Gold & Silver Stock Updates: Gold Standard Ventures, Fortuna Silver Mines, Goldsource Mines, Silvercrest Metals, Gold Resource Corp., BitGold, Canarc Resources, New Jersey Mining
Money should not be a speculative tool or an instrument of volatility and uncertainty. It should be a stable asset which can be trusted to retain its value. And gold along with silver have done just that - for thousands of years!
Its use spans not only time but different civilizations, used by diverse cultures. It is an internationally recognized currency, value preservation tool and the king of all money. Gold is king money, and trumps even the king of paper money, the US Dollar.
The US dollar, along with other major fiat monies, are tied to tens of trillions of dollars, euros, yen, etc. of debt. These hundreds of trillions of dollars equivalent of debt are only sustainable now with aggressive money printing, near 0% rates and direct interventions in markets.
As gold and silver investors, we understand that this will all end with financial and monetary ruin and the longer it takes for the resolution to come, the worse it will be. Until that day comes, the vast and near full majority of participants in the system are deluding themselves to this financial and monetary truth!
The monetary truth is that gold is returning to its historic use as a medium of exchange, and a store of value to be trusted when other money begins to confront reality. The unmanageable global debt loads and massive capital misallocations, a direct result from central monetary planning and central banking interventions, will require some big adjustments to find normalcy again in the financial and monetary systems.
The next phase of the monetary crisis is brewing. Economies are not growing strongly despite the tens of trillions of new monies created, nearly 0% interest rates and now, a growing global trend of negative interest rates!
As debt becomes more onerous and bad debt becomes reconcilable, private citizens to governments will face losses which threaten the integrity of the stability of the global system. There will be growing number of bank bail-ins and this will panic the remaining savers who get virtually no return on their capital by loaning their capital to the banks.
Growing fears of return of your capital to negative interest rates will make gold extremely appealing as places to hide all these trillions of dollars, euros, yen, yuan, etc. look for safety.
Over 6.5 million ounces added to the Gold ETF since December
There has been a big shift in the Western investor in the past months. From selling their gold, they have swung over to aggressive buyers. In my opinion, they are losing trust and looking for money they can put faith in! They are making their money great again by converting their paper units for solid gold.
This is driving up gold and silver prices, with gold looking back at the $1,300-$1,400 range as the next upside with solid support on pullbacks around $1,200. Silver is making a push past $16 at this time and can quickly pop to $18-20 within the coming week(s).
Gold, silver, as well as mining and exploration stocks are having some of the best returns in the sector in this new bull market! Yet from their peaks 5+ years ago, many mining companies remain at a fraction of their former highs and will do well in these stronger metals markets.
If gold and silver surge further, then we could see gains continue to come at rapid speeds before we have a period of consolidation. This will allow mining companies to start financings after a massive drought that has greatly weakened the sector. Now the climate is changing and the sector is reviving. This is turning into a big turnaround year for gold and silver stocks with many of my top picks have gone up multiple times over the past months!
Gold Standard Ventures Corp. (TSXV: GSV; NYSE MKT:GSV) announced a $13.4 million exploration budget for 2016 after closing major financings with OceanaGold Corp. and Goldcorp Inc.
The exploration plans include 43,000 metres of reverse circulation and core drilling in 100 holes, focusing mostly on the Dark Star and Pinion oxide gold deposits.
At North Dark Star the company will be following up on its oxide gold discovery from last year with about 10,300 metres of drilling to expand known shallow oxide gold mineralization. In the larger 6 km-long Dark Star corridor the company plans another 10,100 metres to test new targets south of its maiden resource.
At Pinion, Gold Standard will drill 5,700 metres to extend mineralization in the northwest, 3,700 metres will go towards testing new Sentinel Breccia targets, 3,000 metres will go to expanding the established resource, and 2.4 km northwest of Pinion it will drill 1,800 metres to test the new Irene target.
In mid-March the company released an updated resource estimate for Pinion showing it contains 31.6 million indicated tonnes grading 0.62 g/t gold for 630,300 oz. gold, plus an inferred resource of 61.1 million tonnes averaging 0.55 g/t Au for another 1.08 million oz. gold.
And at its Bald Mountain project the company plans to drill 3,600 to test new oxide gold targets at Bald Mountain.
In February the company closed strategic investments of C$16.1 million with Goldcorp and C$13.8 million with OceanaGold. In March the company said it received $7.5 million from the exercise of warrants, leaving the company with C$44 million and no outstanding warrants.
Gold Standard has been a big winner for us since I began covering the stock last summer. Now cashed up and with big exploration programs starting in a prime gold location, there remains a lot more to be excited about in the coming months and year ahead!
Fortuna Silver Mines (TSX:FVI, NYSE:FSM) slashed costs and boosted production in 2015 but it wasn’t enough to stay out of the red. The company reported a net loss of $10.6 million for last year compared with net income of $15.7 million the year before.
The company said the loss was due to low metal prices, which not only took a bite out of earnings but forced Fortuna to take a $25 million before tax writedown on its polymetallic Caylloma mine in Peru. Excluding the writedown adjusted net income came in at $6.7 million.
A lower assumed silver price meant smaller reserves at Caylloma, which combined with updated geological models and other adjustments, led to a 41% decrease in silver ounces at the mine.
Caylloma’s proven and probable reserves now sit at 1.98 million tonnes grading 121 g/t Ag, 0.3 g/t Au, 2.83% Pb, and 3.55% Zn. At the company’s San Jose mine in Mexico reserves were essentially flat at 3.8 million tonnes grading 232 g/t Ag and 1.73 g/t Au.
On the cost front the company did manage to achieve an all-in sustaining cash cost of $14.51 per oz. silver, 13% below guidance. General and administrative costs were $7.5 million lower than 2014 thanks largely to lower stock-based compensation.
Fortuna Silver Mines continues to be very well positioned for the run in gold and silver prices. As we witnessed over the prior years, Fortuna has a history of sector outperformance, leading stocks higher during rallies. With the turnaround in the sector, Fortuna’s strong investments into San Jose and cost reduction efforts are paying off and the company is positioned well for strong production and financial growth in the year ahead.
SilverCrest Metals Inc. (TSX-V:SIL) said it’s rehabilitating an estimated 6 km of historic silver-gold workings at its Las Chispas project in Mexico’s Sonora State. The brownfield property yielded an estimated 100 million ounces silver and 200,000 ounces of gold between 1880 and 1930.
Company president and CEO Eric Fier said the company has pulled underground channel samples of 15.1 g/t Au over 1.3 metres while the district-sized property has never been drilled to his knowledge. The company plans to change that with an initial 3,000 metre surface drill program and then a 2,000 metre underground program later in the year.
The company estimates the 2016 mine rehabilitation will cost between C$150,000 and C$200,000, while overall 2016 exploration should cost between C$1 and $1.2 million. As of early March the company had over $6.5 million in cash.
SilverCrest also announced the results of a little over a thousand metres of drilling at its Huasabas property in Sonora, showing multiple intercepts of low-grade gold and silver but nothing economic. The company has set the project aside to focus on Las Chispas.
SilverCrest Metals’ share price has been on fire since the start of the year, one of the top performing exploration stocks with the price up multiple times in past several weeks! The success the team had with SilverCrest Mines is now being applied to SilverCrest Metals!
Goldsource Mines Inc. (TSX-V:GSX) completed the first gold pour at its Eagle Mountain gold mine in Guyana barely a year after construction began. The company expects to achieve commercial production in the second quarter of the year, at which point the mine will be operating at 80% of its 1,000-tonne-per-day capacity or higher.
The open pit, gravity-plant-based Eagle Mountain should run at cash operating costs of $500 to $600 per oz. gold according to the PEA. Company president Yannis Tsitos said the gold pour is an extraordinary milestone and Goldsource would be focusing on ramping up production and demonstrating the economics of the project.
The company has had an excellent start to 2016 with the stock also surging in the first months of the year with further upside likely once production milestones are achieved and positive operational cashflow from gold production starts to accumulate.
Brazil Resources Inc. (TSX-V:BRI) says it wrapped up an electromagnetic ground survey on its Rea uranium project in northeastern Alberta that showed the presence of a high-priority airborne conductor. The conductor sits two kilometres west of Areva’s high-grade Maybelle River uranium project.
The company continues to interpret the data but the Time Domain Electromagnetic found a single north-trending conductor spanning at least 1.8 kilometres. The target on the Rea project has not been drill tested.
Brazil also successfully topped up its coffers with a C$4.5 million private placement of 10 million shares at C$0.45 each, after increasing the placement from C$2 million due to high demand.
With the close of the financing, the share price has surged multiple times in a very quick period! Another top market performer which is a result to their strong leverage to the upside in gold. The company continues to be favored by other analysts as well, with Rodman and Renshaw continuing their buy recommendation with a C$2.20 share price target.
Canarc Resource Corp. (TSX:CCM, OTC-BB:CRCUF) announced some significant financial deals, including $8 million in debt financing to develop its El Compas mine in Zacatecas, Mexico, plus C$2 million in equity financing.
The equity deal that closed in mid-March involved the company issuing 5 million units at C$0.09 each, with each unit holding one share and a half warrant.
The debt financing, which Canarc has the option of increasing to $10 million is based on a gold prepaid facility. The company is still working through due diligence on the deal with the lender until early May, after which it will disclose the terms of the deal.
The company is advancing its El Compas mine that a preliminary economic assessment showed could produce at an all-in sustaining cost of $614 per oz. gold equivalent. Canarc also owns the high grade New Polaris gold mine in British Columbia and is looking for a partner to drill its Windfall Hills gold property in the province.
The fully permitted, 100% owned, low-cost gold-silver mine in Mexico will quickly generate positive cash-flow for Canarc as the PEA showed a pre-tax IRR of 117.7% at $1,200 gold. 132.4% at $1,300 gold. Once the money is in place, Canarc estimates a 6-month construction period and the following 9-months to steady production.
The current 7-year mine life will likely expand as exploration work develops the multiple vein system. The timing of the purchase by Canarc was excellent, acquired from Oro Silver from Marlin Gold late 2015.
I have watched Canarc for nearly 15 years. They have some good assets but with latest edition, a near-term gold mine generating healthy cash flow, this transforms the company into a junior producer with a qualified management team. Now only will they create value from their new mine but they will be able to uncapture value from their larger New Polaris gold asset. With gold and silver prices taking off and financing looking close to being secured, Canarc is likely to gain a lot more interests in the coming months with production starting as soon as the end of 2016!
GoldMoney Inc (TSX-V: XAU), owner of the BitGold platform, said it continued to rack up users, transactions, and deposits while also announcing gold payment and transfer services for U.S. BitGold customers.
In March the company had a net increase of more than 73,000, bringing total signups for the company to about 812,500 at the end of the month. Total transaction value increased by 360,477 grams net for a value of C$77.1 million, while deposits increased by about 177,700 grams net to C$45.8 million in value.
On the more traditional GoldMoney business, the company reported a slight increase of 15 accounts to bring total funded accounts to 21,401, with total transaction volume for the month down slightly to about C$48 million.
This past week in Prague, the co-founder along with their CEO hosted a town hall and did a presentation along with 1 on 1 meetings with media on BitGold. With ongoing development in their platform, new technologies are being released to aid in the ability to easily use and transact globally using physical gold.
BitGold is transforming the way we can use gold on a daily basis, as money. From the ability to use a MasterCard that links to your gold account, to sending payments in gold securely online or to simply use the no cost vaulting as a means to save in gold, BitGold is making big strides.
The ability to use gold has been a lacking key in its daily use, from small payments to platforms to easily exchange gold online. BitGold is addressing these gaps and applying technology to ancient, time tested money. Their success will be a success for the entire gold industry and to making money great again!
New Jersey Mining Corp. (OTCQB:NJMC) says that for the year ahead it plans to move its Golden Chest project towards production and advance its Butte Highlands property while keeping an eye out for other opportunities.
In the first quarter the company has already developed a small-scale 3,000-tonne-per-month mine plan at its Golden Chest project and secured much of equipment needed to operate it.
Last year the company took back control of the Golden Chest project after Juniper Resources had spent around $8 million putting it back into production. Juniper mined about 41,000 dry tonnes of ore at 6.65 g/t Au and produced roughly 8,000 oz. gold from the mine through the New Jersey Mill.
Also in the first quarter NJMC secured a 50% interest in the joint venture that owns the Butte Highlands gold mine. NJMC later signed a memorandum of understanding to take a more active role in the Butte mine by taking on permitting and other day-to-day management of the project. Highland Mining, the co-owner of the mine, is responsible for all mine development costs through to production, but the two companies have agreed in principle to work more collaboratively to speed up development.
Gold Resource Corp. (NYSE MKT:GORO) reported its fifth consecutive year of profits with $3.1 million in net income for 2015, down from $16.2 million the year before.
The company produced 29,644 oz. gold and 2.5 million oz. silver at a cash cost of $551 per gold equivalent ounce, roughly in line with 2014. For 2016 the company expects to produce 26,000 oz. gold and 1.9 million oz. silver along with 1,100 tonnes copper, 3,200 tonnes lead and 12,900 tonnes zinc.
Gold Resource CEO Jason Reid highlighted the company’s ability to generate profits despite the tough market, the $6.5 million the company paid out in dividends, and the continued investments in its Mexican and Nevada projects.
For the year ahead the company says it will continue to focus on mining tonnes based on net smelter return values per tonne of all metals to maximize cash flow. On development work in 2016 it says it will focus on completing the second drift from the Arista vein at its mine in Oaxaca, Mexico, to allow for future bulk tonnage mining and further underground exploration. The company has budgeted $2.1 million for further exploration at the mine in 2016.
Gold Resource also announced it was increasing its board of directors by one to five members and named Alex Morrison to the new position. Morrison is a chartered accountant with 30 years of mining experience including executive positions at Franco Nevada Corp. and Newmont Mining Corp.
- Peter Spina, President of GoldSeek.com
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Peter Spina's experience with the precious metal markets started back in the mid-1990s, which led to the creation of GoldSeek.com back in 1995. Today GoldSeek.com ranks in the top three most popular global gold websites and its sister site, SilverSeek.com ranks as the most visited silver website in the world. Back at the start of the new secular precious metals bull market, Peter established the technically-focused subscription newsletter, which at the start of 2005 was merged into the more comprehensive Gold Forecaster (goldforecaster.com) service. In addition to the newsletter and websites, Peter frequently appears in the media including MarketWatch, Reuters, and Investors Business Daily.
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