Excerpt from Stockwatch Gold-Today
Gold Summary for Nov. 24, 2021
2021-11-24 19:04 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold, within hailing distance of the $1,900 mark last week, continued its retreat today, dropping another $1.40 today to $1,788.30. The TSX Venture Exchange broke free, adding 10.99 points to 970.48 while the TSX gold index lost 1.11 points to 288.41. Most Canadian gold miners moved lower today. Victoria Gold Corp. (VGCX), which got to $18.50 early last week, suffered its seventh consecutive loss today, dropping 17 cents to $16.16 on 237,000 shares. Centerra gold Inc. (CG) managed a 15-cent rise, ending the day at $9.35 on 878,000 shares.
Nolan Watson's Sandstorm Gold Ltd. (SSL) dropped six cents to $8 on 429,000 shares. The company has a feasibility study of its Hod Maden project in Turkey. The project is supported by a reserve of 8.7 million tonnes averaging 8.8 grams of gold per tonne and 1.5 per cent copper, about 2.45 million ounces of gold and 287 million pounds of copper. The study proposes a 13-year, $309-million (U.S.) mine that would run at about 2,200 tonnes per day, averaging 156,000 ounces of gold and nearly 20 million pounds of copper per year. The bottom line is pleasing -- they usually are -- with a discounted net present value of $1.05-billion (U.S.) after taxes.
This study is "a major turning point for not only the project, but for Sandstorm as well," enthused Mr. Watson, president and chief executive officer. Sandstorm acquired the project in 2017, and Mr. Watson says that even then, "we knew it would be a major growth catalyst for Sandstorm," adding that the results of the study "spell out just how transformational it will be once in production."
That acquisition of a 30-per-cent interest came via the company's takeover of Mariana Resources Ltd. and at the time, Mr. Watson said that the merger could "unlock the inherent value" of Hod Maden and "deliver the optimal outcome for shareholders without incurring further equity dilution. (He meant that Sandstorm intended to convert the participating interest into a gold stream.)
Unfortunately, today's feasibility study is not quite as optimal nor transformational as a prefeasibility study delivered in 2018. That 11-year plan proposed a $272-million (U.S.) mine running at 2,500 tonnes per day, enough to support a $1.1-billion (U.S.) net present value after taxes with gold at just $1,300 (U.S.) an ounce and copper at $3 (U.S.) per pound. Today's study is based on gold at $1,599 (U.S.) an ounce and copper at $3.19 (U.S.) per pound.
Not to worry: Mr. Watson is nevertheless "excited to see this incredibly robust project make a big leap towards production." So long as Sandstorm is not coughing up cash to make it so, investors appear willing -- just not excited -- to tag along with the Turks, who own a majority interest through -- limber up your tongue here -- Lidya Madencilik Sanayi ye Ticaret AS.