Check back later this morning for today’s BMR Morning Market Musings.
1. Gold tested strong support in the mid-$1,230’s this morning as U.S. equity markets took off to the upside to snap a 4-session losing skid…as of 7:00 am Pacific, bullion is down $12 an ounce at $1,244 after dipping to $1,235, a 5-week low…Silver is off 10 cents at $16.59…base metals are coming off a solid week and are up slightly this morning…the U.S. Dollar Index started the new week strong but is now down marginally after it was reported that U.S. durable goods fell 1.1% in May, more than the expected 0.6% drop…
2. Australian-listed Cobalt One (CO1, ASX) has confirmed it’s prepared to merge with First Cobalt (FCC, TSX-V)…under the terms of an LOI between the 2 parties, Cobalt One shareholders would receive 0.145 of a First Cobalt share for each Cobalt One share (equivalent to 11 Australian cents per Cobalt One share)…the proposal is subject to a number of conditions, including due diligence…First Cobalt remains halted this morning along with CobalTech Mining (CSK, TSX-V)…last Wednesday FCC announced a proposal to acquire Cobalt One as well as CobalTech…the combined entity would hold a large land position in the prolific northern Ontario Cobalt-Silver Camp, multiple past producing mines, a mill and a Cobalt refinery…
3. New Jersey-based Pala Investments Ltd., a multi-strategy investment company focused on the mining and metals value chain, disclosed this morning that it has upped its ownership in Cobalt 27 Capital (KBLT, TSX-V), the Venture’s first pure Cobalt play, to 19.46% after its participation in the large cash offering that closed last week…Pala has a track record of successfully investing across a range of businesses providing raw materials to the battery and renewable energy sectors…commenting on the transaction, Stephen Gill, Pala manager partner, said: “I am delighted to see the successful listing of Cobalt 27 and the creation of a public company which provides investors with high-quality exposure to Cobalt fundamentals, and, importantly, the creation of a platform that can provide leverage to the raw materials needed to support the development of the battery and new energy sectors. This investment is in-keeping with our strategy of investing in businesses and creating investment platforms focused on the raw materials value chains that support the changing global economy. I look forward to continuing to support the company in building out this platform and seeing the company grow.” KBLT is up 86 cents to $10.00 through the first 30 minutes of trading…
4. Weakness in Gold has pushed the Venture down 2 points to 775 as of 7:00 am Pacific…the TSX has added 44 points while the Dow has jumped 111 points…Garibaldi Resources (GGI, TSX-V), after releasing an updated Nickel Mountain presentation Friday, is up another 2 pennies to 15 cents in early trading as geologists in the coming days prepare to ground truth a series of highly promising VTEM conductors up to 6 km away from the historic E&L Nickel Mountain deposit, immediately prior to drilling the first modern era holes into the Eskay Camp’s only known magmatic Nickel-Copper-rich massive sulphide system…comparisons are being made to a robust orogenic Nickel sulphide belt featuring strike-slip faults in China…Jaxon Minerals (JAX, TSX-V) is up 1.5 cents to 31 cents after announcing that it has appointed John King Burns as Chairman and lead director…Burns is former Chairman and founder of Northern Orion which was subsequently acquired by Yamana Gold in a $1-billion transaction…Canadian Zeolite (CNZ, TSX-V) has broken out to 70 cents on fresh news this morning…a 2-year study conducted by the University of Saskatchewan in partnership with PotashCorp, Agrium and Mosaic using Canadian Zeolite’s Bromley Creek Zeolite was successful in remediating Potash brine-impacted groundwater…
5. IDM Mining (IDM, TSX-V) released robust results this morning of an updated Feasibility Study for its Red Mountain Gold Project near Stewart, confirming positive economics for a near-term, high-grade, bulk mineable underground operation at Red Mountain…the pre-tax base case economics indicate an NPV of $155 million (CDN) at a 5% discount rate with an IRR of 40% and a 1.7-year payback of initial capital (after-tax NPV is $104 million with an IRR of 32% and a 1.9-year payback of capital)…initial capital costs are estimated at $135.7 million, which includes a 10% contingency…average annual payable production of 78,000 ounces of Gold and 215,000 ounces of Silver…mine operating life is estimated at 5.4 years with an overall construction and commissioning period of approximately 15 months. “This study demonstrates a high-margin, low-capex underground Gold mine with a short development timeline,” said Rob McLeod, President and CEO of IDM Mining. “With these positive results now in place, our highest priority is the ongoing exploration and resource expansion drilling adjacent to current reserves, with the objective of extending the potential mine life for Red Mountain. These zones remain open for expansion both along strike and down-dip. Importantly, this project would be a tremendous economic benefit to my hometown of Stewart B.C. and to the citizens of the Nis g a’a Nation.”
6. Oceanagold Corp. (OGC, TSX) has completed the Haile optimization study where results demonstrate enhanced value through upgraded mineral reserves, increased annual Gold production, longer mine life and robust economics…highlights include an increase in Proven and Probable Gold reserves by over 70% from 2.02 million ounces to 3.46 million ounces, along with a maiden reserve on the Horseshoe deposit of 0.44 million ounces…the revised mine plan includes larger open-pit operations for a 16-year mine life and an underground operation at Horseshoe for a 6-year mine life…a 33% planned expansion of the process plant will support higher mining rates and increased annual production…economics are robust with undiscounted pre-tax cash flows of $1.4 billion based on current reserves plus an additional $400 million of undiscounted cash flows inclusive of total current resources…excellent potential to increase value and mine life…
7. Perhaps more Venture CEO’s should take a leave of absence…Independence Gold (IGO, TSX-V) is up 3 cents to 20.5 cents in early trading following news from the company that President and CEO Randy Turner is taking a temporary leave of absence for personal and family reasons, effective July 3…he is expected to be on leave for up to 6 months but will remain a member of the board of directors during his leave…while Turner is away, board member Michael McPhie will assume the role of interim CEO and Chairman (he is also Chairman of IDM Mining) while Kendra Johnston, current manager of corporate development, will assume the role of interim President…
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