Wednesday, July 13, 2016

After a year's hiatus but still actively picking away at select juniors - the market decidedly is back on its feet.

Several 5X and 10X gains later - my portfolio is back at a reasonable level.

Lithium is the new gold Q1 2016, with lithium index plays outperforming most other commodities.

Few long time favorites.

1) International Lithium Corp (ILC:TSXV) is up 10X from December lows of $0.02 CDN.
Backed by one of the largest lithium battery companies in China (GF Lithium) a $5B USD market cap trading group and boasting one of the better salars in Argentina, ILC has promised a multimillion exploration program in 2016 after years of waiting.

So far, it's Ireland project (hard rock) is also showing some promises. 

Buy on drilling programs, sell on news.

BUY.

2) Energold Drilling Group (EGD:TSXV)
The shovels and picks play - should rebound nicely with mining sector life coming back and financing (DRILLING!) starting again for juniors.



Last few years it's been in perennial decline (no surprise) with revenues dropping from $103M mining down to under $35M last year, a steep 70% revenue drop in that one sector.

Valuation wise - asset value and net working capital stands at more than $70M.
December's market was at $0.25/share is irrationally depressed at under $12M. 

With the strong rebound back over $1.4 in Q1 2016, Energold took some money from market finally at $1.00 a unit. Well done IMO - despite what investors may complain about dilution. Company is nicely positioned at just over 50 million shares out. 

Stock has done well last ten years, hitting $5/share nearly three times. 

Still a bargain at $1.00/share and around 50M shares out. Revenues expecting to grow and no significant debts on books ($13.5M debenture can be renewed with insiders).

BUY.

3) First Majestic Silver (FR.TO) 

Lead by one of the best mining promoters in Vancouver, certainly one with some of the best exits (First Quantum), FR.TO is a longtime favorite trades around December to March, with strong per ounces results quarter over quarter. 

With the recent spike in silver to over $22/oz during Brexit - FR climbed back to nearly 2011 highs. 

A bit steep lately, considering stock was $4/share in December. We've made our gains and will be lightening up through August.

BUY ON PULLBACK. 

4) IMPACT Silver (IPT:TSXV) 

Since our last update - early 2016 this small cap Mexican silver producer celebrated 10 years of production in country. Impressive feat - even more so when you consider they never took on construction or streaming debt! 

Market rewarded good behavior - stock is easily up 10X from December's $0.10 lows.


BUY 

Monday, July 7, 2014

The TSX Venture looks to be poised for a rebound soon - with the chart and pattern already bucking trends of the usual "summer doldrums".

Here are some great ideas for the Sept-March PDAC bull run that might be coming soon.

1) Western Lithium (WLC:TSX)
Remember this old name? After its meteoric rise to fame back in 2009 backed by Small Cap Ventures, the longtime US favorite lithium junior got a nice rebound and closed a financing after Tesla (TSLA:NYSE) announced a $3 billion dollar plant.
Props to management team and longtime CEO Jay C for innovative product such as OrganoClay which is based off the hectorite clay at King Valley. Way to keep the company going until mainstream lithium comes back!

Western Lithium Announces the Closing of CDN$9.2 Million Bought Deal Offering

RENO, NEVADA, USA
Western Lithium USA Corporation (“Western Lithium”, the “Company”) (TSX:WLC) (OTCQX:WLCDF) is pleased to announce that it has, today, closed the previously-announced bought deal offering with Dundee Securities Ltd., on behalf of a syndicate including Haywood Securities Inc. (together, the “Underwriters”), with RK Equity Capital Markets LLC acting as a U.S. Placement Agent.  The offering consisted of 15,870,000 units of the Company (the “Units”) at a price of CDN$0.58 per Unit for aggregate gross proceeds of CDN$9,204,600 (the “Offering”), which includes those Units issued on the exercise in full by the Underwriters of their over-allotment option.
Each Unit consists of one common share (“Share”) of the Company and one-half of one common share purchase warrant.  Each whole common share purchase warrant ("Warrant") entitles the holder thereof to acquire one Share at a price of CDN$0.75 for a period of 24 months following the closing of the Offering.  The Units were offered in all provinces of Canada (except Quebec) by way of a short form prospectus.
The Company’s current cash balance is approximately CDN$16.6 million after giving effect to the net proceeds of the Offering of approximately CDN$8.4 million.  The Company intends to use the funds available to it for the completion of the organoclay manufacturing plant in Nevada, which is scheduled for commissioning in the fall of 2014, the procurement of the equipment and operation of the Lithium Demonstration Plant in Germany in the fourth quarter of 2014 and for working capital and general corporate purposes.
This news release does not constitute an offer of securities for sale in the United States.  The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

2) International Lithium (ILC:TSXV)
Not too many lithium juniors out there who can claim a joint venture with a large customer / Chinese battery company. Proof is in the deal and we are surprised this ILC deal is hanging around $0.04. Possibly a bit too more shares than most lithium co's but at $0.04 it's certainly a bargain for a reasonable % ownership of a lithium pond in Argentina. Other projects in Ireland and both will see some development this year from the JV partner, Ganfeng Lithium.

Int'l Lithium JV budgets $2.64-million for exploration

2014-06-18 14:51 ET - News Release

Mr. Kirill Klip reports
STRATEGIC PARTNER, GANFENG LITHIUM, ANNOUNCES INITIAL BUDGET FOR JOINT VENTURES WITH INTERNATIONAL LITHIUM
The board of directors of Ganfeng Lithium Co. Ltd., a partner of International Lithium Corp., has approved a 2014 annual mining exploration budget for wholly owned subsidiary GFL International Co. Ltd. of 15 million yuan (approximately $2,645,000). The funds were approved at a board meeting held on June 5, 2014, and will account for expenditures on the Blackstairs and Mariana projects collectively.
"We are encouraged by Ganfeng Lithium's approval of this exploration budget. These projects are a potential source of raw materials for GFL's manufacturing operations, and we are officially making headway moving them along in accordance with our initial vertical integration model," said Kirill Klip, president, International Lithium.
We seek Safe Harbor.

3) Energold Drilling Corp (EGD:TSXV)

The quiet drilling company that could. Most analysts and investors seem to have overlooked the energy services division of Energold.
Q1 results came out late May and since the news stock jumped from $1.50 to nearly $2. Currently at $1.80 - and by our basic calculation even net book value and tangible assets are worth nearly $1.50 along, not to mention the nearly $0.50/share in cash they have on books.

Pick up some at these levels and when mining recovers these guys should be a leading indicator for the health of the sector. Wasn't long ago this was a $5-6 stock. Business has only grown but outlook on mining has this down in the dumps.

Comparables we like - Geodrill (GEO:TSX) and Major Drilling (MDI:TSE).
Foraco (FAR:TSX) is too debt heavy and only has focus on mining - which means short term there'll be more pain.



May 29, 2014
Energold Drilling Group Announces First Quarter 2014 Financial Results

 Energold Drilling Corp. ("Energold" or "the Company") announces first quarter revenue in 2014 of $37.0 million across four business divisions, representing a 31% decrease over first quarter 2013 revenue of $53.9 million. Lower year over year revenue is due mostly to the decline in the mineral drilling segment although the Company realized strong offsetting results in the energy business. These results highlight the successful diversification objectives made by the Company over the last several years.

Gross margin for the quarter was 29% on a Company-wide basis compared to 30% in the same period in 2013. Net earnings per share for the quarter was $0.03 compared of $0.08 in the first quarter 2013. The Company's overall gross margin reflects the energy division's typically strong first quarter activity levels and associated operational efficiencies made in previous periods, allowing for a strong profit in the quarter. The adjusted net earnings** in Q1 was $1.8 million or $0.04 per share compared to net earnings of $7.3 million or $0.15 per share in 2013.

The first quarter is historically one of the slowest periods in mineral drilling for the Company due to the weather conditions in South America and the ramp up from low activity levels after the holiday season. Meanwhile, the diversification efforts made by management over the last several years continue to prove beneficial to shareholders as the Company's oil sands coring business operated at near 100% capacity in northern Alberta during the period. Strong profit for the energy division in the first quarter reflected ongoing efforts to contain costs as management seeks to reduce downtime and associated start-up costs on a go forward basis. The manufacturing division's contribution during the period reflects the typical seasonal effects in that business, where the beginning of the year involves bidding on new contracts with a ramp up in output and revenue recognition occurring in the second half of the year.

Energold's balance sheet for Q1 2014 remains well capitalized with $20.6 million in cash and $75.1 million in working capital.

Wednesday, July 3, 2013

Opportunities in the Shovels and Picks? BLY:asx BOARF:us EGD.vn FAR.to OGD.to MDI.to $BOARF

Much has been written about the California gold rush in the 50's when people abandoned families in the search of the great wealth in the area.

While the success rates were low, people were attracted to the potential of going from zero to hero in the matter of discovering the gold nuggets that were the stuff of dreams.

What many didn't realize, several of today's empires were build on the masses flowing to the California area, not on the actual gold discoveries.

Levi Strauss (1829-1902) was a Bavarian immigrant who, during the California Gold Rush, went into business as a dry goods wholesaler on San Francisco's Market St. Coincidentally In 1853, Strauss began making durable trousers for miners from heavy brown cloth. His firm later switched materials and created the first denim blue jeans in 1873, catering to working men who needed tough garments that would withstand hard manual labor (the company's slogan in 1900 was "For Men Who Toil").
Today, the group is the world's largest pants manufacturer, arguably larger than many of the gold mining companies that were around during the same time.

By this analogy, perhaps during the commodity cycle, one great way to play the markets is via the shovels, picks, and the service companies.

What do you hear when things are busy with the mining markets? Investors are waiting for two things - assay results and drill results.

Boart Longyear (BLY on ASX Australian Exchange, BOARF on the US OTC)  was one of the largest integrated drilling companies globally.
With over 1,000 rigs and just under USD $2 billion annually, they dominate in terms of size compared to many of the TSX Venture and TSX-listed drillers we've mentioned here before.

Unfortunately, their fortunes has not been kind to them lately.
 
 In the last 2 days - Moody's had just downgraded Boart's credit ratings, leading off a selling frenzy, dropping their market cap another 25% so far at time of writing.

With an EBITDA forecast of 2013 for a low of $199 million - $271 million, it's currently trading at ONE time EBITDA/EV. We believe this is an attractive valuation and will recommend pulling the trigger around August.

At this price, there might be issues of waiting too long and seeing some of the institutional investors in Boart pull out and take the deal private.

Why we like it:
Largest in the sector - with this many operations across the globe, it's almost prescribing to the too big to fail model. Look at the intrinsic value and the revenue generating ability.

Diversified service - that is underappreciated. Beyond drilling services, several of the drilling companies use Boart drills, and also their tooling and drill rod/supplies. If this is not vertically integrated I don't know what is.

Trading at discount - at one times EBITDA, it doesn't get much cheaper.
The 14% Yield is nice to have, but don't count on it.

Rating : BUY at dips. $0.39 bottom range

Taking a stroll down memory lane, in 2006 Boart went public and made a huge amount of money for its investors in the PE fund.
Advent PE fund purchased it from Anglo American for just over $500 million 1.5 years and very quickly realized tremendous value, netting nearly a billion dollars. Not bad returns? (Reference)

http://www.altassets.net/private-equity-news/advent-international-to-acquire-boart-longyear-from-anglo-american-for-545m.html
Advent International to acquire Boart Longyear from Anglo American for $545m
8 Jun 2005
Mid-market buy-out firm Advent International has agreed to acquire Boart Longyear, a provider of drilling services and equipment, from Anglo American. The enterprise value of the transaction is $545m. The investment is the first to be made from Advent's latest €2.5bn global buy-out fund, which closed in April.
Boart operates from sites in 38 countries across Europe, the USA, Canada, Latin America, the CIS, the Middle East, Asia Pacific and Africa. Opportunities for further growth exist in areas including the emerging markets, where there is growing demand for mined minerals.
Dave McKenna, partner at Advent, said ‘Boart Longyear is a widely acknowledged global market leader in the mining industry, with a deserved reputation for outstanding customer service and an exemplary health and safety record. Strategically advantaged by its provision of both services and equipment, it’s a fantastic platform from which to capitalise on current industry growth trends and to build an industry-leading diversified drilling services business.’
Humphrey Battcock, also partner at Advent, added, ‘Companies like Boart which have historically operated as smaller divisions of larger parents are exciting to work with and offer significantly untapped potential. In parallel with a program of operating improvements, we will be employing a three-track growth strategy that will focus on consolidating Boart’s leadership through a series of strategic acquisitions, increasing market penetration in under-represented territories, and diversification into non-mining drilling services where there are strong synergies with the company’s core areas of expertise.’
Copyright © 2005 AltAssets

http://www.reuters.com/article/2007/01/19/boartlongyear-macquarie-ipo-idUSSYD29280220070119

I'm sure there are some players on the sidelines itching to do a deal like this again. If you're along for the ride, there could be some good gains here for a real operating business in the mining sector.
___________

Similarly in the space - we have mentioned boutique specialty driller Energold Drilling (EGD.VN EGD.v, EGDFF OTCBB).


Why we like them:

Undervalued. Trading at 20% discount to Net Book Value. Stock has some life here around $1.50 and seems to have rebounded from the base resistance.
Market cap is around 

Unique competitive advantage in mobile modular drilling solutions for early stage projects, but catering to large players for security of revenue stability.

EGD's small portable rigs in display - minimal environmental disturbance and get more holes for the same $ spent for miners

Diversified business. 
In 2010 - 100% of the revenue came from mining drilling.
In 2011 - over 80% of the business was mining, 20% was energy and manufacturing.
2012 it was 54% mining and 46% energy/manufacturing.

Fast growth in Oil Sands energy segment
We will elaborate further in future reports - but Alberta spent over $26 billion on exploration and development in oil sands in 2012.
Comparison to the global expenditure of Metals explorations (as compiled by Metals Economics Group), it was paltry $20 billion, across the globe!
Company states they have a niche service in the energy services sector - given how small a pie they hold a continued oil sands boom should continue to benefit Energold, even if mineral suffers for the next 6-12 months.

Rating : BUY at dips. $1.50 bottom range

Saturday, June 8, 2013

Los Azules Resources Increases TNR.v MUX.to

This projects keeps on getting bigger!
Inferred and Indicated now sits at over 15.4 billion lbs
Even at $0.01 per pound in situ value, which a substantially lower than the $0.03 per pound going in the market, it gives Los Azules a value of over $154 million by itself.

With the rights to back into 25% of Los Azules, gold miner junior TNR Gold (TNR.V) is attractively positioned. One thing to note of course is the dilution factor if TNR were to raise the capital to back-in to the expenditure on their portion of Los Azules so far.

McEwen increases Los Azules NI 43-101 indicated

2013-05-15 09:03 ET - News Release

Mr. Rob McEwen reports
MCEWEN MINING'S LOS AZULES COPPER PROJECT CONTINUES TO GROW!
McEwen Mining Inc. has provided an updated Canadian National Instrument 43-101-compliant mineral resource estimate for its 100-per-cent-owned Los Azules copper project in San Juan province, Argentina. Key developments include the successful conversion of inferred resources into the indicated category while increasing the size of the resource. The resource remains open along strike, to depth, and laterally. Los Azules ranks as one of the world's largest, undeveloped, high-grade, open pit copper projects, and appears to have significant growth potential.
LOS AZULES COPPER PROJECT -- COMPARISON OF PREVIOUS AND CURRENT MINERAL RESOURCE ESTIMATES

       June, 2012, resource estimate   May, 2013, resource estimate           
                   update                       update            % change 

Cut-off   Tonnage    Cu                Tonnage    Cu                        
grade    (million  grade    Cu lb     (million  grade    Cu lb    Contained 
(Cu%)     tonnes)   (%)   (billions)   tonnes)   (%)   (billions)   Cu lb  

Indicated resource                                                          
0.35        323     0.65      4.6        389     0.63      5.4       +17%   

Inferred resource                                                           
0.35        948     0.52     10.8       1,397    0.46     14.3       +32%   

(i) Details for gold and silver resources are included in the attached table.           

"This resource estimate update marks the completion of our most successful drilling season at Los Azules. We discovered a new parallel zone to the west and significantly increased the indicated resource and inferred resource estimates. Congratulations are in order to our exploration team in Argentina who set a record for the number of pounds discovered at Los Azules in one drill season," stated Rob McEwen, chief owner.
This season's exploration effort focused on expanding the resource base. A total of 15,800 metres of drilling was completed which produced a 17-per-cent increase in contained copper in the indicated resource category, to 5.4 billion pounds of copper and a 32-per-cent increase in contained copper in the inferred resource category, to 14.3 billion pounds of copper, since the June, 2012, estimate of mineral resources. On Feb. 5, 2013, the company released an interim, midseason resource update. The "Los Azules copper project -- comparison of previous and current mineral resource estimates" table shows a comparison of the new (May, 2013) resource with the resource estimated at the end of last year's drilling program (June, 2012).
This updated resource estimate will form the basis of a new preliminary economic assessment (PEA), which is expected to be completed in the third quarter of 2013. This PEA will evaluate the possibility of: (1) increasing the daily throughput; (2) producing copper cathode instead of a concentrate; and (3) processing low-grade mineralized material not previously considered, via a heap leach.
The advantages of being able to produce a copper cathode rather than a copper concentrate is twofold: first, it would eliminate the capital intensive, concentrate pipeline through Chile; and second, it would reduce the applicable export tax by 50 per cent.
About Los Azules
Los Azules is a large undeveloped copper porphyry system located in western San Juan province within a belt of porphyry copper deposits that straddles the Chilean/Argentine border. This belt contains some of the world's largest copper deposits, including Codelco's El Teniente and Andina mines, Anglo American's Los Bronces mine, Antofagasta PLC's Los Pelambres mine and Xstrata's El Pachon project, among others. Los Azules is one of the world's largest, highest grade, undeveloped copper-porphyry deposits not owned by a major base metals company.
In order to exhibit reasonable prospects for economic viability, the mineral resource estimate has been contained within a conceptual open pit shell generated using general technical and economic parameters that are defined at the end of this news release. For comparison purposes, resources are listed at a series of cut-off grades in the "Los Azules mineral resource estimate" table.
               LOS AZULES MINERAL RESOURCE ESTIMATE

                                        Au                  Ag              
                                       grade               grade            
Cut-off   Tonnage    Cu       Cu      (grams      Au      (grams      Ag    
grade    (million  grade      lb        per       oz        per       oz    
(Cu%)     tonnes)   (%)   (billions)  tonne)  (millions)  tonne)  (millions)

Indicated resource                                                          
0.15         627     0.49     6.74      0.06      1.13       1.7      34.9
0.20         584     0.51     6.57      0.06      1.08       1.8      32.8
0.25         523     0.54     6.27      0.06      1.02       1.8      29.7
0.30         450     0.59     5.83      0.06      0.92       1.8      25.9
0.35         389     0.63     5.39      0.07      0.84       1.8      22.9
0.40         338     0.67     4.97      0.07      0.76       1.9      20.2
0.45         293     0.70     4.55      0.07      0.68       1.9      17.7
0.50         253     0.74     4.13      0.07      0.60       1.9      15.5
0.55         217     0.78     3.72      0.07      0.52       1.9      13.4
0.60         184     0.81     3.29      0.08      0.45       1.9      11.3
0.65         151     0.85     2.84      0.08      0.38       1.9       9.2
0.70         120     0.90     2.38      0.08      0.30       1.9       7.2

Inferred resource                                                           
0.15       4,141     0.32     29.47     0.05      6.02       1.6      214.3
0.20       3,583     0.35     27.32     0.05      5.43       1.7      190.1
0.25       2,785     0.38     23.36     0.05      4.46       1.7      154.9
0.30       2,016     0.42     18.72     0.05      3.46       1.8      118.0
0.35       1,397     0.46     14.30     0.06      2.58       1.9      85.8
0.40         910     0.51     10.30     0.06      1.79       2.0      58.5
0.45         576     0.57     7.18      0.06      1.20       2.1      38.1
0.50         360     0.62     4.93      0.07      0.79       2.1      24.1
0.55         233     0.68     3.47      0.07      0.54       2.1      15.8
0.60         157     0.73     2.52      0.08      0.39       2.1      10.8
0.65         110     0.77     1.87      0.08      0.28       2.2       7.7
0.70         76      0.81     1.36      0.08      0.20       2.2       5.5

(i) Tonnes are stated in metric and is equivalent to 2,205 pounds.             
(ii) Estimated contained metal values may be subject to rounding errors.    


Details on the parameters of the resource estimate are as follows:
  • The resource estimate is based on data from 185 drill holes comprising a total length of 59,518 metres of drilling completed to the end of March, 2013.
  • There were a total of 27,688 individual samples selected for analysis. The samples were collected and analyzed in accordance with industry standards. Splits from the drill core samples were submitted to either Alex Stewart in Mendoza or ALS Chemex or ACME in Santiago, Chile, for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.
  • The May, 2013, mineral resource estimate for the Los Azules copper project was prepared under the direction of Robert Sim, PGeo, of SIM Geological Inc. The mineral resource estimate uses drill hole sample assay results and the interpretation of a geologic model that relates to the spatial distribution of copper in the deposit. Interpolation characteristics were defined based on the geology, drill hole spacing and geostatistical analysis of the data. Block grade estimates were done using ordinary kriging (OK) with a nominal block size measuring 20 metres long, 20 metres wide and 15 metres high. Resources are classified according to their proximity to sample data locations and are reported, as required under NI 43-101, according to the CIM Definition Standards for Mineral Resources and Mineral Reserves.
  • Mineral resources, which are not mineral reserves, do not have demonstrated economic viability.
  • The quantity and grade of reported inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.
  • As required under NI 43-101, reasonable prospects for economic viability of the mineral resources has been exhibited by the application of a resource limiting pit shell built about copper grades in the model using a projected metal price of $2.75 (U.S.) per pound Cu, mining costs of $1.00 (U.S.) per tonne, milling and general and administrative costs of $4.25 (U.S.) per tonne, 100-per-cent recoveries, and an average pit slope of 34 degrees.
Technical information
Robert Sim, PGeo, a qualified person and independent of McEwen Mining as defined by National Instrument 43-101, has reviewed and approved the technical content of this news release related to the mineral resource estimate presented herein. Bruce Davis, PhD, FAusIMM, who is a qualified person and independent of McEwen Mining, as defined by NI 43-101 and responsible for the quality control for the assaying of the Los Azules drill core, has reviewed the assay quality control information. All samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to the ACME sample preparation laboratory in Mendoza, Argentina, and then transferred to ACME's laboratory in Santiago, Chile, for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays. The mineral resource estimate referenced in this press release was prepared in April and May, 2013, by Robert Sim, PGeo, and Bruce Davis, PhD, FAusIMM.
For additional information about June, 2012, resource estimate and the Los Azules project generally see the technical report titled "Los Azules porphyry copper project, San Juan province, Argentina" dated Aug. 1, 2012, with an effective date of June 15, 2012, prepared by D. Ernest Winkler, PEng, Robert Sim, PGeo, Bruce Davis, PhD, FAusIMM, and James K. Duff, PGeo, all of whom are qualified persons and all of whom are independent of McEwen Mining, each as defined by NI 43-101. The foregoing report is available under the corporation's profile on SEDAR.

Monday, May 20, 2013

Summer Doldrum hits early - Fund managers loses shirt (and faith) in gold bet in 2013

The investment community continues to be shocked by the record breaking Dow Jones index and S&P 500, as if the magic economic engine that is US of A keeps on trucking towards what seems like a full recovery.
 
Have all the gold bugs been deadly wrong? 
Legendary fund managers such as Vinik (of Magellan Fidelity) fame recently closed what was a wildly successful fund after years of successful records. He's down 5% so far since . Link here
 
“While we are very proud of our excellent long-term record of 17 percent annualized returns since we started VAM in 1996, the last 10 months have been more difficult following our restructuring,” Vinik said in the letter, adding that his fund is down 4.8 percent since last July. “It is time for us to take a break.” 
 Considering gold last July 2012 was at  $1,600 per troy ounce and today sits at under $1,390, I'm thinking Mr. Vinik, the gold bugs need you alot more than The Boston Red Sox, the team he's leaving fund management to run. 

Compared to most funds such as US Global's Commodity centric funds lead by the charismatic Mr. Frank Holmes, unfortunately down a staggering Year To Date (YTD) amount of nearly 50%. Mr. Eric Sprott, of gold and silver investment fame, is down similarly on his physical trust holdings and various funds.

PHYS and PSLV are his gold and silver trusts, respectively. Silver (as poor mans' gold) despite its industrial uses has again acted more volatile than gold, dropping over 30% YTD.

With investors gun shy about performances so far, what continues to make the sector appealing?
 If China and India continues to need the supply of raw materials, where is the return for the investors that take the risk to fund these projects?

If its any consolation, Paul Singer, despite recent setbacks on short term gold prices, is convinced the US as a country is going down once QE runs out of bullets, and it will.
 He's sent client notes that he's not at all worried about gold.

When a smart guy like that who's made a killing on timing the US Subprime along with Paulson and Co, we think it's wise to listen.

We remain bullish on sustainable short to midterm deals with cashflow and revenue - or ability to continue to generate joint venture and so-called "miracles" by financing or receiving operating capital from senior partners in this scenario.

Cash rich juniors tend to do well in this environment when there's a tremendous and unreasonable flight to yield and safety.

LONGS: TNR.v, ILC.v, SLW.to, EGD.v, PTW.v
Elliott Management Corp., the $21.8 billion hedge-fund firm founded by Paul Singer, said gold, a money-losing position for the firm this year, remains the best store of value in an uncertain global economy.
“Although our gold position lost money in the quarter and afterward, we remain unconvinced that anything resembling a genuine normalization of global economic and financial conditions has been achieved,” Elliott wrote in an addendum accompanying a first-quarter letter to investors. “There is only one store of value and medium of exchange that has stood the test of time as ‘real money’: gold. We expect this dynamic to assert itself in a large way at some point.”
Enlarge image Elliott Management President Paul Singer




Wednesday, May 8, 2013

TNR Gold engages banker PI Financial to sell Los Azules (TNR.v, MUX.to) #Argentina #mining #ibanking

The turn of events for little known junior miner continues. With capital markets so challenged left and right, banks are desperate for deals.

It would appear Mr. McEwan's namesake mining co is hurting, falling to $2/share on recent risk withdrawal. The sale would likely be favourable to both TNR and MUX.to - challenge on horizon will be the Argentina discount and the substantial capital expenditures (CAPEX) of over $3 billion.

TNR hires PI to advise on Los Azules back-in right sale

2013-05-08 11:47 ET - News Release
Mr. Gary Schellenberg reports
PI FINANCIAL CORP. ENGAGED AS FINANCIAL ADVISOR FOR SALE OF TNR GOLD'S BACK-IN RIGHT TO THE LOS AZULES COPPER PROJECT, ARGENTINA
TNR Gold Corp. has retained the services of PI Financial Corp. to provide financial advice regarding the sale of its back-in right to the northern portion of the Los Azules copper project in Argentina. TNR has a back-in right (TNR press release dated Feb. 5, 2013) allowing it to acquire a 25-per-cent interest in certain mineral concessions at Los Azules that include the northern portion of the deposit.
Los Azules is an advanced-stage copper porphyry project owned and operated by McEwen Mining Inc., which describes the project in news releases as "one the world's largest, highest-copper-grade, undeveloped porphyry deposits not controlled by a major base metal mining company." The company advises that McEwen has published news releases and reports, which are filed on SEDAR, that describe a resource both on and adjacent to the area subject to TNR's back-in right. The total published resource, for which TNR's back-in right includes an undetermined portion, consists of an indicated resource of 310 million tonnes grading 0.65 per cent Cu and an inferred resource of 1,302 million tones grading 0.49 per cent Cu (using a 0.35-per-cent Cu cut-off grade).
"I welcome the opportunity to monetize our back-in right. We have an asset portfolio that will greatly benefit from the sale of the Los Azules asset, for example, the development of our Shotgun project, which our team is ready to further develop and explore the gold resources upon," states Kirill Klip, non-executive chairman of TNR. "It was for the potential of the Los Azules project and TNR's ability to identify top-quality projects at an early-stage of development that I became involved in the company."
TNR has no ownership of the Los Azules project prior to exercise of the back-in right and as such presents information about the project as that of independently published information regarding the entire property. TNR encourages its shareholders to read news releases and reports issued by McEwen Mining to gain a better understanding of the Los Azules project. McEwen Mining's news releases and reports appear to have been prepared by qualified persons, and the procedures, methodology and key assumptions disclosed therein are those adopted and consistently applied in the mining industry, but no qualified person engaged by TNR Gold has done sufficient work to analyze, interpret, classify or verify McEwen Mining's information to determine the current mineral reserve or resource, or other information referred to in the news releases and reports. Accordingly, the reader is cautioned in placing any reliance on the disclosure herein.
The company is also pleased to announce that as part of the settlement terms with McEwen Mining (TNR press release dated Feb. 5, 2013), the transfer of the Escorpio IV mineral rights to McEwen Mining is now complete, and TNR has received the certificates representing one million shares of McEwen Mining (information about McEwen Mining can be found at its website and on SEDAR). The shares are subject to the minimum statutory hold period.
About Los Azules
The company has a 25-per-cent back-in right in the northern portion of the Los Azules property, which is exercisable following the completion of a feasibility study. If the company elects to back in for 5 per cent or less, or has its interest diluted to 5 per cent or less, TNR will receive a net smelter royalty of 0.6 per cent from the northern portion.
The Los Azules copper deposit is located in the San Juan province of Argentina. McEwen Mining is the current operator on the Los Azules copper deposit, and the company advises that on March 13 and March 28, 2013, McEwen Mining issued press releases in relation to the deposit, which are accessible on SEDAR and on McEwen Mining's website.
The press release issued by McEwen Mining dated March 28, 2013, includes preliminary results from drilling operations on the Los Azules copper deposit for the current exploration season. McEwen Mining's press release appears to be prepared by qualified persons, but no independent qualified person engaged by TNR Gold has done sufficient work to analyze, interpret, classify or verify McEwen Mining's information to determine the accuracy of the current mineral reserve or resource, or other information referred to in the press release. Accordingly, the reader is cautioned in placing any reliance on the subject results and estimates.
McEwen Mining is completing a drilling program to further expand the resource to the west and to depth. McEwen Mining has also stated that an updated preliminary economic assessment will be completed later this year that will utilize the expanded resource (expected by the end May, 2013) and will incorporate results of recent metallurgical work focused on floatation optimization and copper leaching (see McEwen Mining press release of March 13, 2013).
About PI Financial
Established in 1982, PI Financial is a leading, full-service, independent investment dealer, providing a full range of investment products and services to corporate and institutional investors. PI has been advising and servicing the capital needs of the global mining industry for over 30 years with its very specialized and focused group of professionals.
John Harrop, PGeo, FGS, is a qualified person as defined under National Instrument 43-101, and has reviewed and approved the technical content of this news release.

Monday, April 8, 2013

PDAC - the downturn cycle continues - TNR.v ILC.v MUX.to

The TSX Venture index has continued to under perform the broad markets. Given it's April this week - it's hard to fathom how the market will correct when usually Jan-Mar is the bullish cycle leading up the PDAC Convention in Toronto every year.

Headlines left and right tell us that major markets has corrected, yet evidence from capital financing and follow on financing for most commodity companies tell us otherwise.
Live from Mines and Money HK. Photo: Mines & Money

At the recent Mines/Money in Hong Kong, the CEO of one of the largest gold miners in the world, Chuck Jeannes, spoke out about the massive underperformance of commodity companies in the last few years.

1. Longterm gold pricing
- With loose monetary policies continuing and Quantitative Easing no real possibility of stopping while economy is still recovering, commodity prices going up are an eventuality.

2. Underestimation of longterm production costs
- Instead of cash-costs - Goldcorp has initiated an industry wide effort to take into account what's called
"sustaining cash costs" - this takes into account the fact that these gold and metal projects had to be acquired or purchased at some point, and that isn't a perpetual expectation that can be relied on.

It's getting harder to find projects of quality, and costs are going up.

3. Spiking overall Capital Expenditures (CAPEX)
- more responsibility to shareholders for delivering projects under budget and timing

Just a reminder what M3 is - and the fact that it's not even measured anymore since 2005 is real worrying! To borrow a chart from ShadowStats



 
"The Federal Reserve publishes weekly and monthly data on three money supply measures -- M1, M2, and M3 -- as well as data on the total amount of debt of the nonfinancial sectors of the U.S. economy... The money supply measures reflect the different degrees of liquidity -- or spendability - that different types of money have. The narrowest measure, M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written. M2 includes M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds. M3 includes M2 plus large-denomination ($100,000 or more) time deposits, balances in institutional money funds, repurchase liabilities issued by depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks and at all banks in the United Kingdom and Canada."

On a positive note, several of the position we've tracked and owned over the years continue to hold their grounds despite wide losses across the overall sector of junior miners.

- McEwan Mining (MUX.TO) has fallen in credibility after confirming in November 2012 that the Los Azules lawsuit did have merit, and TNR has continues to gain momentum.

It's no surprise that after the lawsuit, McEwan Mining has now commenced additional exploration over the land that TNR was contesting for. Why explore something that you know is valuable but will add a bigger price tag to the dispute, right?

Turns out they were right. Northern part of Los Azules continue to impress.

TNR optionee McEwen drills 206 m of 0.55% Cu at Azules

2013-04-02 08:37 ET - News Release
Mr. Kirill Klip reports
TNR GOLD CORP. ADVISES OF MCEWEN MINING'S DRILL RESULTS AT THE LOS AZULES COPPER PROJECT
McEwen Mining Inc. released news on March 28, 2013, in relation to the Los Azules copper project in San Juan province, Argentina. TNR Gold Corp. holds a 25-per-cent back-in right, exercisable upon the completion of a feasibility study, on the northern part of the Los Azules property.
The news release issued by McEwen Mining summarizes recent results from nine new drill holes completed on the property. In its press release McEwen Mining states, "Drilling continues to intersect significant intercepts of high- to medium-grade copper mineralization over long intervals west of the original deposit." The news release is available on McEwen Mining's website and on SEDAR. TNR encourages its shareholders to read the press release issued by McEwen Mining to gain a better understanding of the work performed and the potential impacts this will have on the project. McEwen Mining's press release appears to be prepared by a qualified person and the procedures, methodology and key assumptions disclosed therein are those adopted and consistently applied in the mining industry, but no qualified person engaged by TNR Gold has done sufficient work to analyze, interpret, classify or verify McEwen Mining's information to determine the current mineral reserve or resource or other information referred to in the press release. Accordingly, the reader is cautioned in placing any reliance on the disclosures therein.
In its news release, McEwen Mining announced assay results from nine new drill holes. Highlights from the news release include the reported intervals from two drill holes that are located on the Escorpio II mineral claim, which forms a part of the land package included in TNR Gold's back-in right.
                          RESULTS

Hole ID  From (m)      To (m)  Thickness (m)   Copper (%)    

12106        106         222            116         1.01 
             222         428            206         0.55
             428         496             68         1.18                               
12114        224         374            150         0.70                
In addition, McEwen Mining announced that it has completed 15,800 metres drilling this season with the results to be incorporated into an updated resource estimate to be released by the end of May. The resource will subsequently form the basis of a new preliminary economic assessment expected in the third quarter 2013.
Kirill Klip, non-executive chairman of TNR, stated: "McEwen Mining continues to prove up the potential of the Los Azules project. The latest drill results reported in the McEwen Mining press release show mineralization occurring to the west of the original deposit and at deeper depths. I especially welcome the discovery of higher-grade material and look forward to reading more as the project evolves over time. This project has the potential to become an important value driver for TNR Gold and our shareholders."
John Harrop, PGeo, FGS, is a qualified person as defined under National Instrument 43-101 and has reviewed and approved the technical content of this news release.
About Los Azules
The Los Azules copper project is located in San Juan, Argentina. It is one of the largest undeveloped copper projects in the world. The Los Azules porphyry system occurs within a belt of porphyry copper deposits known as the Andean porphyry belt that straddles the Chilean/Argentine border and contains some of the world's largest copper deposits.
TNR Gold retains a back-in right on the Los Azules project, currently 100 per cent owned by McEwen Mining. The back-in right is for up to 25 per cent of the equity in certain claims making up the northern portions of Los Azules. The right is exercisable upon the completion of a feasibility study. TNR must pay two times the expenses attributable to the back in percentage (that is paying two times 25 per cent all of the costs attributable to the claims comprising the northern portion of the property). If the company elects to back in for 5 per cent or less or has its interest diluted to 5 per cent or less, TNR will receive a net smelter royalty of 0.6 per cent.
TNR Gold's back-in right applies to those properties subject to an exploration and option agreement originally signed by Solitario Argentina S.A. (a subsidiary of TNR Gold) and M.I.M. Argentina Exploraciones S.A. on May 15, 2004.

2. International Lithium (ILC:TSXV) - drill results from Ontario is positive and new discovery in Ireland!
ILC continues to prove the validity of the project in 2013 with high grade lithium drill results in Ontario.
Earlier in 2012 late, ILC receives another $2 million in injection from strategic partner in China, Ganfeng Lithium.

Despite tougher markets, having an end user backing your project puts ILC above and beyond several companies in this space.

International Lithium Corp
SymbolC : ILC
Shares Issued77,133,046
Close 2013-04-02C$ 0.035
Recent Sedar Documents

Int'l Lithium drills 10.85 m of 1.05% Li2O in Ontario

2013-04-03 13:39 ET - News Release
Mr. Kirill Klip reports
INTERNATIONAL LITHIUM CORP. REPORTS HIGH GRADE LITHIUM FROM MAVIS LAKE, ONTARIO
International Lithium Corp. has released lithium and associated rare metal assay results from the remaining eight drill holes of the recent 19-hole (2,075-metre) diamond drill program on the lithium and rare metals pegmatite field spanning the contiguous Fairservice and Mavis Lake claim blocks near Dryden, Ont.
Key highlights:
  • 1.34 per cent lithium oxide over 8.5 metres intersected in MF-12-33;
  • 1.05 per cent lithium oxide over 10.85 metres intersected in MF-12-34;
  • 1.06 per cent lithium oxide over 10.75 metres intersected in MF-12-36.
Recent drill program
The objective of the 2012 drill program carried out at the Fairservice/Mavis Lake project during November and December was to test the subsurface continuity of significant pegmatite intersections along strike and downdip. Extensive structural, geological, geochemical and geophysical interpretations of both new and historical data were utilized to co-ordinate drilling and better understand the orientation and distribution of pegmatite bodies in the area.
The attached table reports highlights from the final eight holes of the 2012 program.
Hole No.    From         To    Length*     Li2O   
              (m)        (m)       (m)       (%)

MF-12-31   34.25      39.00      4.75      0.53     
MF-12-33   22.00      30.50      8.50      1.34     
MF-12-34   22.45      33.30     10.85      1.05     
MF-12-35   32.90      35.20      2.30      0.64     
MF-12-36   27.75      38.50     10.75      1.06     
MF-12-37   23.70      27.85      4.15      0.51      

*All widths reported are drill core widths 
 and have not been converted into true width.
The attached table includes intervals of significant tantalum values from MF-12-31 through MF-12-38.
Hole        From         To    Length*     Ta     Ta2O5   
              (m)        (m)       (m)   (ppm)       (%)

MF-12-34   22.45      33.30     10.85     108     0.013    
MF-12-35   32.90      35.20      2.30     152     0.019    
MF-12-37   23.70      27.85      4.15     171     0.021    

*All widths reported are drill core widths and 
 have not been converted into true width.
Diamond drill holes were oriented perpendicular to the surface trace of the central band of pegmatite. The central band has a number of lithium-bearing outcrops that were the focus of historical drill programs and currently forms the primary target for the company's drilling. It is now evident that the central band of pegmatites has a thick, shallow-dipping, spodumene-bearing core zone centred on pegmatite No. 4.
Laboratory work was conducted by Activation Laboratories Ltd. of Ancaster, Ont., with the samples being submitted by company staff to its Dryden prep facilities. Activation Laboratories is an accredited laboratory with ISO 17025:2005 and CAN-P-1579 certification. Analysis was conducted using a sodium peroxide fusion followed by ICP-MS. The company uses industry recognized practices to ensure quality control. To support this, a number of large samples were collected from surface sites known to have significant lithium and tantalum values. Following preliminary analysis, a blend of these samples is being used to develop a certified reference material matrix matched to the company's pegmatite projects. The new reference material has been inserted into the sample stream at the property and will be utilized on other company projects.
The Mavis/Fairservice property area
The property is located 15 kilometres northeast of Dryden, Ont., and is easily accessed via the Trans-Canada Highway and a series of logging roads. The claim blocks comprise a total of 2,624 hectares and straddle a continuous pegmatite field exhibiting high-grade, well-evolved lithium and tantalum zonation, as well as significant levels of cesium and rubidium. Regional pegmatite mineralization is directly associated with the strongly peraluminous Ghost Lake pluton and related pegmatitic granite dikes. Rare metal mineralization in the Mavis Lake area occurs in zoned pegmatites hosted by mafic metavolcanic rocks. Rare metal mineralization occurs in four zones: internal beryl zone within the parent of the Ghost Lake pluton that evolves to the east within the Fairservice and Mavis Lake claim blocks into external zones of beryl-columbite-, spodumene-beryl-tantalite- and albite-type pegmatites.
John Harrop, PGeo, FGS, is the company's qualified person on the project as required under National Instrument 43-101 and has reviewed the technical information contained in this press release.