news mining

Here are a couple stories that caught my eye this morning and some thoughts on each news release.

Reservoir Minerals - (RMC:TSXV) - A corporate update this morning from Reservoir and their partner Freeport-McMoRan on the Timok project in Serbia. A 2015 budget of $18.7 million will be used to move project forward towards the completion of a scoping study. The $18.7 million dollar budget will be fully funded by Freeport-McMoran as part of the earn in agreement. Freeport currently is the operator with 55% ownership but can earn up to 75% by completing a feasibility study. The budget will include infill drilling, exploration drilling, as well as technical studies. Timok in my opinion is one of the best discoveries made in the last several years in the mining space. An Inferred Mineral Resource shows the high grade nature of the deposit with 65.3 Mt @ 2.6% Cu and 1.5 g/t Au, including 6.8 Mt @ 9.6% Cu and 5.9 g/t Au. Infill drilling will focus on increasing the confidence within the "Upper Zone" while exploration drilling will test the potential for more mineralization in the "Lower Zone" which is open to the west,north, and east. Reservoir is well funded with C$37 million in the treasury after closing $30 million at $5.75 per share in 2014. Management owns 6.3% of the stock with other major shareholders including Jing Bao (10.5%), Adrian Day Asset Management (5%), BlackRock (4.75%), J.P. Morgan (4.7%), Sprott (4.1%), and Xiangguang Copper (3.5%).

Read: Reservoir Minerals Executes Joint Venture and Shareholders Agreement with Freeport and Outlines the 2015 Exploration Budget for the Timok Project in Serbia

Kaminak Gold - (KAM:TSXV) - Kaminak is out with the 2015 feasibility budget for the Coffee project in the Yukon. The Coffee project has robust economics demonstrated in the 2014 PEA which show an after-tax NPV@ 5% of  C$330 million and a after-tax IRR of 26% at $1250 US gold.

Eira Thomas, CEO commented: "The Coffee feasibility study is more than 50% complete and remains on track for completion in early 2016. As we move forward into the engineering phase of the study, we are pleased to have assembled a strong, diverse team of leading industry professionals led by JDS Energy and Mining. Further, Kaminak is pleased to announce that following the $21 million bought deal financing announced last month the study is now fully funded."

Total costs to complete the feasibility study are rising with a budget increasing $6 million to $36.5 million. The rise in costs is due to ongoing studies that could enhance the project economics in the PEA.

The 2015 budget will be $30 million can be broken down as follows:

  • $21 million for the feasibility study.
  • $3.6 million on permitting.
  • $5.4 million for exploration work, G+A, and marketing.

Kaminak has one of the world's highest grade undeveloped heap leach gold projects. In my opinion this immediately puts the company as a takeover candidate where it is getting increasingly rare to find solid economical projects at/near the current gold price.

Read: Kaminak Announces $21 Million, 2015 Coffee Project Feasibility Budget; On track for completion early Q1 2016 or Two Mining Legends invest in Kaminak Gold

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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.