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Canadian Miner Advancing One of the World’s Few ‘Pure Play’ Silver Projects

Source: Rick Mills for Streetwise Reports   03/08/2021

Rick Mills of Ahead of the Herd delves into the investment metrics of the silver market and explains why he thinks Dolly Varden’s prospect is a good bet."Native silver," found in the Earth’s

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This article was originally published by Streetwise Reports

Source: Rick Mills for Streetwise Reports   03/08/2021

Rick Mills of Ahead of the Herd delves into the investment metrics of the silver market and explains why he thinks Dolly Varden’s prospect is a good bet.

“Native silver,” found in the Earth’s crust on its own, is relatively rare. More commonly, it is mined alongside gold, or as a byproduct of zinc-lead ore. There are currently only 75 “pure play” silver companies, most of whom have projects in Chile, Argentina, Mexico and Peru.

The rarity of silver and gold becomes apparent when we consider how little of both have been mined throughout history—just 190,000 tonnes of gold and 1.6 million tonnes of silver. Or, in ounce (oz) terms, 6.1 billion oz of gold and 51.3 billion oz of silver. All the gold ever mined in the world could fit into a cube 21.6 meters on each side, and all the above-ground silver could fit into a 55m cube.


All of the above-ground silver could fit into a 55-meter cube.

While most of the world’s mined gold is still around, either cast as jewelry, or smelted into bullion and stored for investment purposes, the same cannot be said for silver. It’s estimated that 60% of silver is utilized in industrial applications, leaving only 40% for investing. Of the 60% used for industrial applications, almost 80% ends up in landfills.

Despite silver being about 17.5 times more plentiful than gold in the Earth’s crust, silver and gold have roughly the same amount, ~2.5 billion ounces, available for investment purposes. However, since very little gold is used by industry, it trades as an investment commodity—prices moving up and down in relation to factors like the U.S. dollar, inflation, interest rates and sovereign bond yields.

In comparison, silver commands a relatively small amount for investment, just 40% of supply. Because over half of supply is needed for industrial applications, silver trades more like an industrial metal than an investment commodity.

This also explains silver’s volatility. Because the investment market for silver is so small (60% is locked up in industrial uses) prices swing up and down wildly, at relatively low volumes. For this reason, investors nicknamed silver “the devil’s metal.”

Silver prices

Silver last summer gained an astonishing 35%, as investors sought shelter from pandemic turmoil and low interest rates, while industrial demand for the metal recovered in some parts of the world. Its July performance, seen in the 1-year chart below, made silver the darling of the commodities complex.

The story behind its success—we were among the first to predict the potential for a silver breakout—was one of two demands, reflecting silver’s role as both a monetary and an industrial metal. There was also a supply narrative to silver’s rise, with respect to COVID-related output reductions at silver mines in Peru and Mexico, from which 40% of the world’s silver is produced.

Silver jumped to $28.32/ounce in August 2020, its best performance in seven years, and though prices retreated last fall, silver bounced higher in December, finishing the year up an impressive 46%, more than doubling gold’s 22% gain.

Despite pulling back in January and February, due mostly to expectations of better economic conditions and the recent rise in sovereign bond yields (ie. US Treasuries), silver and gold prices are expected to recover.

We know from previous articles that certain metals have done very well under government-mandated COVID restrictions. In countries where the virus got into the mining workforce, mines were shut down temporarily, impacting 2020 production. This happened in South America, including top copper producers Chile and Peru, and the number 1 silver mining country, Mexico. When combined with robust demand from China, the top metals consumer, the prices of copper, silver, zinc and nickel, just to name a few, had nowhere to go but up.

The silver outlook is extremely positive due to tight supply, combined with strong monetary and industrial demand drivers.

Hey Big Spender

The American government has already spent $4.5 trillion on COVID, not including the $1.9 trillion aid package currently before Congress, and the Federal Reserve has added around $7 trillion to its balance sheet.

To pay for these expenditures, the Fed printed so much money that the M2 money supply increased the most since 1943—when the U.S. was at war with Nazi Germany and tripled its military spending.

The national debt is $28 billion and clearly going higher, with most of the spending promises not yet put into action.

President Biden’s economic recovery package, expected to be unveiled this month, has as its centerpiece the biggest infrastructure spending commitments since Roosevelt’s New Deal. It includes roads, bridges and broadband internet access, with progressive Democrats eyeing much more, ie., an expansion of Obamacare and a public sector jobs program.

When campaigning for president, Biden proposed $2 trillion for economic rebuilding, so we expect the infrastructure bill to contain at least that much.

Then there’s his Clean Energy Plan, another $2 trillion program, to decarbonize U.S. electricity in 15 years, and create a net zero-emissions economy by 2050.

This big-spending environment is bound to be good for gold and silver prices. Not only is it inflationary, on the scale of historical spending imperatives like the New Deal of the 1930s or the Second World War, but the kind of spending we are talking about will increase the debt-to-GDP (gross domestic product) ratio, and lower the U.S. dollar (in an earlier article, we showed the close relationship between debt-to-GDP ratios and gold).

Supply Deficit

The two waves of COVID-19 that hit Latin America last year, impacted some of the biggest silver mines in the world.

In Peru, among the companies affected were Trevali Mining Corp. (TV:TSX; TV:BVL; TREVF:OTCQX) and its Santander silver mine, Hochschild Mining Plc’s (HOC:LSE) Inmaculada, and Fortuna Silver Mines Inc.‘s (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) Caylloma.

Investment projects such as Anglo American Plc’s (AAUK:NASDAQ) $5 billion Quellaveco, Minsur’s $1.6 billion Mina Justa and Chinalco Mining Peru’s $1.5 billion Toromocho expansion were delayed.

In Mexico, the world’s largest silver producer, a surge of COVID-19 cases last March led to the suspension of non-essential services. Among the companies forced to temporarily halt their operations, were Newmont Corp. (NEM:NYSE), Argonaut Gold Inc. (AR:TSX), Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ), Sierra Metals Inc. (SMT:TSX), Excellon Resources Inc. (EXN:TSX; EXLLF:OTCPK) and Alamos Gold Inc. (AGI:TSX; AGI:NYSE).

As a result of COVID, the Silver Institute predicted a 13% decline in silver production from Latin America in 2020—equivalent to 67 million fewer ounces. The global tally amounted to 6% fewer ounces mined last year compared to 2019, according to the U.S. Geological Survey (25,000 tonnes vs 26,500 tonnes).


Source: USGS

Given supply and demand factors, Capital Economics estimates the silver market will remain in a small deficit, right through to 2022.

Industrial Demand Drivers

When gold prices approach or retake highs reached last summer, silver prices will likely follow; the white metal’s dual-demand drivers, being both a monetary and an industrial metal, has some analysts predicting it will outperform gold in 2021.

Analysts at Capital Economics think silver prices should gain momentum on the back of ongoing fiscal stimulus in China, and greater industrial activity which drives around half of annual silver consumption. They point out the latter will be helped by governments investing in green energy, including solar panels which contain silver paste.

The solar power industry currently accounts for 13% of silver’s industrial demand.

More and more silver will be demanded for its use in solar photovoltaic (PV) cells, as countries move further toward adopting renewable energy sources. Around 20 grams of silver are required to build a solar panel. The Silver Institute predicts 100 gigawattas of new solar facilities will be constructed per year between 2018 and 2022, which would more than double the world’s 2017 capacity of 398GW.

All that solar will be a major boon for silver.

CRU expects PV manufacturers to consume 888 million ounces of silver between now and 2030. That’s 51.5 million oz more than the combined output from all the world’s silver mines in 2019.

5G technology is set to become another big new driver of silver demand.

Among the 5G components requiring silver, are semiconductor chips, cabling, microelectromechanical systems (MEMS), and Internet of Things (IoT)-enabled devices.

The Silver Institute (SI) expects silver demanded by 5G to more than double, from its current ~7.5 million ounces (Moz), to around 16 Moz by 2025 and as much as 23 Moz by 2030, which would represent a 206% increase from current levels.

A third major industrial demand driver for silver is the automotive industry. While copper and battery metals are usually thought of as the main beneficiaries of electrification, it appears the white metal will get swept up in the EV growth story. SI anticipates that, due to the evolution of hybrid and battery electric vehicles, the auto industry is expected to absorb 90 million ounces of silver by 2025, rivaling silver consumption in photovoltaics, currently the largest application of global industrial silver demand at 98 Moz this year. Automotive demand in 2021 is projected at 61 Moz.

A recent Silver Institute report says battery electric vehicles contain up to twice as much silver as ICE-powered vehicles, with autonomous vehicles requiring even more due to their complexity. Charging points and charging stations are also expected to demand a lot more silver.

Golden Triangle

While most of the world’s silver (Ag) is mined in Latin America and China, British Columbia should not be overlooked as a past and future Ag producer. The province is endowed with one of the richest mineralized regions on the planet, in the Golden Triangle of northwestern BC.

With over a century of mining history, the triangle has been the site of three gold rushes and some of Canada’s greatest mines, including Premier, Snip and Eskay Creek. Other significant and well-known deposits include Brucejack, Galore Creek, Copper Canyon, Schaft Creek, KSM, Granduc and Red Chris.

The Golden Triangle takes its name from a 500-kilometer belt of mineralization that stretches from the British Columbia-Yukon border in the north, to the town of Kitsault, just southeast of the port of Stewart, BC. The Kitsault area is historically associated with molybdenum and silver production.

When production started at Eskay Creek in 1994, it was the highest-grade gold mine in the world. The operation produced over 3 million ounces of gold at an average grade of 45 grams per tonne (g/t), and 160 million ounces of silver, at 2.2 g/t, before shutting down in 2008. However, the ore that has been left is valuable. A recent PEA (preliminary economic assessment) shows a 4 Moz gold-equivalent resource grading 4.4 g/t, which is quite high grade for an open pit.

Seabridge Gold Inc.‘s (SEA:TSX; SA:NYSE.MKT) KSM is considered the world’s largest undeveloped gold-copper porphyry deposit. It hosts 38.8 million ounces of gold and 10.2 billion pounds of copper in reserves, with an initial 44-year mine life production plan. The project spans four deposits: Kerr, Sulphurets, Mitchell and Iron Cap.

The Brucejack Mine commenced production in 2017 and, at 16.1 g/t, is one of the highest-grade gold mines to have opened in recent years. The underground gold and silver mine has estimated reserves of 4.2 million gold ounces, and a mine life of 13 years.

Other large deposits/mines worth mentioning include Schaft Creek, a joint venture between Teck Resources Ltd. (TCK:TSX; TCK:NYSE) and Copper Fox Metals Inc. (CUU:TSX.V) that hosts Proven and Probable reserves of 5.6 billion pounds of copper, 6 Moz of gold and 52 Moz of silver; and Red Chris, an open pit mine developed by Imperial Metals Corp. (III:TSX). Imperial opened the mine in 2015 and sold it four years later to Australian gold miner Newcrest Mining Ltd. (NCM:ASX), for $804 million. According to Imperial, Red Chris produced 71.9 million pounds of copper in 2019, 36,741 ounces of gold, and 133,879 oz of silver in 2019, and will keep producing until at least 2043.

Lately there has been a resurgence of interest in the Golden Triangle, with the excitement driven by:

  • New road, power and port infrastructure built by the BC government
  • Receding glaciers revealing fresh mineralization
  • Improved relationships between mining/exploration companies, the BC government and the region’s two First Nations groups
  • New technologies allowing geologists to gain a better understanding of the Golden Triangle’s complex geology

The rocks underlying the triangle host a variety of mineral deposits, including gold, silver, copper and molybdenum. Situated within the Sulphurets Hydrothermal System, known to host one of the world’s largest concentrations of metals, the Golden Triangle contains an estimated 188 million ounces of gold reserves, including 47.5 million in the highly certain proven and probable category; 1.2 billion ounces of silver with 214 Moz proven and probable; and 55 billion pounds of copper of which 10B is proven and probable.

Geologists believe most of the mineralization was formed because of volcanism during the Late Triassic and Early Jurassic periods. Importantly, all the mineral deposits have one characteristic in common: they are all found near surface, at depths no greater than 2,500 meters. This allows for relatively easy access, especially with the help of receding glacial ice cover.

Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCMKTS)

The story of Dolly Varden Silver’s involvement in the Golden Triangle, particularly the area south of Stewart, began in 1910, when the Dolly Varden Mine was discovered by prospectors of Scandinavian descent.

Its namesake project is a volcanogenic massive sulfide (VMS) and epithermal-style pure silver deposit, with a small amount of lead and zinc.

The Dolly Varden properties, consisting of two past-producing silver deposits, became part of British Columbia’s mining lore, featuring assays as high as 2,200 ounces (over 72 kg) silver per ton, with historical production of 20 million ounces Ag, between 1919 and 1959.

In fact, the Dolly Varden/North Star Mine was among the richest silver mines in the British Empire, producing 1.3 Moz at an average grade of 1,109 g/t Ag between 1919 and 1921. An interesting historical tidbit: The mine was opened by mining engineer Herbert Hoover, who would go on to become U.S. President.

In 1956, the Torbrit Mine was the third largest silver producer in Canada, outputting 18 Moz at 466.3 g/t Ag, plus base metal credits, between 1949 and 1959, when the mine closed. A large part of the Torbrit deposit was left intact due to silver prices falling below $0.85/ton.

Dolly Varden’s goal is to try and extend Torbrit through some step-out drill holes, and to get into the high-grade, 500g to 1kg material. There are early indications of other Torbrit “look-alikes” along a 4.5-km trend. Through drilling, Dolly Varden wants to prove up another Torbrit and drastically increase the size of the resource, which in all categories is about 44 Moz at an average grade of 300 g/t.

A key part of the exploration thesis is the fact that the rocks hosting the mineralization on the property are the same age as some of the other large deposits found in the Golden Triangle including Eskay Creek.

“The exciting thing about the Dolly Varden project is that it is hosted in the Hazelton formation, a Jurassic package of volcanic rocks that went through the same expansion or release of pressure called the Eskay Rift period,” says head geologist Rob van Egmond, in a recent AOTH video interview. “That was the time frame when a lot of the metallogenic deposits throughout the whole Golden Triangle were emplaced, such as Eskay Creek. After that rifting there was a compressional period which formed a lot of the structures that host the epithermal veins. And a lot of those epithermal veins were probably active to form the deposits that were on the seafloor, VMS-style.”

CEO Shawn Khunkhun likes to compare Dolly Varden Silver to Skeena Resources Ltd. (SKE:TSX.V), which has seen a significant re-rating commensurate with its success so far in developing the historical Eskay Creek Mine.

“Our story is very similar,” he says. “They’re awakening Eskay Creek, we’re re-awaking the Dolly Varden silver mine. It’s got a rich history, it’s one of the richest silver mines in the world, it’s produced 20 million ounces of high-grade silver, and we’re endowed with 44 million ounces in a cornerstone high-grade pure silver resource, and we’ve got a technical team that has the ability to unlock further discoveries in this trend.”

Last year the company raised $27 million through two tranches ($2.5M from Hecla Canada, a major shareholder with 11% ownership.) Eric Sprott soaked up CA$2.3 million of a $0.33 financing, the billionaire resource investor upping his stake in Dolly Varden (DV) to 19.9%. Institutional investors have come into DV in a big way—they own 50% of the 129.9 million shares outstanding (144.4 million fully diluted) and include Frank Holmes’ US Global Investors and Sprott Asset Management.

It’s unusual for a junior Dolly Varden’s size to be so tightly held by institutional and notable shareholders. In fact, when all is said and done, retail only owns 12%.

Emerging Silver District?

The Dolly Varden project comprises 8,800 hectares (88 square km) in the Stewart Complex of northwestern BC, which hosts base and precious metals deposits. The property has four historically active mines—Dolly Varden, Torbrit, North Star and Wolf.

On the map below, note that Dolly Varden’s project is in the bottom corner of the Golden Triangle. It lies to the west of Hecla Mining’s (HL:NYSE) Kinskuch project, and borders Fury Gold Mines‘ (FURY:TSX) Homestake Ridge, where a PEA envisions a 13-year mine with peak annual production of just over 88,000 gold-equivalent ounces. More than 275 holes totaling over 90,000 meters have been completed on the Dolly Varden? or Homestake? property.

Hecla’s Kinskuch is an early-stage project with the potential for discovery of epithermal silver-gold, gold-rich porphyry and VMS deposits.

According to Dolly Varden Silver, only 3% of the Dolly Varden property has been explored in detail, leaving tons of upside for shareholders.

“Despite the long production history and exploration history we’re still making new discoveries,” says van Egmond. “We’ve done structural re-interpretation of the whole project, and we’ve drilled across faults and found offsets to the main Torbrit deposit, within 50m of the old drilling from the ’50s. So, there’s still a lot of exploration upside near deposit, as well as all the way up the trend to the northern end of the property, we have four and a half kilometers of these Hazelton rocks with a strong potassic alteration signature, as well as sodium depletion, so that’s indicative of VMS heat cells working within that alteration, so we look forward to exploring up the rest of that belt.”

Map of BC’s Golden Triangle region, with Dolly Varden’s property in the
bottom corner.

An updated NI 43-101 resource estimate completed by Dolly Varden in 2019 revealed 32.9 Moz silver in Indicated resources and 11.477 Moz Inferred, adjacent to the historical deposits. Drilling and underground work that went into the resource estimation confirmed that the mineralization occurs as two styles: bedding-parallel VMS, similar to that mined at Eskay Creek, as well as cross-cutting epithermal mineralization similar to that being developed at Pretium Resources Inc.‘s (PVG:TSX; PVG:NYSE) Valley of the Kings deposit (Brucejack Mine).

According to DV, both the Eskay Creek and Valley of the Kings deposits are located on the same structural trend to the north of Dolly Varden’s ground. Dolly Varden represents the silver end of these styles of mineralization and includes the base metals lead and zinc.

Could Dolly Varden represent the southern end of a silver district that extends northward? It seems likely and further exploration may prove it.

2020 Drill Results

Over the past three years, structural re-interpretation and aggressive drill testing have yielded new discoveries of high-grade silver mineralization proximal to areas with 100 years of exploration history. Since 2017, Dolly Varden has drilled over 66,000 meters in 213 holes.

Last October, Dolly Varden published results from 2020 exploration, which included step-out drilling at the Torbrit Mine, and infill drilling to expand the high-grade zones within the deposit. The step-out highlights were 351 g/t over 12.75m, including a higher-grade 1,083 g/t Ag intercept over 2.7m; and 135 g/t Ag over 37.5m, including 906 g/t over 1m. The best infill drill hole featured 302 g/t Ag over 31.95m, including 642 g/t Ag over 4m.

A total of 11,397 meters in 40 drill holes were completed in 2020, 19 of which were in the Torbrit area. The rest were reconnaissance and exploration drill holes, testing multiple areas on the property.

In February, the rest of the assays came in, with highlights that included 310 g/t over 6 meters, a standout 304 g/t over 45.82m, and 306 g/t over 5.10m. Higher-grade core within those intercepts featured 648 g/t over 6.06m, 1,595 g/t over 1.06m, and 1,290 g/t over 0.6m.

“We are seeing consistent intervals of high-grade silver mineralization at the Torbrit Silver deposit that has the potential to support economically attractive underground bulk-mining technics, while at the same time each successive drill programs continues to demonstrate that the deposit is open for expansion,” states CEO Shawn Khunkhun, in the Feb. 16 news release.

He adds that the company “cannot rule out a gold discovery consistent with the plus million-ounce resource at the adjacent Homestake property in addition to the potential for another Torbrit like silver discovery,” given encouraging geological and geochemical results for gold and copper mineralization from the four-kilometer-long trend to the northwest of the silver deposits.

Conclusion

Dolly Varden is conducting exploration in the Golden Triangle at the perfect time for the silver market, which, as mentioned, is supporting higher prices, and a renewed sense of purpose, as an essential metal for the modern economy.

Unlike its sister precious metal, gold, silver has both a monetary and an industrial function, meaning that prices can move on demand drivers that mesh with the prevailing trends of the modern industrialized world. For silver, that means the growth of solar power (photovoltaics), electric vehicles, and 5G.

As the prospects for economic growth continue to brighten, as vaccine rollouts accelerate, we expect silver prices to catch a bid on strengthened industrial demand. And with trillions of dollars in new government spending related to economic stimulus and recovery, about to be unleashed in the United States alone, precious metals will surely react to inflationary concerns, especially considering that the Federal Reserve is severely restricted in how high it can raise interest rates to cool the economy. The Fed has already stated it will let inflation run higher to accelerate growth and bring down record-high unemployment, and expects to keep interest rates close to zero for the next two years—both policies are good for precious metals.

Dolly Varden is a tightly held stock—85% of the outstanding shares are with insiders, Hecla Mining, Eric Sprott and institutional investors—that is well financed and comes with a strong management and technical team. The company finds itself in the rare position of being a pure-play silver explorer, in a space where most silver production comes from lead-zinc deposits or is a by-product of gold mining.

This makes Dolly Varden the perfect vehicle for rising silver prices.

Dolly Varden Silver Corp.
TSXV:DV, OTC:DOLLF
CA$0.69/share, 2021.03.01
Shares Outstanding 126,022861M
Market cap CA$89.6M
DV website

Richard (Rick) Mills
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Richard (Rick) Mills, AheadoftheHerd.com, lives on a 160-acre farm in northern British Columbia. Richard’s articles have been published on over 400 websites, including: Wall Street Journal, USA Today, National Post, Lewrockwell, Montreal Gazette, Vancouver Sun, CBSnews, Huffington Post, Beforeitsnews, Londonthenews, Wealthwire, Calgary Herald, Forbes, Dallas News, SGT report, Vantagewire, India Times, Ninemsn, Ib times, Businessweek, Hong Kong Herald, Moneytalks, SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of Mining Analysts.

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Precious Metals

Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

First things first, when is a wealth tax not a wealth tax?…

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Stocks, Bonds, Bitcoin, & Bullion All Bid As Billionaire Tax Threat Builds

First things first, when is a wealth tax not a wealth tax? When Janet Yellen says so…

The proposal under consideration from Senate Finance Committee Chairman Ron Wyden (D., Ore.) would impose an annual tax on unrealized capital gains on liquid assets held by billionaires, Treasury Secretary Janet Yellen said Sunday on CNN.

“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Ms. Yellen said.

But House Speaker Nancy Pelosi told CNN:

“We probably will have a wealth tax.”

But markets either a) don’t believe a word of it (given the relationship between all these billionaires as benevolent overlords of the political class), or b) don’t give a shit as The Fed will always be there…

And nowhere is this craziness more obvious than here. While Trump’s SPC (DWAC) stalled today (after rallying 800% in 2 days), TSLA and BKKT took over the crown of momentum-driven insanity kings

TSLA topped the trillion-dollar market-cap level for the first time (TSLA was up more than 1 GM today) on headline about HTZ ordering 100,000 TSLA vehicles…

Surpassing FB (ahead of tonight’s earnings) to join the ‘cuatro comas’ club…

Source: Bloomberg

All on the back of a massive gamma bomb.

@Stalingrad_Poor exclaimed:

“TSLA call options strikes up $10,000 in a single day. I’ve never seen this in my life”

NOTE: If unrealized gains are taxed as income (as several Democrats have indicated), Elon Musk would face a $30 billion tax bill for his gains this year!!

And BKKT soaring over 160% on its partnership with Mastercard on crypto rollout…

Bitcoin and Ethereum were both up today on the Mastercard news (and Neuberger Berman has linked up with BlockFi).

Bitcoin topped $63,500…

Source: Bloomberg

And Ethereum rallied back above $4200…

Source: Bloomberg

All the major US equity indices were higher today, led by Nasdaq and Small Caps. The Dow lagged but still closed green…

Record intraday (and closing) highs for The Dow and S&P today.

On a side-note, the S&P/TSX Composite rose again today – a record 14th straight daily gain (a record that stood for 102 years)…

All thanks to yet another major short-squeeze….

Source: Bloomberg

Utes and Financials lagged today while Consumer Discretionary and Energy ripped…

Source: Bloomberg

Treasuries were mixed today with yields lower across the curve aside from 30Y…

Source: Bloomberg

The yield curve (5s30s) steepened back into its recent range…

Source: Bloomberg

The dollar rallied on the day to the top of its recent narrow range…

Source: Bloomberg

WTI hit a new 7-year-high today above $85 before fading back into the red…

Gold jumped back above $1800…

Real yields dropped a little today, leaving room for a considerable move higher in gold still (to around $2000)…

Source: Bloomberg

Finally, the level of “greed” in the market is back at 2021 highs…

Source

“probably nothing” – oh and don’t forget that the last time capital gains taxes were hiked significantly was 1987 (from 20% to 28%) and that didn’t end so well eh?

Tyler Durden
Mon, 10/25/2021 – 16:00



Author: Tyler Durden

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Peppermint delivers key milestones in the last quarter, including the launch of micro-loan platform bizmoPay

Special Report: Peppermint has had another significant quarter, delivering on all key metrics which was highlighted by the launching of … Read More
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Peppermint has had another significant quarter, delivering on all key metrics which was highlighted by the launching of bizmoPay.

Fintech company Peppermint Innovation (ASX:PIL) has had a very productive quarter, with the highlight being the delivery of its alternative non-bank micro-enterprise loan offering, bizmoPay.

In July, the company achieved a significant milestone after being awarded a financial lending licence for bizmoPay by the Philippines Securities Exchange Commission (SEC).

Following that approval, PIL immediately commenced a three-month pilot program for a select number of bizmoto agents to test out the bizmoPay platform.

The aim was to identify and optimise any friction points or blockages to ensure efficient  system operations before it started offering the loan program to more than 56,000 registered bizmoto agents.

The pilot program has rapidly expanded in the last two weeks of September to more than 150 bizmoto agents.

“Having initiated a select 10-agent pilot program to identify friction points in our bizmoPay system, we rapidly expanded the size of the pilot due to the level of interest shown by other bizmoto agents,” commented Peppermint CEO, Chris Kain.

Kain said the pilot program was so in demand that by October 12, PIL had issued 359 loans across its three different loan products – Platinum Plus, Platinum and Silver.

During the quarter, PIL also recorded cash receipts of $472,000, which was an 83% increase on the previous quarter.

The company is well funded, with a strong cash position in the bank of $2.7m at quarter end.

 

BizmoPay

The granting of a financial lending licence by the Philippines SEC allows bizmoPay to offer alternative non-bank micro-enterprise loans to qualified bizmoto agents, registered bizmoto network members, and enterprise platform partners.

bizmoPay services fully complement the commercialisation of Peppermint’s proprietary technology platform which targets four key business sectors – mobile payments, ecommerce, delivery and logistics and mobile financial services.

Based on data analysis from the first 45 days of the bizmoPay pilot program, loan recipients on average increased their transactional volume by approximately eight times across the bizmoto ecosystem of services.

“We’re starting to get a picture of an overall positive impact on the agents’ ability to conduct transactions across the platform, which is exactly what we wanted to do,” Kain told Stockhead.

And of course, the more transactions across the platform, the greater revenue that the company earns.

The bizmoPay pilot program started with only the Platinum Plus and Platinum loan products, with the shorter term and lower value Silver bizmoPay loan product commencing trials in the last week of September.

As such, no meaningful data were able to be collected for the Silver bizmoPay loan type.

The program yielded significantly different results in terms of transactional volumes and values across the first 45 days.

On average across the board, the total number of bizmoPay loan recipients completed 13 transactions during the first 45 days of the bizmoPay pilot program, and processed $1.05 per day in transactional value.

“That volume of transactions would represent an additional $22 million per annum in revenue if extrapolated across our 56,000 registered bizmoto agents,” said Kain.

“We’re also on schedule to deploy the next phase of our commercial roll-out for bizmoPay next month, whereby recipients will be able to apply for their micro-enterprise loans via their mobile app.”

Several agents significantly outperformed the average transactional volume during the first 45-day pilot period, including 20 agents who performed more than 50 transactions.

At the higher end, five agents completed more than 100 transactions, while one agent undertook more than 250 transactions.

Peppermint expects to expand bizmoPay’s agents to more than 56,000 users when the pilot is completed, with a target of $30m in micro loans over the next three years.

The graph below is an extrapolation of what the different average performance of each loan type would yield if applied across selected numbers of the registered bizmoto agent base over the same initial 45 day period of the bizmoPay pilot program:

Kain expects this simple and easy to use feature will be incredibly popular with many of its bizmoto agents.

The non-bank lending space in the Philippines is currently undergoing massive changes, especially in the mobile app space where users have exploded as more people access non-bank loan finance through their mobiles.

To capitalise on this momentum, Kain said the next level of regulatory licensing that Peppermint would be chasing is an Electronic Money Issuer (EMI) licence.

With an EMI  licence in place, he believes that Peppermint could turbocharge its capabilities in the digital transaction space.

“An EMI licence will allow us to facilitate any e-money transaction and service open-loop e-wallet accounts, providing all Filipinos – not just bizmoto agents – with a convenient and secure way to receive digital money and access digital services,” Kain said.

“Every Filipino will have the chance to receive a bizmoPay loan, paid to their bizmoto e-wallet to access the bizmoto ecosystem and agent services. We believe this will stimulate significant transaction volumes over the bizmoto platform.”

In February, the company told the market that its phase 2 objective was the launch of bizmoPay.

“We’ve done that and ticked that box, so now we’re moving to phase 3, an EMI licence which is Peppermint’s next objective in delivering financial inclusion to the Filipino people.”

 

Other significant milestones

In March, PIL signed an API agreement with the Bank of the Philippine Islands, which saw PIL’s proprietary bizmoto platform integrated into the bank’s operating systems.

The integration will begin during Q4 2021, with the product expected to go live later in 2021 or early 2022.

PIL’s strategic Merchant Biller Agreement  with Cebuana Lhuillier back in April allowed its bizmoto agents to cash in money and top up their mobile wallets at any of the 2,500 Cebuana shop fronts across the country.

The API that serves as the gateway for Cebuana Lhuillier to send funds has now been developed, with a projected go-live date later this year or early Q1 2022.

Integration of the bizmoto platform with GCash as a payments facilitator is also underway, and expected to be launched in December.

Once the GCash offer is live, bizmoto agents, riders and merchants will have exposure to approximately 46 million registered GCash users throughout the Philippines.

PIL’s bizmoTinda website meanwhile, has been improved to include multi-vendor customer and multi-vendor merchant functionality, allowing  users to register as multiple vendors or multiple merchants.

The bizmoTinda allows users to sell their own items, with the convenience of having their own website.

Other milestones during the quarter include launching a blog newsroom with the aim of providing non-ASX sensitive information and news updates about the company’s activities to shareholders.

PIL also executed a direct marketing campaign around bizmoPay during the quarter, introducing the concept of a “Planet bizmoto” community among its agents.

The primary objectives of the “Planet bizmoto” community are to experience unique value, be loyal to the brand and transact frequently within the bizmoto ecosystem.

This article was developed in collaboration with Peppermint, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Peppermint delivers key milestones in the last quarter, including the launch of micro-loan platform bizmoPay appeared first on Stockhead.



Author: Special Report

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Lefroy Exploration secures major nickel frontier land package in WA

Special report: In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications ……

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In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications over a new nickel project named Glenayle.

The Glenayle Project covers a massive contiguous 2735sqkm of the Proterozoic age Salvation Basin that is intruded by multiple dolerite sills which extend over the entire land package.

These dolerite sills are part of the Warakurna Large Igneous Province (LIP), which extends west to the Bangemall Basin and east to include the Giles layered intrusive complex. More importantly, they are considered prospective for nickel mineralisation.

Glenayle represents a first mover approach by Lefroy (ASX:LEX) into a frontier nickel-copper exploration project with its stake over the Warakurna LIP.

New wholly owned subsidiary to list on ASX in 2022

The Glenayle tenement package is held by a new wholly owned LEX subsidiary, Johnston Lakes Nickel (JLN), which Lefroy aims to list on the ASX in 2022 subject to shareholder and regulatory approvals.

JLN will also hold other nickel assets currently held by LEX at Lake Johnston and at Carnilya South in the Lefroy Gold Project.

The company expects the tenements to be granted in Q4, 2022.

While the explorer aims to expand its portfolio in search for nickel, the focus remains on exploration at Eastern Lefroy and the Burns gold-copper prospect.

A rare opportunity

LEX managing director Wade Johnson said it is not often that an opportunity like this presents itself.

“It is a monster land package,” he said.

“We have taken the first mover approach into a new area that has seen very little exploration.

“We are very keen to further develop and apply knowledge learned about nickel mineralisation in large igneous provinces that will provide exploration targeting criteria for target selection,” he said.

“Glenayle adds another wholly owned project to the LEX greenfields exploration portfolio and complements our other nickel assets at Lake Johnston and Carnilya South.”

The Glenayle project relative to the other company projects and key geological rock units in Western Australia. Pic: Supplied

Identified in desktop assessment

The Glenayle nickel project was identified after a desktop assessment to identify new areas in Western Australia considered prospective for nickel mineralisation.

Prior geological knowledge of the area from a field reconnaissance trip in 1998 by Wade Johnson and the subsequent review of the research paper by Pirajno and Hoatson (2012) supported LEX’s acquisition.

What’s next?

Lefroy has kicked off compilation and assessment of previous surface geochemistry, geophysical and drilling data from WAMEX at Glenayle.

The location of drill core from the only three diamond holes drilled at Glenayle is being sourced, with two of the three holes being located.

Geophysics, and in particular interpretation of gravity survey data, will play a key role in guiding exploration targeting within the project.

Development of a detailed aeromagnetic and gravity dataset is underway and will be the primary exploration tool in the interpretation of the distribution of the mafic rocks such as feeder sills, layered intrusions and dykes within the Salvation Basin.

This will then be followed by targeted stratigraphic diamond drilling in 2023.

The company will apply for funding support through the WA State Governments Exploration Incentive Scheme (EIS) for this drilling where applicable.

LEX has also commenced land access negotiations with the determined Native Title group.

 


 

 

This article was developed in collaboration with Lefroy Exploration, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Lefroy Exploration secures major nickel frontier land package in WA appeared first on Stockhead.





Author: Special Report

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