After a relatively long period without significant news, Terraco Gold seems to have shifted a gear now, and after meeting in Vancouver around the latest VRIC show I felt it was an opportune time to interview CEO Todd Hilditch on a number of subjects. First Paul Zink, a royalty veteran was contracted, and shortly afterwards on February 1 an additional royalty was acquired from the Schmidt Family Mining Partnership LLC on the Spring Valley Gold Project in Nevada. This is a 0.5% Net Smelter Returns royalty (NSR royalty) on lands within a one-half mile perimeter of the Schmidt Claim Block. Red Kite Mine Finance also had a right to, and purchased, an identical royalty on the same lands, for the same price, USD$567,895. Furthermore, according to the news release:
Terraco Gold (TEN.V) made headlines with their Spring Valley royalties transaction in May 2016. Spring Valley is a multi –million ounce gold project in Nevada owned by Waterton Global, advanced by Barrick to a PFS level by spending over US$70M before Waterton bought it for appr US$83M. Unfortunately for Terraco, but typical of private equity firms, the Spring Valley news flow slowed down after this (though industry sources believe they are improving the Spring Valley project behind the scenes as they did in the below example). This scenario is not new to Waterton, and by way of example they have made a very decent return by buying assets on the cheap (in bankruptcy at times) and quietly improving them before selling to a major mining company.
Excelsior Mining experienced significant positive sentiment of late, with several good reasons to back it up, too. For starters, the company is closing in on the announcement of a Feasibility Study, which is expected in December 2016. After talking to management I got the impression that FS economics wouldn't necessarily differ a lot from the very strong PFS results, which would be impressive again at smaller margins of error. Another reason is the election of Donald Trump, who seems to be pro-mining and against long-winding procedures of projects (which he probably hates as a real estate developer), which could bode well for mining projects in permitting stages in more or less difficult jurisdictions. The most important one was the copper price printing new 52w highs for some weeks now:
- Nemaska Lithium secures a 8000t LCE per annum off-take with FMC
- LCE prices seem to be bottoming for now, a deficit is still expected well into 2018
- The upside for the Nemaska thesis is still intact
Whabouchi Project; pegmatites
Nemaska Lithium (NMX.TO) reached two important milestones on July 8, 2016, as it completed its previously announced public offering for aggregate gross proceeds of $69M, and got uplisted from the Venture to the TSX. This financing was important, as the company needed cash to proceed with down-payments for long lead items for the main project, which in turn were needed to stay on course with the time schedule leading to production in Q2 2018.
- Lithium X has experienced quite a runup during it's first four months of being listed, generating excitement but also negativity
- After acquiring an Argentinean brine project, significant substance has been added to the story in my view
- This Q & A with Executive Chairman Paul Matysek discusses a number of subjects, with the intention to provide useful insights about the company and its projects
- True Gold has one of the most profitable gold projects worldwide, with economics at a gold price of $1100/oz of an after tax IRR of 30%, NPV5 of $106M
- This Karma project is fully financed and progressing through construction, and commencing production in Q1 2016
- The company had to overcome a violent local demonstration, resulting in lots of damages, which halted the project out of nowhere
- Mark O'Dea of controlling Oxygen Capital was unpleasantly surprised and immediately replaced CEO Melrose by himself, and quickly found a new CEO, Christian Milau, who was the CFO of 500,000 oz pa producing powerhouse Endeavour Mining
- My guess is Milau didn't leave Endeavour for no reason