With economic weakness in the U.S. pushing a likely rate hike out to next year (at the earliest), gold continues to show signs of life. The yellow metal was last closing in on US$1,190 an ounce after trading as low as $1,080 in July.
It also didn't hurt that Paul Singer of Elliott Management described gold as "overlooked" at the SOHN investment conference in Tel Aviv yesterday.
“In a world where the value of paper money is affirmatively aimed at being degraded by central bank policy, it’s kind of surprising to me that gold can’t catch a bid,” the billionaire money manager said (Bloomberg story here).
Gold's move is providing a lift to the share prices of both gold producers and juniors as well as the spirits of junior mining investors who have grown accustomed to a relentless bear market. And active juniors that have money for exploration are positioned to benefit from any lift-off in the gold price.
Erdene Resource Development
Erdene Resource Development announced new high-grade intercepts from the Discovery Zone at its flagship Altan Nar gold-polymetallic project in southwest Mongolia this morning.
Highlights included 38 metres of 2.8 g/t AuEq, including 9 metres of 9.2 g/t AuEq, and 53 m of 2.0 g/t AuEq, including 5.8 m of 7.0 g/t AuEq.
The near-surface results help reinforce continuity of mineralization as well as increase confidence in the potential location for an open-pit development. Erdene believes there is excellent expansion potential as mineralization in the Discovery Zone remains open at depth and along strike. Altan Nar is a 5.6-km by 1.5-km mineralized trend with 18 gold and polymetallic targets, only two of which (Discovery and Union North) have been drilled by Erdene.
On March 31 the company announced a maiden resource estimate at Discovery and Union North of 147,000 oz AuEq indicated at 2.5 g/t AuEq and 102,000 oz inferred at 2.1 g/t AuEq, at a 1.0 g/t AuEq cut-off. Gold makes up between 75-80% of the resource and about 90% of the mineral resource is within 150 metres of surface.
Erdene's plan is to advance Altan Nar to a production decision, with the focus on a lower-capex, scalable mine to start. Metallurgical testing showed high gold recoveries of up to 88% using conventional processing methods.
"Each successive program is strengthening our confidence in the economic viability of a potential expedited pit development at Discovery Zone and Union North," said Erdene CEO Peter Akerley.
Erdene is also preparing to drill a new high-grade discovery nearby, Bayan Khundii, where grab samples announced Oct. 5 included a 4,380 g/t rock sample and trenches grading up to 55 g/t.
Yukon explorer Klondike Gold is an exploration play unlike the others, on everything from revenue generation (it leases property to Todd Hoffman of popular Discovery Channel show GOLD RUSH) to more mundane details (news releases on its website have a blue background).
Klondike also has money to drill, and today the company announced the first assays from four of 19 diamond drill holes completed at the Lone Star property on the outskirts of Dawson, Yukon. Highlights included:
EC15-01: 4.6 g/t Au over 7.65 meters (7.65 meters true thickness) from 3.8m to 11.45m.
EC15-02: 2.3 g/t Au over 7.2 meters (5.7 meters true thickness) from 4.4m to 11.6m.
EC15-03: 5.3 g/t Au over 7.6 meters (6.1 meters true thickness) from 4.4m to 12.0m.
EC15-04: 5.7 g/t Au over 3.0 meters (3.0 meters true thickness) from 21.1m to 24.1m.
Most of that gold occurs in quartz veins, and the goal of Klondike's program is to identify more near-surface quartz veins that host gold mineralization. Assays for the remaining holes should be ready over the next month.
Klondike Gold CEO Peter Tallman describes the four holes released today as "among the less exciting targets drilled" but noted they still encountered good gold grades and widths.
“Thus far, the 2015 diamond-drilling program has succeeded in validating the Company’s exploration model for the discovery of new gold-bearing vein arrays and has vastly improved the Company’s technical understanding of important gold lode-deposit formation characteristics for the district," said Klondike Gold CEO Peter Tallman. "Or, in plain terms: the hunt is on.”
Shareholders pushed the stock down 2 cents, or about 15%, to 11 cents in early trading.
Klondike Gold owns a 100% interest in 1,406 quartz claims and 14 crown grants covering 250 square kilometers underlying the western half of the Klondike placer goldfields.
The discovery of bonanza-grade gold near Klondike Gold's property in 1896 sparked a gold rush that saw an estimated 100,000 prospectors flock north in the following three years. An estimated 20 million ounces has been pulled from the placer goldfields in the years since, and placer mines are still very active in the area.
On that note, season 6 of Gold Rush kicks off tomorrow night.
Guyana gold developer Sandspring Resources (SSP-V) has launched a fall exploration program including a 3,700-metre diamond drill program and a regional geochemical survey at its Toroparu project.
The goal is to find new mineralized systems within the Puruni shear corridor that hosts Toroparu, which has a 4.1-million ounce proven and probable gold reserve.
The exploration program should be completed over an 8-week period, with results expected in early 2016, the company says.
Sandspring brought some financial and promotional muscle on board in June when it announced a business combination with PNO Resources, a Frank Giustra shell. PNO raised $4.5 million in a private placement (Giustra participated) and PNO also loaned the new company $800,000, bolstering its treasury as it works toward a feasibility study. Sandspring already has a gold and silver stream in place with Silver Wheaton.
“Although market conditions remain challenging, Sandspring has been re-energized following the acquisition of PNO Resources, with a stronger balance sheet and additional expertise at both the management and Board level,” said Sandspring CEO Rich Munson. “Sandspring’s team is focused on adding shareholder value by prudently managing the Company’s treasury and continuing to advance the Toroparu project with modest drilling and exploration programs.”
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Erdene Resource Development and Klondike Gold are clients of CEO.CA, which makes us biased. All investors should verify facts and do their own due diligence.