Stockwatch gold today
Gold Summary for Oct. 3, 2022
2022-10-03 18:41 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold leapt $39.70 to $1,700.80 on Monday. The TSX-V added 13.85 points to 607.98 while the TSX gold index gained 6.34 points to 248.14. Most Canadian gold miners moved higher today, a few energetically. One, Argonaut Gold Inc. (AR), jumped four cents to 46 cents on 6.13 million shares -- pleasing to be sure, but recall this was a $4 stock a year ago and it traded for over $11 a decade ago. New Gold Inc. (NGD) also did well, adding 14 cents to $1.37 on 2.77 million shares -- but yes, it sold for $3 early in 2020 and for over $14 in 2011.
Today's high tide did not lift all boats. Endeavour Mining PLC (EDV) fell 25 cents to $25.23 on 1.68 million shares despite -- or perhaps because of -- the company assuring the market that recent political events in Burkina Faso are not affecting the company's operations. For those not following -- which is nearly everyone -- Burkina Faso experienced a successful coup on Friday. Judging by pictures of the recent events, the incoming rulers' opinions can be summed up thusly: colonial France bad; Russia good.
Doug Ramshaw's Minera Alamos Inc. (MAI) jumped six cents to 54 cents on 1.41 million shares on word that it has received "positive results" -- when are they ever not? -- from an independent preliminary economic assessment of its Cerro de Oro project in Zacatecas, Mexico. The dream sheet is based on a 67-million-tonne inferred resource of oxide gold averaging 0.37 gram per tonne, about 790,000 ounces.
The plan calls for an eight-year open-pit, heap-leach mine that would cost $28-million (U.S.) to build, and which would average 58,000 ounces per year. With an average all-in sustaining operating cost of $873 (U.S.) per ounce, the bottom line is attractive, with an internal rate of return of 111 per cent and a discounted net present value of $115.5-million (U.S.) after taxes.
Mr. Ramshaw, president, was predictably enthused. He lauded his team's "collective experience in mine building in Mexico" and the results of the dream sheet as "a game changer for Minera," as the company strives to reach its target of becoming a 100,000-ounce-a-year gold producer. Mr. Ramshaw acknowledged the "rampant inflationary pressures across the industry," but he touted the modest cost estimates as a "testament to Minera's smart and nimble business model."
Minera Alamos had a healthy balance sheet at the end of June, with over $15-million in working capital, but Mr. Ramshaw and his nimble crew will also have to be quick to stave off the inflationary pressures and get their mine fully proved up, financed and operating. First up, at least according to the study recommendations, are further studies and drilling to upgrade both the resource and the plan.
Dale Andres's Gatos Silver Inc. (GATO) had a good day, jumping 44 cents to $4.14 on 76,000 shares on word of an updated reserve estimate for its Cerro Los Gatos project in Chihuahua, Mexico. The new calculation, which also includes an updated resource estimate, is part of a new life-of-mine plan for the operation. Despite the happy market reaction, the new reserve reflects drops of nearly 20 per cent in both tonnage and grade above the mining depletion rate, resulting in drops in the precious metals ounce count of nearly 35 per cent -- again not counting the effect of mining.
The new reserve lists 6.07 million tonnes averaging 244 grams of silver and 0.27 gram of gold per tonne, plus 4.48 per cent zinc and 2.14 per cent lead -- a total of 47.7 million ounces of silver and 51.8 million ounces of gold. Another 1.9 million tonnes are present as a measured and indicated resource and 2.1 million tonnes are additionally inferred at Cerro Los Gatos, although all at lesser grades of precious metals, nevertheless contributing a further 13.6 million ounces of silver and 25,000 ounces of gold.
So why the good cheer? Well, it appears the market had been expecting worse. Recall that in January, Gatos's stock crashed from $13 to $4 on word that "there were errors" in the 2020 resource estimate for the project. At the time, Mr. Andres, chief executive officer, ominously predicted a potential reduction in the ounce counts of between 30 and 50 per cent, again without consideration for any mining.
Today, Mr. Andres gushes that, while these are early days -- Howe Street parlance for "don't hold me to this" -- "it appears there is potential to extend mine life as a result of significant mineralization that we have discovered in the South-East Deeps zone." That zone extends more than 300 metres below the 2020 reserve area, so it appears that the company's good news is more the result of exploratory success than an overly pessimistic view of the previous errors.
Alan Carter's Cabral Gold Inc. (CBR), which lost five cents to 24.5 cents on 755,000 shares Friday, shed another 2.5 cents to 22.5 cents on 855,000 shares today. The two-day slump follows word of an updated resource estimate for its Cuiu Cuiu project in Brazil. The deposit now holds 21.56 million tonnes indicated at 0.87 gram of gold per tonne and 19.78 million tonnes inferred at 0.84 gram per tonne, a total of 1.14 million ounces of gold. Nearly one million of those ounces are open-pittable, but just 233,000 of them are oxide gold residing in heap-leachable rock.
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