Rocks And Stocks News Report On Press Releases Of Interest
In this report we discuss news from McEwen Mining and Kootenay Silver.
Below are two companies I follow closely that had news out over the past couple of days that I would like to highlight for readers. I have only taken portions from the news and added some of my own observations. You will find links to the news releases for additional information in each company’s write-up.
McEwen Mining
Goldcorp’s Red Lake Mine was transformed when they drilled under the near the surface mine hitting the bonanza grade portion of the mine. Over the past year, the valuation of McEwen Mining has doubled due to the success they are having with their subsidiary McEwen Copper. The gold mining side of the company is pretty much being ignored. I think this is a mistake because at their projects in Ontario, they can take a page out of the Goldcorp playbook to grow with the drill rig.
Last month, they had an exploration update from their Stock project that returned several impressive intersections of high-grade gold. Then they announced their quarterly report, what stood out to me was the amount they are spending on exploration drilling at the various gold projects. On November 21, they announced they are doing a flow through financing, they will issue 1.9 million shares to raise CAD $22 million. As this is a flow through financing, the funds have to be used for exploration on the ground for Canadian projects.
It is clear to me that McEwen mining intends to spend a lot on exploration on their Ontario projects. They are located on the Destor-Porcupine fault which is a prolific region known as the ‘Golden Highway.’
Orogenic gold mines are known for high grades of gold and low costs to mine. You need certain key things to check the boxes. You need the right age of rocks, greenstone belts that are very old rocks. You also need deep crustal faults, you can think of them as deep cracks in the earth that gold bearing fluids from very deep can make their way closer to the surface. Then you need high-grade gold mineralization.
McEwen Mining’s projects in Ontario have all these boxes checked, just like Goldcorp did at their Red Lake Mine. The Red Lake Mine was in production for many years, the game changer event was when they drilled deeper and tagged into the bonanza-grade gold. That happened at around 1000 metres deep, then it just kept going. That is the nature of orogenic gold systems, they have very deep roots.
In the October exploration update they had some key highlights. One is that the potential impact of the reported results is that it could lead to shorter payback of the costs to mine and add longer mine life. Below are the highlight holes with images that show where they came from.
Drillhole SM23-308: 38.5 g/t Au over 7.4 m Down-plunge of Stock West. In this image you can see the headframe at the surface, in the brown is the current underground workings and blue is the preliminary ramp design to access deeper into the system. What stands out to me is that they have plenty of gold as they get deeper into the system which only gets them down to around 450 metres and that both the Shallow Plunge Zone and the Steep Plunge Zone are open at depth.
Drillhole SM23-201: 21.6 g/t Au over 5.1 m in the Ramp Portal Zone. In this next image they zoom into the ramp portal zone. It highlights a lot of high-grade gold, right as they start the ramp. They plan to start that ramp next month. They believe that as they are building the ramp they can start mining early into that high-grade gold to create cash flow to partially pay for the cost of the Stock ramp.
Drillhole SM23-281: 98.8 g/t Au over 0.9 m in Footwall Timiskaming Sediments. I love bonanza-grade gold that you can see at the bottom of hole S23-281. An interesting thing about this hole is that it is in the sediments in grey. They have drilled 100 holes into that sediment unit and because it wasn’t believed to be in the right unit to carry gold was never sent in for assaying. They are having a close review of that core and plan to send some of it in for assaying.
As you can see in these images, they have spent a lot on exploration drilling, are planning to spend more on additional underground works, and they have plenty of additional targets for future drilling.
Please note that I have presented details that stand out to me and mentioned why, there is a lot more information in the news releases that you can find here. I encourage you to review the news releases and while on their website you can find plenty of additional information to do your homework on the company.
I’m very impressed with McEwen Mining’s subsidiary McEwen Copper as they have a copper project that ranks it in the top 10 of undeveloped copper projects world wide that also ranks it in the lowest quartile of costs to mine the copper. It is such a high quality project that it overshadows their gold mines, and I don’t think the gold mines should be ignored.
They are following the Goldcorp playbook to unlock near term and long term potential of their gold mines with the drill rig. I don’t think many are giving them a chance to have major breakthroughs with the drill rig, I disagree.
Kootenay Silver
One of my daily tasks is to review drilling news looking for results that stand out to me. On several occasions the drilling results from Kootenay Silver’s Columba project in Mexico caught my attention. What prevented me from featuring them in the reports is that they also had a lot of stock outstanding.
On November 9, they announced that they had consolidated their shares on the basis of 1 post-consolidation share for 10 pre-consolidation shares, effective on November 14. Now they have much less stock outstanding at a little under 46 million. Then on November 21, they announced their latest drilling results.
The headline from the November 21 news release caught my attention, “Kootenay Silver Drills 1,142 gpt Silver Over 2.37 Meters Within 510 gpt over 9.67 Meters at Columba High Grade Silver Project.” The news release had more details about the recent drilling that you can find here.
The Columba project is in the state of Chihuahua of Mexico. Near the prolific Sierra Madre Trend. It had seen historical mining around 100 years ago, but no modern exploration.
The underground workings enabled them to go underground to take samples and as the epithermal veins outcrop they took surface samples. They also have done a significant amount of drilling. All of this work has returned a lot of exceptional assay results.
As I was doing my homework on the company I was impressed by the cluster of epithermal veins on the project. As you can see in the image below, highlighted in yellow is the cluster of epithermal veins on their ground. They have plenty of veins to explore where there was historical mining and in the remaining veins.
Now that the company has less stock out, and all the great drilling results, I plan to reach out to the company to learn more and see if they would come on our shows at Rocks And Stocks News for an interview.
All the best,
Allan Barry Laboucan
Rocks And Stocks News does not make buying or selling recommendations. The reports are for information purposes only. Sponsors pay a fee to Rocks And Stocks News for content creation. This funding helps cover the costs of research and reporting on the sponsors and picks that aren’t sponsors. Before making any investment decision it is important for you to speak with your financial advisors to consider your risk profile. It is also important to do your homework. To help in that process, Rocks And Stocks News means to be a gateway by doing reports and interviews of management of sponsors and picks. The reports and interviews should not be considered investment advice. Allan Barry Laboucan is the founder and owner of Rocks And Stocks News, he has worked in the mining sector since 1993 and has been reporting on the sector since 2005. He has worked with and been mentored by very talented geoscientists in geology, geochemistry and geophysics. He uses the skills he has picked up during his career to assess sponsors and picks in the reports. Whether a company is a pick or a sponsor they go through the same filter and are reported on when important news is made that Allan Barry Laboucan wants to discuss on the Rocks And Stocks News platform. He may own shares in sponsors and picks for investment purposes.