Newly Consolidated Spartan Energy Announces Production of 6,600boe/d

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spartan

The recently consolidated Spartan Energy (formerly Renegade Petroleum and Alexander Energy) has provided their first post-merger quarterly production and drilling update.  The company has been garnering a lot of attention from institutions and analysts abroad due to the underappreciated assets that have been removed from Renegade and put into the capable hands of the new Spartan Energy team.

Spartan’s team is the same team that have had two previous iterations of the Spartan name, both being sold out.  Most recently, in January of 2013, they sold Spartan Oil to Bonterra Energy for $480 million.

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Torex’s Final Financing Piece Found with US$375M Bank Facility for Morelos

Locals gaze at Goldcorp's Los Filos mine, located next to Torex's Morelos project (Photo: subversiones.org)

Locals gaze at Goldcorp’s Los Filos mine, located next to Torex’s Morelos project (Photo: subversiones.org)

This morning, the long awaited financing piece for Torex’s (TXG:TSX) Morelos project has been found. The company announced it has signed a commitement letter with six banks, including Bank of Montreal, BNP Paribas, SocGen, Commonwealth Bank of Australia, ING and Bank of Nova Scotia for a US$375 million, 8.25 year project debt facility.  This package fully-funds Torex to complete their 21 month build (15 months remaining) to production of their high-grade Morelos gold project in the Guerrero Gold Belt, Mexico.

The company recently closed a $148 million bought deal in February and had over $216 million cash at year-end.  They have raised over $500 million in equity in the past two years.  The company is roughly three quarters of the way through their $725 million build and so with the $300 million available plus the additional $364 of cash they have on hand, this should take them through to production.

There are also some 60 million $1.50 warrants that expire on August 12, 2014 (currently TXG is trading at $1.09).

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CEO.CA – April 16, 2014


[Most Recent Quotes from www.kitco.com]
New friendly offer trumps Goldcorp by 11%. Osisko unveils $3.9-billion deal with Yamana Gold, Agnico Eagle. Globe and Mail

James Kwantes with the latest on Pretivm. Mining executive Bob Quartermain goes for gold in northwest B.C. Vancouver Sun

Kip Keen: Torex: $375m loan means Mexican gold project ‘fully financed’. Mineweb

>> Bob Moriarty visits Curis and Desert Star. Arizona Copper Alternatives. 321 Gold

Travis McPherson was along with Bob, here’s what he learned. Potential copper fortunes under cover next to Arizona’s largest open pits. CEO.CA

Boyd Erman makes a strong case for consolidation in the Potash sector. At BHP, the stars align for second run at Potash Corp. Globe and Mail (subscribers only)

Robert Friedland comes to North America next week, and more… Kipushi’s Big Zinc bigger than expected and what’s next for Ivanhoe Mines. CEO.CA

Revolution Resources becomes IDM Mining. This gold junior will come screaming out of the bear market… CEO.CA

This is pretty great video. Perella Weinberg Founder: Every Successful Person I’ve Seen Shares These Two Traits. Business Insider

Kipushi’s Big Zinc bigger than expected and what’s next for Ivanhoe Mines

Kipushi Mine

Underground miners at Kipushi in 1944 (photo U.M.H.K.) [More historical Kipushi photos]

Ivanhoe Mines’ Kipushi project in the D.R. Congo was one of the world’s richest copper, zinc, germanium and precious metals mines from 1924 until political instability in the Congo forced the mine’s closure in 1993.

Kipushi’s current 68% owner, Robert Friedland’s Ivanhoe Mines, believes the mine was not fully exhausted despite 68 years of operations.

2013-10-30_NRc-1

Kipushi diagram (Click to enlarge)

At depths of roughly 1200 meters, Ivanhoe has embarked on a 20,000 meter drill program to explore what’s referred to as the Big Zinc ore body, a high grade zinc deposit discovered shortly before the mine suspended production, and never mined.

Ivanhoe released good news today in that the Big Zinc resource extends to a depth of 1700 meters, which is 200 meters deeper than originally thought. Assays are pending from the first four holes which were reviewed in today’s release.

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This gold junior will come screaming out of the bear market…

Red Mountain, Mining

Revolution Resources is acquiring the Red Mountain gold project near Stewart, BC, and renaming itself to IDM Mining. Here is a photo of the project I took in April, 2013, when it was owned by another company.

Long suffering investors in Rob McLeod’s Revolution Resources will get another kick at the can, and we think it’s a pretty darn good one.

The company announced today that they are acquiring the high grade, low cost Red Mountain gold deposit near Stewart, BC, Mr. McLeod’s home town. Revolution also intends to raise $5.03 million in a financing led by Haywood Securities ($0.24 per Common Unit or $0.31 per Flow Through Unit, with a 15 month half warrant at $0.36 post 6:1 consolidation).

Additionally, the company is changing its name to IDM Mining. Mr. McLeod tells me the IDM name is for his dad and uncle, Ian and Don McLeod, two British Columbia mining pioneers.

This is after the appointment last week of Michael McPhie to the role of Executive Chairman at the company. Mr. McPhie previously led the financing, team building and permitting efforts of copper developer Curis Resources. Mr. McPhie is now a managing director with JDS Energy and Mining, a respected and successful mining engineering and investment firm led by Jeff Stibbard.

JDS will become Operations and Mine Development Advisors to the company, according to a one sheet provided by CEO Rob McLeod by email (Download here).

Early in his career, Mr. Stibbard was a protege of Don McLeod, sources tell us.

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Skyharbour Expands 2014 Budget After Hitting Radioactivity in Initial Drilling

Skyharbour's Swoosh drill targets (Source: Skyharbour Resources Ltd.)

Skyharbour’s Swoosh drill targets (Source: Skyharbour Resources Ltd.)

Skyharbour Resources (SYH:TSXV) has released the initial results from their first phase of drilling at the Preston Lake project in the Patterson Lake South discovery area.  The uranium explorer has drilled five holes (totally 986m) which have all encountered broad, hydrothermally altered and reactivated structure with three of the holes intersecting elevated radioactivity.

Drill hole PN14003 intersected 802 counts per second (cps) over 1.5m in a background of 80-100cps.  Due to these encouraging first results, Skyharbour and their syndicate partners (Athabasca Nuclear, Noka and Lucky Strike) have decided to increase their budget for this year’s drill campaign.

Jordan Trimble (read his Kitco interview here), President and CEO of Skyharbour Resources, states: “We are very excited with the early findings in this ongoing first phase of drilling and are planning to extend the program into May as a result. The visual signatures and elevated radioactivity seen in the core from these first few holes confirm the prospectivity of the Swoosh target and illustrate the strong discovery potential at the Preston Property.”

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Asanko Gold Revises $150M Red Kite Debt Package for First Phase

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red kite mine finance fund

As the company promised, Asanko Gold (AKG:TSX) has finalized and amended their $150 million project debt facility with Red Kite which is inline with the previous terms.   Final definitive agreements are expected by the end of Q2.  When Asanko merged with PMI Gold late last year and the combined entity revised their plan to build both projects under one mine in two phases; phase I being the former PMI asset, Obotan and phase II being Asanko’s former Esaase mine.

It always seems like gold companies hit milestones when the gold price is taking it on the chin (gold down ~$30/ounce at time of writing).

The $150 million loan makes the company fully-financed for phase I of their project which is estimated to produce over 220,000 ounces of gold in the first 5 years (average of 200,000 ounces LOM). Continue reading

Gold Runs Stops Below $1300

Gold is under heavy selling pressure this morning after 1700 futures contracts changed hands within one second moving price down from $1298 to $1284.40:

Click to enlarge

GC_1284

Eric Hunsader of Nanex has an excellent chart illustrating the 10-second trading halt which took place after gold hit $1284:

GC_halt

After reaching $1331 yesterday the worst case scenario appears to be unfolding for gold bulls. The advance of the past two weeks can now be interpreted as a bear flag with $1300 now becoming resistance.

Potential copper fortunes under cover next to Arizona’s largest open pits

Desert Star Resources Site Visit

From left: Dan MacNeil, Tommy Humphreys, Thom Calandra, Travis McPherson, Dave Maher, and Bob Moriarty at Desert Star Resources’ Red Top exploration project in Arizona. Photo: CEO.CA

A recent tour of the Globe-Miami copper mining district between Phoenix and Tucson, Arizona provided four natural resource writers with an appreciation of the massive scale of mining operations in the region.

The Globe-Miami district spans roughly 30km from west to east and is almost entirely composed of open pits, heaps, tailings, haul roads, processing plants and smelters, and has been home to mining operations since as early as 1878.

Desert Star's three Arizona copper projects (Source: Desert Star Resources)

Desert Star’s three Arizona copper projects (Source: Desert Star Resources)

Our host on the trip, Desert Star Resources (DSR:TSXV), has optioned three properties proximal to existing mines, which they believe could host rich copper resources at depth.

Executives from Desert Star were in Arizona last week showing the projects to potential partners who could help fund the drilling of its targets and we were fortunate to tag along.

Joining us were Bob Moriarty, editor of 321Gold.com, Thom Calandra, editor of The Calandra Report ($110 yearly here), and hosts Vince Sorace, President and CEO of Desert Star Resources, Dan MacNeil, Project Acquisition and Development for Desert Star Resources (click here for our interview with Dan MacNeil and Dr. Alan Wainwright), and Dave Maher, Vice President of Bronco Creek Exploration, a subsidiary of Eurasian Minerals.

We met for breakfast in the town of Superior, Arizona, half way between Pheonix and Tucson, where our hosts provided an introduction to the geology of the area. Continue reading

This Chart is Flashing a Red Light for the Stock Market

A few weeks ago we pointed out that the J.P. Morgan Chase chart held the potential for a false breakout which could be a potentially bearish omen for the broader US stock market. Since then we have seen JPM hammer out a double-top and subsequently suffer a precipitous 10%+ decline:

Click to enlarge

JPM_Daily

JPM has not fallen below its 200-day moving average since the summer of 2012 – a potentially highly significant change of trend which could have far reaching implications for the broader market may be at hand:

JPM_Weekly

The support/resistance confluence with the 200-day moving average near $54-$55 should be enough to encourage buyers to step up:

JPM_SupportHowever, should sufficient buying interest fail to materialize, the implications of a breach of this area of support cannot be overstated. Simply stated, we may have just witnessed the end of the five year bull run from the March 2009 bottom and the JPM chart tells us everything we need to know about where stocks are headed.

Gold Nearing Key Inflection Point

Gold has rallied more than $50 in the past two weeks and is now back to where it was trading when Goldman Sachs issued its bearish call on gold. However, significant resistance lies just overhead in the $1330-$1340 area:

Click to enlarge

Gold_Daily_4.14.2014

There has been a great deal of trading activity in the $1330s since last year’s massive gold crash, and price has continued to gravitate around this area despite trading in a $250 range during the last eight months.

Gold bulls will want to see a decisive move above $1350 this week, whereas, a decline below $1300 would suggest that the current rally is merely a bearish flag and price will likely have to fall below $1277 before a sustainable bottom is put in place.

Lucara Diamond Halfway to Full Year Revenue Guidance after First Exceptional Stone Tender Brings in $50.5M

The two largest stones offered in the first 2014 exceptional stone tender (Source: Lucara Diamond Corp.)

The two largest stones offered in the first 2014 exceptional stone tender (Source: Lucara Diamond Corp.)

Lukas Lundin’s Lucara Diamond (LUC:TSX) announced its first exceptional stone tender of 2014 after the market closed yesterday and it shattered expectations.  The first exceptional stone tender was comprised of 20 diamonds totalling 1,191 carats which were sold for $50.5 million ($42,347/carat).  Last year’s average per carat value of their exceptional stone tenders was roughly half of this 2014 one(~$25,000/carat).

The highest priced stone was a 167.08 carat stone which sold for $12.7 million or $75,821/carat.  The highest priced stone sold last year was $6.4 million.

Lucara also held two regular stone tenders in Q1/2014 which brought in a combined gross revenue of $33.6 million.  This brings their total year-to-date revenues from the Karowe mine in Botswana to $84.06 million.  They are guiding $150-$160 million in annual revenue this year and they still have at least one more exceptional stone tender and six more regular stone tenders.

William Lamb, President and CEO, commented, “Strong regular tenders combined with the outstanding results from the exceptional stone tender continue to demonstrate the quality of the Karowe Mine and firmly establishes Karowe as one of the world’s leading diamond producers by value, further reinforcing the updated resource statement issued in December 2013.

Recall, the board of directors approved the first dividend policy of any Lundin Group company, for the payment of semi-annual and occasional special dividends.  The first semi-annual dividend has been set at $0.02 per share (total cash outlay of ~$7.5 million) in May.  This equates to an annualized dividend yield of 2.4%.

With these large stones coming out of Karowe as well as their future ability to recover them better as the plant is upgrade to accommodate the rare size, special dividends could be awarded.

The shares continue to hit all-time highs:

LUC ChartLUC data by YCharts

Read: Lucara’s Exceptional Stone Tender Generates $50.5 Million; Year-To-Date Revenues Exceed $84 Million

No Guts, No Glory – NGEx Continues to Find High-grades at Filo del Sol

Copper oxides at Filo del Sol (Photo: NGEx Resources Inc.)

Copper oxides at Filo del Sol (Photo: NGEx Resources Inc.)

The Lundin Group’s only mineral exploration vehicle, NGEx Resources (NGQ:TSX) announced fantastic results from their Filo del Sol project in San Juan, Argentina.  They released ten holes today, which continued to help expand the high-grade manto zone.  Filo del Sol is the last of NGEx’s three projects without a resource estimate.  The company expects to put out its maiden resource estimate on the project by yearend.

Highlights of this latest ten holes include:

  • VRC70 which intersected 22m of 5.80% Cu (from 146 m) in the supergene blanket plus a 6m interval of 12.41 g/t gold (from 120 m)
  • VRC66 which intersected the high-grade manto zone with 16m of 222g/t Ag (from 358 m), extending the zone by 290 metres to the northwest of previous drilling (FSDH02) and also intersected 20 m of 2.11% Cu (from 238 m) in the supergene enrichment blanket

All ten of the holes were terminated in porphyry mineralization and the Filo del Sol deposit remains open in all directions.  These ten holes span a north-south distance of 2km.

The goal of NGEx’s 2014 drill campaign at Filo del Sol is to expand and infill the copper-gold porphyry mineralization and the manto high-grade zone.

A lonely drill rig at Los Helados, high in the Atacama desert (Photo: NGEx Resources Inc.)

A lonely drill rig at Los Helados, high in the Atacama desert (Photo: NGEx Resources Inc.)

The company is undergoing a transformation this year.  They are intending to release their first economic study on the Los Helados project in Chile.  It hosts a staggering 15.3 billion pounds of copper and 8.9 million ounces of gold in the Indicated category.  They are also working to bring Josemaria into the economic-stage of study.  Josemaria itself hosts 6.1 billion pounds of copper and 6.1 million ounces of gold in the Indicated category.

At this point, these are large exploration plays.  However, once they receive economic validation and the street can get a baseline value on the projects, the stock is likely to react.  Due to the geographic complexity of the projects, in particular, the fact they straddle the international border with some projects in Chile and some in Argentina, it is unclear if they will be able to utilize any central processing facilities.  Hopefully this will be cleared up in the subsequent economic assessments that are in the works.

These will be large projects and not for the faint of heart (which suits their company phrase well: “No Guts, No Glory”).

They do have large and deep-pocketed project partners in Pan Pacific Copper and JOGMEC (the Japanese government’s natural resource arm).  Pan Pacific is building its first large-scale copper mine, Caserones, a mere 20km from Los Helados.

Shares are up $0.15 (~10%) to $1.80 at the time of writing.

Read: NGEx Drills 5.80% Copper Over 22 Metres at Filo Del Sol Project

Thermal Coal In Mongolia: The Next Boom

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[PCY | KOL | ANK | DSR | GSV]

Coal, thermal coal for our purposes, is fired up. Does not look it, when you scan financial media on this arcane commodity. But it is. Or will be. We’ve been talking thermal coal since TCR’s visit to northern Mongolia — and briefly, Russia — 8 weeks ago.

Market Vectors Coal fund, or index, is making its biggest up-arrow move since June 2013. KOL (ticker in USA) represents 10 coal producers, led by China’s China Shenhua Energy Company Limited H Shares.

Coal prices, which are challenging to quote real time. The metric ton price, in dollars, depends on source location, shipment size and KCAl count — also percentage of sulphur, ash and other nasties. Also: tariffs if going cross border. Plus: user conditions for the mix. Is the carbon going straight into the smelter, so to speak? Or is the user blending the good stuff — 4,000 KCAl/kg and higher – with the mediocre stuff? On the profits side of the sheet: transportation costs for rail, ship and truck are a big deal.

The great recent year for thermal coal, which is No. 1 on the list of the world’s electricity fuels, was 2011. That is when so-called Newcastle coal rose to $140 per ton. It’s down to about $80: Australia, Colombia and South Africa are flooding the market, supposedly, with their thermal coal exports. That average price, assembled by World Bank, in actuality is 20 percent or more higher than what many producers outside of Australia, Colombia and South Africa get for their thermal. Signs of life? India’s 12 state-owned ports report thermal coal imports up 22 percent, to 71.6 million metric tons, for fiscal year 2013-14 that closed March 31.

India will have used in that fiscal year about 125 million or more tons of the high-quality coal, mainly for power plants, cement plants, steel plants, and even individual villages and small towns. Vietnam this year said it will be importing more thermal coal. Southern Russia is a white knight for the black hydrocarbon. Bordering Mongolia and into Russia, thermal coal is so valuable, it ranks almost up there with Olympic bronze and silver (but not yet gold) Olympics Games medals.

Several large coal producers’ shares are rising sharply in recent weeks. Recall that thermal coal is one of the few commodities that has yet to enjoy a resurrected price in the new century. TCR subscribers know that if we were not heading to Cambodia on Thursday for a priority review of Angkor Gold’s gold mine, which is under rapid development with an India partner, I today would be in southern Russia. (Brief addition on Angkor and its non-profit foundation at close of this report***.) I would be touring possible new buyers of thermal coal and dropping into Lake Baikal, the world’s oldest fresh water lake, for a brisk dip. The invitation, at my expense, is from John Lee at Prophecy Coal — the two-mine owner in Mongolia that I reviewed earlier in this year of 2014.

This second visit to Mongolia to see Prophecy (and fifth overall to that nation) defers to Cambodia. Mr. Lee appears to be working through Prophecy’s challenges. The shares (PCY in Canada) this week were removed from the British Columbia Securities Commission’s default list. The financial are out in full. The management discussion is in the filing. Yes, there is a long way to go on improved cash flow from the Ulaan Ovoo Mine, which appears to my eyes, as a writer and researcher, I remind you, to be experiencing gains in production, gains in resource and gains in quality levels for the thermal coal. Also: selective stockpiling of grades, marked by KCAL grade — photos, my own, on request. Prophecy is working with Mongolia’s Ministry of Finance on a customs clearing zone at Ulaan Ovoo to facilitate exports into Russia.

Mr. Lee on previous trips has signed more than one Russia buyer for the company’s high-KCAl coal and fewer than five, by my count. I also have witnessed plans to lay in fresh road from UO across the three dozen or so kilometers required to reach Russia paved roads, and also interior rail head. He has his critics, mostly because of a salary that at times approaches  yearly half-million dollars. Continue reading