Experts such as Eugen Weinberg, Head of Commodity Research at Commerzbank, predict a precious metal comeback and that the gold price should rise again soon. Indeed, the gold price started a strong countermovement yesterday, while the USD index lost significant ground in yesterday's trading session. A new upward trend in the gold price will trigger a fireworks display of gold stocks, as these have corrected above average in the last few weeks and now offer a favorable entry and post-purchase level.
One gold stock that has been relatively stable over the past few weeks is Ximen Mining Corp. (TSX.V: XIM; WKN: A2JBKL). The company today announced additional laboratory results from the 2020 exploration program near the ultra-high-grade Kenville Gold underground mine in southern British Columbia, Canada.
At the end of today's press release, Ximen mentioned that regulatory approval for the Kenville mine launch and new adit construction is expected in the spring. Ximen received a $ 5 million (approximately $ 6.4 million CAD) non-dilutive injection of cash in early February , with the cash being paid out upon receipt of regulatory approval to immediately bring the Kenville Gold Mine into production. The delay in granting approval was the main reason for the poor stock price performance in recent months - but this is exactly the opportunity for a massive stock price increase.
Today's press release ( German / English ) makes it clear that the Kenville deposit is larger than expected. Rock samples collected near the Kenville Mine in 2020 impressively show that high-grade gold, silver and copper are present directly on the earth's surface:
Full version / source
Vollversion / Quelle / Ximen meanwhile controls large areas around the Kenville gold mine.
Ymir-Protection gold-silver mine
With 1 3.1 g / t gold , the best laboratory results were achieved from the old Ymir-Protection gold-silver mine . However, the high-grade gold was not found in the mine itself, but in the mine tailings. This shows impressively that the previous mine operators only mined gold sporadically and did not recognize high-grade gold ore. In the years 1899-1973, the Ymir-Protection Mine produced a total of 10,719 ounces of gold, 82,824 ounces of silver (plus zinc and lead) from only 14,788 tons of ore. This corresponds to an extremely high grade average grade of 23 g / t gold and 174 g / t silver. And obviously it was the case that the old mine operators could only mine the highest grade gold and had to leave some gold behind in the mine itself and in the spoil pile.
Full version / source / samples from the mine tailings at the Ymir-Protection Mine returned 13.1 g / t gold.
California gold-silver mine
At the California mine , Ximen also achieved positive laboratory results with 8.4 and 3.8 g / t gold . The mine was operational from 1910-1947 and produced a total of 2,258 ounces of gold and 3,942 ounces of silver (plus zinc and lead) from just 1,454 tonnes of ore mined. This corresponds to an extremely high grade average grade of 48 g / t gold and 84 g / t t silver . The California mine is mineralized with gold more than twice as high as the Ymir-Protection mine . Records show that in the western end of No. 3 mine shaft there is still a large ore block that is 91 m long and 1.1-1.5 m wide and has an average grade of 29 g / t gold. That's almost 1 ounce of gold per ton!
The cross-section through the California mine shows that ore was only mined sporadically and large parts have not yet been explored:
Full version / source / cross section through the California mine.
Full version / Source / In an open rock hole (old mine shaft?) Near the California mine, Ximen was able to discover 8.4 g / t gold.
Good Hope gold-silver mine
At the Good Hope Gold-Silver Mine , Ximen was able to detect 2.82 g / t gold and 1.61 g / t silver . The mine produced approximately 90 ounces of gold and 80 ounces of silver from only 48 t of mined ore as of 1911. This corresponds to an average grade of 59 g / t gold and 53 g / t silver . Further exploration work can also demonstrate larger gold-silver deposits here.
Full version / Source / At the Good Hope Mine, Ximen found quartz-pyrite rock with a value of 2.82 g / t gold.
Conclusion & outlook
The new laboratory results confirm that there is a lot more gold and silver around the Kenville underground mine than previously thought.
It was therefore a logical step for the Ximen management to acquire additional properties around the Kenville mine over the past few months. For financiers and strategic partners, it is immensely important that a prospective gold producer not only owns a promising mine, but controls the entire area. Because once production begins, on the one hand more explorers will be drawn to the area and, on the other hand, a manufacturing company must think long-term and have ore replenishment options at an early stage. Only then does a budding producer become a takeover candidate for large gold mining companies and / or attractive for strategic partners / financiers such as the Swiss metal trading company, which provides funds of around $ 6.4 million CAD (non-dilutive;refundable in gold after start of production).
With only 72 million shares currently on the market, Ximen as a budding gold producer has an extremely narrow share structure - and the stock market valuation is only 19 million EUR. The $ 5 million USD loan must be repaid with around 3,000 ounces of gold . Ximen announced last week that it would use the funds to mine a 10,000 t bulk sample and build the new tunnel in the Kenville underground gold mine, among other things .
Assuming a conservative gold grade of half an ounce of gold or 15.6 g / t, the upcoming 10,000 t bulk sample would contain around 5,000 ounces of gold ( thanks to high recovery rates of up to 99% ) with a current sales value of around $ 11 million .CAD . After deducting the loan repayment (in gold), around $ 4.4 million CAD would remain in the cash register. A great deal for the company and for us shareholders!
As soon as the approval has been received ("within 8 weeks", according to the press release in mid-February), the loan will be paid out and the bulk sample can be dismantled immediately, thereby making money. After an initial 10,000 t bulk sample, Ximen could apply for a 50,000 t bulk sample , from which around 25,000 ounces of gold can be extracted (current sales value around $ 54 million CAD ). For a long time I can not imagine the Ximen share at such a low price level and would not be surprised by a strong upward trend starting today with a new all-time high in a few weeks.
Chris Anderson, President and CEO of Ximen, commented on News in mid-February: "This non-dilutive financing is an important milestone in the development of the Kenville goldmine into production. After months of negotiations, we are delighted to be pleased with a experienced company that understands our industry and that enables us to take the final step towards meeting our cash flow needs. "
During the last few months, Ximen has not only increased its fleet of vehicles for the Kenville mine start and brought it into shape (so that mining can begin immediately after the approval has been granted), but has also diligently repaired the "257" tunnel entrance of the formerly producing Kenville underground mine, All official requirements met and applications submitted with detailed documentation for a mine start.
All that was missing was the approval of the mining authority. It turned out that due to COVID-19, faster processing of the Ximen applications was not possible. So there were annoying delays that made themselves felt with a falling Ximen share price. The Ximen share has lost value since summer 2020 and is therefore listed at a relatively cheap level - a long-term price increase over the next few weeks should follow, because:
With the success of modernization work at the Kenville Mine Portal, it is convenient to have access to the existing 257 adit to mine the high grade gold resources identified by drilling in 2009. In total there are still 373,238 ounces of gold ready for mining, which at the current gold price have a sales value of $ 811 million CAD :
With an average of 22.9 g / t gold is this allows an exceptionally high degree of resource that very high profit margins. This has become very rare worldwide, as most underground mines have much lower gold grades. In addition, Ximen tested tests last year that the gold recovery rate was 99%. This means that almost all of the gold can be extracted from the rock, with Ximen conservatively using a mixture of high and low grade ore with a conservative average grade of 17.1 g / t gold . Not even the 5 highest grade underground gold mines in the world have such a high recovery rate:
Source: Mining.com / Gold recovery rates are from company reports ( here , here , here , here , here )
New tunnel construction
The 373,238 ounces of gold that can be mined with the 257 adit are by no means all that is in Kenville. With the construction of a new tunnel, Ximen wants to mine additional gold deposits. Ximen is secretly planning to mine gold from 2 tunnels at the same time in order to inspire shareholders with growth prospects after the start of production of the 257 tunnels.
The resources listed above are based solely on drilling in the 257 adit in 2009, which has been followed by further drilling programs to discover new gold veins at depth to the west and south of the existing adits. These "new" resources, most of which have already been confirmed by drilling, are to be mined with a new gallery that has yet to be built and will be several hundred meters long to reach these deposits. However, there should also be gold-rich zones on the way there, which can be mined with large samples during the tunnel construction and converted into cash.
The following graphic shows how easily the 2009 resource can be mined with the existing 257 tunnel and how the new tunnel to be built ("new decline") will remove the new gold deposits in the west (" New Target West Area ") and south (" New Target South Area ") is to dismantle:
Full version
The past few months have been difficult times for Ximen shareholders as regulatory approval has been delayed and no more news has come out of the Kenville gold mine. British Columbia was one of the hardest-hit provinces in Canada by COVID-19 restrictions. There were major delays at rock analysis laboratories and mining authorities. The situation seems to have improved noticeably, however, because Ximen is expecting approval within the next 8 weeks. Since Ximen is able to state a tight time frame for the expected approval to be granted, this indicates a confirmation from the authority.
The $ 5 million non-dilutive loan enables Ximen to get a substantial amount of cash on favorable terms in one fell swoop that is needed to accelerate Kenville production even faster.
With a current market valuation of just $ 27 million CAD and only 72 million shares outstanding, it's rare to find a budding gold producer as cheap as Ximen. The time is now (over) ripe to really give full throttle. This should now be reflected in a sustained rise in the share price, as regulatory approval is only a (short) question of time.
From a technical point of view, the Ximen share is at the beginning of a new upward trend, as the consolidation within the (green) triangle formation has been completed and the dissolution movement out of the triangle (so-called thrust) has already begun and, by definition, aims at the resistant triangular high (> $ 1.10 CAD) into a new support so that another uptrend can start. A massive share price increase is expected for the coming weeks:
Full version / updated chart (15 min. Delayed): https://schrts.co/hTzxUABj