Monday, April 8, 2013

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

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
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.

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. 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.

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