Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Hitting on all cylinders. Drilling at Labrador Gold’s 100%-owned Kingsway gold project continues to target the Appleton Fault over a 12-kilometer strike length. The drilling is part of the company’s ongoing 100,000-meter diamond drilling program of which approximately 69,000 meters are complete. Assays are pending for approximately 3,500 meters of core. Most of the drilling has occurred at the Big Vein target which has been drilled over a 722-meter northeast-southwest strike length and remains open in both directions.
Drilling to resume next week. Following the seasonal thaw, drilling is expected to resume next week at the Drop Kick target, previously known as Home Pond South, where 10 to 12 holes representing approximately 2,000 meters of drilling will be completed. Following Drop Kick, the drill could move to the Pristine target where Labrador may drill 5 or 6 holes representing approximately 1,200 meters of drilling. Following Pristine, the drill could move either to the Gap Zone between Pristine and Big Vein or to the Peter Easton target, depending on receipt of drill permits for the Gap Zone. We expect the company to operate with three drill rigs, including two rigs at Big Vein to test for extensions of the mineralization to the northeast and southwest.
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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.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Volcanogenic massive sulfide (VMS) targets. Maple Gold Mines Ltd. revealed plans for a summer field program at the Douay and Joutel Gold Projects to explore volcanogenic massive sulfide (VMS) targets. Maple Gold is also planning VMS exploration work at its 100%-owned Morris Project approximately 30 kilometers east of the town of Matagami in Morris Township, Quebec. Morris is located approximately 30 kilometers east of the Matagami VMS mining camp and hosts the Watson Lake rhyolite unit which forms the footwall of all the VMS mines at Matagami.
Multiple styles of mineralization. Maple Gold’s 400 square kilometer land package is highly prospective for multiple styles of mineralization and the company has added technical expertise to its board and technical advisory committee to ensure the land package is fully explored for all sources of potential world class deposits. For example, the joint venture recently hired Dr. Marina Schofield, an expert in volcanology, structural geology, and VMS systems, to lead the company’s VMS exploration efforts.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Vancouver, British Columbia–(Newsfile Corp. – May 18, 2023) – Maple Gold Mines Ltd. (TSXV: MGM) (OTCQB: MGMLF) (FSE: M3G) (“Maple Gold” or the “Company“) is pleased to provide an update regarding property-wide volcanogenic massive sulfide (“VMS”) targeting and plans for a summer field program at the Douay and Joutel Gold Projects (“Douay” and “Joutel”, respectively) located in Québec, Canada, which are held by a 50/50 joint venture (the “JV”) between the Company and Agnico Eagle Mines Limited. The Company is also planning VMS exploration work at its 100%-owned Morris Project (“Morris”) located approximately 30 kilometres (“km”) east of the town of Matagami in Morris Township, Québec.
The JV’s primary focus remains on testing resource expansion targets at Douay and testing prospective near-mine extension targets in the Telbel mine area at Joutel. However, the Douay and Joutel projects each have demonstrated potential for gold and base metals VMS mineralization, as is illustrated by a series of targets previously defined by field mapping and geophysical surveying across the combined 400 km² property package (see news from July 19, 2022). Under the terms of the JV agreement, the partners agreed to jointly fund C$500,000 in exploration on VMS targets on the western portion of Douay (see news from February 3, 2021).
Summary of VMS-focused exploration and corporate initiatives:
The Company’s mapping, sampling and top of bedrock drilling during 2018 identified six (6) priority target areas for potential base metals and gold-rich VMS mineralization (see press release November 14, 2018).
The Company subsequently appointed Dr. Gérald Riverin, a recognized VMS expert with 40+ years of experience in the Abitibi Greenstone belt, to its board of directors and Technical Advisory Committee (see news from June 9, 2020).
In late 2021, the JV consolidated two (2) inlier claim blocks covering 22 claims and 12.3 km² of ground in the central portion of Douay in an area deemed prospective for zinc and copper mineralization (see news from October 19, 2021).
Also in 2021, the Company acquired 100% of Morris and completed preliminary ground geophysics and lithogeochemical sampling. In 2022 and 2023, the Company completed deep penetrating pulse electromagnetic (“PEM”) surveys that outlined a 3 km long conductive zone adjacent to a favorable rhyolite unit.
In 2022, the JV completed a regional airborne magnetic and electromagnetic (“Mag-EM”) survey to support exploration drill targeting, which identified 55 targets within four (4) primary target areas prospective for pyritic gold and VMS mineralization (see news from July 19, 2022). After geophysical review, sixteen (16) of these targets were selected for priority follow-up (see Figure 1).
In 2023, the Company appointed Paul Harbidge, CEO of Faraday Copper Corp., an emerging U.S. copper developer, to its Technical Advisory Committee to further strengthen the Company’s technical group and support gold and base metals exploration (see news from February 7, 2023).
The JV has recently hired Dr. Marina Schofield, an expert in volcanology, structural geology and VMS systems, to lead the Company’s VMS exploration efforts.
“We have methodically built a pipeline of prospective gold and base metals VMS targets across the large >400 km² Douay-Joutel property package and have expanded our technical expertise in order to systematically evaluate and advance a VMS-focused exploration program,” statedMatthew Hornor, President and CEO of Maple Gold. “The past-producing high-grade Estrades zinc-gold mine is located just over 11 km to the west of Douay-Joutel and the same geologic horizon that hosted that mine appears to continue onto the western portion of the Douay property. Further to the southeast, historical regional exploration drilling along the Joutel Deformation Zone, east of the historical Eagle-Telbel deposits, has also returned anomalous zinc and gold values. We look forward to completing further cost-effective field work this summer to bring the highest priority VMS discovery targets to a drill-ready stage.”
VMS Targets and Associated 2023 Summer Exploration Plans:
Figure 1: Geology base map highlighting VMS and VMS-like base metal mines and deposits in the region and copper-zinc showings.
The Douay-Joutel property straddles the Casa Berardi Deformation Zone, which is geologically underlain, from south to north, by predominantly intermediate to felsic tuffs of the Joutel-Raymond Grp, the basinal sediments of the Harricana Grp and the predominantly mafic volcanic sequence forming the Cartwright Hills Grp, followed by further basinal sediments of the Taïbi Grp. Although the geological model for Eagle-Telbel is still evolving, gold mineralization was associated with mixed sedimentary and pyroclastic horizons hosting abundant iron carbonate and semi-massive sulfide (pyrite) at the top of the volcanic package that hosts the past-producing Joutel/Poirier VMS mining camp. The main VMS target horizons occur laterally along the Eagle-Telbel Mine Horizon, as well as along multiple interflow horizons within The Cartwright Hills Grp, which include the interpreted eastern extension of the Estrades horizons.
Figure 2: Gold, VMS and base metal target areas in the greater Joutel area (same legend as Fig 1).
The Joutel Targets (see Figure 2 above) include several EM anomalies within ~2-5 km of the historical Eagle, Telbel and Eagle West deposits that have very limited drilling. These deposits are associated with the Harricana and Joutel Deformation Zones and appear as discrete conductive zones aligned along a well-defined northwest trend. The Mag-EM survey indicates possible similar structures extending more than 9 km further to the east in this area where historical drilling intersected anomalous gold (“Au”) and zinc (“Zn”) in several holes. Hole M-94-078 (also known as McClure 93-2 showing) intersected 0.81% Zn over 0.6 metres (“m”); hole JO-12-05 intersected 6.1 g/t Au over 1.5 m, as well as 0.55% Zn over 4 m further downhole, including 0.88% Zn over 1m.
Planned work to advance VMS targets at Douay and Joutel is expected to include compilation of existing data, including review of historical drill logs, followed by field work including lithogeochemistry and initial follow-up ground EM surveys to support bringing highest priority VMS target areas towards a drill ready stage.
Separately, planned work at Morris is expected to include detailed lithogeochemical sampling to establish the full extent of strong VMS related hydrothermal alteration identified in 2021 and identify promising portions of the 3 km long conductor identified by ground geophysics in 2022 and 2023 (see Figure 3). Morris is located approximately 30 km east of the Matagami VMS mining camp and hosts the Watson Lake rhyolite unit which forms the footwall of all the VMS mines at Matagami.
Figure 3: 100% owned Morris claims with geology and geophysics compilation. Favorable alteration is highlighted by higher Riverindex values.
The scientific and technical data contained in this press release was reviewed and prepared under the supervision of Fred Speidel, M. Sc., P. Geo., Vice-President Exploration of Maple Gold. Mr. Speidel is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Speidel has verified the data related to the exploration information disclosed in this press release through his direct participation in the work.
About Maple Gold
Maple Gold Mines Ltd. is a Canadian advanced exploration company in a 50/50 joint venture with Agnico Eagle Mines Limited to jointly advance the district-scale Douay and Joutel gold projects located in Québec’s prolific Abitibi Greenstone Gold Belt. The projects benefit from exceptional infrastructure access and boast ~400 km2 of highly prospective ground including an established gold resource at Douay (SLR 2022) that holds significant expansion potential as well as the past-producing Eagle, Telbel and Eagle West mines at Joutel. In addition, the Company holds an exclusive option to acquire 100% of the Eagle Mine Property.
The district-scale property package also hosts a significant number of regional exploration targets along a 55 km strike length of the Casa Berardi Deformation Zone that have yet to be tested through drilling, making the project ripe for new gold and polymetallic discoveries. The Company is well capitalized and is currently focused on carrying out exploration and drill programs to grow resources and make new discoveries to establish an exciting new gold district in the heart of the Abitibi. For more information, please visit www.maplegoldmines.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 PRESS RELEASE.
Forward Looking Statements:
This press release contains “forward-looking information” and “forward-looking statements” (collectively referred to as “forward-looking statements”) within the meaning of applicable Canadian securities legislation in Canada, including statements about exploration work and results from current and future work programs. Forward-looking statements are based on assumptions, uncertainties and management’s best estimate of future events. Actual events or results could differ materially from the Company’s expectations and projections. Investors are cautioned that forward-looking statements involve risks and uncertainties. Accordingly, readers should not place undue reliance on forward-looking statements. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to Maple Gold Mines Ltd.’s filings with Canadian securities regulators available on www.sedar.com or the Company’s website at www.maplegoldmines.com. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Is Further Consolidation in the Mining Sector Expected?
Two of the world’s leading gold producers have agreed to merge. In a press release this week, Newmont Mining (NEM) said it entered into a definitive agreement to acquire 100% of shares of Newcrest Mining (NCMGY). The deal represents a 30.4% premium to Newcrest stockholders above the price when Newmont first made an offer in February. While this is a huge deal that will greatly expand the world’s largest gold-producing company, investors are seeing possible opportunities in smaller mining companies. It’s likely some are quietly being targeted in 2023 for a number of important reasons. Investors interested in this industry may want to familiarize themselves with the current dynamics.
About the Newmont Newcrest Deal
Newmont, the world’s largest gold producer, is solidly moving toward becoming much larger after the board of takeover target Newcrest Mining unanimously agreed to recommend the merger bid to shareholders. Newmont projections indicate the combined entity could create annual production of 8Moz of gold and 155k tonnes of copper.
The merged company would easily control world-leading gold stocks. Newmont is also set to become a significant copper producer, with current and expected developments to provide significant production upside in the coming years, including the world-class Wafi-Golpu copper-gold project in Papua New Guinea.
Takeover Details
After rejecting Newmont’s initial February 2023 offer, the Newcrest board today elected to accept the significantly upgraded April revised proposal. The deal carries an implied equity value of US$26.2 billion and enterprise value for Newcrest of US$28.8 billion.
Current Newcrest shareholders will have 31% ownership of the combined group.
According to Newcrest’s chairman, Peter Tomsett, the transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of the company growth pipeline.
Will the Merger Trend Continue?
Higher metals prices and increased demand brought on by changing energy production and storage, post-pandemic demand, and commodities investing in an uncertain global economy have caused a number of deals in this sector already this year.
The primary reasons to expect more consolidation within the mining sector are growing.
The chart above created by the CRU Group shows how fragmented gold mining is relative to other metals. The top 10 largest gold miners only produce 28% of all output. Gold prices have been rising fairly steadily but spending on exploration has been stalled. Growth to create shareholder value, would most efficiently and expediently be achieved by merger and acquisition (M&A). In the current environment, buyouts of active producers with known reserves are the alternative way for larger miners to to increase their production share, replenish depleting gold reserves and… lower production costs through with far less risk and in a shorter time period.
More Reasons to Own Mining Companies
World demand has been heightened for gold, copper, and other minerals used to store or distribute electricity. This dynamic which has been trending upward in recent years, is likely to push other financially strong mining companies, that want to satisfy new production demand now rather than through exploration and long, uncertain bureaucratic approval processes will shop for producers to increase production and grow to serve shareholders. Smaller companies that find themselves the target of an acquisition, also have a duty to serve shareholders. Often this plays out by the target company negotiating terms that are similar to the 30% gain seen in the Newmont/Newcrest deal.
What Else
Informed stock selection is key to discovering and deciding whether to invest in companies best positioned to benefit from a sector experiencing growing demand where acquisitions, in full or in part, fulfill larger company goals.
Where does an investor start to better understanding the mining sector and individual companies? Earlier this year The Channelchek Take Away Series brought to viewers a live in-depth presentation of 12 mining companies that were just coming off the huge PDAC mining conference in Canada. These presentations are available on video to be replayed – they may be the best place to begin hearing from mining company executives and a highly respected senior natural resources analyst. Click here to get started. Then visit Channelchek’s Natural Resources data of the many other companies available to discover for even more interesting, actionable opportunities.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter 2023 financial results. First quarter revenue totaled $187.3 million compared to $210.1 million in the prior period and $188.4 million in the first quarter of 2022. Coeur reported an adjusted first quarter loss of $33.1 million or $(0.11) per share compared to our first quarter loss estimate of $33.8 million or $(0.11) per share and the median loss estimate of $30.7 million or $(0.10) per share. On a GAAP basis, the first quarter loss was $24.6 million or $(0.08) per share. First quarter adjusted EBITDA amounted to $25.1 million. Free cash flow during the first quarter amounted to $(109.0) million, inclusive of capital expenditures totaling $74 million.
Guidance reaffirmed. First quarter gold and silver ounces produced were 69.0 thousand and 2.5 million, respectively, while gold and silver ounces sold were 70.9 thousand and 2.6 million. We had forecast gold and silver production of 69.2 thousand and 2.3 million ounces, respectively. Silver production at the Rochester mine was ahead of our estimate. Coeur reaffirmed its 2023 gold and silver production guidance of 320.0 to 370.0 thousand ounces and 10.0 to 12.0 million ounces, respectively. Production is weighted toward the second half of the year due to mine plan sequencing and the anticipated ramp-up and commissioning of the Rochester expansion. Operationally, we expect the third quarter to be the company’s strongest based on the Rochester mine’s production profile.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First phase of deep drilling completed. Maple Gold announced first phase completion of deep drilling at the Douay and Joutel gold projects which are held by a 50/50 joint venture (JV) between Maple and Agnico Eagle Mines Limited. The JV completed more than 13,100 meters of drilling across both projects. Early indications from the joint venture’s first phase of deep drilling are encouraging, particularly at Telbel. At Douay, management is most excited by what has been observed in the drill core beneath the Porphyry Zone. Assay results are expected in the second quarter of 2023 and will be reported once received and interpreted.
100% success rate at Telbel. In the Telbel mine area at Joutel, the joint venture drilled a total of 7,343 meters in three master drill holes and four wedge drill holes. All Telbel drill holes intersected broad zones of semi-massive to massive sulfide mineralization. Hole TB-22-003 and its associated wedges intersected three mineralized zones and bottomed in mineralization. Importantly, upper mineralized zones intersected by the hole were well north of the main mine horizon.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
The Debate Over the U.S. Spending Limit Opens Investment Opportunities
The U.S. debt-ceiling crisis, as Summer 2023 approaches, can go one of two ways. First, all parties in Congress could quickly meet and vote on fixing it, thus averting a catastrophe; alternatively, the debate could heat up as we approach the day when the U.S. Treasury can’t borrow to pay the country’s bills. At the risk of sounding negative, the timing of Washington finally ironing out a solution is likely to be hours before the moment the country would have been unable to fund maturing debt, minutes before it would have to send workers home and halted other spending.
Okay, so that was a bit pessimistic. But, as investors, we rely on past performance, even though we know it is no guarantee of future results. And past performance by Congress has been that it waits until the 11th hour after all hope seems to be lost.
This has happened many times in the past. The last time it became truly scary was in 2011. For equity investors, stocks became volatile but overall averaged flat in the period. But, there were two investment sectors that attracted positive activity.
What’s Rallied in the Past?
The winning sector was U.S. Treasury bonds out along the yield curve with maturity dates not expected to be impacted by a possible non-payment at maturity. Today, bonds are rallying (rates down) even after the PCE inflation gauge showed little headway over the past two months, so this is an indication that government debt may still be considered an investor safe haven. But, investing in an entity headed toward insolvency is questionable practice, even when the entity speeding toward bankruptcy is the United States of America.
The second is precious metals (PM), a currency alternative – the longest-running safe haven of all. By precious metals, I’m speaking specifically of gold, silver, and the stock of companies whose main business it is to mine these metals.
The most recent nail-biting standoff was in 2011. It was a politically contentious time in Washington, arguably, today’s climate is even less agreeable. At the time, the U.S. government had reached its borrowing limit of $14.3 trillion and needed to raise the debt ceiling in order to continue paying its bills and avoid default. Congress, and the White House eventually agreed to a last-minute compromise, which included some spending cuts but avoided a U.S. default.
Between July 1 and September 8, 2011, PM investments trounced the S&P 500 (Koyfin)
During this time, the financial markets whipsawed investors. However, gold-related investments, along with silver related, turned dramatically upward until a deal was struck the second week of September. Gold rose to an all-time high of around $1,900 per ounce in September 2011. Investors used gold as a hedge against the same concerns we are experiencing in 2023, namely inflation and currency debasement.
Silver also saw its price rise, although not to the same extent as gold. The price of silver reached a high of around $48 per ounce in April 2011, before retreating to around $30 per ounce by the end of the year.
Mining stocks also benefited from the uncertainty in the financial markets (see above graph). Shares of companies like Barrick Gold, Newmont Mining, and Goldcorp all saw significant gains while other industries were getting whipsawed. Junior miner Coeur mining (CDE) rose 25.7% during the period between July 1 and September 8, 2011. Endeavour Silver (EXK) rose a full 30% in the same period.
Mark Reichman the Senior Research Analyst covering Natural Resources at Noble Capital Markets pointed to additional macroeconomic events shaping precious metals investment, “We remain constructive on precious metals. Year-to-date, gold prices have risen more than silver, and the gold-to-silver ratio has widened since the beginning of the year. Mr. Reichman suggests, “Two things to track are changes in monetary policy and the strength of the U.S. dollar.” Outside of the U.S., Reichman informed, “Global demand for precious metals, particularly in Asia, is very strong, and is driven in part by global uncertainty.”
Take Away
Historically, investors asking, “what happened last time?” can be helpful when choosing a direction. The U.S. may avert a showdown on the debt ceiling/spending limit issue. But the month of June, when analysts expect the U.S. to run out of money, is fast approaching. There doesn’t seem to be any headway at this point.
Every challenge brings opportunities to investors. Market participants interested in precious metals mining companies can get detailed information on many companies here on Channelchek by clicking here.
Mark Reichman, Managing Director, Natural Resources Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Big Vein strike length extended to 722 meters. Labrador Gold released results from five drill holes at the Big Vein target within the company’s 100%-owned Kingsway project. Step out drilling to the northeast and southwest continue to intersect gold mineralization at Big Vein which has now been extended to 722 meters in strike length and remains open in both directions. Hole K-23-216 intersected 3.69 grams of gold per tonne over 2.97 meters from 389.41 meters including 12.05 grams of gold per tonne over 0.59 meters, while Hole K-23-218 returned 1.95 grams of gold per tonne over 9 meters including 8.97 grams of gold per tonne over 1.6 meters. Hole K-23-225, a 100-meter step-out to the northeast intersected 1 gram of gold per tonne over 10.1 meters from 46.9 meters, that included an interval of 2.28 grams of gold per tonne over 2.26 meters containing visible gold.
Discovery of a new mineralized zone. Hole K-22-214B returned 5.22 grams of gold per tonne over 2.80 meters from 418.6 meters that included 22.02 grams of gold per tonne over 0.4 meters, along with 8.62 grams of gold per tonne over 0.7 meters from 496 meters. Both it and Hole K-22-214 are associated with a new mineralized zone, the Greenmantle Zone, that lies below the HTC Zone at a vertical depth of 415 meters. The discovery of the Greenmantle zone demonstrates the potential for continued mineralization at depth.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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*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.
Is This The Start Of A New Golden Age Of Gold Mining Deals?
We may be about to enter a new golden age of gold mining deals as explorers and producers seek to capitalize on higher metal prices and gain exposure to other key minerals, including copper, at a time when consolidation in the gold industry vastly trails that of other metals.
Last week, major U.S. gold producer Newmont raised its bid for Australian rival Newcrest Mining to $19.5 billion after its earlier bid of $17 billion was rejected. Due diligence is expected to take around four weeks, and if Newcrest’s board and shareholders accept the offer, the acquisition would represent one of the top 10 biggest metal deals ever and the single biggest gold mining takeover, nearly twice the value of last year’s merger between Kirkland Lake and Agnico Eagle.
(A note about the chart above: Just today, Teck Resources rejected Glencore’s $23 billion takeover bid, calling it “opportunistic and unrealistic.” Vancouver-based Teck says it will proceed with plans to spin off its steelmaking coal business, creating two new companies: Teck Metals and Elk Valley Resources. This separation “creates a significantly greater spectrum of opportunities to maximize value for Teck shareholders” compared to an acquisition by Glencore, says Teck’s Board of Directors Chair Sheila Murray.)
This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes
Time will tell if Newcrest approves of Newmont’s offer, but I believe this could be the start of a much-needed consolidation cycle in the gold industry, one that could potentially benefit shareholders.
Gold Is One Of The Most Fragmented Gold Mining Industries
Back in 2019, many analysts and market participants—myself included—heralded Newmont and Goldcorp’s $9.3 billion merger as the beginning of a new era of gold consolidation, and I believe the Newmont-Newcrest deal could serve as a (delayed) continuation of the trend.
The truth is that, compared to other important metals, gold is sorely in need of consolidation. The chart below, courtesy of metals and mining consultancy firm CRU Group, shows the global share of output from each metal’s top 10 producers. Gold is at the bottom, with its top 10 producers responsible for only 28% of global output. By comparison, the top 10 iron ore producers generate nearly 70% of the world’s supply.
Higher gold prices in recent years have not resulted in significantly increased exploration spending. In lieu of that, companies can expand and create shareholder value through mergers and acquisitions (M&A), which allow miners to “increase their production share, replenish depleting gold reserves and… lower production costs through relatively less risk,” writes CRU analysts.
Copper To Face Ongoing Supply Deficits
M&A can also result in metal diversification—one of Newmont’s stated goals in acquiring Newcrest. Copper currently accounts for roughly 25% of Newcrest’s total net revenue, and the company hopes to increase it to 50% of revenue by the end of the decade. As one of the key minerals in the global transition to renewable energy, copper is poised to surge in price in the coming years as demand far outpaces supply.
In fact, copper mining deals exceeded gold mining deals in total value last year, according to a new report by S&P Global. M&A work among copper companies in 2022 totaled more than $14 billion in value, a 103% jump over the previous year, while the combined value of gold deals stood at $9.8 billion, a 48% decrease from 2021.
US Global Investors Disclaimer
The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Frank Holmes has been appointed non-executive chairman of the Board of Directors of HIVE Blockchain Technologies. Both Mr. Holmes and U.S. Global Investors own shares of HIVE. Effective 8/31/2018, Frank Holmes serves as the interim executive chairman of HIVE.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/2021): Torex Gold Resources Inc., Centerra Gold Inc., Gran Colombia Gold Corp., Dundee Precious Metals Inc., Pretium Resources Inc., Endeavour Mining PLC, Barrick Gold Corp., Eldorado Gold Corp., SSR Mining Inc., Silver Lake Resources Ltd., Karora Resources Inc.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.
Mark Reichman, Senior Vice President – Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Expectations for 2023. In February, Coeur provided 2023 gold and silver production guidance of 320.0 to 370.0 thousand ounces and 10.0 to 12.0 million ounces, respectively. Production is weighted toward the second half of the year due to the impact of the Rochester expansion and higher gold production at Wharf. Operationally, we expect the third quarter to be the company’s strongest based on the Rochester mine’s production profile.
Updating estimates. We have lowered our 2023 EBITDA and EPS estimates to $132.7 million and $(0.23) from $158.1 million and $0.00. We have refined our quarterly production estimates and also raised our cost estimates. We note that the company’s guidance on taxes could result in variances to our EPS estimates. While the company expects first quarter cash taxes in the range of $14 to $18 million, we note that cash taxes paid and recorded income tax expense may differ. We have also adjusted our EBITDA estimate to reflect certain items such as inventory adjustments.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Telbel drilling results are pending. The goal of exploration and drilling along the past-producing Eagle-Telbel mine trend is to define high-grade zones of gold mineralization and additional mineral resources to complement the established resource at Douay. Maple Gold has completed more than 21,500 meters of drilling across the four-kilometer Eagle-Telbel Mine trend, with 14,720 meters at Maple’s 100%-owned Eagle mine property and more than 7,000 meters of joint venture drilling at the Telbel Mine area of the Joutel Project, which is held by a 50/50 joint venture between Maple and Agnico Eagle Mines Limited. Assay results associated with the drilling at Telbel are pending.
Last of the 2022 Eagle results released. Maple recently released remaining assay results from ~20% of the 14,720 meters of drilling at Eagle. To date, the company’s drilling at Eagle has confirmed that gold mineralization is not limited to the Eagle-Telbel Mine Horizon, a narrow stratigraphic interval, but instead covers a significantly broader stratigraphic interval of over 100 meters straddling the Harricana Deformation Zone. Drill core observations support Maple Gold’s concept of a significant structural component to gold mineralization in the form of an orogenic gold overprint.
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*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.
TORONTO, April 04, 2023 (GLOBE NEWSWIRE) — Labrador Gold Corp. (TSX.V:LAB | OTCQX:NKOSF | FNR: 2N6) (“LabGold” or the “Company”) is pleased to announce results of its annual general meeting of shareholders held in Toronto on April 3, 2023.
At the meeting shareholders re-elected five current directors, being Roger Moss, James Borland, Trevor Boyd, Leonidas Karabelas and Kai Hoffmann and approved the re-appointment of DeVisser Gray LLP, of Vancouver, British Columbia, as auditors of the Corporation. Shareholders also ratified the 2021 Stock Option Plan and approved the Corporation’s new 2023 Stock Option Plan which supercedes and replaces the 2021 Stock Option Plan.
Following the shareholder meeting the Board of Directors reconstituted its Audit Committee and also reappointed officers for the ensuing year as follows:
President and CEO: Roger Moss
Chief Financial Officer: Eric Myung
Corporate Secretary: William Johnstone
The Company also announces that in accordance with its Stock Option Plan, it has granted officers, directors, consultants and employees an aggregate of 3,100,000 incentive stock options exercisable until April 3, 2028 at $0.23 per share. The options will vest according to the following schedule, 20% on August 3, 2023, 20% on October 3, 2023, 20% on April 3, 2024, 20% on October 3, 2024 and 20% on April 3,2025.
About Labrador Gold Labrador Gold is a Canadian based mineral exploration company focused on the acquisition and exploration of prospective gold projects in Eastern Canada.
Labrador Gold’s flagship property is the 100% owned Kingsway project in the Gander area of Newfoundland. The three licenses comprising the Kingsway project cover approximately 12km of the Appleton Fault Zone which is associated with gold occurrences in the region, including those of New Found Gold immediately to the south of Kingsway. Infrastructure in the area is excellent located just 18km from the town of Gander with road access to the project, nearby electricity and abundant local water. LabGold is drilling a projected 100,000 metres targeting high-grade epizonal gold mineralization along the Appleton Fault Zone with encouraging results to date. The Company has approximately $16 million in working capital and is well funded to carry out the planned program.
The Hopedale property covers much of the Florence Lake greenstone belt that stretches over 60 km. The belt is typical of greenstone belts around the world but has been underexplored by comparison. Work to date by Labrador Gold show gold anomalies in rocks, soils and lake sediments over a 3 kilometre section of the northern portion of the Florence Lake greenstone belt in the vicinity of the known Thurber Dog gold showing where grab samples assayed up to 7.8g/t gold. In addition, anomalous gold in soil and lake sediment samples occur over approximately 40 km along the southern section of the greenstone belt (see news release dated January 25 th 2018 for more details). Labrador Gold now controls approximately 40km strike length of the Florence Lake Greenstone Belt.
The Company has 170,009,979 common shares issued and outstanding and trades on the TSX Venture Exchange under the symbol LAB.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release .
Forward-Looking Statements: This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. Shareholders are cautioned not to put undue reliance on such forward-looking statements .
Are Safe Haven Investments Just Beginning Their Rise?
Gold is continuing to move up. Fueled by global tensions, rising prices, a weakening dollar, and new wariness of the banking system, gold seems to have regained its place as a safe haven portfolio allocation. Over the past five calendar days, the precious metal has gained $84 per ounce or 4.3%. In recent days price movement has been helped by lower yields on U.S. Treasuries and OPEC+ oil production cuts which can be expected to increase inflationary pressures as the cost of transportation and production rises for the majority of new goods.
Physical gold, priced in $USD, as seen on the chart below, is up 10.62% on the year. But that does little to tell the recent story. The investments in the yellow metal had gone negative on the year until two days before the Silicon Valley Bank’s problems became widely known in early March. This means much of the current increase on the year has occurred in under a month’s time. And the mindset that is driving the rise seems to be lingering.
Technicians point out that the $2020 level was an area of resistance that traders easily pushed through on Tuesday. Are there also fundamental reasons for it to continue its upward climb?
Global Tensions
Global tensions and geopolitical events can have a significant impact on the price of gold. Uncertainty surrounding the war in Europe, U.S. enemies forming closer alliances with each other, and a former U.S. President being indicted are providing heightened tensions. Gold has remained a safe-haven asset historically because investors turn to in times of political or economic uncertainty – it is perceived to be a store of value that is less vulnerable to fluctuations in currency values and stock markets.
We are in times of political and economic certainty now, this can continue to increase the demand for gold and drive up its price.
Inflation
Gold is often considered a hedge against inflation, so as inflation rises, the price of gold tends to increase. Recent reports in the U.S. have shown inflation, especially core inflation (net of food and energy price changes), has resumed an upward move. The spike in oil stemming from recently announced production cuts should increase both core and overall inflationary pressures.
When inflation is running high, the value of the U.S. dollar erodes. Investors gravitate to alternative stores of wealth that can maintain their purchasing power. Gold is seen as a safe-haven asset that can protect against inflation and currency devaluation. As a result, investors tend to buy more gold, driving up its price.
As mentioned above, a weakening U.S. dollar can have a significant impact on the price of gold expressed in U.S. dollars. Precious metals are typically priced in terms of U.S. dollars globally. When inflation runs higher than safe-haven U.S. Treasury yields than assets move toward alternatives like gold, real estate, or cryptocurrencies.
As a result, when the U.S. dollar weakens, the demand for gold may increase, driving up its price.
Systemic Risk
The risk of bank failures can impact gold prices in several ways. In times of perceived financial instability and/or economic uncertainty, investors’ confidence in banks and other financial institutions weakens. This often leads to a shift to safe-haven assets like gold.
In addition, if there is a continued risk of bank failures. If it happens, central banks could take steps to stabilize the financial system by injecting liquidity into the markets and lowering interest rates. These actions weaken currency which increases inflation. Inflation expectations, as mentioned earlier, support higher gold prices.
The chart shows the correlation between gold, and mining stocks since the beginning of the year. As a reference, the performance of the VanEck gold mining ETF (GDX), and the junior gold mining ETF (GDXJ) are charted against the S&P 500 (SPY), and an S&P mining index (XME). The XME is designed to track changes across a broad market-cap spectrum of metals and mining segments in the U.S.
The mining stocks have been moving in the same direction and pivoting at the same time as gold (XAUUSD). The difference is the moves have been more pronounced (up and down) for the mining stocks.
Investors expecting gold to continue to increase and considering increasing their exposure to safe-haven precious metals, ought to do their due diligence and determine if gold mining stocks are a better fit for what they are trying to accomplish.
In his Metals & Mining First Quarter 2023 Review and Outlook (April 3, 2023) Mark Reichman, Senior Research Analyst, Natural Resources, at Noble Capital Markets provides various potential scenarios to his outlook for gold and other metals. The report (available at this link) is a good place to start to weigh this industry expert’s considerations with your own.
