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Gold Summary for July 23, 2020
2020-07-23 18:20 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold rose another $14.60 to $1,885.70 on Thursday. The TSX-V nevertheless dropped 13.60 points to 680.20 while the TSX gold index fell 6.99 points to 375.50. Most Canadian gold miners lost ground today, although Newmont Corp. (NGT) was an exception as it added 10 cents to $87.81 on 244,000 shares. The company said today that it will pay a dividend of 25 U.S. cents in September. Pan American Silver Corp. (PAAS) went the other way, dipping $2.23 to $47.66 on 1.63 million shares.
Jean-Marc Lacoste's Monarch Gold Corp. (MQR) lost one cent to 53 cents on 3.71 million shares on word that it drilled a 14.35-metre interval averaging 13.95 grams of gold per tonne at its McKenzie Break project, just north of Val d'Or in northwestern Quebec. The assays, from another four holes, were otherwise lacklustre, with a second hole producing 5.34 grams per tonne over 7.2 metres and the two others managing just a few grams per tonne over one metre each.
Mr. Lacoste, president and chief executive officer, cheered the latest assays, stating that McKenzie Break "keeps generating very impressive gold assays and new gold zones." He was clearly enthused with the one glittering hit, which included a 0.5-metre zone that held 311 grams per tonne, and he pointed to a new zone encountered deeper within that hole, which averaged 27.15 grams per tonne over two metres. He also mustered enthusiasm for the second hole, which was drilled in an area hosting other higher-grade hits. As for the other two tests, Mr. Lacoste managed to find some pleasant words there as well, noting that "there is gold throughout this part of the property."
Monarch is now planning a new round of drilling at McKenzie Break, work that will attempt to further expand and define the outer limits of the mineralization. Mr. Lacoste is clearly expecting more good news, as the company recently expanded the property to over 5,100 hectares, an order of magnitude larger than when the company first acquired the project late in 2017 from Agnico Eagle Mines Ltd. (AEM: $92.66).
At the time, the property held a historical resource of 814,000 tonnes averaging 6.63 grams of gold per tonne and Mr. Lacoste had an eye on that mineralization -- and the existing infrastructure to get at it -- as possible feed for the company's Beacon mill. Monarch rolled out a compliant estimate two years ago, listing a pit-constrained resource of 940,000 tonnes indicated at 1.59 grams per tonne and 305,000 tonnes inferred at 1.52 grams per tonne, or about 63,000 ounces. Another 524,000 tonnes are indicated underground at 4.87 grams per tonne and 501,000 tonnes are inferred at 4.5 grams per tonne, for another 193,000 ounces.
The new assays offer encouragement that the tonnages and grades will grow, a trend that has been evident over the past year. In February, Monarch hit a 7.1-metre zone averaging 32.3 grams per tonne and a month earlier, it drilled a 2.1-metre zone averaging 26.78 grams per tonne. Indeed, Mr. Lacoste points out that the new high-grade zone that Monarch has been drilling now spans an area over 150 metres square, lying east of the existing resource estimate. As a result, the drilling to come is slated for areas beyond the bounds of the existing resource.
Also failing to elicit any enthusiasm from the market on Thursday was John Dorward's Roxgold Inc. (ROXG), which has drilled a 14-metre interval averaging 13.3 grams of gold per tonne from the Ancien zone at its Seguela project in Ivory Coast. Of course, Roxgold, which dropped nine cents to $1.54 on 3.41 million shares on the news, had a better result a month ago, when it hit a 20-metre interval averaging 28 grams of gold per tonne, also from the Ancien zone. It rolled out even more glitter in late April, with assays of up to 59.4 grams of gold per tonne over 10 metres, from Ancien yet again.
Mr. Dorward, president and CEO, applauded the "exploration success" at Seguela, which "builds our confidence that the feasibility study, due for completion early next year, will outline a larger, more robust deposit than what was defined on the preliminary economic assessment," completed in April. That dream sheet was based on 7.1 million tonnes indicated at 2.3 grams per tonne and 5.4 million tonnes inferred at 2.9 grams per tonne, or just over one million ounces. Most of that gold resides within the lower-grade Antenna, Agouti and Boulder zones, with the 6.1-gram-per-tonne average at Ancien being a key reason that Roxgold is focused on drilling there.
If the good news continues, the feasibility study could look considerably different than the eight-year, 3,500-tonne-per-day plan contemplated in the dream sheet. The $142-million (U.S.) proposal supported a discounted net present value of $268-million (U.S.) after taxes, and Mr. Dorward is looking forward to his coming feasibility study.
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