General Market Commentary
General Market Commentary
General Precious Metals
US Snapshot: Six juniors with active programs
With prices for gold, silver, and other metals and minerals on the upswing, the mining and exploration scene is heating up again in the U.S., particularly in traditional mining destinations such as Nevada, Arizona, Utah and Idaho. Here are six juniors with operating mines and substantial exploration programs underway in the western United States.
Toronto-based junior silver miner Americas Silver (TSX: USA; NYSE-AM: USAS) has been on a bit of a roll of late, with two operating mines in Idaho and Mexico, growing production and its new status as one of the lowest cost silver producers globally.
In Idaho, the company has its Galena mine and mill complex, which produced 1.14 million oz. silver and 20 million lb. lead in 2017. Exploration drilling is underway at Galena to extend and upgrade resources and reserves — particularly at depth, as the mineralization transitions from silver-lead to silver-copper. The complex has already produced 250 million oz. silver, and the mine life stands at a minimum 10 years.
In Mexico, Americas Silver achieved commercial production in the fourth quarter of 2017 at its San Rafael silver-zinc-lead mine, which is part of its wider Cosala operations in Sinaloa state. In 2017, the company produced 940,000 oz. silver, 11.6 million lb. zinc and 5.6 million lb. lead at the mine.
For 2018 from the two mines, Americas Silver is guiding combined production of 1.6 to 2 million oz. silver (or 7.2 to 8 million equivalent oz. silver) versus the 2017 total of 2.1 million oz. silver (4.7 million equivalent oz. silver). Last year’s all-in sustainable cost (AISC) was US$13.11 per oz. silver, but Americas Silver is guiding an AISC of a maximum US$4 per oz. silver in 2018.
The junior notes that mining at San Rafael is proceeding at a planned 50% of reserve grade for the first 18 months, so that silver production will increase noticeably through 2020 as head grades rise.
Kerr Mines (TSX: KER; US-OTC: KERMF) is focused on its goal of redeveloping the fully permitted, past-producing Copperstone gold property located along the Walker Lane mineral belt in Arizona.
Copperstone produced over 500,000 oz. gold from an open pit in the past, but left behind was a high-grade measured resource of 934,000 tonnes at 10.4 grams gold per tonne for 311,000 contained oz. gold. Another 335,000 tonnes at 12.2 grams gold lie in the inferred category.
This year, Kerr has planned several milestones, starting with a new resource estimate and prefeasibility study expected in the first quarter and a production decision within the next three months.
Kerr sees the project having upside in several respects, including monetizing by-product copper, expanding the Copperstone and Footwall zones and exploring the property’s regional potential.
Kerr raised $17 million in 2017, and in January 2018 had $9.5 million in debt and $5.6 million in cash.
Rob McEwen-led McEwen Mining (TSX: MUX; NYSE: MUX) is a familiar name in the gold-silver sector, and the growing company in building the Gold Bar gold mine in Nevada to complement its three operating mines in Canada, Mexico and Argentina.
Gold Bar is located in Nevada’s prolific Battle Mountain-Cortez trend, 40 km southeast of Barrick Gold’s stellar Cortez and Gold Rush assets.
The capital expense to build Gold Bar is US$60 million, and the open-pit, heap-leach mine is slated to produce 65,000 oz. gold annually over a six-year mine life at an AISC of US$995 per oz. gold.
At US$1,350 per oz. gold, Gold Bar has a compelling 40% after-tax internal rate of return and 1.9-years estimated payback.
McEwen also has its newly acquired Black Fox gold mine in Ontario’s Timmins district, its aging El Gallo gold-silver mine in Mexico and its 49%-owned San Jose gold-copper mine in southern Argentina.
Development projects include the Gallo Silver project near the El Gallo mine, and the large, low-grade Los Azules copper asset in Argentina’s San Juan province.
NEVADA SUNRISE GOLD
Vancouver-based Nevada Sunrise Gold (TSXV: NEV; US-OTC: NVSGF) is exploring for gold, lithium and cobalt in Nevada.
Its three gold exploration properties in the state are Golden Arrow, Kinsley Mountain and Roulette, and in the state’s southwest are its wholly owned Neptune and Aquarius lithium brine projects.
Its most advanced gold project is its wholly owned Golden Arrow property northeast along the Walker Lane structural belt. Golden Arrow hosts a measured and indicated resource of 296,500 oz. gold and 4 million oz. silver in 12.2 million tonnes grading 0.024 oz. gold per ton (0.82 gram gold per tonne) and 0.33 oz. silver per ton (11.31 grams silver per tonne), plus 3.8 million tonnes at lower gold grades. These figures were calculated in 2009.
In July 2017, Nevada Sunrise struck an agreement with Emgold Mining (TSXV: EMR) granting Emgold the option to acquire up to an 80% interest in the project by paying US$250,000 in cash, 2 million units in Emgold and spending $2.75 million on exploration over three years. The deal was amended in January 2018.
In November Nevada Sunrise Gold and its partner Advantage Lithium (TSXV: AAL) sold their Clayton NE lithium project to Pure Energy Minerals (TSXV: PE; US-OTC: PEMIF). The Clayton NE property borders the lithium brine mine operated by Albemarle (NYSE: ALB) at Silver Peak in Nevada’s Clayton Valley.
Just before the sale, Advantage exercised its option to acquire 70% of the project, so that Nevada Sunrise wound up with 2.1 million Pure Energy shares while Advantage received 4.9 million Pure Energy shares.
On Nov. 21, Nevada Sunrise signed a letter of intent to acquire 100% of the Lovelock high-grade cobalt property, 150 km east of Reno, Nev., in return for a small series of cash and share payments over three years. In January 2018, Nevada Sunrise reported cobalt, nickel and copper grades in preliminary sampling.
There’s more for miners in Nevada than gold, silver and lithium — there’s zinc, too. Exhibit A is Bruce Durham-led Nevada Zinc (TSXV: NZN), which is exploring its Lone Mountain zinc project in Nevada’’s Battle Mountain-Eureka trend, northwest of the town of Eureka.
Nevada Zinc has drilled a geochemical anomaly to 250 metres depth so far and intersected zinc oxide-carbonate with only minor lead mineralization. This contrasts with more typical zinc deposits that are comprised of zinc sulphide minerals such as sphalerite.
Nevada Zinc says there is more untested potential for zinc sulphide and precious metal mineralization at depth.
Between 2014 and 2017, Nevada Zinc drilled 83 holes at the property totalling 12,200 metres. Hole 15-27 was drilled in northwest of the deposit and returned 119 metres (not true width) grading 10.32% combined zinc and lead, including 29.07% combined zinc and lead over 15.2 metres.
This year, the company looks to finish metallurgical studies on Lone Mountain, calculate an initial National Instrument 43-101 compliant resource estimate and study development scenarios for this unusual deposit.
The company is active at its gold properties in the Yukon, and looks to corporately separate these assets from its zinc activities in Nevada.Click here to see more from Nevada Sunrise Metals