Tocvan closes oversubscribed Private Placement - WHY?Tocvan closed an oversubscribed Private Placement this week for $420,560, the combined Offerings resulted in gross proceeds of $2,520,390. It was great to see this oversubscription as it shows significant support for Tocvan's geological model and approach to near-term production as outlined by Brodie Sutherland.
Tocvan closed the week at $0.36. Again, Anonymous was the dominant seller representing 47,000 of the 49,900 shares sold on Friday. If you look back at the week of trading, Anonymous sold over 327,000 of the 358,000 shares, while buying only 26,000, and as in previous weeks, it looked like a share exchange had been taking place.
What do I mean by a "share exchange"?
In my experience, when a large shareholder wants to sell a block of shares, they contact the company or trader to see if anyone wants to buy their stock. Sometimes the trade is done in a pre-arranged cross, while other times the stock is placed on the board and acquired in bits and pieces during the day. Since trading has occurred in a very narrow range since the beginning of April, the buying of stock from Anonymous has likely been arranged through a combination of new buyers and by existing shareholders averaging down their positions. The largest buyer has been National, followed by Red Cloud, RBC and Canaccord.
Enough said about Anonymous trading patterns, except to say that at some point they will be out of stock. Not sure why they are selling at these levels, but there is no doubt it has been happening for the last few months.
Tocvan also provided an update on Pilar's drill program this week, " A Reverse Circulation (RC) drill program is ongoing at the Company's majority owned Pilar Project in Sonora, Mexico. Since early April, a total of 1,825.4 meters have been drilled across 15 drill holes on the Project to conduct infill and step-out drilling. All samples for the first 15 drill holes are at the lab for assay. First results from the program are expected to be available soon. The Company is pleased with the efficiency of the program and encouraged by target horizons intersected."
I am encouraged by how quickly they drilled 15 holes, adding another 1,825 m of infill and step-out drilling to the digitized 3D model used to calculate a compliant 43-101 maiden resource estimate for Pilar. It is my understanding that cores are sent in batches to the lab as they are drilled, thus I anticipate we should be getting back assays soon from the first 3 or 4 holes and then the remaining holes staggered over time as they are received.
This data will be used in realtime to determine where the next holes are to be drilled in order to gain the highest degree of confidence when the maiden resource estimate is calculated. I am encouraged when a CEO states in a press release that they are "encouraged by target horizons intersected", implying they really like what they are drilling. In a previous Youtube video, Brodie stated that they drilled one hole 50 m deeper below the depth of a previously angled drill hole, thus likely extending the target horizon in this area.
It appears everything is proceeding as planned, from press release 2024-02-29, "after a year hiatus of drilling to focus on bulk sampling and land consolidation, the company will now begin systematic drilling for resource definition and additional targeting across the Pilar property. The initial focus will be on infill and step-out targeting within and adjacent to the Pilar Main zone including where previous drill campaigns successfully discovered the southern extension of the Main zone, returning 108.6 metres of 0.8 gram per tonne Au, including 9.4 metres of 7.6 g/t Au and five g/t Ag."
Further in this release, Tocvan estimates that "all-in drill costs to be $130 (U.S.) per metre which includes drilling, gold and multi-element analysis, mobilization, geological and technical support. Assay laboratory turnaround is currently ranging from 10 to 14 days allowing for rapid reporting and progressive target development."
Tocvan goes on to say in this press release that they have "been working toward a long-term arrangement with a new Sonora-based drill company, Canmex Exploraciones y Servicios (CANMEX). The newly formed CANMEX is made up of management and operators with extensive experience in Sonora including several successful drill campaigns across the company's Pilar and Picacho projects. Owned and operated by longtime Tocvan supporters Leo Wurtz and Gerardo Martinez, CANMEX has at its disposal three RC rigs, five diamond core rigs and two truck-mounted water well rigs. All of this equipment can be utilized by the company during the next phases of exploration and development. The arrangement allows for cost-effective drilling to continue across both projects with a trusted local operator known for drilling excellence and environmental stewardship."
I am mentioning the drilling relationship with CANMEX, cost of drilling, and rapid turnaround times at the laboratory as the "PERFECT STORM" for Tocvan. Sonora is a prolific area for gold and silver mines, and has subsequently attracted infrastructure such as laboratories and drilling companies to support the mining industry. Brodie Sutherland has been careful in establishing relationships as it means Tocvan can accelerate their drilling program and reach production much faster than experienced in other parts of North America, such the US and Canada.
The process of permitting for an open pit mine, which includes processing infrastructure and heap leach systems, is well underway. The recent acquisition of the Great Pilar, 94% larger than Pilar, will be instrumental in providing room for production infrastructure and additional feed-stock for the heap leach pads. It becomes obvious why the last year was spent on acquiring Great Pilar, it is truly a company maker.
I anxiously await drilling assays.and other material events that may affect Tocvan.
My dad was very pragmatic and old school, once a year he would say, "It is Mother's Day tomorrow, I trust you bought an appropriate card and gift.".
I always replied, "YES".