"Commodity Supercycle" - will Tocvan benefit?It was a great week for Tocvan, closing Friday at $0.48 on 121,000 shares. In total, Tocvan traded over 780,000 shares for the week.
The significant increase in volume and share price this week was clearly in response to the release of assays from the first 4 holes drilled at Pilar, speculation around ongoing drilling, and anticipation of the next set of drill results. A total of 1,825.4 metres were drilled in 15 holes with eleven holes currently pending analysis. Exciting days ahead as Tocvan is planning several thousand metres of drilling leading to a maiden resource estimate and production using an open pit mine and heap-leach operation.
From the press release this week, "Results today are highlighted by drill hole JES-24-77 which returned 56.4 metres of one gram per tonne Au from 18.3 metres vertical depth, including 9.2 metres of 5.3 g/t Au. The entire length of the hole returned anomalous gold values averaging 76.3 metres of 0.8 g/t Au. A high-grade centre to the mineralized zone returned 5.3 g/t Au and 3 g/t Ag over 9.2 metres, including 1.5 metres of 26.7 g/t Au. Like the Main zone, the 4-T trend is exposed at surface along a rounded ridge top, allowing the potential for a low strip ratio during early development. The hole tested near-surface mineralization and was stopped at 76.3 metres, mineralization at 4-T remains open at depth".
A detailed description of the 4 drill holes reported this week is described below. "JES-24-77 hole targeted near-surface mineralization vertically below the 4-T prospect. The prospect gets its name from four trenches completed historically across a known area of artisanal underground workings. The prospect was first drilled in 1996 by Santa Catalina, a Lundin company evaluating Pilar. First drilling hit 7.5 metres of 3.3 g/t Au and 31 g/t Ag in drill hole K-16 (hole was stopped at 7.5 m). Follow-up drilling over 15 years later by a private operator returned 30.5 metres of 0.7 g/t Au (JESP-18). In 2021, Tocvan drilled 15.3 metres of 1.1 g/t Au along the same ridgeline 300 metres to the northwest. The result released today from JES-24-77 is the most significant result along the 4-T trend drilled to date and ranks as the fifth best drill result ever from the over 60 drill holes Tocvan has completed thus far at Pilar. JES-24-77 was a vertical drill hole testing the down-dip projection of surface mineralization, successfully intersecting several zones of low-grade gold and silver and one high-grade zone. Follow-up work is to be completed along this developing trend".
It is important to understand the other 3 holes reported were exploratory, used to test step-out areas to the south, "Drill holes JES-24-74 and 75 tested an area southeast of the Main zone where local surface mineralization hosted along structures and veins had returned 5.1 g/t Au and 24 g/t Ag. Although no significant mineralization was recorded in these holes, anomalous values of silver warrant further investigation. Drill hole JES-24-76 tested the southernmost flank of the 4-T trend, alteration and veining were recorded in logging although no significant mineralization was recorded".
My takeaway from the press release this week is nothing short of positive. In an effort to put the 15 holes in perspective and what is still to be reported, one needs to examine where the holes are located. I suggest going to Tocvan's website and review the recent figure/map from this press release.... https://tocvan.com/home/pilar-project
The figure on Tocvan's website shows 7 of the eleven holes pending were drilled around Main Pilar to the 4-T zone. Hole JES-24-77 just reported is located on the north east edge of 4-T. This was a vertical hole and produced one of the best holes in this location. I am very excited to see assays from the 7 holes pending shown on this figure; 3 located in the Main Zone, 2 in North Hill, and 2 holes in and to the north of 4-T. Given previous drilling, I am confident we will see interesting if not excellent results.
The results from the 15 holes drilled thus far will be essential in determining the next drill hole locations.
Brodie Sutherland goes on to state, " "We are extremely excited with the results today highlighting the additional resource potential that exists along the several parallel trends to the main zone which we believe can be tied together into a sizable area," commented Brodie Sutherland, chief executive officer. "Today's results are the best from the 4-T trend to date and rank as a top five drill intersect in Tocvan's history of drilling at Pilar. Gold mineralization intersected in hole JES-24-77 is close to surface, projecting to workings exposed along a low rolling ridgeline much like the Main zone. This allows for low strip ratio potential in future mine development, reducing costs for extraction. We are confident the 4-T trend will continue to develop into another key resource area for Pilar, being just 400 metres from the heart of our Main zone. Part of our bulk sample was extracted from 4-T adding to that confidence of resource viability. More results from the trend are pending. As for our exploration drill targets, it is still early in testing these areas and the data available suggests more work is needed to fully evaluate and target mineralization. Surface mapping and geochemistry strongly suggests the known trends extend to the southeast and northwest, while new trends have yet to be tested. Recent sampling across the expansion area supports this thesis, indicating much more is to be uncovered."
I think it is safe to say Pilar is a robust at surface deposit, and the Greater Pilar has several newly discovered targets which could potentially add to the overall resource.
You have probably been asking where did Brodie drill the other 4 holes that weren't identified on the diagram/map I mentioned above? The answer is a bit above my pay grade, but if I were to guess, I would have drilled them in strategic areas of high grade surface mineralization that were recently discovered in the Greater Pilar, i.e. the source of placer gold. Brodie did say in a previous press release at the start of this drill program would look at the evaluation of new discoveries and targets, including Placer mining corridors consisting of a 3 km corridor with multiple targets.
I think it is well worth revisiting Brodie's statement in a press release on April 18th about finding the source of placer gold and why I think this area is a logical target area in this drill program.
"Over the past three years placer mining by local workers have ramped up activities in the Pilar area, most notably just north of Pilar where workings now extend 3.5 kilometres up a dry creek bed. Placer miners have focused on loose unconsolidated material that can easily be extracted and screened with an excavator. Most operations consist of one excavator operator and three 20-tonne haulage trucks used to transport material to a nearby sluice box for quick gravity recovery of the gold. The placer activity has provided an obvious vectoring tool toward areas potentially shedding gold from larger source rocks. Through geological mapping and sampling above these placer activities, the company has quickly been able to pinpoint the primary source for the placer gold. An area 800 metres by 700 metres has been identified as the source zone with the highest-grade samples collected so far adjacent to new road development and placer activities. Mineralization is described as hosted in quartz veins, silicified hydrothermal breccias and faults associated with altered andesite host rocks similar to those mapped at the Main zone. Sample highlights include 5.5 g/t Au with 80 g/t Ag on trend with artisanal mine workings and shafts. The company looks to further evaluate mineralization along these trends with the areas to the north and east remaining open to further gold-silver potential."
The big story is silver rallied nearly 6% on Friday moving over $30 and gold again rocketed above $2,400 as commodities catch fire, with analysts seeing no end in sight for either gold or silver. It seems as though the stars are starting to line up for Tocvan. Brodie continues to deliver great drill results, however, I think the best results are yet to come. I am getting excited since the publishing of a compliant 43-101 resource estimate and future production will align perfectly with surging gold and silver prices.
As my dad often said, "once the commodities start to play, this will trickle down first into the more advanced resource plays". I often think of what he said when he was alive as it was exactly what I experienced back in the late 90's and early 2000, and what looks like has started again in late 2023.
I believe we are at the start of a "commodity supercycle" which will eventually drive junior share prices higher. I remember back in the last 90's, when the last supercycle started, resource stocks exploded in price. Speculators drove penny resource stocks to record prices, and more advanced stocks exploded over $5 and $10 and often higher. It was an exciting time in the stock markets. I often made multiple trades a day, it was all about timing and gambling as stocks were overvalued and no one wanted to be left holding the bag. Then speculation and FOMO (Fear of Missing Out) was over and resource stock prices came crashing back to earth as the supercylce balanced out, millions were made and millions where lost during this period.
A “commodity supercycle” is commonly described as a period of consistent and sustained price increases lasting more than five years, Supercycles occur because of the long lag between commodity price signals and changes in supply. The most recent commodity supercycle started in 1996 and peaked in 2011, driven by raw material demand from rapid industrialization taking place in markets like Brazil, India, Russia and China.