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Gold Summary for Aug. 10, 2020
2020-08-10 18:11 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold fell $8.10 to $2,026.70 on Monday. The TSX-V jumped 7.68 points to 747.66 while the TSX gold index dipped 4.98 points to 389.18. Victoria Gold Corp. (VGCX) had another good day adding 13 cents to $17.16 on 184,000 shares. Alacer Gold Corp. (ASR) went the other way, dropping 43 cents to $9.14 on 1.81 million shares.
The assays were eyepoppers, but the market reaction was not. John Burzynski's Osisko Mining Inc. (OSK) dropped 11 cents to $3.98 on 5.78 million shares on word that a 28-metre interval drilled deep within the Lynx corridor, on the Windfall Lake gold project in the Urban district of northwestern Quebec, has returned 202 grams of gold per tonne. The bonanza-grade result, which spans a true width of nine metres, was aided by two 0.3-metre intervals that returned 9,830 grams and 1,785 grams per tonne, but even when cut to 100 grams per tonne, the 28-metre zone still managed an average grade of 31 grams per tonne.
The assays, from 20 new holes and 12 wedges, produced plenty of glitter elsewhere, including 171 grams per tonne over 2.5 metres at Lynx and 173 grams per tonne over two metres at Triple Lynx. There were two other longer hits, both at Triple Lynx, with 21 grams of gold per tonne over 13 metres and 9.07 grams per tonne over 10.8 metres. None of the gold hits were particularly surprising, as Windfall Lake, and the Lynx veins particularly, have been regular providers of high-grade assays for the past few years, which presumably accounts for the market's ho-hum reaction.
Mr. Burzynski, president and chief executive officer, was predictably pleased with the "very impressive results" that included one of the highest-grade intercepts so far. The infill drilling program, he adds, continues to highlight the high-grade continuity within the resource area -- another reason for the muted market response -- although he does dangle some extension encouragement, noting that the resource remains open down plunge and, importantly, toward the surface.
Osisko's busy drill programs have created a significant resource at Windfall Lake. The company now lists 4.17 million tonnes indicated at 9.1 grams of gold per tonne and another 14.53 million tonnes inferred at 8.4 grams per tonne, a total of 5.1 million ounces. Lynx now accounts for 2.9 million of those ounces and it has the best grades, averaging 11 grams of gold per tonne. (Underdog, with 1.2 million ounces, averages barely seven grams per tonne, while the Main zone, with one million ounces, averages just over six grams of gold per tonne.)
With bullion soaring, gold promoters are seeking new prospects to dangle in front of the market's eager eyes. David Lane's Victory Resources Corp. (VR) succeeded, getting as high as 25 cents before ending the day up 6.5 cents to 21.5 cents on 501,000 shares. The company is acquiring an option on the Hammond Reef South project in Northwestern Ontario, which as its name implies, is south of the Hammond Reef project being worked by Agnico Eagle Mines Ltd. (AEM: $109.38).
This, says Mr. Lane, president and CEO, is "the first major advance" in the company's "objective to embark on a significant gold, silver and precious metals acquisition strategy." The cost of a 100-per-cent interest in the project is modest -- 2.75 million shares and $275,000 in cash plus $550,000 in exploration over the next three years -- which reflects the lack of promotable prior work on the property.
Not to worry, Mr. Lang points out that Hammond Reef hosts 208 million tonnes measured and indicated at 0.67 gram of gold per tonne, about 4.5 million ounces. He adds that Hammond Reef South is immediately adjacent to this big deposit and so it "may contain extensions of the Hammond Reef zone," or perhaps, some parallel structure.
Mario Bouchard's Radisson Mining Resources Inc. (RDS) was also in acquisition mode today. It gained one cent to 36 cents on 560,000 shares on word that it is acquiring the New Alger gold property from Nicole Brewster's Renforth Resources Inc. (RFR). Renforth, which added one-half cent to eight cents on 5.44 million shares on the news, gets 12 million shares and $500,000 in cash for New Alger, and it may get $1.5-million more, should Radisson subsequently sell the project for over $40-million. Further, Radisson has agreed to make a 9.6-per-cent investment in Renforth.
New Alger hosts 1.04 million tonnes indicated at 1.88 grams of gold per tonne and 3.23 million tonnes inferred at 1.81 grams per tonne, a total of 250,000 ounces. Of those ounces, 185,000 are deemed an open-pit-constrained resource. Ms. Brewster, Renforth's president and CEO, cheered the deal as one that provides cash to her company and limits shareholder dilution, while Mr. Bouchard, Radisson's CEO, was predictably enthused with the "win-win" arrangement. (There are never losers on Howe Street on the day juniors make a deal -- the disappointments invariably turn up later.)
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