)

Source: SRK, 2020

Mining Methodology

Bolivar is a producing operation. The primary mining method at Bolivar is underground room and pillar mining. Previous mining at Bolivar has sometimes used lower cost and more productive long hole stope mining in areas where the mineralized zones have a steeper dip angle. The mine plans are to undertake a geotechnical assessment program in 2020/2021 to expand the use of long-hole mining.

Mineral Processing

The Piedras Verdes Plant, located 5.1 kilometers from the Bolivar Mine, uses a conventional crushing-grinding-flotation circuit to recover mineralized ore and produce commercial-quality copper concentrates with silver and gold by-products credits. The mineralized ore is delivered from the mine to the plant in 18-tonne trucks. In addition, the mine is constructing an underground tunnel that will enable mineralized material to be delivered via underground truck transport to a portal adjacent to the mill. This development will eliminate the impact of bad weather on the current surface truck haulage system. In addition, it will provide a lower cost and more reliable method of delivering mineralized material to the plant.

Mineral processing and the recovery of the mineral are demonstrated, and copper, silver and gold recoveries are established at 88%, 78.7% and 62.43%, respectively.

The Piedras Verdes Plant’s current throughput capacity is 5,000 TPD. In line with proposed increases in mine output, the processing capacity at Piedras Verdes will increase to 10,000 TPD in 2024.

A new tailing storage facility (“TSF”) (herein referred to as “New TSF”) is to be located just to the west of the existing facility and has an expected life through 2025. The PEA considers the use of tailings as a backfill and has included the capital and operating costs for a backfill plant. Storing some of the tailings underground would increase the life of the New TSF, and potentially permit the removal of mineralized material pillars that are currently unrecoverable.

The overall Project infrastructure exists already and is functioning and adequate to support the mine and mill.

Economic Analysis

This PEA indicates an after-tax NPV of US$361million (using a discount rate of 8%) at 10,000 TPD (in 2024). The total operating cost for the life of mine is US$1,071 million, equating to a total operating cost of US$25.62 per tonne milled and US$1.50 per pound copper equivalent. Highlights of the PEA are provided in Table 1-2.

Table 1-2: PEA Highlights

Quality Control

All technical data contained in this news release has been reviewed and approved by:

Americo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

About Sierra Metals

Sierra Metals Inc. is a diversified Canadian mining company focused on the production and development of precious and base metals from its polymetallic Yauricocha Mine in Peru, and Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

For further information regarding Sierra Metals, please visit www.sierrametals.com.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc | Instagram: sierrametals

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws (collectively, “forward-looking information“). Forward-looking information includes, but is not limited to, statements with respect to the date of the 2020 Shareholders’ Meeting and the anticipated filing of the Compensation Disclosure. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading “Risk Factors” in the Company’s annual information form dated March 30, 2020 for its fiscal year ended December 31, 2019 and other risks identified in the Company’s filings with Canadian securities regulators and the United States Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Mike McAllister
Vice President, Investor Relations
Sierra Metals Inc.
Tel: +1 (416) 366-7777
Email: info@sierrametals.com

Americo Zuzunaga
Vice President of
Corporate Planning
Sierra Metals Inc.
Tel: +1 (416) 366-7777

Luis Marchese
CEO
Sierra Metals Inc.
Tel: +1 (416) 366-7777

Source: Sierra Metals Inc.

Sierra Metals Announces Update Of 10,000 Tonnes Per Day Positive Preliminary Economic Assessment Results To Now Include Iron Ore Production At Its Bolivar Mine In Mexico

 

TORONTO–(BUSINESS WIRE)– Sierra Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) is pleased to report the results of an updated Preliminary Economic Assessment (“PEA”) regarding the Company’s Bolivar Mine, located in Chihuahua State, Mexico to now include iron ore concentrate production.

This PEA report was prepared as a National Instrument 43-101 Technical Report for Sierra Metals Inc. (“Sierra Metals”) by SRK Consulting (Canada) Inc. (“SRK”). The full technical report will be filed on SEDAR within 45 days of this news release.

Highlights of the PEA include:

• Updated After-tax Net Present Value (NPV): US$361 Million vs. US$283 Million previously at an 8% discount rate
• The incremental benefit includes iron ore production and increasing production to 10,000 TPD from 5,000 TPD is now estimated to have an after-tax NPV (@8%) of US$78.2 million, an IRR of 69.0% vs. an NPV of US$57.4 million, and an IRR of 27.9% previously reported
• Net After-tax Cash Flow: US$650 Million vs. US$521 Million previously
• Life of Mine & Sustaining Capital Cost: US$345 Million
• Total Operating Unit Cost: US$25.62/tonne and US$1.50/lb copper equivalent
• Average LOM Copper Grade 0.72%
• Average LOM Iron Ore Grade 13.5% from ROM ore, 15% from long term residues stockpile
• Copper Price Assumption US$3.05/lb
• Iron Ore Concentrate Price Assumption for 62% Fines US$75.90/DMT
• MineLife: 14 years based on existing Mineral Resource Estimate
• Life of Mine Copper Payable Production: 551 million pounds

Luis Marchese, CEO of Sierra Metals commented: “I am very encouraged by the results of this updated PEA now including iron ore production. As mentioned in the previous PEA published in October 2020, the value could be further increased by the potential sale of magnetite (iron ore) as a by-product. Today we are happy to report that we are confirming enhanced economics and improving the value of the Bolivar Mine. The economics in this PEA confirms the rationale for approving this project in April of this year, which is proceeding on a fast track basis.

Additional to the iron ore project, the plan is to profitably develop and grow the Bolivar Mine through accelerating staged increases to a production rate of 10,000 TPD in 2024 from today’s capacity of 5,000 TPD, based on current analysts consensus metal price estimates.

We are continuing with our strategy to increase the value of the Company on a per-share basis. This builds upon the demonstrated success we have shown with increases in our mineral resource base and working to improve the throughput at all mines. At the same time, we continue to use best practices to deal with the daily effects of COVID-19 on our workforce and communities. We expect these positive developments to improve profitability further and cash flow for the Company and all shareholders this coming year as well as in the future.”

Mineral Resource Estimate

The property is located in the Piedras Verdes District of Chihuahua State, Mexico, located approximately 250 kilometers southwest of the city of Chihuahua and consists of 14 mineral concessions (6,800 hectares). The Bolivar deposit is a Cu-Zn skarn and is one of many precious and base metal deposits of the Sierra Madre belt, which trends north-northwest across the states of Chihuahua, Durango, and Sonora in northwestern Mexico (Meinert, 2007). Mineralization exhibits strong stratigraphic control, and two stratigraphic horizons host the bulk of the mineralization: an upper calcic horizon, which predominantly hosts Zn-rich mineralization, and a lower dolomitic horizon, which predominantly hosts Cu-rich mineralization. In both cases, the highest grades are developed where structures and associated breccia zones cross these favorable horizons near skarn-marble contacts.

This PEA considers depleted measured, indicated, and inferred resources reported in 2019 by SRK and effective as of December 31, 2019. The results of this PEA shown in Table 1-1 are indicative of conceptual potential and are not definitive.

Table 1-1: Summary of Mineral Resources estimate as reported by SRK,2020(EffectiveDecember 31, 2019)

Source: SRK, 2020

Mining Methodology

Bolivar is a producing operation. The primary mining method at Bolivar is underground room and pillar mining. Previous mining at Bolivar has sometimes used lower cost and more productive long hole stope mining in areas where the mineralized zones have a steeper dip angle. The mine plans are to undertake a geotechnical assessment program in 2020/2021 to expand the use of long-hole mining.

Mineral Processing

The Piedras Verdes Plant, located 5.1 kilometers from the Bolivar Mine, uses a conventional crushing-grinding-flotation circuit to recover mineralized ore and produce commercial-quality copper concentrates with silver and gold by-products credits. The mineralized ore is delivered from the mine to the plant in 18-tonne trucks. In addition, the mine is constructing an underground tunnel that will enable mineralized material to be delivered via underground truck transport to a portal adjacent to the mill. This development will eliminate the impact of bad weather on the current surface truck haulage system. In addition, it will provide a lower cost and more reliable method of delivering mineralized material to the plant.

Mineral processing and the recovery of the mineral are demonstrated, and copper, silver and gold recoveries are established at 88%, 78.7% and 62.43%, respectively.

The Piedras Verdes Plant’s current throughput capacity is 5,000 TPD. In line with proposed increases in mine output, the processing capacity at Piedras Verdes will increase to 10,000 TPD in 2024.

A new tailing storage facility (“TSF”) (herein referred to as “New TSF”) is to be located just to the west of the existing facility and has an expected life through 2025. The PEA considers the use of tailings as a backfill and has included the capital and operating costs for a backfill plant. Storing some of the tailings underground would increase the life of the New TSF, and potentially permit the removal of mineralized material pillars that are currently unrecoverable.

The overall Project infrastructure exists already and is functioning and adequate to support the mine and mill.

Economic Analysis

This PEA indicates an after-tax NPV of US$361million (using a discount rate of 8%) at 10,000 TPD (in 2024). The total operating cost for the life of mine is US$1,071 million, equating to a total operating cost of US$25.62 per tonne milled and US$1.50 per pound copper equivalent. Highlights of the PEA are provided in Table 1-2.

Table 1-2: PEA Highlights

Quality Control

All technical data contained in this news release has been reviewed and approved by:

Americo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

About Sierra Metals

Sierra Metals Inc. is a diversified Canadian mining company focused on the production and development of precious and base metals from its polymetallic Yauricocha Mine in Peru, and Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three Mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

The Company’s Common Shares trade on the Bolsa de Valores de Lima and on the Toronto Stock Exchange under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

For further information regarding Sierra Metals, please visit www.sierrametals.com.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc | Instagram: sierrametals

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws (collectively, “forward-looking information“). Forward-looking information includes, but is not limited to, statements with respect to the date of the 2020 Shareholders’ Meeting and the anticipated filing of the Compensation Disclosure. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading “Risk Factors” in the Company’s annual information form dated March 30, 2020 for its fiscal year ended December 31, 2019 and other risks identified in the Company’s filings with Canadian securities regulators and the United States Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

Mike McAllister
Vice President, Investor Relations
Sierra Metals Inc.
Tel: +1 (416) 366-7777
Email: info@sierrametals.com

Americo Zuzunaga
Vice President of
Corporate Planning
Sierra Metals Inc.
Tel: +1 (416) 366-7777

Luis Marchese
CEO
Sierra Metals Inc.
Tel: +1 (416) 366-7777

Source: Sierra Metals Inc.

	Image Credit: Tom Fisk (Pexels)

What’s in the Infrastructure Bill for US Battery Production?

 

The Infrastructure Bill that just passed the Senate and is headed to the House for a possible vote this Fall is undoubtedly helpful for metals producers. However, not all will benefit. If passed, there’d be billions for upgrading highways, railways, and power grids. So steel, copper, and aluminum are obvious winners, but as written, for minerals used in batteries such as lithium or cobalt, the bill will not only increase domestic demand but aims to increase supply as well.

There is $6 billion earmarked for battery materials processing and manufacturing projects and an additional $140 million allocated to what is called a rare earths demonstration plant. This is part of a greater investment drive across the full metallic supply chain.

The “investment” within the bill works to place importance on production capacity of critical metals and “green” the overall infrastructure of the country while making a solid effort to “buy American.” A tall order considering the country’s reliance on imports.

Rare Earth Metals

The United States’ supply of rare earth compounds can best be described as imported. Almost 80% of shipments come from China, according to the United States Geological Survey (USGS).

The Department of Energy (DOE) is already steering funds into research and development on the necessary materials needed, from primary processing to recycling, the infrastructure bill makes the commitment much larger with a $140 million grant to build a facility, “to demonstrate the commercial feasibility of a full-scale integrated rare earth element extraction and separation facility and refinery”.

 

 

A partner from academia is expected to “provide environmental benefits through use of feedstock derived from acid mine drainage, mine waste, or other deleterious material.” The US is considered vulnerable in its not being able to supply enough critical minerals for what is expected to provide the energy needs of the near future.

Critical mineral recycling also gets money through this bill as it allocates $100 million per year through 2024 in grants for developing, processing, and recycling critical minerals. Recycling projects will get a minimum of 30%. Any project based in the United States will be prioritized and none will be allowed to export to “a foreign entity of concern”.

Battery Metals

There is $7.5 billion allocated in the bill for EV charging. The House is rumored to be looking to refine the bill and bolster some of these numbers for them to approve a revised version.

While the plan is to move quickly forward with electric vehicles, currently the country will not have enough domestic production of lithium, nickel, and cobalt to make the batteries needed to power those vehicles. This may be remedied by the bill’s allocations of $3 billion for each of the following: battery materials processing, and battery manufacturing projects. Grants in each case will be for either demonstration plants, full commercial facilities or the retrofitting of existing facilities in the United States. Grants are only offered to U.S. owned organizations. The winners of grants will be subject to North American intellectual property rights with a commitment not to “use battery material supplied by or originating from a foreign entity of concern.” 

Permitting

Getting US-funded new mines for nickel, lithium, or cobalt refining can be a slow process given the current complexity of the permitting processes. Far too slow if the country is going meet the stated targets. The bill notes, “The Federal permitting process has been identified as an impediment to mineral production and the mineral security of the United States,” it calls for the implementing performance metrics as a condition of approving critical mines that are part of the program.

Environmental opposition to these metal mining projects is another impediment. This will be part of what is addressed; it remains to be seen just how quickly permitting can be put through, given the obvious counter-productive nature of mining.

The Dirty Mining Issue

“Whole-concept” or “total mining” is addressed in the infrastructure bill. Despite the shorter deadlines and grant periods, the bill allows a 10-year deadline for the United States Geological Survey (USGS) to provide a comprehensive survey of national mineral resources. The intent is “using a whole ore body approach rather than a single commodity approach, to emphasize all of the recoverable critical minerals in a given surface or subsurface deposit”.

The bill also calls for the USGS to “map and collect data for areas containing mine waste to increase understanding of above-ground critical mineral resources in previously disturbed areas.” These wastes are expected to feed the proposed new rare earths processing plants.

Brand new mines will remain a problem for critical minerals planners; going back to what has already been mined seems more sensible.

Take-Away

The infrastructure bill is an obvious win for construction materials but will also provide a strong framework and a lot of R&D money for miners and academia alike. The top take from the as yet not fully passed or signed bill is that it will focus on companies in the U.S. This will mean many current mining and recycling companies within our borders will have tremendous potential to grow at a rapid pace.

Discover US-based mining companies to explore here on Channelchek. Then subscribe to our YouTube channel to listen to interviews with the top brass from metal producers.

Suggested Reading:

ESG Scores and How to Use Them

Lithium Battery vs Hydrogen Fuel Cell

Ford’s Announcement is Another Reason for Copper Producers to Smile

Debt Ceiling Debate Impact on Stocks and US Treasury Credit Rating

Sources:

 

https://www.reuters.com/article/us-critical-minerals-ahome/column-u-s-infrastructure-bill-targets-critical-minerals-supply-idUSKBN2FD1GU

https://www.cnn.com/2021/07/28/politics/infrastructure-bill-explained/index.html

https://www.sciencemag.org/news/2021/08/big-step-forward-energy-expert-analyzes-new-us-infrastructure-bill

 

Stay up to date. Follow us:

	Image Credit: Tom Fisk (Pexels)

What’s in the Infrastructure Bill for US Battery Production?

 

The Infrastructure Bill that just passed the Senate and is headed to the House for a possible vote this Fall is undoubtedly helpful for metals producers. However, not all will benefit. If passed, there’d be billions for upgrading highways, railways, and power grids. So steel, copper, and aluminum are obvious winners, but as written, for minerals used in batteries such as lithium or cobalt, the bill will not only increase domestic demand but aims to increase supply as well.

There is $6 billion earmarked for battery materials processing and manufacturing projects and an additional $140 million allocated to what is called a rare earths demonstration plant. This is part of a greater investment drive across the full metallic supply chain.

The “investment” within the bill works to place importance on production capacity of critical metals and “green” the overall infrastructure of the country while making a solid effort to “buy American.” A tall order considering the country’s reliance on imports.

Rare Earth Metals

The United States’ supply of rare earth compounds can best be described as imported. Almost 80% of shipments come from China, according to the United States Geological Survey (USGS).

The Department of Energy (DOE) is already steering funds into research and development on the necessary materials needed, from primary processing to recycling, the infrastructure bill makes the commitment much larger with a $140 million grant to build a facility, “to demonstrate the commercial feasibility of a full-scale integrated rare earth element extraction and separation facility and refinery”.

 

 

A partner from academia is expected to “provide environmental benefits through use of feedstock derived from acid mine drainage, mine waste, or other deleterious material.” The US is considered vulnerable in its not being able to supply enough critical minerals for what is expected to provide the energy needs of the near future.

Critical mineral recycling also gets money through this bill as it allocates $100 million per year through 2024 in grants for developing, processing, and recycling critical minerals. Recycling projects will get a minimum of 30%. Any project based in the United States will be prioritized and none will be allowed to export to “a foreign entity of concern”.

Battery Metals

There is $7.5 billion allocated in the bill for EV charging. The House is rumored to be looking to refine the bill and bolster some of these numbers for them to approve a revised version.

While the plan is to move quickly forward with electric vehicles, currently the country will not have enough domestic production of lithium, nickel, and cobalt to make the batteries needed to power those vehicles. This may be remedied by the bill’s allocations of $3 billion for each of the following: battery materials processing, and battery manufacturing projects. Grants in each case will be for either demonstration plants, full commercial facilities or the retrofitting of existing facilities in the United States. Grants are only offered to U.S. owned organizations. The winners of grants will be subject to North American intellectual property rights with a commitment not to “use battery material supplied by or originating from a foreign entity of concern.” 

Permitting

Getting US-funded new mines for nickel, lithium, or cobalt refining can be a slow process given the current complexity of the permitting processes. Far too slow if the country is going meet the stated targets. The bill notes, “The Federal permitting process has been identified as an impediment to mineral production and the mineral security of the United States,” it calls for the implementing performance metrics as a condition of approving critical mines that are part of the program.

Environmental opposition to these metal mining projects is another impediment. This will be part of what is addressed; it remains to be seen just how quickly permitting can be put through, given the obvious counter-productive nature of mining.

The Dirty Mining Issue

“Whole-concept” or “total mining” is addressed in the infrastructure bill. Despite the shorter deadlines and grant periods, the bill allows a 10-year deadline for the United States Geological Survey (USGS) to provide a comprehensive survey of national mineral resources. The intent is “using a whole ore body approach rather than a single commodity approach, to emphasize all of the recoverable critical minerals in a given surface or subsurface deposit”.

The bill also calls for the USGS to “map and collect data for areas containing mine waste to increase understanding of above-ground critical mineral resources in previously disturbed areas.” These wastes are expected to feed the proposed new rare earths processing plants.

Brand new mines will remain a problem for critical minerals planners; going back to what has already been mined seems more sensible.

Take-Away

The infrastructure bill is an obvious win for construction materials but will also provide a strong framework and a lot of R&D money for miners and academia alike. The top take from the as yet not fully passed or signed bill is that it will focus on companies in the U.S. This will mean many current mining and recycling companies within our borders will have tremendous potential to grow at a rapid pace.

Discover US-based mining companies to explore here on Channelchek. Then subscribe to our YouTube channel to listen to interviews with the top brass from metal producers.

Suggested Reading:

ESG Scores and How to Use Them

Lithium Battery vs Hydrogen Fuel Cell

Ford’s Announcement is Another Reason for Copper Producers to Smile

Debt Ceiling Debate Impact on Stocks and US Treasury Credit Rating

Sources:

 

https://www.reuters.com/article/us-critical-minerals-ahome/column-u-s-infrastructure-bill-targets-critical-minerals-supply-idUSKBN2FD1GU

https://www.cnn.com/2021/07/28/politics/infrastructure-bill-explained/index.html

https://www.sciencemag.org/news/2021/08/big-step-forward-energy-expert-analyzes-new-us-infrastructure-bill

 

Stay up to date. Follow us:

Thursday, August 12, 2021

Endeavour Silver (EXK)(EDR:CA)
Operating Cost Profile Expected to Improve in the Second Half

As of April 24, 2020, Noble Capital Markets research on Endeavour Silver is published under ticker symbols (EXK and EDR:CA). The price target is in USD and based on ticker symbol EXK. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Endeavour Silver Corp is a precious metal mining company. The company is primarily engaged in silver mining and owns three high-grade, underground, silver-gold mines in Mexico. Its other business activities include acquisition, exploration, development, extraction, processing, refining and reclamation. The company is organized into four operating mining segments, Guanacevi, Bolanitos, El Cubo, and El Compas, which are located in Mexico as well as Exploration and Corporate segments. Its Exploration segment consists of projects in the exploration and evaluation phases in Mexico and Chile.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter 2021 results. Endeavour reported second quarter 2021 net income of $6.7 million, or $0.04 per share, compared to a loss of $3.3 million, or $(0.02) per share during the prior year period. Excluding a gain on the sale of the El Cubo mine, the company generated net income of $0.8 million, or $0.01 per share. We had projected net income of $6.9 million or $0.04 per share. Revenue was in line with our estimates although operating costs were higher than expected due to inflationary pressures, including increased labor costs. Cash costs per silver ounce and all-in sustaining costs per ounce increased to $13.03 and $25.30, respectively, compared to $7.86 and $19.94 in the first quarter of 2021.


Updating estimates.  We have trimmed our 2021 EPS and EBITDA estimates to $0.03 and $47.5 million from $0.06 and $52.5 million, respectively. Our 2022 EPS and EBITDA estimates are $0.18 and $75.5 million, respectively. While our 2022 estimates are largely unchanged, our 2021 estimates reflect second quarter results although we anticipate some margin improvement in the second half of the year. There …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.