Friday morning news – Luna Gold, Silver Wheaton, Cordoba Minerals

POSTED ON May 08, 2015 BY James Fraser
CATEGORY Cordoba Minerals, Luna Gold, Silver Wheaton, Stories,

Aurizona Gold Mine (Image Luna Gold)

A look at my top press releases in the mining world this morning.

Luna Gold - (LGC:TSX) - Fantastic news for struggling gold company Luna Gold shareholders this morning announcing a $20 million debt and $10 million dollar equity financing with Pacific Road Resources Funds. LGC is not out of the woods yet though as part of the closing of the financing requires another $10 million to be raised via equity.

Pacific Road will provide Luna with a $20-million senior secured note bearing interest at a rate of 10 per cent per annum, payable quarterly in arrears in cash or shares at Pacific Road's election.

Luna if they can close these financings and restructuring with Sandstorm will hopefully be in a position to restart the Aurizona gold mine in Brazil. A 18 month work program will be put in place with the goal being the restart of operations.

Marc Leduc, Luna's chief executive officer, said: "The fundamentals of the Aurizona asset remain strong, and the economics of the project will be enhanced with the replacement of the old 17-per-cent gold stream with the much lower NSR royalties and optimization of the mining plan. We have a new team of senior managers in place; that includes a committed core of existing Brazilian management that together are ready to move the project development forward. With the closing of both the Pacific Road financing and the Sandstorm restructuring, the company expects to have the financial resources and working capital necessary to fund the work programs currently outlined. Additionally, the company has two long-term committed shareholders/partners in Pacific Road and Sandstorm to further strengthen our financial and technical mining expertise. Finally, we will extinguish our existing bank debt and rebuild the capital structure of the company."

I had never heard of Pacific Road so I looked into them and found out they manage two funds the US$320 million Pacific Road Resources Fund I and the US$476 million Pacific Road Resources Fund II (the Funds). Pacific Road is based out of Australia and most investments are Australian companies but they do have a Vancouver office.

A tough 5 year chat for Luna shareholders. Luna is a stock I would personally avoid at these levels.

At higher gold prices over $1400 I would reconsider. What do you think?

Read: Luna Gold arranges $30-million financing with Pacific

Silver Wheaton - (SLW:TSX) - A record quarter production wise from the worlds largest streaming precious metals company. First quarter production was 10.4 million silver equivalent ounces (6.3 million ounces of silver and 55,100 ounces of gold). Net earnings came in at $49.4 million a decrease of 30% year over year as silver prices are much lower.

Silver Wheaton was busy in the quarter purchasing an additional 25% of gold production from Vale at the Salobo mine in Brazil for an upfront payment of $900 million.

"Silver Wheaton had a strong start to 2015, with record production in the first quarter and the addition of more gold from one of our cornerstone assets. For the first time in our history, Silver Wheaton produced over ten million silver equivalent ounces in one quarter. While the quarterly sales volumes did not reflect the record production, we recognize that this is simply a timing issue and we fully expect to see increased sales as the year progresses," saidRandy Smallwood , President and Chief Executive Officer of Silver Wheaton. "Our record first quarter production was driven by the recent acquisition of an additional 25% of gold from the Salobo mine in Brazil, as well as the first contributions of gold and silver from the Constancia mine in Peru. We expect both of these streams to realize further gains over the coming year, as the Salobo mine is currently ramping-up production after expanding in the middle of last year and the Constancia mine achieved commercial production on April 30^th of this year. We also continue to see some very good opportunities to add additional accretive ounces to our existing portfolio. Overall, the first quarter represents a strong start to what we believe will be a prolonged period of significant organic growth for Silver Wheaton without requiring any further capital."

Royalty companies continue to be a favourite investment method of mine for investing in precious metals. The business model is "rock solid" and has shown to outperform.

Silver Wheaton has a strong organic growth profile going forward and great leverage to the silver price. While waiting for the silver price investors pocket a dividend that is linked to operating cash flow.

Hard to beat Silver Wheaton for a buy and hold investor looking for precious metals exposure.

Read: Silver Wheaton Reports Record Production Of Over Ten Million Silver Equivalent Ounces In The First Quarter Of 2015

Cordoba Minerals - (CDB:TSXV) - Cordoba has announced a partnership with private mineral exploration company High Power Exploration Inc. HPX is controlled by mining entrepreneur Robert Friedland. HPX has agreed to make a strategic investment in Cordoba and will have the option to enter into a joint venture with the company to earn up to a 65-per-cent interest in Cordoba's highly prospective San Matias copper-gold project in Colombia by financing the project and completing a feasibility study.

HPX will purchase 7.3 million units at 14 cents for proceeds of $1,022,000. After closing HPX will own ~11% of Cordoba's shares.

Also in the agreement is for a separate JV which will have HPX finance $2.5 million in work over the next 17 months at the San Matias project. HPX will be the operator of the project. HPX also has additional earn in requirements to earn up to a 65% interest.

"This partnership with HPX is a significant development for Cordoba as it provides the company with a strong strategic shareholder and access to an experienced exploration and development team instrumental in delineating and advancing several world-class mineral deposits, which will complement Cordoba's team that has successfully drilled and discovered high-grade copper-gold mineralization at San Matias," commented Mario Stifano, president and chief executive officer of Cordoba.

"HPX is pleased to be able to gain an interest in what we consider is one of South America's best copper-gold exploration projects," said Mark Gibson, HPX's chief executive officer. "We look forward to bringing our leading-edge exploration technology to explore San Matias and leverage our team's experience in having discovered numerous significant orebodies."

Exciting news for Cordoba shareholders as they partner with a very significant partner who will be funding exploration efforts. Investors should see a fair amount of work done on the San Matias project in the next couple years.

Read: Cordoba arranges financing, JV with High Power

Watch: Cordoba Minerals (TSXV:CDB) 2015 Subscriber Summit Presentation

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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.

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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