newsFeb25

Here are some news releases this morning that caught my eye and a comment on each.

Midway Gold - MDW.T -  Midway is a Nevada based gold company with three excellent development projects. One of which Pan is expecting to commence production shortly. News today was on the Spring Valley project which is owned 75% by Barrick and 25% by Midway.The press release today was about Barrick publishing an initial resource estimate for the project. The Barrick resource is for an initial measured and indicated resource of 1.3 million ounces (70-per-cent basis) averaging 0.66 gram per tonne and an inferred resource of 600,000 ounces (70-per-cent basis) averaging 0.62 gram per tonne. Midway has calculated its own resource which can be found here. Barrick will continue to move the project forward with a $11 million dollar budget for 2015 with $10 million of that being spent on internal pre-feasibility study and other related project development expenditures.

Update - Several readers are wondering about the difference in size of the resource. The main difference lies in the cut off grade used by each company. Midway is reporting 4.1 million ounces in the measure and indicated category at .21 grams per tonne cut off. Barrick on February 18th as part of fourth quarter and year end results provided an update on the project.  Barrick reported  an initial measured and indicated resource of 1.3 million ounces (70-per-cent basis) averaging 0.66 gram per tonne and an inferred resource of 600,000 ounces (70-per-cent basis) averaging 0.62 gram per tonne for Spring Valley at the end of 2014.

Why the considerable difference?

Since both companies do not provide estimates at the same cut off grade we do not know for sure. It is likely they are similar though when you take into account the cut-off grade as Barrick uses ~3x the cut off grade of Midway. 

I tend to side with Barrick personally on this one as a .21 cut off grade is pretty low grade even for an open pit heap leach project.

Investors will have to wait until a prefeasibility study is published to determine economics and the grade that will likely be mined. Barrick expects to complete a prefeasibility study before the end of 2015.

Note: This is my personal opinion.

Spring Valley Resource (Midway)

MidwaySpringValley

Source: NI 43-101 Technical Report on Resources, Spring Valley Project, Pershing County, Nevada (January 2015). Base Case assumes a cutoff of 0.21 g/t

Source Exploration- SOP.V - Source has announced that a drilling contract has been signed to drill 2000m at the Las Minas project (Mexico) in early March. Source had some success on the project in 2014 hitting several good drill holes. The stock hit a high of 15 cents in July but lost momentum and is now trading at the 8 cent level. Source announced on February 23rd that the recent $800,000 private placement is fully subscribed and they will be increasing it to $1.01 million.

Canarc Resource Corp - CCM.T - Canarac has finally been able to find a partner for the high grade New Polaris project in northern British Columbia. After years of trying to sell/joint venture the project a deal has been made with Panterra Gold out of Australia. Panterra has the option to earn 50% of the project by spending $10 million on pre-development activities within 30 months. New Polaris hosts a NI-43101 resource of 1.1 million total ounces at a grade of 12.3 grams per tonne (February 2007).

North American Palladium - PDL.T - North American Palladium has released a new reserve estimate for the Lac des Iles mine (LDI) located in Ontario, Canada. Proven and Probable reserves now stand at a combined 5.9 million ounces of contained palladium at a grade of ~2 grams per tonne. The LDI mine is one of only two primary palladium producing mines in the world and has been operating since 1993.  PDL stock price has doubled this year since getting as low as 15 cents after a challenging couple of years. Investors will be watching to see if North American Palladium can turn a profit. The balance sheet showed only $4.1 million in cash at the end of 2014.

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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.