Post by
lifegoeson on Jul 08, 2023 1:09pm
The quiet days of the "Summer Resource Cycle".
We are in what I term - the quiet days of the "Summer Resource Cycle" - where everyone is on vacation. A great time to average down and build positions as people get impatient, think the "SKY is FALLING" and sell cheap stock. Tocvan traded 96,000 shares yesterday and closed at $0.50, whereas for the week, it traded 344,000 shares at an average price of $0.478. This tells me as people exited, others were happy to buy the stock.
I just got back from a trip to Ontario where I dogged the dreaded 401 traffic of Toronto, I even noticed a clip by Tom Cruise the other day where he said the traffic was crazy.
Brokers are essentially asleep as there are few people to call. I think everyone will agree, it is hot, El Nino is forming and the hottest recorded average temperature around the world was set again yesterday, the Atlantic is at record warm for this time of year, and the arctic is experiencing elevated temperatures. Of particular interest to the resource sector is that forest fires in Canada have put exploration on hold in many areas, especially the lithium plays in Quebec.
It is also important to note that gold has been in a downward trend for weeks, creating doubt and selling pressure in the gold sector. But I believe an important event may happen at next month's BRICS meeting (Brazil, Russia, India, China and South Africa) to establish a gold-backed currency. If approved, I suspect we will see a dramatic increase in gold prices over the next few years as banks will begin to buy and traders will play their games to push buyers into the gold market. This may be the beginning of a "GOLD supercycle". This bodes extremely well for Tocvan and any other undervalued and advanced gold resource stocks.
Tocvan Ventures is tucked away in Sonora, Mexico where it is also hot, but business continues. In a press release this week, Tocvan provided an update of the bulk sample leaching process.
From Press Release, "Tocvan Ventures Corp. has provided an update and sampling results from a bulk sample being completed at its Pilar gold-silver project in Sonora, Mexico. The leaching process has concluded, and the company's technicians are now washing and prepping the leach pad for final sampling, decommissioning and precious metal recovery. The leaching process was active for 44 days, extracting gold and silver from over 800 tonnes of bulk sample material. Sampling of the bulk sample material was completed in May (news release, May 16, 2023), results from ALS (Hermosillo) provided an average grade of 1.9 grams per tonne gold and 12.7 g/t silver. An on-site laboratory was used to sample the pregnant solution during the program with weekly duplicate samples sent to certified labs LTM (Hermosillo) and SGS (Durango). LTM (Hermosillo) will provide an official calculated head grade and recovery of gold and silver based on its final analysis of the data. The company is pleased with the progress of data capture throughout the process, and encouraged by the early indications of successful gold and silver recovery....".
The results are pending from the 800 ton bulk sample. It will be interesting to see the recovery of gold, versus the head grade tested while they crushed the bulk sample, where the average head grade was 1.9 g/t of gold and 12.7 g/t of silver.
Further in the release, ...".... As previously announced, an additional 350 tonnes of crushed material and 250 tonnes of raw bulk sample are available for gravity recovery and later agitated leach testing. Samples collected from the fine fraction of screened material not included in the heap leach pile averaged 2.1 g/t Au and 14.8 g/t Ag. The fine fraction along with additional bulk sample material will be used in testing gravity recovery methods with later agitated leach, as suggested by the leaching study completed by LTM, showing potential for the high recovery of both gold and silver. A new agitated cyanide bottle roll test by LTM of 20 mesh material has returned 81-per-cent recovery of gold and 99-per-cent recovery of silver after a 72-hour retention time. Over the retention time, a moderate low sodium cyanide consumption of 0.47 kilogram per tonne and moderate CaO (calcium oxide) consumption of 1.72 kg/t were recorded. LTM recommends bottle roll studies be completed for three different grind sizes (100 mesh, 140 mesh and 200 mesh) to evaluate the impact to extraction...."....
It is important to understand the finer material was not included in the larger bulk sample, thus adding to the ABSOLUTE value of gold recovery potential when added to the bulk heap leach sample. Further testing with an agitated cyanide bottle roll test returned 81% recovery of gold and 99% recovery of silver. Other mesh sizes will also be used to determine the best process going forward when they design the final production process that will be used, thus this process is ongoing.
Brodie Sutherland stated, "We are extremely excited to have successfully completed this important step and await the final results imminently. The data we have received so far has all been very encouraging and suggests heap leach recovery at Pilar will match or exceed the recoveries recorded at neighbouring open-pit mines. In addition, continued studies of the gravity and agitated leach recovery methods look to prove an even stronger case for high gold and silver recovery at Pilar through advanced techniques."
My takeaway from this week's press release is simple, Brodie Sutherland is methodically proceeding with advanced testing to determine the best production method for Pilar. Early indications suggest recoveries will be equal to or better than local operating heap-leach mines, further strengthening the overall economic value proposition for Pilar.
You might be thinking, why is Brodie conducting these studies at this stage of exploration rather than drilling? My takeaway from this is again simple, the reason they can collect such a large bulk sample, over 1,200 tons, is that mineralization starts at the surface (this is not possible from deeper deposits without considerable cost to extract, so generally left to the end). Thus it is prudent to conduct these studies now as it will provide a faster path to production and an earlier snapshot into the future economics of Pilar. The bottom line, consistent grades of gold at surface and deeper with over 23,000 metres of drilling, suggest Pilar has the potential to become a major producer in Sonora.
The first full week of summer is over, enjoy the summer, but keep an eye on your favourite stocks as the summer progresses as there are often price pullbacks that allow for averaging down and building a larger position at better pricing. In the case of Tocvan Resources, since there are less than 40 M shares outstanding and thinly traded, there will be bargains for those who take advantage of yearly downturn cycles.
Something my dad always told me and I have never forgot, "I can't tell you how many times I have sold due to impatience, only to find a few days, weeks or months later, the price has recovered, and I miss out when the stock runs because I am no longer in the play." He taught me patience.