Rockhaven and diamonds

Sightholders not too excited about De Beers price cut. [Mining North]  Polishers are worried the news of the price cut will feed through to polished diamond prices in a weak market:

Some expressed concern that manufacturers might be buying into the rough market at the new price
levels even though polished demand is lacking. “Some boxes fell 10 percent to 20 percent so people
requested more of those goods even though I don’t see profit there,” said a sightholder. “We all know
how overpriced the goods were to begin with and we’re not seeing the pull through from the polished
yet.”  Polished prices might decline further on the back of the rough price correction, ultimately downplaying
the extent of  the reductions. “Let’s call it an adjustment rather than a reduction,” pleaded a sightholder.
“We shouldn’t expose the correction widely because it effects polished prices and sentiment.”

Andrew Nelson on Rockhaven. [CEO.ca]  Good coverage on the Yukon’s Rodney Dangerfield project:  RK’s Klaza.  If you use Mickey Fulp’s analysis of what you eventually get for a gold deposit, they’re undervalued. [Mercenary Geologist]  Tightly held and cheap-like-borscht to explore (for a Yukon project).
RK

Kennady Diamonds releases more drill results. [Junior Mining Network]  Looks like they are shifting exploration attention to the nearby MZ Dyke and are getting ready for some deeper drilling to follow Kelvin off to the north.
Kelvin

Dunnedin Ventures arranges $1.1M financing. [Stockwatch]   They’ve appointed Chuck Fipke to the their Advisory Board and he’s going to take some of this financing.  Not coincidentally perhaps CF Minerals is getting their tills and some kimberlite there for analysis.  They collected 4 tonnes of kimberlite and 180 till samples this summer at Kahuna near Rankin Inlet.

Icahn, space mining and the old Premier Mine

Carl Icahn dives into Freeport McMoRan, picking up 8.5%. [Zerohedge]  This after FCX announces a 33% reduction in capex, a 50% reduction in exploration and a 20% reduction in production for next year.  ZH thinks this might be the end of FCX once shareholder value is extracted by leveraging the company to its eyeballs and paying out the proceeds.  All in all, a pretty clear sign of a market bottom when Wall Street closes in for some last minute scavenging.

vultures


Also of interest from Zerohedge – CITI Group’s analysis of commodity performance this year. [Zerohedge] The chart below says it all…. Gold’s your bet.

commodities


First we send in the lawyers:  Time to check in with the “space miners”. [Mining Weekly]   Commodity prices might be crashing to earth but the space miners forge ahead.  In the vanguard are the “space lawyers”.   To “establish their claim”, one outfit issues NASA a $20 ticket for crashing a probe into their prize asteroid; it get’s thrown out of court.   Then Congress, with nothing else on its agenda, passes the SPACE Act this year.   Trouble for the space lawyers is that it only covers the recovered ore and not the “resource”.  They’re fretting about claim jumpers but with a law to play with, you can be sure they will get the courts to sort this out.

While the lawyers get ahead  and set up shop, the “space miners” are making progress too.   Planetary Resources plans to launch their next probe in December (launch in space-speak means getting it tossed out of the ISS airlock).   There’s a new world ahead folks and they are already thinking about what it will mean:

Planetary plans to remotely control its robotic-prospecting technology from the comfort of earth-bound offices. In time, the company hopes to be able to provide reports on asteroid targets similar to that of the Canadian National Instrument 43-101 on earth.  [Property visit required?]
In later phases of space exploration, construction materials, such as iron, nickel and cobalt, which are plentiful in near-earth asteroids, could provide the keys to building space structures. These can be built using new manufacturing techniques exploiting 3D printing that not only uses local space materials, but can also make the structures more appropriate for their environment, because one does not need to fold them up and send them to space on a rocket ride, Lewicki says.

Think this is pie in the sky?  Guess again:

The company’s robotic equipment would make trips to the asteroid targets that could span from a few weeks to more than eight months. “It’s more like planning a bus schedule. It’s about knowing when to leave and when to arrive at them. There are thousands of near-earth asteroids,” he says. “It is rocket science, but it’s a well-known science. We’re actually making money today and will make money at every step along the way as we build the capability to prospect and mine asteroids,” he concludes.

I’m sure they’ll be making money at this without a pound of product hitting Earth.

Space balls


Part 5 of Andrew Nelson’s trip through the Yukon. [CEO.ca] The investment eye view of Kaminak Gold’s Coffee Project.  If nothing else, this YTG-backed junket did a lot of good raising Yukon’s profile.


Rah Rah Lac de Gras. [Resource clips]   Zimtu pump piece on Zimtu companies (& others) at work in the NWT.  Timely in view of their announced field program.


Nice results from Ascot Resources program at the Premier Mine near Stewart.  [Marketwired]   While the “1009.5 g/t Au over 0.9 m” intersection was the headline there were some broader, lower grade but nonetheless quite economic intersections as well.   Rob McLeod worked there and provides some background. [Stockhouse]

Ascot Resources is the real deal. Historically at Premier, the mine was highly profitable for multiple decades mining the spectacular grades of the recent drilling. Structurally, the ultra-high-grade have seemed complex in the modern era, but I believe their geo team has it sorted out. I used to work in the mill at Premier when I was an undergrad, and they had these historic stacks of ‘curved level plans’; never seen anything like it since. High grade veins at Pretium could do something similar. Start flat, then curve vertical like a fishhook.


Stockwatch’s Will Purcell on the Kelvin bulk sample results:

Patrick Evans’s Kennady Diamonds Inc. (KDI) gained six cents to $3.62 on 188,000 shares. Kennady, just $3 earlier this week, jumped 39 cents Wednesday after Mr. Evans applied his usually effective spin to the company’s mini-bulk test results at Kelvin, 10 kilometres northeast of Gahcho Kue in the Northwest Territories. The 442.5 tonnes of dry kimberlite produced 892.86 carats of diamonds larger than a 0.85-millimetre mesh. Including diamonds smaller than a 1.18-millimetre sieve probably added roughly 50 carats, enough to allow Kennady to reach the promotionally important two-carat-per-tonne hurdle with a grade of 2.02 carats per tonne.

Mr. Evans said he and his crew were “particularly pleased” with the test as it had been collected from the more diluted southeastern lobe of the Kelvin kimberlite. The company averaged just 1.79 carats per tonne at the southeastern lobe last year in a 25-tonne sample, while a 19-tonne test in the northern lobe averaged 2.59 carats per tonne. He must have scaled back his expectations while the latest test was under way; after drilling wrapped up in April he said he expected to recover “approximately 1,000 carats” from the sample. (Approximate has a generous range on Howe Street, but Mr. Evans, a former South African diplomat and Kennady’s founding CEO, has long been careful to promise small and deliver large.)

Investors were in a forgiving mood nevertheless, in part because the grade hit the lower end of the company’s grade projection, but also because the sample yielded some large stones. A total of 35 gems weighed at least one carat and five topped 2.5 carats; the largest being a 4.22-carat colourless gem with no inclusions. (It was a macle, not an octahedron, otherwise it might have carried the upcoming valuation all on its own.) In any case the five largest gems weighed 16.18 carats and with a typical distribution pattern the 35 largest stones would weigh about 60 carats, suggesting a distribution pattern at Kelvin that is at least as coarse as those in the economic Gahcho Kue pipes. That would augur well for Kelvin, as the colour and geometry of the other large diamonds appeared equally pleasing. As a result, Mr. Evans says Kennady is set to start preparations for a bulk test of the northern lobe next year.

Diamonds and zinc

We’re number 3!  Canada remains the world’s third largest diamond producer by value (fifth by volume).   In fact, if the NWT were a country, it would be the world’s third largest diamond producer by value. [NWT Chamber of Mines]

diamonds


Micro-wave mining:  Synthetic diamonds are becoming trendy with Millennials who want to avoid conflict-free diamonds.  [Bloomberg]

De Beers sees this as no threat:

“The value of a diamond is inextricably linked to the inspirational and unique narrative that lies behind each one, from its formation to its history to its emotional significance, which lab-grown diamonds simply don’t have,” the company said in a statement.

What me worry

 


Zinc bulls take note:   Australian officials threaten to shut down Glencore’s McArthur River mine unless it cleans up its act and posts a larger bond. [Reuters]   Numbers move around a bit but McArthur River appears to be the world’s third largest zinc mine. [Market Oracle]   There is no support for a zinc price rise in the fundamentals however. [MetalMiner]

Zinc


Alrosa holds the line on prices at their August sale. [Rough & Polished]   …but allows customers to defer up to 80% of their selection limit (ie. just buy a few expensive parcels and we’ll call it a deal).

Kelvin bulk sample results

Silver falls to a 6 year low. [Kitco]  Is it “gold lite” or a commodity?  The market can’t decide anything except that any bad news should be priced into silver.  Looks like this week it’s a commodity so we’ll take it lower along with other base metals.   IKN points out this is part of a longer term trend, with the gold:silver ratio rising from ~32 to 77 over the past 4 years. [IKN]


Zimtu starts KIM till sampling at Munn Lake. [Zimtu Capital]  This is a bit of a surprise:  Munn Lake was supposed to be Prima Fluorspar Diamonds flagship prospect; looks like it might have been abandoned on the doorstep and is now being bottle-fed by grandma.  Their consultants should have no trouble finding KIM’s out there; kimberlite dykes produce impressive till train anomalies and SouthernEra spent a fortune chasing them down to no avail in days of yore.   Nonetheless – hope springs eternal.


The interesting case of tin:  Illegal mining may be contributing to the price decline. [Bloomberg]   Seems that 90% of Indonesia’s tin comes from the islands of Banga and Belitung and that illegal tin miners are mining and smuggling a lot of it out despite Indonesia’s attempts to throttle the tin market to its own benefit.  Now the President is vowing to stamp out this business – entirely out of concern for the poor artisanal tin miners of course.

Banka


Pump piece on Wellgreen Platinum. [CEO.ca]  One of a series of articles by Andrew Nelson on his excellent trip to the Yukon (aka.  YTG’s Yukon Gold Tour 2015).  He has the good grace to note that the numbers in WG’s latest PEA are way outside of the money:  they used metal prices to dream of and you can’t “exchange rate” your way around the difference.   They’re going to have to cash up in the next 12-18 months – hopefully at higher metal prices.


Kelvin bulk sample results are out. [Kennady Diamonds]  Overall grade: 2.04 ct/t (+0.85mm)  The five largest diamonds range from 2.59 to 4.22 ct and 35 (of 16,247) stones recovered were greater than 1 ct.   This was an RC bulk sample so some breakage is to be expected.  The sample was from the likely lower grade southeast lobe of the pipe so there is room for grade to improve when the rest of the sampling is complete.  A valuation on the parcel is expected in October.  The grade is within the range that KDI has been telegraphing for months.  Looks like full steam ahead at KDI.


The Contra Guys at the Globe & Mail like Strategic Metals.  [Globe & Mail]  They point out that they have 130 Yukon properties in their portfolio as well as 8 royalties and shares in other related juniors.

ATAC, Agnico and Peak Gold

Peak gold is here … but it won’t help gold prices because of inventory disposal. [Bloomberg]  This according to Sanford & Bernstein in London (never heard of ’em..)

So... where do you think the gold price will go?

So… where do you think the gold price will go?


Capitulation in the diamond biz:  De Beers lowers its rough diamond prices by 9%; Alrosa by 6%. [Mining Weekly]  This is really old news repackaged as new by Bloomberg.  Since De Beers prices are “set” (to the extent that word applies) at their sights, and since De Beers has done just about everything to keep their buyers still bidding, this is just a recap of what happened at the July sight.  Anyway – it’s out there and official; diamond prices are in retreat.

Paul Zimnisky’s data provides another perspective; longer time prices are stable and we may be just testing a low amidst the financial fracas. [Zimnisky]

Diamond prices


Squeaking from the wreckage:  Vancouver Capital Market Association lobbies the BC Government to ditch IIROC and reform the BC Securities Commission. [Resource Clips]  They make a good point in that IIROC is a government-sanctioned private sector regulator dominated by the big financial guys in Toronto.  They just add to the burden and complexity of company operation.  On the other hand… be careful what you ask for: do you really want the super efficient, industry friendly BC government regulating every aspect of junior miner life?

And while we’re on the subject:  Some research by Palisades Research on cashed up Zombies that could be ripe for taking down a-la-Ryan Gold / Oban / etc. [Palisades Research]  The only Northern entry of note on the list is Strategic Metals, suggesting the author needs to look at more than just share price and current assets…

Zombie chart

 


Stockwatch’s Will Purcell on the trials and travails of Talmora Diamonds:

Dr. Ray Davies’s Talmora Diamond Inc. (TAI: $0.005) says it has been focused on asset preservation for the past six years. (Dr. Davies apparently takes preservation seriously: Talmora’s Horton River diamond property north of Great Bear Lake has been entombed in mothballs since 2012.) In the last work on the property, Dr. Davies and his son, Alan Davies, used a portable packsack drill to test a target on the property, work that amounted to a Hail Mary attempt to hit kimberlite and put some life into Talmora’s stock, which can sit for weeks at “no-bid.” Dr. Davies says one of the holes hit cuttings of a rusty, dark-brown clay that “show many characteristics of weathered kimberlite” — this despite the fact that the material had lost its fines and were contaminated by till and marine sand.

Dr. Davies may be grasping at straws but kimberlite finds in the area are plausible. The Franklin cluster, to the northwest of Horton River, produced a dozen kimberlite discoveries about 15 years ago and although none warranted further work, a majority of them were diamondiferous. Another kimberlite, Dharma, was discovered in the mid-2000s north of Great Bear Lake. It was too small to be of interest but it produced a larger macrodiamond and a promotable grade. Dr. Davies says each spring that he wants to raise several million dollars for a serious drill program on Horton River, but each fall he concedes his financings failed to do much more than keep the lights burning in Talmora’s office.

Kick’em when they’re down:  These guys, along with Olivut Resource (Leni Keough) are real troopers who have kept plugging away at technically sound, big-upside bets despite market indifference.


ATAC announces a new discovery in the Anubis area:  Orion discovery drill hole returns 47 m @ 3.8 g/t Au. [ATAC Resources]  The  CEO chatterers  are underwhelmed, claiming that the summer drill season is over for ATAC and that no new news is in the offing.  One observer noted however that this discovery is in the siltstone, not the carbonates – opening up a new package of rocks to explore.  Too bad we’re in such a crappy market where there is little reward for success.


A bit of old news but it is significant:  Agnico Eagle expands Amaruq by 35% to 2M oz Au.  [Agnico Eagle]  Looks like lots of room to grow and no doors closed yet.  The current resource stands at 9.7 Mt @ 6.47 g/t Au.  Since 5 g/t Au seems to be the threshold for something to fly North of Sixty, this should be easy.  The deposit is 50 km NW of Meadowbank and a satellite operation could extend the life of Agnico’s biggest producer beyond 2018. [Nunatsiaq Online]

Deflation and predation

Deflation watch:  As summer winds down, time to check in again on metal prices as the world continues to rebound from the 2008 debt revulsion thanks to the skillful guidance of central banks and Wall Street [Infomine]:

Metal prices

In the end, bad money must be destroyed and the only question is who will bear the pain.


The Venture Exchange is gets sucked down the hole with the big boards this morning… [Stockwatch]

TSX-V

Could this be the long-awaited final market capitulation?  IKN thinks it possible…. [Inka Kola News]


The Oreinc Index continues its slump – suggesting a very slow fall ahead for mineral exploration financing. [Oreinc]

Oreinc


Bad news in the diamond biz:   India’s rough diamond imports down 43% YoY and polished exports down 18% in the same period. [Rough & Polished]  We’re talking the Walmart and not the Macy’s end of the market here but it nonetheless indicates where things are going.


Canterra extends its financing, giving investors an extension until September 18 to “complete and deliver their subscription agreements.”   Maybe one in particular….

Jimmy Pattison


Independence Gold hits 12.2 m @ 7.23 g/t Au at Boulevard near Coffee.  [Independence Gold]  This was the best of 13 holes reported; they also had a hit on a new (“Denali”) zone of 4.25 g/t Au over 6.1 m grade smeared a bit.   Results were good enough to extend the program with ground mag, mapping and more RC drilling.


Shakeup at the Predator.  [Mineweb]  Good commentary on the Friday-after-market announcement that everybody quit at Bill Sheriff’s Golden Predator and the new board is a group of geriatric finance guys from Till Capital.  But Till is also run by Bill!   If Bill & Bill at Till have developed ill will, expect another resignation soon.  Seems likely the Predator is out of mining for the time being and Brewery Creek will up for sale (or disposal) soon.

Predator

Options, financings and Alaskan news

Front end of the diamond industry continues to contract:  12% less jewelers, manufacturers and wholesalers in the business this year.  [International Jeweler]

On sale

It’s a steal – we’re going out of business next week.


The latest from our un-scientific index of mineral property option activity… things remain depressed.

Options


And the Oreinc index continues to slide.. [Oreinc]

Oreinc


Alaskan exploreco’s  trying various tactics to weather the downturn. [Petroleum News of Alaska]   Thumbnail summaries of what Millrock, Contango, Constantine and others are up to this summer.

Country boy


And in other Alaska news…  Freegold Ventures starts drilling at Shorty Creek. [Junior Mining Network]

This is a gold show near Livengood – hopefully the grades turn out to be better.


Kaminak releases infill drill results at Coffee. [Marketwired]   ~40 +5 g/t Au hits in 256 drill holes.   Let the engineers now speak.


Fortune Minerals completes restructuring. [Fortune Minerals]  All they’re left with is NICO and Sue-Dianne.

Yuan, Rockhaven, Wolverine and more.

Gold rises (a bit) amidst Yuan devaluation fracas. [Mineweb]  The narrative seems to be that a currency war is breaking out and the US Fed will be unable to raise interest rates this fall without tanking their own economy.  If you can’t trust the US$ what can you trust?

Currency wars

 


It’s not all bad news #1:  Recent currency fluctuations are a boon to miners outside of the US. [Financial Post]  Today’s gold price? $1,457 ($CDN).


It’s not all bad news #2:  TSX-V financings for July are up (spiking like they did last year).

TSX-V financings


Kennady Diamonds closes a $4M non-brokered private placement.  [Junior Mining Network]  Still waiting on the bulk sample results.


Auryn Resources trying to raise $4.8M. [Junior Mining Network]  Plans to use the work at Committee Bay (NU) and to “look for other projects in the Americas”.


Alexco reports second quarter results. [Junior Mining Network]  Access Environmental Group seems to be the bright light, generating quarterly profits of nearly $600K.  The successful completion of a remediation project in Colorado should release $3.3M (US) to the company.


Rockhaven in the news….


TMAC provides an operational update on the Hope Bay Project. [Marketwired]  Plans to complete 16,700 m of surface exploration drilling.


MinQuest raises $A2.29M ($2.4M CDN) to buy Wolverine Mine. [Mining Weekly]  They are the “preferred bidder” for Yukon Zinc’s bankrupt operation.   This is chump change and suggests local Yukon suppliers are going to get hosed on Friday when everyone is back in court.


Pump piece on why Bokan Mountain might fly with MRT. [Metalnews.com]  The trouble with REE mining is that you have to do everything yourself.  Anyway, this guy’s sold.


And another Stockhouse pump piece on Terrax’s Yellowknife Gold Project. [Stockhouse]  Still waiting to see where this “top quality virgin mineralization” in the “New Zone” is located.   Last year, a 10 m step out drill hole was big news so we’re waiting on the edge of our seats over this one too.

 

Bad market news and good field news.

Deflation watch:


Cue the uranium bulls:  Japan restarts their first reactor. [Reuters]


Terrax channel samples 11.0 m @ 7.55 g/t Au across a new zone at Barney (Yellowknife Gold Project).  [Marketwired]   There’s a bit of grade smearing here but not as bad as in previous reports.  Basically 2x 2m high grade zones with some mineralized wall rock betwixt.  It’s not clear where this “New Zone” is from their website.


Rah-rah Yukon: Kitco’s latest daily report from YTG’s “Yukon Gold 2015 Tour”.  [Kitco.com]   Neils had better sound happier about Yukon’s  prospects in the next few articles or the hype-o-crats from Energy Mines and Resources might kick him off the tour.


Baffinland ships its first load of ore from Mary River.  [Mining.com]  How long they can continue amidst low iron ore prices remains to be seen.


Canadian Zinc continues to hit on their underground drill program at Prairie Creek. [Marketwired]  The best was from a new vein running 34% Zn, 18% Pb and 247 g/t Ag over 7.5 m.


Frank Guistra takes a swing at Pebble. [CEO.ca]  First Dynasty is buying his shell (Cannon Point Resources) and giving them a seat at the bar.  If Billary gets elected Prez next year, NDM will have an in at the highest level since Frank and Bill Clinton are good buddies.


Results in from Northern Empire’s Hilltop (Alaska) first phase.  [Junior Mining Network]  Something to work with: grabs to 26.6 g/t Au, 10 m @ 2.29 g/t Au (grade smeared around 1.0 m @ 19.5 g/t) in a trench and soils to 483 ppb Au.   Looks like they are ploughing old ground to date however.


Stockwatch on Victoria Gold:

John McConnell’s Victoria Gold Corp. (VIT) remained unchanged at 12 cents on 238,000 shares. The company says its Olive gold property in the Yukon is heap leachable. Olive is contiguous to Victoria’s eight-million-ounce Eagle gold deposit, where a mine would cost $400-million. Victoria received its mining licence in 2013, but by then the price of gold had started to fall and the company has been unable to raise the money. Mr. McConnell sold four of the company’s exploration properties for $51-million in 2011 and 2012. There are still three for sale, but no more interested buyers. Victoria is left with $10-million in working capital, which president McConnell says could last until 2018. He took a small pay cut last year, receiving $348,000, down from $462,000 in 2013. The president will be hosting property tours at Eagle all next week. He is hoping to attract a joint venturer by talking up Eagle’s projected all-in cash costs of $729 an ounce.


Arctic Star “plans to commence” diamond exploration on their T-Rex Property, east of Ekati.  [Arctic Star Exploration]  This is the old De Beers / Monopros ground east of the Ekati mine leases which was worked over in the 1990’s and early 2000’s.   Most of the known kimberlites were picked up by DEMCO and others before ADD came along but they think that the undisclosed locations of the Penelope, Petra and Hanna pipes might be on their property.   They claim 12 pipes are located in their  claim block.


Aston Bay starts a gravity survey at Storm (near Resolute Bay in NU).  [Aston Bay Holdings]


Nighthawk Gold starts a 3,000 m drill program at Colomac. [Nighthawk Gold]  They plan to concentrate on the northern portion of the Colomac Sill.


Strategic drills 2.65 m @ 12.15 g/t at Hopper (SW Yukon). [Strategic Metals]