Kitco MINING

More aggressive M&A is coming to the gold sector, said Dan Wilton, CEO of First Mining Gold. 

On Thursday Wilton spoke with Kitco Mining. 

First Mining Gold Corp. (TSX: FF) is a Canadian gold developer focused on the development of the Springpole gold project in northwestern Ontario and the Duparquet gold project in Quebec, what the company calls the two of the largest gold projects in Canada. 

Springpole’s land position totals 41,943 hectares. The project is located in a remote area, approximately 110 kilometres northeast of the town of Red Lake. The project is situated within the Birch-Uchi Greenstone Belt. The Springpole gold project will include the development, operation and eventual decommissioning/closure of an open pit mine and mill with supporting infrastructure. The company plans to submit its environmental assessment to regulators in the fall. 

Wilton said permitting is key to building value. 

"Almost every 5 million ounce plus gold project in Canada that has received its environmental assessment approvals has been either acquired or funded into at valuations in excess of $500 million," said Wilton. 

First Mining also owns the Duparquet Gold Project, a preliminary economic assessment stage development project located on the Destor-Porcupine Fault Zone in the prolific Abitibi region in Quebec. Duparquet currently hosts 3.4 million ounces of gold in the Indicated Mineral Resource category and 2.6 million ounces of gold in the inferred mineral resource category.

In September First Mining Gold announced it closed a C$8 million bought-deal financing. 

Wilton said the pipeline for gold projects in Canada has dropped off. 

"It's a very short list," said Wilton. "All those large projects have to go through permitting processes and we know where we are in the process, which is at the front of the pack or not or near the front of the pack."

Wilton said cash is coming into the sector with some big M&A's, but financings in the resource sector have been selective.

"We haven't had the rising tides raising of all boats," said Wilton. "What makes that happen: you're going to start seeing more aggressive strategic investment and acquisitions from large caps and mid-tiers who know that there is no way that they can advance projects for less than they can buy them for today." 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The Golden Triangle is one of the world's top five mining areas, said Shawn Khunkhun, president and CEO of Dolly Varden Silver. 

On Thursday Khunkhun spoke to Kitco Mining at its Vancouver studio.

Dolly Varden Silver Corporation (TSX.V:DV) is a mineral exploration company focused on advancing its 100% held Kitsault Valley project located in the Golden Triangle of British Columbia, Canada, 25kms by road to deep tide water. In 2022 Dolly Varden acquired Homestake Ridge gold-silver project from Fury Gold Mines. Homestake is located adjacent to the Dolly Varden project. Last month Dolly Varden closed a $32 million bought deal offering.  

The Golden Triangle is situated in the northwest of British Columbia. Red Chris and Brucejack mines, both owned by Newmont, operate in the region. 

The Dolly Varden project contains historic mines. 

"I don't doubt there's a lot of silver to discover, probably north of 100 million ounces at Dolly," said Khunkhun. "But bringing in Homestake and bringing in the million ounces of gold and having the big hits that we've had...I think we may be onto a system that's reminiscent of Brucejack, Eskay, or Premier, and that's what we've got on deck in terms of these drill results that are pending."

Khunkhun said a number of factors favor precious metals: the Fed is easing, geopolitical turmoil and an uptick in precious metal ETF buying. 

"I would be shocked if we didn't get a new all-time high in silver," said K. "Every other time we've been into precious bull market, silver has lagged and then outperformed. It looks like that setup is occurring right now."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Precious metal miners are in a great bargaining position with the smelters, said Walter Coles, executive chairman of  @skeenaresources6013 .

Last week Coles spoke to Kitco Mining in Vancouver, B.C. 

Skeena Gold + Silver (TSX: SKE) is advancing its Eskay Creek project, a high-grade volcanogenic massive sulphide deposit that previously operated as an underground mine. 

“When Eskay Creek was operational in the 1990s and early 2000s, it produced 3.3 million ounces of gold and an astonishing 160 million ounces of silver," said Coles. "That was from an underground mine. We're revitalizing it as an open-pit operation, and we changed the name to highlight the silver still present."

In November 2023, Skeena completed a definitive feasibility study on Eskay Creek, revealing reserves of 4.6 million ounces (Moz) of gold equivalent (AuEq) at an average grade of 3.6 g/t AuEq. The study projects an after-tax NPV5% of C$2 billion, a 43% IRR, and a 1.2-year payback period, based on US$1,800/oz gold and US$23/oz silver. Recently, the company changed its name to Skeena Gold & Silver to emphasize the significant silver reserves remaining at Eskay Creek.

"Exploration is tough," Coles admitted. "There’s an old saying: 'The best place to find a mine is in the shadow of a headframe.' Our strategy was to acquire past-producing mines that were shut down during low points in the commodity cycle, hoping to find untapped resources."

The company plans to reopen it as an open-pit mine, with estimated annual production of 450,000 AuEq ounces in the first five years. Coles highlighted that current precious metal prices are favorable for miners, and that there are downstream benefits as well.

"I believe we're in a good position to negotiate better terms with smelters," said Coles. "With excess global smelter capacity, mines can push for higher payables."

Supply constraints are expected to sustain high precious metal prices for years.

“One thing that's certain is that commodities are cyclical," said Coles. "During downturns, companies reduce exploration and capital expenditures, which eventually leads to lower future supply. Now, we’re seeing the boomerang effect. Even with capital flowing back into the sector, supply won't rebound for years, creating favorable conditions for miners in the meantime."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

G Mining Ventures achieved commercial production in September, according to Louis-Pierre Gignac, the company's founder, president, and CEO.

Last month, Gignac spoke with Kitco Mining.

G Mining Ventures Corp. (TSX: GMIN) aims to grow into a mid-tier precious metals producer. Its flagship operations include the Tocantinzinho Gold Mine in Brazil and the Oko West project in Guyana.

In September, the company released a preliminary economic assessment for Oko, highlighting an after-tax NPV5% of $1.4 billion, an IRR of 21%, and a payback period of 3.8 years, based on a $1,950/oz base case for gold. The company plans to submit permit applications by the end of the year and aims to release a feasibility study in the first quarter of 2025.

Tocantinzinho reached commercial production in September and is designed for a 10.5-year mine life, with an average annual gold production of 174,700 ounces, increasing to 196,200 ounces for the first five full years.

Gignac noted that when Oko operates alongside Tocantinzinho, G Mining Ventures will become an intermediate gold producer.

"We have set a target of 500,000 ounces of production as the next milestone to achieve intermediate producer status," Gignac said. "The combination of Tocantinzinho and Oko will enable us to reach that goal."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Gold and copper production are increasing at New Gold, noted CEO Patrick Godin. 

Godin spoke with Kitco Mining last month during the Gold Forum Americas/XPL-DEV 2024 in Colorado.

New Gold Inc. (TSX: NGD) is a Canadian-focused intermediate mining company operating the Rainy River gold mine and the New Afton copper-gold mine. The company also holds additional Canadian-focused investments.

New Gold is expanding its production. Consolidated gold output is projected to increase by approximately 35% from 2023, reaching 410,000 to 460,000 ounces in 2026 at both Rainy River and New Afton. Copper production is expected to grow by about 60% over the same period, reaching 71 to 81 million pounds by 2026.

Godin mentioned that while investors are mostly satisfied with the performance of the gold miners, they are eager for further growth.

"Shareholders are...asking us: 'Okay, what's next?'," said Godin. "They appreciate that we’re adding value through exploration and organic growth, but the next question is: 'Can you do more?'"

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Use cash to grow gold production, said Jason Simpson, president and CEO of Orla Mining.

Last month Simpson spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Orla Mining Ltd. (TSX: OLA) operates the Camino Rojo mine in Zacatecas State, Mexico. Camino Rojo is an open-pit, heap leach mine producing gold and silver. The site, 100% owned by Orla, spans over 139,000 hectares and contains both oxide and sulphide mineral resources. Additionally, Orla’s South Railroad project, located on the Carlin trend in Nevada, is a feasibility-stage, open-pit, heap leach gold project.

For 2024, Orla’s gold production guidance stands at 120,000 to 130,000 ounces, with all-in sustaining cost guidance improved to $800-$900 per ounce of gold.

Simpson noted that recent increases in gold prices have prompted the company to reassess its capital expenditure plans.

"The rise in gold prices has accelerated some of our capital allocation discussions," said Simpson. "We are accumulating cash at a faster pace than anticipated, which allows us to reconsider the timing of construction while ensuring we can self-fund not only construction but also exploration across all the countries we operate in."

When asked if gold miners should hold more precious metals rather than cash, Simpson responded:

"Most gold companies, including ours, intentionally grow our pipeline. We use that cash to enhance the value of the business by expanding gold production and making new discoveries."

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Costs in the resource sector appear to be easing, said Steven Dean, chairman and CEO of Artemis Gold. 

Last month Dean spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Artemis Gold Inc. (TSX-V: ARTG) is developing the Blackwater Mine in central British Columbia, about 160 km southwest of Prince George. Dean expects the first gold pour by the end of this year. The company’s stock has doubled year-to-date, most recently trading at $12.63 per share. With favorable metal prices, Artemis is considering expansion. Phase 2 is projected to produce an average annual gold equivalent of 561,000 ounces and generate average annual after-tax free cash flow of C$544 million between years three and six.

Despite gold hitting multiple all-time highs, many miners have not experienced significant gains. Dean attributes this to lingering investor skepticism toward the sector.

"It's still a 'show me' market," said Dean. "The key to closing that value gap lies in more consistent performance across the sector—meeting guidance, hitting cash flow targets."

Dean noted that cost pressures are easing, which should help boost margins.

"Labor pressures aren’t as tight as they were," he said, adding that other costs are also showing signs of easing. "This should allow us to improve cash flow margins and deliver the kind of cash generation I believe the sector is capable of."

The Gold Forum Americas/XPL-DEV 2024 coverage is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Despite gold's record highs, the miners aren’t celebrating yet, said Tim Wood, executive director of the Denver Gold Group. 

Last week Wood spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Despite gold hitting several all-time highs in 2024, Wood noted that the miners are still wary. While gold prices have surged to $2,600 per ounce, the enthusiasm seen in previous cycles has yet to materialize, with skepticism still prevalent among investors.

"I don't think we're at that belief stage," said Wood. "We've heard quite a few keynote speakers saying it's very clear that we are nowhere near even the onset of a euphoria stage. There's still a lot of skepticism."

Wood highlighted that, despite the high gold prices, attendance at the Gold Forum has decreased compared to its peak in 2018. The drop is due to broader uncertainties in the commodities markets. However, reduced interest rates in the U.S. usually boost metal prices, noted Wood.

Wood also discussed how falling fuel prices and reduced costs for chemical reagents used in mining could expand margins for gold producers in the coming quarters. This could lead to even stronger financial results for gold companies, many of which have already seen significant stock price increases this year. However, Wood believes that more investors will turn to gold stocks once they see consistent, strong quarterly results.

In terms of M&A, Wood predicted continued activity, especially among majors looking to maintain production levels. He suggested that the industry may see a "mega deal" in the near future, potentially creating a $100 billion gold company. Additionally, intermediate companies and single-asset producers may also face consolidation pressures.

Wood noted that while technology, including AI, is playing a larger role in the exploration and mining sectors, human expertise, particularly from skilled geologists, remains irreplaceable. He expressed skepticism about AI's ability to fully take over certain aspects of the mining process.

Looking ahead, Wood expects the rest of the year to be positive for gold producers, with higher metal prices, increased dividends, and strong financial results likely to attract more generalist investors to the sector.

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Maintain perspective in this gold bull market, warned Darren Hall, president and CEO of Calibre Mining. 

Last week Hall spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Calibre Mining (TSX: CXB) is a Canadian-listed, Americas-focused, mid-tier gold producer with development and exploration projects across Newfoundland and Labrador, Canada, as well as Nevada, Washington, and Nicaragua. Calibre operates the Limon Mine in Nicaragua and recently finalized the acquisition of the Valentine Gold Mine in Newfoundland and Labrador, with initial gold production expected in the first half of 2025.

For 2024, Calibre's gold production guidance is between 275,000 and 300,000 ounces. Once Valentine becomes operational, production is expected to rise to 500,000 ounces annually.

Hall stressed the importance of diversifying the company’s asset base to mitigate the risks associated with relying solely on production from Nicaragua. The acquisition and development of Valentine in a stable jurisdiction like Newfoundland significantly bolster the company’s profile.

Calibre’s growth strategy has often been compared to B2Gold, which also began with assets in Nicaragua and grew through strategic acquisitions to become a million-ounce-per-year producer. While there are similarities, Hall emphasized that Calibre's success is driven by strong management, a dedicated team, and a focus on organic growth and exploration, particularly in Nicaragua and Nevada. The company’s strong balance sheet has allowed it to fund projects like Valentine while continuing exploration.

With gold prices around $2,600 per ounce, Hall acknowledged that the additional cash flow provides more financial flexibility but stressed that it doesn’t alter Calibre’s strategy. The company remains focused on organic growth, with exploration at the forefront of its future plans. Despite gold hitting several all-time highs in 2024, Hall urged miners to maintain perspective when making deals.

“Higher metal prices don’t make for more intelligent decisions,” Hall cautioned. “You’ve got to take a long-term view on any transaction. Is it durable? I’d take a conservative view on metal prices with respect to acquisitions and investment decisions, and then bank the upside when it comes, rather than require higher metal prices to support the decision.”

When evaluating projects, Hall noted that if you “torture the asset long enough, it’ll confess to any answer you want,” warning that committing under such conditions leads to unrealistic expectations.

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Without big backers, most juniors are going to struggle, said Luc ten Have, founder of GoldDiscovery.com

Last week ten Have spoke to Kitco Mining at the 2024 Precious Metals Summit Beaver Creek in Colorado. 

Ten Have speculates that the gold equities may be entering a period of slow, sustained growth, akin to the early 2000s, rather than a rapid spike. He said a slow build would be preferrable. 

"My impression is that the market is slowly building," said tenHave. "You don't really feel it yet, but it's a bit comparable to 2000 and 2001 where you didn't get that [shooting up] within half a year. All the stocks are up five or six X. 2016 was a year like that. 2020 was a year like that. I think it's better that this time it's going a little bit slower, because you don't get this six-month window and then everybody leaves again."

Ten Have noted the difficulty junior mining companies face in raising capital, despite high gold prices. Many smaller companies have not moved significantly, and while some with backing from major investors, like Eric Sprott and Pierre Lassonde, are doing well, others struggle. Ten Have emphasized that access to capital is critical for early-stage explorers, and without it, promising projects may not advance.

Coverage of the 2024 Precious Metals Summit Beaver Creek in Colorado is sponsored by Newcore Gold.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.