Anyone who keeps an eye on the GDXJ will tell you that there has been a lot of selling going on lately in some of the ETF's holdings. If you own shares in the ETF itself it hasn't been really bad but for investors who own some of the particular stocks of the ETF it's been a bit of down hill ride. With some stocks have dropping by as much as 30% over the past month its been a bit of hard on investors nerves. The Junior Gold Miners ETF (GDXJ), down about 5.6% this week. Among components of that ETF with the weakest showing for the week were shares of Continental Gold (CNL.CA), lower by about 15.3%, and shares of Premier Gold Mines (PG.CA), lower by about 11.4% on the week. Undoublty there has been long faithful holders of some of the stocks cashing in and maybe waiting it out till the dust settles and things turn around.
So what's causing this sell off? Well the ETF is comprised of a whole bunch of different junior mining companies. It even has some stocks that are not classified as junior as some are more in the mid-tier section as they are small producers. The ETF holds different percentages of stock in various junior mining companies. What's happening now is that the fund is getting too much money invested in it and now it has to re-allocate this money by adding different companies to the fund. Since early 2016, assets in the fund shot up from a little more than $1 billion to $5.4 billion currently. This added money puring into the fund has nearly doubled the ETF price from $19.80 at the start of 2016 to $36.71 today which is a gain of almost 90%.
The ETF has gotten so big that it now owns giant stakes in some of its underlying holdings, three-quarters of which are Canadian companies. All this extra money has created a dilemma for the fund as its holdings surge above 10 percent of some of the companies it owns. Over the past 12 months, GDXJ has surged 15 percent, outperforming VanEck Vectors Gold Miners, which tracks bigger producers of the metal.
In order for the fund to remain compliant with regulators etc. it needs to sell off a certain amount of shares from various holdings because if they own to many shares the fund can be classified as being a insider of that particular company and would have another issue of reporting holdings etc. with different tax jurisdictions. So to keep things as simple as possible the fund has decided to sell off various assets as it looks to buy into other assetts. (At present there are 10 Canadian companies that the ETF owns where its ownership percentage is more than 18%. These are holdings it is starting to liquidate.)
What this means in the end is that some stocks holders are seeing their stocks sell off for no apparent reason aside that fact that the fund needs to liquidate and other stock holders are seeing the opposite as the fund is starting to buy various other stocks with all this money that has come into the fund.
On thing for certain though is that looking at all this extra money that is coming into this fund tells you one thing and that is that there are a lot of big time investors and funds with lots of big money who see a lot of value and growth in the junior and mid tier mining sectors and this all bodes well for the junior miners. As some would say, "A rising tide lifts ALL boats."
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Is Now The Time To Buy Mining Stocks?
I get emails once in a while asking what stocks I recommend and while I don’t recommend any stocks or equities, I will tell people what I am buying and why I am buying them if I’m asked. I’ve gotten some good insight from some readers in the past and I hope to have past the same onward to them.
Right now almost all mining stocks are out of favor because of pot stocks, blockchain, crypto stocks and just the large money stocks like Amazon, Google etc., which mean there are what could be some very good speculative buys out there in the junior mining sector along with some very undervalued buys in the more developed miners. The big question is how long will it take before the market turns around so that these so called “good buys” reward investors with a decent return
The chart above is a 40 year chart showing the difference between equities and gold. Most recent was of course 1999-2000 when gold prices were $260 per ounce. From that point on gold started it’s bull run to 2011. Fast forward to today and we see that bullion is even cheaper compared to stocks than it was back in 2000.
So is it time to buy? Well I’ve been saying yes for the last 4-5 years and unfortunately I have been totally wrong. I never took into consideration things like zero per cent interest rates, massive amounts of money printing, a strong dollar, etc. and it hasn’t been nice being a gold bug during this time. However I do tend to believe that there are global issues going on at this moment that will cause the tables to turn and we shall see the precious metals start an upward move. Some of these issues is the China Yuan oil pricing, a Chinese gold exchange that only permits gold and not paper to be exchanged, a North Korean issue, maybe some US politics and we can’t forget the overwhelming debt issue, both personal and sovereign. Sooner of later something has to snap and when that will be is anyone’s guess.
So getting back to mining stocks, what stocks are looking poised for upward momentum the most? In my opinion silver plays will reward long term investors the best bang for their buck. I believe silver will do well because it is the smallest market in the world and is one of the few commodities that is being used more than it is being replaced. Once buyers of physical silver start asking for the real thing instead of cash things could get very interesting in my opinion.
Second would be zinc and then cobalt stocks which would also include nickel plays. Zinc because there is a large demand for zinc and the price keeps climbing. Cobalt prices also are also sky high and continue to climb even more so since the government of Congo wants to add more taxes etc to it’s cobalt extraction industry.
Mining stocks I am watching or holding include Klondike SilverKS, GT GoldGTT, Fireweed ZincFWZ
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Is Now The Time To Buy Mining Stocks?
Is Now The Time For Juniors To Buy Mining Stocks?
Discover opportune moments in the financial market with insights on whether now is the ideal time to invest in mining stocks.
A NEAR-TERM ENVIRONMENTALLY FOCUSED
GOLD PRODUCER ~12 MILLION MARKET CAP
This article is written and presented by The Shareholder Report.com. Junior Miners would like to thank the author and editor for allowing us to present this article on our website. Be sure to visit the authors website by clicking the link above.
Secova Metals (CSE: SEK & OTC SEKZF) is an extremely exciting near-term gold producer in the province of Quebec, Canada which is currently trading at a ridiculously low valuation.
Secova Metal's is a Canadian environmentally aware resource exploration and processing company. One of its business strategies is acquiring old abandoned mining sites that have historical tailings which can be reprocessed to extract the remainder of the metals. While processing the tailings, it will systematically explore the property for more in-ground ore to process. Once processed, the toxic sites are returned back to their natural non-toxic state.
3D Model of the Montauban Gold and Silver Processing Plant
Production is expected to begin in about 6 to 9 months at its 100% owned Montauban project. The 16,000 sq ft processing plant has been built (located right beside one of the largest tailings sites), it is fully permitted for production, all infrastructure is in place and most of the large pieces of the processing plant have been purchased. The installation of the processing equipment is expected to begin in early June, 2022. Once completed, gold and silver dore bar production will begin.
Processing Montauban's 5 tailings sites and the near-surface historical resource (1 million tonnes grading 3.4 g/t gold and about 1 oz/tonne silver) could potentially generate C$259.4 million in post processing revenue (using US$2000 gold, US$25 silver & exchange rate of 1.30).
Although the property was mined for base metals from 1910 to 1966 and some gold veins were mines from 1983 to 1990, a historical data base review identified that gold was not systematically assayed at the Montauban Zone which was mined prior to 1954.
The massive sulphide with possible gold mineralization was logged but not assayed for gold as the focus was base metals. The Technical Report's assessment concluded that "the potential for precious metal deposits near the historical deposit was not adequately assessed during the base metal production phases." Systematic exploration could identify vast quantities of ore to process.
The province of Quebec currently has about 263 abandoned toxic projects. The CEO has publicly stated that he would like acquire the next 4 or 5 best projects and would be working with the province of Quebec for more reclamation projects like the Montauban. He mentioned that he hopes to acquire 2 or 3 in 2022.
Reclamation projects like the Montauban have low capital costs, low risk, the immediate processing of the tailings quickly recovers the capital expenditures upfront and funds systematic exploration programs to locate more ore for processing.
Prior to becoming the CEO/President of Secova Metals, Brad Kitchen was CEO/President of Eagle Hill Exploration. He basically took an abandoned project called the Windfall Lake project, systematically explored it and it's now owned by Osisko Mining.
It's now a 6.8 million oz gold (measured, indicated & inferred) and counting deposit with a large amount of the drill rigs aggressively drilling at the project.
Eagle River Project
Secova Metals has a very large strategic project (Eagle River Exploration) which was acquired well before the Windfall Lake region looked like it would become Canada's next gold camp. The project is adjacent to and on-trend to several gold projects in the area so there is a lot of potential with this exploration project.
Secova Metals has about C$2.4 million from flow-through financing that needs to be spent on exploration in 2022. The company will soon be drilling at both properties (Montauban & Eagle River).
Secova Metals has outstanding potential of attaining a very high market capitalization in a rising precious metals bull market as it successfully/aggressively implements its restoration, recovery & exploration strategy resulting in producing projects.
If interested in reading the full in-depth 65 page report on Secova Metals or viewing the dedicated page containing all the research material, please see The Shareholder Report: theshareholderreport.com/research/secova-metals.
For disclosure and disclaimer on this article, you can view it HERE
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Top Three Gold Miners For 2022
Lots of metal watchers and gold bugs in general are calling for $2000 plus gold in 2022. Whether that will happen or not has yet to be seen, but with all the problems going on in the world these days it's actually shocking to see that gold has not responded in a postive upward rally. Having said that we're going to take a look at three (3) gold mining stocks that have the greatest potential to see their stock values increase when gold finally decides to rally.
The gold miners I've picked here are more of the contrarian type of stock and all three of these stocks pay a dividend already. The dividend paid out by these gold miners is not a lot but it is a whole lot more that any bank or financial institution will ever give you. Also remember these miners all have active mines with a good portfolio of properties in various areas of the globe. I am also not going to include the big blue chip type gold miners like Barrick Gold or Franco Nevada because I feel they will not appeal to the readers of a junior mining site. The three gold stocks listed are ones that I feel have a very good potential to double in value over the course of the next year while giving investors a small dividend. Also I am only giving a very brief write up on each company
The first gold company here is Kinross Gold TSX-K. Founded in 1993, Kinross Gold is a senior gold mining company with a diverse portfolio of mines and projects in the United States, Mauritania, Ghana, Brazil, Chile and Russia, Kinross has approximately 9,000 employees worldwide. On a global bases, Kinross produces about 2.1 million ounces of gold annually from all it's mines. So far for 2021 the company's all in cost of mining was around $1100 per ounce. The company expects about 2.7 million ounces in 2022. Over half of all revenues are from it's Nevada and Alaska mining operations. These mines include Ft. Knox in Alaska, Round Montain and Bald Mountain both in Nevada. At present Kinross pays a quarterly dividend of 3 cents per share and has ratings from 10 analysts with an overall strong buy.
Kinross has been active in putting out news for shareholders with the lastest news being that the company announces the acquisition of Great Bear Resources TSX-GBR. In the news release it states that Kinross will acquire Great Bear's flagship Dixie project located in the Red Lake mining district in Ontario, Canada. The Dixie project is one of the most exciting recent gold discoveries globally and extensive drilling results have shown that it has the makings of a top tier deposit. With this deposit the future looks very bright for Kinross.
In Africa, Kinross has the Tasiast mine which is an open-pit operation located in northwestern Mauritania and the Chirano mine in Ghana which is an open-pit and underground operation. The Tasiast mine produced over 400,000 ounces of gold in 2020 with a low cost of extraction and production of just $580 per ounce.
In Russia, the company has the Kupol mine which is a high grade underground mine located in the Chukotka region of the Russian Far East. It is the leading gold mine in Russia and has one of the lowest operating costs in the Kinross portfolio of proprties. In 2020 this mine produced over 500,000 ounces of gold with a cost of $600 per ounce. In January 2020, Kinross acquired the high-quality Chulbatkan license in Russia's Far East. In 2020, drilling at the Chulbatkan license was focused within the Udinsk resource pit being the first project the Company expects to develop on the Chulbatkan license. First production at Udinsk is expected in 2025.
The second gold miner is Yamana Gold TSX-YRI. Yamana has five producing mines that produce just under a million ounces gold per year with a cash cost of mining of approximately $1080 per ounce. Yamana stock pays a 3 cent quarterly dividend and is followed by 9 different analyst and has also has a strong buy rating.
In Canada the company has the Malartic mine, in which Yamana holds a 50% interest. This mine is located in the Abitibi region of Quebec near the town of Val-d'Or. It is Canadas largest gold mine and Yamanas biggest producer. Canadian Malartic is currently an open-pit mine, but the operation is advancing a large underground project. This project hosts three main underground mineralized zones: East Gouldie, East Malartic, and Odyssey with an underground mineral resources had grown to approximately 14.4 million ounces of gold. Annual production of this mine is approx. 350,000 ounce of which Yamana will receive 50%.
In Argentina, Yamana has the Cerro Moro mine which is a gold and silver operation located in the Santa Cruz province. This mine produces approx. 90,000 ounces of gold and about 5.4 million ounces of silver annually. It is a combination of both open pit and underground. Next door in Chile the company has the El Penon mine which is an underground operation. The El Penon mine produces about 160,000 ounce of gold and about 4.3 million ounces of silver annually.
The Jacobina mine is a long life underground mine that has more than doubled production since 2014. This mine is located in Brazil. This operation produces appox. 180,000 ounces of gold annually. With ongoing drilling and exploration to increase the reserves along with added expenditures to the mine and milling operations itself, the company could would increase throughput to 10,000 tpd and bring annual production to 270.000 ounces.
The company's smallest operation is the Minera Florida which is an underground gold mine located in central Chile. This mine produces approx. 190,000 ounces of gold per year. Drilling from 2018 through 2020 led to the discovery, delineation, and initiation of new production fronts which have added new sectors away from the historic core mine, providing flexibility to the operation while increasing mine life.
The third gold miner is a different sort of miner as they do not actually mine the ore. The company is Dynacor Gold TSX-DNG and has it's operations in Peru. The company pays a monthly dividend of 1 cent per share which gives investors at this time about 3%. The other added bonus with Dynacor is the fact that the company only has 39 milion shares and does share buy backs.
The one big difference with this company is that they are more of a gold processing company that an actual miner. What the company does is purchases ore from smaller mines and then mills and process that ore and takes a percentage of the returns. Dynacor has been doing this gold pouring in Peru since 1998 and has upgraded and streamlined operations over the years to make the company more profitable. This milling operation at present grinds out 430 tons per day.
The company does have it's own exploration projects also. The Tumipampa project has a positive geophysical and surface channel results have defined six (6) shallow high priority drill targets on the Breccia Sumac. The drill targets are plotted to intersect with the highest value geophysical readings and surface channel location reporting high anomaly of gold results collected in the past. The company has a planned drilling project of 12 holes totalling 4200 meters.
This gives you the reader and short over view of three potential gold stocks to invest in for 2022. With a potential gold rally and a gold price above $2000 per ounce these three companies could become very profitable and as an investor you could potentially see not only an increase in share price but maybe even an increase in the dividend.
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Top 3 Silver Stocks For 2022
2022 is just around the corner and with tax loss selling in Canada, investors and traders will be wondering what sectors will be in the money next year. One of the commodities that a lot of metal watchers and analysts these days are talking about is silver. One reason is that silver is the most undervalued commodity and according to many it is also the most suppressed commodity. Looking forward there is going to be huge demand for silver for everything from solar panels to electric cars and almost everything in between. Just recently a couple of the big silver producers said they are now withholding silver going into the market. They are just plain sick and tired of seeing the Comex, bullion banks, traders, funds and Wall street manipulate the price of silver on paper day in and day. I don't blame these miners one bit.
Right now most silver miners and silver explorers across the board are seeing their stock prices pretty much at yearly lows and for a lot of these miners stocks there is potential to make a lot of money going forward when silver prices do take off. We're going to take a look at what we think is the top three silver miners to own shares in. These a miners with actual mines running and producing silver everyday.
First up on the top three list is First Majestic Silver TSX:FR Being one of the worlds largest silver miner First Majestic carries a lot of clout in the silver market. When the Wall Street Bets group decide to buy silver back in January 2021, they went in and bought First Majestic hand over fist. First Majestic saw it's stock price double litterly over night. Since that time the stock has pulled back to reasonable levels and at the time of this writing the stock price is sitting at $17 CAD.
First Majestic is one of the biggest names in Mexico and has multiple mines there plus projects and streams in Nevada and Canada. Headed by CEO Keith Neumeyer this company will produce appoximately 13 million ounces of silver and 100,000 ounce of gold from it's mining operations. Their largest mine in Mexico is the San Dimas which is located in the state of Durango, Mexico consists of 71,867 hectares of mining claims. This mining and milling facility is estimated to produce 8 million ounces in 2021. This mine has a measured and indicated resource of 62 million ounces silver and 750 thousand ounce of gold. The company is able to mine and mill these resources for about 12 bucks an ounce.
First Majestic additional mines include the Santa Elana and the La Encantada located in Mexico and Jerrit Canyon which is locatred in Nevada. First Majestic also has 8 different exploration projects on the go throughout Mexico plus has a silver stream at the Spring Pole project in Canada. First Majestic trades on both the TSX and the NYSE.
Second silver miner up on the list is Endeavour Silver TSX:EDR. Endeavour operates two, underground, silver & gold mines in Mexico. The company is currently advancing the Terronera Mine Project towards development. The first mine is the Guanacevi which is a high grade silver mine and milling operation. It is located 250KM from Durango City and con=vers an area of 4200 hecatres. In 2020 this mine produced 3.1 million ounces of silver and 9,814 ounces of gold. Endeavour's second mine, the Bolanitos, is located just outside of Guanajuato City and covers an area of 2500 heactares. The mill is capable of milling 1600 tons per day. This mine in 2020 produced 353,318 ounces silver and 18,963 ounces gold. Mineral grades at this mine are silver at 40 gram per ton and gold at 2.02 grams per ton.
Endeavour also has a third operation, the Terronera, that will be going into production. This will also be a high grade silver mining operation consisting of 25 mineral concessions, totalling 20,128 hectares. This deposit has upwards of 40 veins in which many have not been drilled. Some of these veins are 1 to 8 meters thick and even up to 30 meteres in places with grades ranging anywhere from 100 to 1000 grams per ton silver and 1 to 10 grams per ton gold.
Endeavour has additional exploration projects on the go also. There are three projects in Mexico and three projects in Chile. At the time of this writing November 2021, Endeavour had $129 million in cash and no debt. Between all mines and projects Endeavour has a Measured and indicated resource of 21,466,000 ounces silver and 201,600 ounces gold. Endeavour stocks trades under both the TSX and the NYSE.
Number 3. Our third silver miner is Alexco Resources TSX:AXU. Alexco is a Yukon silver miner that has it's mines and mill in the Keno Hill Mining district of the Yukon. The Keno Hill District is well known as one of the world's highest-grade silver districts. According to the Yukon government's own mineral database, this district has produced in excess of 200 Million ounces of silver from over 5.3 Million tons of ore with average grades of 44 ounces per ton making it the second largest historical silver producer in Canada.
In May of 2021 Alexco filed a new updated technical report which increased it's mineral reserves by 22%. This new updated reserve mine plan is projected to allow the company to produce over 35.5 million ounces of silver over the next 8 years.
There are four mines in the area that the company has to extract ore from. These mine are the Bellakeno, Lucky Queen, Flame and Moth and the Bermingham. Total indicated ounces for all these mines including the Bellakeno surface stockpile is 73,352,000 ounces silver. Total inferred ounces is 24,413,000. The company has an ongoing drill program that is continuing to build on this resource. In fact recent drilling updated drilling at Bermingham has shown grades of 20.37 meteres of 1,681 grams per ton silver. 54 ounces per ton. This grade is on a 500 meter strike length & +100 meter vertical extention. The Bellekeno silver mine is one of the world's highest grade silver mines with a production grade of up to 1,000 grams per ton of silver. Alexco trades on both the TSX and the NYSE.
This write up isn't much more than a tweet but it will gives you a brief highlight of what we concider to be the top three silver miners that are poised to do well in 2022 and with an increase in silver prices.
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Uranium Is Hot
The past couple of weeks have been hot for uranium and uranium stocks. With the price of uranium hitting $45 per lb. you have to go all the way back to 2012 to fetch that sort of price. Prices still have a long way to go to reach the high of $140 per lb. back in 2007, however a close 50% jump in prices in the past few weeks might be a sign of things to come.
So what's really causing this price spike in uranium anyways? Well one thing that is happening out there is back in early March Sprott Asset Management entered into a definitive agreement with Uranium Participation Corporation TSX: U in which UPC shareholders will become unitholders of the Sprott Physical Uranium Trust which is a newly-formed entity managed by Sprott Asset Management.
This new Sprott fund is busy buying up physical uranium on a daily basis. The fund started buying the commodity on the spot market in mid-August and has amassed over 24 million pounds of uranium, sometimes buying more than 500,000 pounds in a single day. Of course this is great for the juniors and even the producers of uranium as they are seeing new 52 week highs in their stock prices.
Of course the majors are usually the first to benefit with rallies like we've seen the past few weeks. Miners like Cameco TSX-CCO have seen a 50% rise in share price in the past few weeks. Denison Mines TSX-DML another larger player has almost doubled in price in the last couple weeks. This rally is helping some of the juniors as well and if prices hold up I'm thinking we will see lots of activity in the drilling and exploration end this coming winter as a lot of uranium exploration takes place in areas like northern Saskatchewan where some of the highest grae uranium is mined in the world.
A quick look at some of the smaller explorers like Fission Uranium TSX-V:FCU that have also seen stock prices hit new highs are getting investor attention. Fission Uranium has 100% ownership of the PLS Property, which comprises 17 mineral claims totaling 31,039 ha located on the southwest margin of the Athabasca Basin. The property is accessible by all-weather Highway 955 which continues north through the area of the UEX-AREVA Shea Creek deposits to the past producing Cluff Lake uranium mine.
Skyharbour TSX-V:SYH has seen it's stock price double in the past few weeks. It's also working in the Athabasca Basin with six drill-ready projects consisting of over 240,000 hectares. One of the properties, the Moore Project is an advanced-stage uranium exploration property with high grade uranium mineralization at the Maverick Zone with drill results returning up to 6.0% U3O8 over 5.9 metres including 20.8% U3O8 over 1.5 metres at a vertical depth of 265 metres. The company has several other properties that all merrit eploration.
UEX Corp TSX-V:UEX is another junior worth a look. The company has four projects. The West Bear Cobalt-Nickel project is a shallow, open-pit amenable and very high-grade cobalt-nickel deposit in the eastern Athabasca Basin that remains open in all directions for expansion. The Christie Lake property in the eastern Athabasca Basin located only 9 km northeast and along strike of the McArthur River Mine, the world's largest uranium mine. The Horseshoe and Raven deposits and the Shea Creek property which is host to one of the largest undeveloped uranium resources in the Athabasca Basin.
This wraps up a very short write up on what's happening in the uranium end of things here. I'll be doing some more research on some of these juniors and hopefully be able to have more information dug up in the near future.
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Investing In Storage Batteries
Battery metals like lithium and cobalt as well as graphite and vanadium are vital to the lithium-ion batteries used to power electric autos, with need expected to increase in the coming years. As the green power revolution continues to unfold, car makers are becoming more concerned with the requirement to protect these raw materials in order to complete their ambitious electrification objectives.
Everyone has hear about lithium and a lot of juniors jumped onto the lithium bandwagon last year. Just a quick look at their stock prices will tell you that that buying into the rage last year wasn't such a great idea. Some of the Nevada juniors like Cypress Minerals TSX;V-CYP, Neo lithium TSX:V-NLC have held up OK but the rest it seems have lost a lot of value.
One of the lesser followed commodities in batteries is Vanadium. The past couple of years in battery developement have actually brought renewed rate of interest in vanadium. Experts anticipate that the battery metal, which is made use of mainly as an alloy in steel manufacturing, will certainly see an uptick in demand thanks to its enhanced use in the power storage space industry.
The meteoric rise of the silvery-gray steel has stimulated the passion of experts and capitalists who see the value in a battery steel that is safer, longer-lasting as well as a lot more durable than lithium.
There's not a lot of vanadium miners out there to chose from. Most juniors will come across vanadium as a by product from another commodity they may be mining. However there are a few that focus on exploring for vanadium. One such company is Vanadium One TSX-V: VONE Vanadium One has the Mont Sorcier Iron ore property hosts a large high quality Iron resource with significant and extractable Vanadium. The Mont Sorcier Iron-Vanadium deposit is located just 18 km outside of Chibougamau, Quebec.
The deposit which is a higher grade iron ore deposit consists of a North and South deposit and with a low Titanium content, allowing for simple extraction of the Vanadium metal by a blast furnace. Mont Sorcier boasts an impressive 113.5 Mt Indicated and 520.6 Mt Inferred with the potential for expansion along strike, where the deposit's magnetic anomaly continues, and at depth. Over 7,000 m of drilling at 32 holes by Vanadium One Iron in both the North and South Zone between July 2017 and December 2018 have revealed wide downhole iron ore intersections as long as 214 meters.
The company this year entered into a long-term arrangement with a wholly owned subsidiary of mining giant Glencore, to support the development of the Mont Sorcier Iron and Vanadium project. The parties have entered into a financing agreement and a separate concentrate offtake agreement to support the ongoing development and the eventual construction and production of the Mont Sorcier iron and vanadium project.
In early June the company announce they had raised 6.9 million dollars in May and had commenced a drill program at Mont Sorcier. This would be in fill drilling with a goal to upgrade sufficient inferred Mineral Resources to the Measured and Indicated Categories to support at least a 20-year mine life. This will be part of a feasibility study to begin later this year or early 2022.
A couple of other companies that are in the exploration and extraction of vanadium are Energy Fuels TSX: EFR and Largo Resources TSX: LGO. Energy Fuels is big in uranium. Energy Fuels is also a major U.S. producer of vanadium and an emerging player in the commercial rare earth business in the USA while Largo has a high grade vanadium deposit at the Maracas Menchen Mine located in Brazil.
If you enjoyed this article, please feel free to share. When seeking out mining stocks always use Due Diligence and see our Disclaimer and be sure to sign up for our free news letter located on the right hand side of this page.
Disclosure: The author of this article does not own any shares in any of the above mentioned companies at the time of writing
Is the World Running Out of Gold?
How much gold would you have if you had all the gold that's ever been mined? Not much. With all the gold ever mined you'd be able to make a cube of solid gold with 60-foot sides. There just isn't that much gold in the world, and it's getting harder and harder to find it. In fact, our love of electronic / digital devices maybe part of the problem.
In a report from the Wall Street Journal, it was stated that the world is not far away from exhausting the world's gold supply if gold mining continues at the current pace. How could we be running out of gold? It's simple. As gold boomed in the 90s and 00s, the easy-to-access deposits were sapped of their supplies. Now, the gold being discovered is way deeper into
the Earth, which means that discovering it takes a lot more work before it can be extracted.
The BBC stated, all the gold mined since the beginning of time has been recycled: A piece of gold mined by the Romans may have been melted down into a gold bar in the 1800s, say, and may have eventually made its way into a consumer product like a gold watch.
Those devices, computers and electronics that require only minute amounts of gold to function are changing that gold reuse pattern for the first time in history. Because so little gold is used in this technology, it is not cost effective to recycle it. So, while gold, like air, has remained a static resource on Earth, that's no longer true. Our gold resources will continue to deplete, one iPhone at a time, one tablet at a time.
Large mining companies are not in the exploraton business. They are producers and not explorers. Junior mining companies on the other hand are the boots on the ground out exploring ever nook and cranny on the planet looking for the next big find and finding that next junior to invest in to take advantage of this depletion scenario is not always so easy. Open-pit or underground gold mines can command high premium prices when bought out buy a senior or major mining company, but it's hard to find those buy out opportunities.
This year major gold producer Endeavor Gold bought out 100 % of the junior developer Avnil Resources for their gold mine in Mali for $122M, which was at a 48% premium, the reason Endeavor bought this junior was to further strengthen its high-quality project pipeline. Strengthening the pipeline is a real concern for all major gold producers because as they mine and extract gold from their existing gold mines they are constantly depleting their reserves of gold and need to replenish them for future growth, revenue and production.
When it comes to discovering new gold deposits, the low-hanging fruit has likely already been picked. Gone are the days when someone could stumble upon an exposed hunk of gold at the bottom of a riverbed, as James Marshall did in 1848, setting off the California Gold Rush. Every year, the pursuit of gold becomes increasingly more challenging not to mention more expensive requiring ever more sophisticated tools and technology, including 3D seismic imaging, direction drilling and airborne gravimetry.
Major gold producers are increasingly buying out junior gold miners that have a gold deposit of merit. Both Guyana Goldstrike and Nexus Gold Corp. are on the verge of the the next big find. Guyana Goldstrike has it's 880,000 ounce Marudi Mountain project in Guyana and Nexus Gold has a drilling campain in Burkino Faso.
Guyana Goldstrike's Marudi Gold project could be the next buy out target for a major or senior producer. In Guyana, Cambior which has the operating Omai Gold mine, there is also senior gold producer Guyana Goldfields with their Aurora mine. Guyana Goldfields has over $75M in cash and could be watching the development of Guyana Goldstrike's Marudi Gold project.
Nexus Gold's Bouboulou property borders Roxgold's property. Endeavor Mining is active in Burkina Faso and is watching drill results very close of any juniors in the area. Winter drilling returned 26.69 g/t gold over 4.85 metres (including 8.50 g/t gold over 0.62 metre, and 120.00 g/t gold over 1.03 metres). Hole NGL-17-DD-006 returned 4.00 g/t gold over 6.20 metres (including 20.50 g/t gold over 1.00 metre). NGL-17-DD-009 returned 2.61 g/t gold over 4.00 metres (including 5.92 g/t gold over 1.00 metre), and NGL-17-DD-003 returned 1.80 g/t gold over 5.10 metres (including 6.14 g/t gold over 1.10 metres).
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Mining Companies Seen as Winners After Trump Victory
A few months back I did a short article on whether Donald Trump would be good for the mining industry. My reasoning at the time was that so many politicians seem to side for the more liberal thinking and so called greenies and being as mining in general is sort of frowned on or hated to be exact, I concluded that Donald would be more of a pro mining guy because of his roots. You see his grandfather Fredrick Trump was a hotelier in the Yukon during the Klondike goldrush and people never like to forget their past. It was gold that got the Trump empire started.
Well today after the US election, I am sort of proud of my assumption that I made back at that time. It turns out that there was an article written in the Wall Street Journal today where the headlines read, "Mining Companies Seen as Winners After Trump Victory".
Excerts from the news article state: Mining and metals company stocks surged on Wednesday after the election of Donald Trump, as investors looked to the president-elect's promises to revive U.S. manufacturing and rehabilitate the country's aging infrastructure.
Swiss commodities giant Glencore PLC was up 3% while the world's second largest miner by market value, Rio Tinto PLC gained 2.5%. ArcelorMittal, the world's largest steelmaker, was up 3.9%.
Overall, in London, the FTSE 350 mining index was up 3.4% compared with a 0.2% drop in the FTSE 100 index. Among the biggest winners here was Mexican precious metals producer Fresnillo PLC, which rose 9%.
One of the key notes to the write up was, "The market is telling you that the mining sector is the biggest beneficiary of a Trump election, particularly precious metals." Mr. Trump had made remarks regarding rejuvenating the U.S. coal industry a large part of his platform, but that wasn't seen as the main factor driving global mining company stocks higher.
At first sign of a Trump win, Dow futures were off by 700 points and gold rocketed up almost $50 an ounce. However once trading started the following day it was all back to normal as if nothing really happened.
So if you voted for Trump and are pro mining and resource, maybe the next four years will be a bit rosier than the past four years. Us gold bugs are long over due for a bull run on metals.
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Six Palladium Stocks To Keep On Watch
Since late summer of 2019, the price of palladium has rallied from the $1,500 area to almost $2,800. That's close to an 80% rally in about 6 months time. A few of the reasons for this price explosion is that most of the palladium in the world comes from Russia and South Africa. With trade sanctions on Russia imposed, industry ends up buying from South Africa but that country is seeing droughts and water shortages which in turn wreak havoc on the hydro situation and with power outages happening, the country ends up seeing a lot of it's mines being shuttered or working at partial capacities.
The second reason for the rally in palladium price of course is the extra global demand for the metal due to the increase in hybrid cars, which use this metal to control pollution. This is happening all at the same time governments are imposing tougher regulations on carbon emissions. So it's the classic increased demand plus decreased product which equals price explosion.
A third reason could also be the price of rhodium is getting to a point where an alternative needs to be found. I wrote an article back in September of 2019 about sky high rhodium prices when the price was $4,000 an oz. Today that price has reached $12,000 and ounce and palladium is keeping in line.
As far as investing in palladium goes, you can buy the metal itself from various bullion dealers like Kitco and so on. Aside from investing in the metal itself and paying the huge premiums though, there are a few mining comapnies that do explore and mine for palladium that you could look at investing in.
Palladium One Mining Inc. (TSXV:PDM) which was formerly known as Nickle One, has properties in Canada and Finland. It holds interests in the Lantinen Koillismaa project in north-central Finland and in August 2019 the company acquired the Tyko property located in Ontario, Canada.
New Age Metals Inc. (TSXV:NAM) New Age has interests in the River Valley PGE project located in Ontario and the Genesis PGE/polymetallic project located in south central Alaska. The company also has interests in lithium properties.
Grid Metals Corp. (TSXV:GRDM) has interests in the East Bull Lake, a platinum group metals-nickel-copper exploration project, as well as Bannockburn nickel property located in the Sudbury Mining Division, Ontario. The company also has the he Makwa Mayville Project located in the Bird River Greenstone Belt approximately 145 km from Winnipeg Manitoba. The project consists of two open pit NI 43-101 resources containing nickel copper platinum group metals and cobalt mineralization.
Group Ten Metals Inc. (TSXV:PGE) has the STILLWATER WEST PROJECT where it owns a 100% interest on a large 54 km2 claim block that adjoins the producing J-M Reef PGE deposit. This is the area where still Stillwater Mining is located and this area has some of the highest-grade major PGE deposit in the world and the largest outside of South Africa and Russia. The company also owns the Kluane Project in the Burwash Yukon area. This project has one of the largest undeveloped PGE-Ni-Cu projects in North America at 6 Moz of Pt+Pd+Au and 3 Blbs of Ni+Cu in M&I resources and an additional 2 Moz of Pt+Pd+Au and 1 Blbs of Ni+Cu in Inferred resources.
Platinum Group Metals Ltd. (TSX:PTM) has operations in South Africa and is focused on the production at the Maseve Mine, and the exploration and the Waterberg platinum deposit. The Waterberg Project is a bulk underground deposit in northern South Africa. The deposit was discovered by the Company and has the potential to be a low-cost producer of palladium, platinum, rhodium and gold.
Generation Mining (TSXV:GENM) Generation Mining owns a 51% interest (with an option to earn up to an 80% interest) in the Marathon PGM deposit located near Marathon, Ontario.
So the big question is will palladium continue to go up in price like rhodium for instance? Rhodium today sits between $10 - 12,000 per ounce. Some market watchers say yes. There are market forcasters who see $5,000 before 2025 and there are probably commodity traders who are also calculating the future price also now that issues like the Coronavirus is starting to put hickups in supply chains. Palladium could become a lot more expensive unless a junior mining company can somehow find and develope a deposit to fill that supply gap. But with 10 year construction build times on any mine today, most see the price continue to go up.
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What's Going On With The GDXJ?
Anyone who keeps an eye on the GDXJ will tell you that there has been a lot of selling going on lately in some of the ETF's holdings. If you own shares in the ETF itself it hasn't been really bad but for investors who own some of the particular stocks of the ETF it's been a bit of down hill ride. With some stocks have dropping by as much as 30% over the past month its been a bit of hard on investors nerves. The Junior Gold Miners ETF (GDXJ), down about 5.6% this week. Among components of that ETF with the weakest showing for the week were shares of Continental Gold (CNL.CA), lower by about 15.3%, and shares of Premier Gold Mines (PG.CA), lower by about 11.4% on the week. Undoublty there has been long faithful holders of some of the stocks cashing in and maybe waiting it out till the dust settles and things turn around.
So what's causing this sell off? Well the ETF is comprised of a whole bunch of different junior mining companies. It even has some stocks that are not classified as junior as some are more in the mid-tier section as they are small producers. The ETF holds different percentages of stock in various junior mining companies. What's happening now is that the fund is getting too much money invested in it and now it has to re-allocate this money by adding different companies to the fund. Since early 2016, assets in the fund shot up from a little more than $1 billion to $5.4 billion currently. This added money puring into the fund has nearly doubled the ETF price from $19.80 at the start of 2016 to $36.71 today which is a gain of almost 90%.
The ETF has gotten so big that it now owns giant stakes in some of its underlying holdings, three-quarters of which are Canadian companies. All this extra money has created a dilemma for the fund as its holdings surge above 10 percent of some of the companies it owns. Over the past 12 months, GDXJ has surged 15 percent, outperforming VanEck Vectors Gold Miners, which tracks bigger producers of the metal.
In order for the fund to remain compliant with regulators etc. it needs to sell off a certain amount of shares from various holdings because if they own to many shares the fund can be classified as being a insider of that particular company and would have another issue of reporting holdings etc. with different tax jurisdictions. So to keep things as simple as possible the fund has decided to sell off various assets as it looks to buy into other assetts. (At present there are 10 Canadian companies that the ETF owns where its ownership percentage is more than 18%. These are holdings it is starting to liquidate.)
What this means in the end is that some stocks holders are seeing their stocks sell off for no apparent reason aside that fact that the fund needs to liquidate and other stock holders are seeing the opposite as the fund is starting to buy various other stocks with all this money that has come into the fund.
On thing for certain though is that looking at all this extra money that is coming into this fund tells you one thing and that is that there are a lot of big time investors and funds with lots of big money who see a lot of value and growth in the junior and mid tier mining sectors and this all bodes well for the junior miners. As some would say, "A rising tide lifts ALL boats."
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The Silent Rise Of Palladium
When it comes to precious metals, most of us think gold and silver. After all those two metals are the most common and almost everyone on the planet has heard of or seen both metals mostly because of jewelry and maybe old coins etc. But there is two other metals that are part of the precious metal family and those are palladium and platinum and it's palladium that we'll take a look at today.
Palladium is a chemical element with symbol Pd and it is quite rare. About 45% of all palladium mined and produced comes from Russia followed by South Africa. The bulk of the metal ends up in catalytic converters, which convert as much as 90% of the harmful gases in your car's exhaust. High end electronics use palladium also as well as some aspects of the medical field and it is also a key component of the fuel cell industry. Palladium is used in coins in Russia and in the last few decades we are seeing palladium jewelry.
Rise Of Palladium
Since the middle of last year, palladium has been on the rise from around $800 to a high today of $1800. That's a rise of approx. $900-$1000 in the last 18 months or so. That's like a 100% rise in the price of palladium and it seems very few are noticing. I skim the headlines of various websites daily looking for clues to anything that might be on the move in the metals and I have yet to see anything related to palladium and it's rise since the new year. In fact today November 20, while all eyes are on the Amazon or Facebook and seeing what the Fed is going to do, the price of palladium rallied about 30 bucks from $1756 up to $1786. FYI - The all time high for palladium was $1821 on October 30 and the low was $78 back in 1993.
Of course by now you are probably thinking .... Geee, how can I get into what is looking like a palladium run away here? At $1750 for an ounce plus all the fees etc. that'll work out to more than $1800 an ounce. You could rumage around the scrap yards and old auto wrecking yards looking for catalytic converters. Rise Of Palladium You could also play the futures markets if your really clever or you can look at buying some palladium miners. One of big names in Palladium mining is Stillwater Mining SWC. Stillwater has a mine in Montana. If your looking for something in Canada there's either North American PalladiumPDL or Eastern PlatinumELR. There is also Implats and Anglo Platinum which both trade on over seas exchanges. The largest producer of palladium is Norilsk Nickel and they trade on the Moscow exchange.
So while your going to check on the gold price every day like I do, be sure to take a quick peek and see what palladium is doing. While your at it keep an eye open on some of the base metals also. That'll tell you which junior miners to take a look at when it comes time to investing or speculating in the junior mining market.
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The Rise Of Nickel
Most of us gold and metal buffs tend to follow the precious metal scene and aside from taking a glance a copper once in a while we seem to ignore what's going on with the base metals. For the past year a lot of analysts have been following cobalt and lithium but at the same time nickel has almost doubled and very few had even noticed. If you have a junior mining stock that has exposure to nickel you may have seen a bit of a bounce or slight increase but all in all the gains in nickel have not reflected it's self in the stocks. Some of the stocks that have seen price gain of course is Alcoa and Excelsior Mining.
Two stocks that have a nickel exposure that I follow are Royal Nickel TSX:V-RNX and of course good old Sherritt TSX-S. Royal Nickels principal assets are the producing Beta Hunt gold and nickel mine in Western Australia, a 50% stake in the nickel joint venture that holds the Dumont Nickel Project in the Abitibi region of Quebec, anda 30% stake in the producing Reed Mine in the Flin Flon-Snow Lake region of Manitoba, Canada.
Another explorer that is focused on nickel is North American Nickel TSX-V: NAN. North American Nickels main project is the Maniitsoq property in Greenland and the Post Creek and Halcyon projects in Ontario.
So why is nickel taking of in price while precious metals are sitting dormant? One of the larger reasons is of course USA and Russia embargoes and sanctions. Norlisk which is the Russia's largest nickel miner is also one of the worlds largest nickel producers and when sanctions went into effect that of course has an effect on availability of the product.
Also last year Indonesia put an export ban on nickel that was produced in the country and added to extra pressure on the supply side. Indonesia wanted to see more nickel being refined and smelted in it's own country instead of being shipped out to other countries.
Last but not least, the new electric cars not only use lithium and cobalt but there is also a lot of nickel that is used in these automobiles. Nickel sulfide deposits are used to make nickel metal as well as nickel sulfate. The latter salt, nickel sulfate, is what's used primarily for electroplating and lithium-ion cathode material, and less than 10% of nickel supply is in sulfate form. As more and more cars become electric there will be more of a demand for nickel especially the nickel sulfate and less than 10% of this nickel is in sulfate form and even less is suitable for batteries.
The way the gold and silver market is going, maybe it's time to look at nickel as a wealth creator.
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Here's Why Mexico Is the "GO TO" Place
When it comes to investing in a junior mining company the one you thing can almost always be certain of is "uncertainty." Mining and especially exploration is and always has been a high risk business full of uncertainties. Those uncertainties and risks can range from everything from government politics to commodity prices and everything in between. From raising money to how that money is going to be spent, there is the uncertainty factor that never be avoided. One of the greatest risks or uncertainties though is the unknown. Prospecting in areas that have little to no past exploration records or data to go by. This is one of the reasons why so many smaller companies will tend to explore within areas that have some proven history and then explore within those areas that show a potential.
Most countries today though have the bulk of their country's minerals catalogued. The more exploration over the years, the bigger that catalogue becomes. Modern day explorers just need to spend time researching the area of interest and narrow down through the data to get a fairly good idea of what the proposed area will offer. When it comes to countries that offer a decent proven history of mineral data along with the extraction of minerals, Mexico is one of the top contenders. After all, the mining of gold and silver has been going on here for centuries. Even long before the Spaniards arrived, the locals of that time were well aware of the mining of gold and silver.
A person would almost think that with around 400 years of mining there would be very little in regards to minerals left to mine but it's almost the opposite. The silver mining industry has been thriving in the last few years, and investment in new projects has been continuing at a strong pace and Mexico has consolidated its position as the number one producer of the precious metal. What's even more is that Mexico today still offers the small junior a fighting chance to strike it rich with silver (and gold). The Sierra Madre mountains in Mexico, part of the same range that provides massive mineral wealth from the Andes in South America to the Rockies in the north, are still largely unexplored and other opportunities lie in wait for new entrants to the industry. Other companies are opening up old mines as the advancing state of mining technology allows companies to reassess ore grades and left-over tailings deposits. Mexico attracted hundreds of junior exploration companies during the high price cycle of 2010-2011, mostly focused on gold and silver, and ended up with a larger ratio of exploration to development spending as could be observed in other countries and this has lead to a lot of new discoveries.
For small junior companies, Mexico has become a "go to" place to explore. According to a report published by SNL Metals & Mining 2015, Mexico is the first destination in mining exploration within Latin America and the fourth worldwide. Since 2003, Mexico's aggregate exploration spending grew faster than the world average moving Mexico from eight to fourth place on the global mining ranks. Much of this growth was attributed to Canadian-based junior exploration companies, making up between 75%-80% of the active explorers in Mexico. Other items that have helped is mining regulations and laws. Newer legislation encourages investments in the sector. The 1993 Mining Law (Ley Minera) opened up new areas to foreign investment previously limited to Mexican financing. Permitting for mines has been simplified and obtaining mining licences are quick. The time ttypically takes between 6-8 months for a licence to be granted as opposed to North America it can take between 5-10 years. Lower labor cost have also helped with getting a lot of exploration started along with a very moderate weather climate.
The Ministry of Economy's Mining Promotion Trust is another key player. In 2009 this trust helped capitalize micro, small and medium-sized mining companies as well as the sector's production chain with loans worth 510 million USD, 20% higher than in 2008, in addition to offering training and technical assistance to more than 8,000 companies.
For Canadian based juniors, Mexico is one of the "go to" places to explore. Out of more than 738 exploration projects currently carried out by 232 companies, 70% are undertaken with investment coming from other countries: 75% from Canada, 15% from the US and the rest coming from countries such as the UK, Australia and Japan,
Of all Canadian companies that go to Mexico to explore, Mammoth Resources is one of those companies that is taking advantage of all the benefits that Mexico has to offer. Having property within the Sierra Madre region in the state of Chihuahua, this company is about to embark on it's first ever drill program starting in the fourth quarter of 2017. Having property in the same trend as the third largest silver mine in Mexico, the Palmarego Mine owned by Coeur Mining, this property holds a lot of potential.
Also in this same trend, sits the Pan American Delores Mine. This mine produced 4.3 million ounces of silver and approximately 79,100 ounces of gold in 2015. By the way, the Palmarego Mine owned by Coeur produced 65 million ounces of silver and 71 million ounces of gold in 2015.
Investing in any exploration play has it's uncertainties, but going into an area of proven resources with a miner friendly enviroment can take some of the edge off those uncertain risks. This silver play will be a very interesting one to watch. Once drilling begins and results start to prove up a resource, other juniors will be more than eager to get into the rush.
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Lithium. The New Gold Rush.
After seeing the performance of most mining stocks lately one can understand why a lot of long term investors have been throwing in the towel and taking their money elsewhere. I wrote in the past article here that a lot of old gold bug money held in family trusts was being taken out and going into the digital space of crypto currencies like bitcoin. One only has to look at data and charts like the one posted below that money for metal mining has been falling steadily. Some would argue that news mines are not needed like before because of new technologies in recycling of these metals. Those people who argue the recycling gig are only partially true because as the world continues to grow and expand, so do the materials needed for the infastructure.
Now if there is one place in mining that money will go, I believe that will be in the exploration and extraction of lithium. Whether it be clays, brines or hard rock, I believe that for those who position themselves now with good quality lithium miners and explorers will see their investments outperform any of the other types of resources whether it be exploration or extraction. Like it or not the green revolution that the greenies always wanted is coming and there are opportunities for juniors and investors to profit from it.
(Note: This is by NO means investment advise. I've been known to be wrong many times before and I will be the first to admit it.)
But my reasoning for this belief is in the numbers. Under the new Biden administration as well as governments around the world, the push towards electric cars is now in high gear. All auto companies are racing ahead to compete with each other in the EV space. While everyone in the western world though seems to focus on Tesla and it's giga factories in Nevada, China is building more cars than most of the entire world combined. According to the International Energy Agency in 2019 there were already 2.58 million battery electric vehicles in China, compared to just 0.97 million in Europe, and 0.88 million in the USA. Each of these cars needs a battery of some kind and the most popular batteries need a particular element and the element is lithium.
Now I am not saying to not invest in any of the lithium juniors that are working in places like Nevada. I myself have bought and sold some of those juniors and they have performed extremely well. Juniors like Neo Lithium TSX-V:NCL have seen their stock price up almost 800% this year. America Lithium TSX-V:LI has seen it's stock rise over 1000%. All of this is due to the fact that Tesla is looking to buy into a lithium deposit close to home and being that Nevada is home for Tesla it would only make sense to buy into a lithium mine a few miles away verses thousands of miles away. These Nevada based juniors still have a lot of upside in their value as far as I'm concerned but it's a big world out there.
As I mentioned earlier, Tesla is only a fraction of the EV auto market. Where is China, Korea or some other Asian based EV manufacturer going to get it's supply of lithium? Well the one place that stands out as first in line is Australia as it is at present the largest producer of lithium on the planet at this time. In 2019 the country produced 42,000 tonnes from hard-rock mining of spodumene - an ore that contains high levels of lithium, as well as aluminium.
The second largest producer is Chile. Chile accounted for for 18,000 tonnes of lithium production in 2019. Out of the three countries comprising the lithium triangle Chile, Bolivia and Argentina, Chile has has some of the world's third-largest reserves of the metal, totalling around nine million tonnes and has made the most successful progress in developing its vast natural resource to commercial scale.
Now believe it or not but China is the worlds third largest producer of lithium and produces about 7,500 tonnes a year as far as data available from 2019. Coming in fourth place is Argentina which produces 6,400 tonnes of the metal in 2019, taking fourth place on the list of the world's top producing countries. Argentina is home to the world's second-largest known reserves' with 17 million tonnes concentrated in vast salt flats in the north west of the country. It's within this lithium triangle that a few junior companies are exploring and looking to develope in the near future. This area where Argentina, Chile and Bolivia all border is the area known as the Lithium Triangle which is host to some of the richest lithium brines in the world. Once developed and producing this lithium can easily be exported to Asian and other global markets as location to sea ports is just a short distance away.
One company working in Chile at present is Lithium Chile TSX-V:LITH This company has 71,900 hectares covering sections of 10 salars and two laguna complexes in Chile. It also has a gold, silver & copper property In Chile. At present the company is raising $3.5-million for drilling and sampling.
The second company is Alpha Lithium TSX-V:ALLI and is active in Argentina. Alpha holds a 100% ownership of +27,500 hectares (67,954 acres) of the Tolillar Salar. Early stage investigations have shown Lithium concentrations up to 504 mg/L in borehole samples. Alpha is an agressive company with active drilling. In a news release in October 2020 the company applied for drilling permitts. By the end of October the company had started drilling. Mid November they announced a significant brine discovery. Mid January the company announced a 10 million bought deal and later the same day increased it to 20 million. Following day the company decides to add a second drill rig to the program. This current drill program is an additional step towards the completion of a 43-101 resource estimate.
At present worldwide demand for lithium is over 350,000 tonnes. Conservative estimates for 2025 and based only on increased EV units worldwide would be over 1,000,000 tonnes. This is the equivailent shortfall of 650,000 tonnes which translates to 26 lithium mines worth of production. These figures are based on just a 14% increase in EV sales. So you can see now that lithium could very well become the new gold that miners will want to go out and explore for. Problem is there is a very limited amount at present.
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Added note: The author of this article holds postions in all the above at the time of this writing. The author may buy or sell any time going forward.
A Look At Lithium Stocks
Lithium. Known as the new oil. The next generation of power. The price of lithium has shot up over 100% just this year alone. For explorers it's created a new type of gold rush trying to find a mineable deposit. But what is lithium and where does it really come from?
Lithium is one of the lightest of all the metal elements known to man and it's being explored for the world over. Sith new lithium Ion battery technology some people say lithium will power the world and when it comes to things like laptops, tablets and other digital gadgets it definately is powering the world. Lithium compounds, also known as lithium salts, are primarily used as a psychiatric medication. This includes the treatment of major depressive disorder that does not improve following the use of other antidepressants, and bipolar disorder.
Lithium is a chemical element with symbol Li and atomic number 3. It is a soft, silvery-white alkali metal. Under standard conditions, it is the lightest metal and the lightest solid element. Like all alkali metals, lithium is highly reactive and flammable, and is stored in mineral oil. When cut open, it exhibits a metallic luster, but moist air corrodes it quickly to a dull silvery gray, then black tarnish. It never occurs freely in nature, but only in (usually ionic) compounds, such as pegmatitic minerals which were once the main source of lithium. Due to its solubility as an ion, it is present in ocean water and is commonly obtained from brines. Lithium metal is isolated electrolytically from a mixture of lithium chloride and potassium chloride.
When it comes to mining or extraction of lithium the most efficient methods of course is extraction from lithium brines or salts. Lithium is found in all parts of the world and is found in hard rocks in Australia, clays and muds in Nevada but nowhere in the world is this more abundant and productive than in the so called lithium triangle of South America. Known as the great Salar the Slar flats in Boliva cover over 100,000 square KM. Thats an area that is larger than a lot of European countries.
For a long time, most of the world's lithium was produced by three producers often referred to as the Big 3. Before being acquired by Albemarle (NYSE:ALB), Rockwood Lithium, part of Rockwood Holdings, was on that list. The other members of the club were Chile's Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC), which operates in Argentina. Today however there are dozen of junior mining companies that are on the hunt for lithium deposits but there are very few that are actually extracting lithium at this present time. Most of the lithium that is produced at present comes from the companies that are in the lithium triangle right now.
Some of the other companies in the triangle today that are both exploring and producing lithium are Lithium AmericasLAC and OrocobreORL. Lithium Americas through a Joint Venture with Sociedad Quimica y Minera de Chile SQM, is developing the Cauchari-Olaroz brine deposit in Jujuy in Argentina. Through its wholly-owned subsidiary, Lithium Nevada Corp. the company is developing one of North Americas largest lithium deposits in northern Nevada. Lithium Americas just finished a 5:1 roll back on stock and has applied for an NYSE listing.
Orocobre is in partnership with Toyota and is now operating the world's first commercial, brine-based lithium operation in Argentina. The Company also owns Borax Argentina S.A, a well-established boron chemical and mineral producer with extensive operations and a 50-year production history.
A few other noteable lithium explorers are Lithium XLIX, Neo LithiumNLC and Nemaska LithiumNMX.
Lithium X holds two projects in in the prolific lithium triangle as well as participating in the Clayton Valley in Nevada through its ownership interest in Pure Energy Minerals.
Nemaska is a bit different as they are developing lithium hard rock deposits in Quebec instead of brines like the others. The concentrate produced at Nemaska Lithium's Whabouchi mine will be shipped to the company's lithium compounds processing plant to be built in Shawinigan, Que. This plant will transform spodumene concentrate into high purity lithium hydroxide and lithium carbonate.
Neo Lithium has the 3Q Project is located in Catamarca Province, Argentina. The 3Q Project has one of the highest-grade lithium brine projects in the world, with a large salar and lithium brine lake covering more than 150 square KM and controls more 350 square KM in and around the complex. The 3Q Project is 100% owned by Neo Lithium.
In Australia, Macarthur MineralsMMS is focused on identifying high-grade gold and lithium. Macarthur Minerals has significant gold, lithium and iron ore exploration interests in Australia and Nevada along with two iron ore projects in Western Australia.
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Profiting From The Green New Deal
Sure lots of talk and chatter about the "Green New Deals" lately. I guess it's those who within society want to do away with fossil fuels and power everything green. In the last few months you can tell by the stock prices of companies like Tesla that have gone through the roof that a lot of people are jumping onto the alternative energy bandwagon. Of course all these new alternatives still require one thing and that thing is raw materials or better known as minerals of some kind and last time I checked, minerals still needed to be mined.
Lithium Batteries:
Once you start to look into the subject at any depth you'll find that there is a quite a few different minerals that are required for a green world. You got lithium that goes into these lithium batteries, but there is a whle lot of nickel and cobalt also that is needed for these electric car batteries. I did an article a few years back on lithium and you can read it here. Lithium is still quite costly to mine especially when mining lithium brines while lithium in hard rock is quite a bit less. Lithium hard-rock producers have lower costs but the price they receive for their end product, usually spodumene concentrate, is significantly lower than that received for lithium carbonate, chloride and hydroxide, which are produced at brine operations. In 2019, lithium concentrates are expected to achieve an average price of US$4,619/t, 57% lower than the price expected for lithium carbonate.
The lithium mining has some big players such as Lithium Americas TSX-LAC, Orocobre Limited TSX: ORL and Albemarle Corporation NYSE: ALB. There are quite a few small lithium explorers like American Lithium TSXV:-LI, Plateau Energy Metals TSXV: PLU and E3 Metals Corp. TSXV: ETMC who are in places like Nevada, Peru, Argentina and any other place where lithium could be found.
As you can see lithium prices have slumped a lot in the last year also as more mines come on stream. This also by the fact that some of the newer battery technologies are starting to see the use of cheaper elements like good old nickel along with cobalt and vanadium. This has led to a nice increase in nickel prices which of course is good for nickel and cobalt miners. Companies like Sherrit TSX-S should benefit from these price increases down the road. Other companies include Canada Nickel Company TSXV:CNC, FPX Nickel TSXV:FPX and Talon Metals TSX:TLO.
Graphite:
Of course there is the solar industry that is uses lots of silver and graphene for solar panels. Graphene itself is a whole new industry that is derived from the mining of graphite. Silver miners are quite common and there are a few graphite explorers also such as Berkwood Resources TSXV:BKR, Canada Carbon TSXV:CCB, Canada Strategic Metals TSXV:CJC, Eagle Graphite TSXV:EGA, Focus Graphite TSXV:FMS, Lomiko Metals TSXV:LMR, Northern Graphite TSXV:NGC, and ZEN Graphene Solutions TSXV:ZEN.
Any new trend that incorporates metals will play an important roll in junior mining companies and at the same time give investors a chance to cash in on these new trends. I think the electric cars, cordless equipment, and technology is only going to get bigger and this all gives the average guy and opportunity to invest. Whether your playing the market or out in the field prospecting, learning what to look for will give you that slight advantage.
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Gold Mining Alaska
Alaska. It's a vast state with few people and lots of wild remote wilderness. It's known as the last frontier. A land rich in resources of both oil and minerals both precious and base. Its an explorers and prospectors paradise where dreams are made and many even come true. And when it comes to gold, Alaska really is that pot at the end of the rainbow. Absolute fortunes have been made in the goldfields of Alaska and there are still many more fortunes to be found in Alaska.
Gold was first found in the Kenia River back in 1848 by Russian explorers. Mining never took off until around 1870 when gold was found around the area of Juneau. Soon after that discovery gold was found in both the Fairbanks area and of course there was the world famous Nome gold rush. Today Alaska has the second most amount of active mines in the USA, second only to Nevada. It is estimated that there is close to 200 active mining operations in the state. Most of these operations are smaller placer operations along with other seasonal hard rock shows. There are however some very large mines run by major mining companies. Some of these mines are massive with ore reserves that are almost mind boggling.
Greens Creek is one of the largest and lowest-cost primary silver mines in the world and is owned by Hecla MiningHL. Last year, Greens Creek produced 8.5 million ounces of silver at a cash cost per silver ounce of $3.91 and 60,566 ounces of gold. The mine holds current proven and probable silver reserves of 88.7 million ounces, 677,000 ounces of proven and probable gold reserves, as well as 218,400 tons of lead and 582,640 tons of zinc in proven and probable reserves.
Fort Knox owned by Kinross GoldK
is located in the Fairbanks mining district. This mine produces close to 400,000 ounces of gold annually. Proven and probalble reserves total around 2.4 million ounces gold. The mine and mill hammer out close to 40,000 tons of material per day.
Pogo Mine owned by the Sumitomo Metal Mining and Sumitomo Corporation has been in operation for 10 years and has produced over 3 million ounces of gold. The mine boasts five known deposits: Liese Zone, North Zone, East Deep, South Pogo and 4021. Extensive exploration efforts are underway to identify additional ore reserves as the magnitude of these deposits is not clearly defined. Pogo is an underground mine with more than 90 miles of underground roads winding to depths more than 1,000 feet below the surface. The quartz veins of the deposit yield an average of 1/2 troy ounce of gold per ton of rock, which makes Pogo a high-grade gold mine.
Kensington Mine is an underground mine located on the Alaska panhandle and is owned by Coeur MiningCDE
. This mine is a smaller mine and has only been in operation since 2010. Production from the mine averages 125,000 ounces gold per year. Proven and probable reserves is about 560,000 ounces gold but ongoing work may add to this reserve.
Red Dog Mine owned by TeckTCK is not a gold mine but it is world's largest producer of zinc and has the world's largest zinc reserves. The mine accounts for 10% of the world's zinc production and accounted for 55% of the mineral value produced in Alaska in 2008. The mine produces 515,200 metric tons of zinc, 122,600 metric tons of lead, and 283 metric tons (9,100,000 ozt) of silver, for a total metal value of over one billion dollars in 2008 alone.
How To Invest & Play Alaska Junior Miners.
If you don't want to invest or play the large cap stocks that are in Alaska, there are some juniors that are well worth putting on a watch list. Today there is even more on going work in the exploration and prospecting field in all areas of Alaska such as the Livengood Project in the Fairbanks region owned by International Tower Hill MinesITH.
Further north in the state, the Upper Kobuk Mineral Projects run by Nova CopperNCQ is showing off some great finds on the copper front where one hole delivered 178 meters averaging 3.89% copper in a mineral resource with an approximate 6% copper-equivalent grade, and is one the largest and highest-grade known VMS deposit of its kind in the world.
On the Aleutian Islands of Alaska, Redstar GoldRGC is exploring what Dr. Jeffrey Hedenquist, who is recognized as one of the world's most renowned experts on epithermal deposits describes Redstar's Unga property as district scale. The company has a summer program on at this time as well as site tours by various major mining companies.
Not far from Haines Alaska, Constantine Metal ResourcesCEM has a joint venture with Dowa Metals & Mining Co., Ltd. of Japan who has the option to earn a 49% interest in the companies Palmer VMS project. Dowa metals will make aggregate expenditures of US$22,000,000 over a four year period. This project is already a NI 43-101 resource. The 2016 exploration drill program will test several targets located within a 3 km radius of the RW and South Wall Resource an Inferred Mineral Resource of 8.1 million tonnes grading 1.41% copper, 5.25% zinc, 0.32 g/t gold and 31.7 g/t silver.
About 60 miles from Fairbanks you'll find Free Gold VenturesFVL where they are working on their Golden Summit property and newly aquired Shorty Creek copper gold, and copper moly porphyry project. Highlights include 220 feet grading 1.22 g/t Au starting from surface.
There are some very large projects awaiting approvals from various state organizations and departments. Northern Dynasty MetalsNDM is one of those companies wanting to develope it's Pebble Project which is a copper, gold, molybdenum and silver deposit located in the Bristol Bay area of Alaska. This deposit is one of the greatest stores of mineral wealth ever discovered. The current resource estimate includes 6.44 billion tonnes in the measured and indicated categories containing 57 billion lb copper, 70 million oz gold, 3.4 billion lb molybdenum and 344 million oz silver; and 4.46 billion tonnes in the inferred category, containing 24.5 billion lb copper, 37 million oz gold, 2.2 billion lb molybdenum and 170 million oz silver. Quantities of palladium and rhenium also occur in the deposit.
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The Suppression Of Gold Prices
If you enjoyed this article, please feel free to share. When seeking out mining stocks always use Due Diligence and see our Disclaimer and be sure to sign up for our free news letter located on the right hand side of this page.
Alaska. It's a vast state with few people and lots of wild remote wilderness. It's known as the last frontier. A land rich in resources of both oil and minerals both precious and base. Its an explorers and prospectors paradise where dreams are made and many even come true. And when it comes to gold, Alaska really is that pot at the end of the rainbow. Absolute fortunes have been made in the goldfields of Alaska and there are still many more fortunes to be found in Alaska.
