Wednesday March 18 Morning News

POSTED ON March 18, 2015 BY James Fraser
CATEGORY Dynacor Gold Mines, Fission Uranium, Rye Patch Gold, Stories,

A look at some of the headlines this morning that caught my eye and some more details on each.

Dynacor Gold Mines (DNG:TSX) - Dynacor Gold has received the final construction permit for a new gold processing plant in Peru. The new plant will have processing capacity of 300 tpd but will be designed so it can expand to 450 tpd and then 600 tpd if required. The $10 million dollar plant will be financed internally from the current cash balance of $14.2 million (Sept 30,2014).

The new plant has been strategically located in the district of Chala which is one of the most productive gold regions in Peru. The location offers the following features:

Offers easy highway access for ore producers from all over Peru;
Has ample space for tailing ponds for many years and a favourable climate;
Offers access to the Peruvian national grid;
Is located in a mining-friendly region.

Once construction is complete Dynacor plans on processing >102,000 tonnes of ore at the new plant. This will be the second plant Dynacor is operating in Peru. Huanca currently in operation processes ~85,000 tonnes per year and has been extremely successful for DNG. Huanca has allowed Dynacor to generate free cash flow and build it cash balance all well keeping a low float of only 36.2 million shares out.

I believe Dynacor was one of the first public companies to create a toll mining business. The business model has been proven to be a success and now you have several companies joining the party Inca One (IO:TSXV), Cortez (CUT:TSXV), Standard Tolling (TON:TSXV), and Cyprium (CUG:TSXV) come to mind.

Investors are liking the news this morning with the stock hitting a new 52 week high last at $2.17 up 11% on the day.

Read: Dynacor obtains final construction permit for its new gold ore-processing plant in Chala

Fission Uranium (FCU:TSX) - Fission continues to hit high grade uranium at the R600W zone which is half a kilometre west of the Triple R deposit in Saskatchewan. Assays released today have expanded the R600W zone strike length to 45 metres. Highlights of the four drill holes released include:

Strike length of mineralized trend discovered on the PL-3B conductor, which hosts the Triple R deposit, R600W and R1620E zones, increased to 2.25 kilometres;
Step-out holes, shallow depth mineralization hosted in basement rock;
Hole PLS15-364 (line 630W)
- 45.5 metres total composite mineralization over a 61.0-metre section (between 107.0 metres and 168.0 metres), including 6.44 metres total composite mineralization of (greater than 10,000 counts per second) radioactivity;
- Located 570 metres west of the Triple R deposit;
Hole PLS15-352 (line 615W):
- 56.5 metres mineralized zone (between 102.5 metres and 159.0 metres), including 12.11 metres total composite mineralization of (greater than 10,000 counts per second) radioactivity, including 11.77 metres continuous mineralization of (greater than 10,000 counts per second) radioactivity.

Ross McElroy, president, chief operating officer and chief geologist for Fission, commented: "We recently intersected high-grade mineralization at zone R600W -- a full 555 metres west of the Triple R deposit. A few step-out holes later and we have expanded the footprint of the R600W zone to the north and west and substantially increased our understanding of the geometry and tenure of the mineralization. These latest results are a clear indication that R600W is shaping up to be an important zone."

The zone RW600 is one of the four separate mineralized zones located at PLS the others being R00E, R780E and R1620E. The Triple R deposit is part of the R00E zone and the larger R780E zone.

Fission is cashed up and will be drilling into April. Plans are to release an initial PEA this summer.

Read: Fission Step Out Holes Hit High Grades; Expand Zone at R600W or Video: Brent Cook and Ross McElroy discuss good Fission Uranium news, live from the PDAC

Rye Patch Gold - (RPM:TSXV) - Rye Patch attracted my eye this morning as they have announced a 5000 metre drilling program will begin immediately at Garden Gate Pass and Patty properties. What has got me interested is in the location of these two properties which are located in Nevada in the prolific Cortez trend.

illiam C. Howald, president and chief executive officer of the company, stated: "The Cortez trend is an exciting exploration area that has tremendous upside potential. Since 1991, over 50 million ounces of gold have been discovered, mined and processed along the trend, with Barrick's 15-plus-million-ounce Goldrush deposit illustrating the potential and the prize. Our Garden Gate Pass property abuts the Goldrush discovery, and the Patty project sits to the south and in the same geologic environment along the trend. We have been refining the drill targets since 2012 and believe they pose some of the best exploration opportunities along this world-class gold trend."

The Garden Gate Pass property has similar geological feature to the growing Goldrush discovery according to Rye Patch management. The project abuts the discovery and drilling will test if RPM ground holds the extension to the deposit. If RPM hits any sniff of something like Goldrush the stock will see a substantial increase in price in my opinion. This is an exciting drill program to watch in a market that badly needs a new discovery from a junior.

Rye Patch has ~$7 million in cash and owns a 3.4% NSR on Coeur's Rochester mine so no worries about a financing.

Read: Rye Patch Drilling Targets World Class Cortez Gold Trend

Discuss in CEO.ca live

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

James Fraser

Mr. Fraser joined CEO.ca in October 2014. He is passionate about the mining industry. His passion led to co-authoring the e-book "Mining Stocks Investor Guide: A Guide to Investing in Mining Companies." He has a finance background and has completed his Canadian Securities Course (CSC) and Conduct and Practices Handbook (CPH). When Fraser is not "digging" up the latest mining stock, he can be found enjoying a wide variety of sports or travelling the world. More →

Twitter: @miningstocks

james@miningstocksguide.com

James Fraser

Twitter: @miningstocks

james@miningstocksguide.com

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