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This company believes high-grade copper-gold in Colombia is a recipe for success

Special Report: Advanced, high-grade copper-gold projects located in attractive jurisdictions and geological settings don’t grow on trees. … Read More



This article was originally published by Stockhead

Advanced, high-grade copper-gold projects located in attractive jurisdictions and geological settings don’t grow on trees.

But that’s exactly what Andean Mining has brought to the table in the form of its El Dovio copper-gold (with silver and zinc) project in Colombia as it seeks to raise up to $7m through its initial public offering that is due to close on 9 December.

An ASX listing under the code ADM is expected just before Christmas.

El Dovio is a volcanogenic massive sulphide system with high-grade lenses contained within a well-developed and mineralised (albeit to a lesser extent) stockwork system that is up to 68m wide, both of which are exposed at surface.

There is a significant amount of surface sampling and mapping, geophysics, diamond drilling and extensive underground development that have combined to give Andean a very good idea of what is present at the project.

Additionally, the shallow nature of the mineralisation means that it is relatively low cost to quickly drill out a maiden JORC resource while ensuring that any mining operation would be relatively inexpensive.

Speaking to Stockhead, managing director Willian Howe said the company had acquired the project from Newrange Gold Corporation, which had been selling off its Colombian assets to focus on North America..

“The main attraction was the amount of work that had been done before that all pointed to a very high-grade VMS system with copper, gold, silver and zinc,” he commented.

“The grade and advancement were big drivers for us and there’s plenty of upside in relation to a number of other targets that are drill ready.

“We were in the right place at the right time.”

Location of the El Dovio project. Pic: Supplied



Why Colombia?

Colombia’s growing attraction as a mining destination also played a major part in the company’s decision to acquire El Dovio.

Howe noted that the South American country had a stable, conservative government for the last 25 years and had seen its gross domestic product increase ten-fold during that time from US$1,400 per capita to +US$14,000 per capita.

“Just that alone has generated a tremendous amount of stability because it has taken an enormous number of people out of poverty,” he added.

This is supported by the Fraser Institute, which in 2020 ranked Colombia as its top mining destination in South America, and an incredible fifth in the world on a country-by-country basis.

Colombia is also geologically very attractive.

While mining investment has historically gone to Chile and Peru due to their incredible mining endowment, Howe noted that Colombia is equally resource rich.

“It’s one of the greatest metallogenic belts of the world and there is no reason why there shouldn’t be major discoveries in Colombia,” he says.

andean mining el dovio block
El Dovio block model. Pic: Supplied



El Dovio Project

El Dovio is located close to other significant mining projects such as AngloGold Ashanti’s 28 million oz gold equivalent (AuEq) Quebradona project and Zijin Mining’s 12Moz  Buritica gold mine.

The VMS potential of the region can also be seen with other nearby projects such as the producing El Roble mine, which has mined ore plus reserves totalling 3.89Mt grading 2.77% copper and 2.44 grams per tonne (g/t) gold, and El Alacran (4.8Mt at 1.4% copper and 0.83g/t gold).

At El Dovio, trenching, drilling and underground development on the Sabana Blanca stringer zone has identified high-grade polymetallic mineralisation within a stockwork system up to 68m wide in outcrop and about 1km long.

Other drill ready targets include the Granizales and Sopetrana stringer zones located 400m to the south and in the footwall of the Sabana Blanca stringer zone respectively that were identified at surface.

This mineralisation style offers two possible development opportunities for Andean.

The first is focused on the bigger, lower grade stockwork system that will return larger tonnages and a longer mine life in exchange for much higher development capital costs.

However, Andean favours the second option, which will focus on mining the high-grade lenses such as at the El Roble mineand have correspondingly low development capital costs.

“You’re not looking for big tonnages, our view of a very good outcome for a starter operation is about 1,000t per day for at least 10 years, which would make it the same size tonnage wise as the El Roble operation,” Howe explained.

“We are talking about grades of somewhere between 4-6g/t gold and 2.5% to 3.5% copper, which account for about 95% of the value of the metal, plus zinc and silver.”

Metallurgical test work carried out by the company has also proved that 93.6% of the gold and 86% of the silver reports to the copper concentrate rather than the zinc concentrate.

“You don’t want gold in the zinc concentrate as it will force you to treat the zinc concentrate on site to extract the gold, as buyers do not pay for any gold in zinc concentrate, adding another layer of complexity and capital and operating costs,” he added.

These positive results along with achieving the same 95% overall recoveries that Newrange had historically achieved for all the metals into separate copper and zinc concentrates combine into a positive outcome for Andean.

“We have answered that question and did all the grind tests for both crushing and milling for a future plant development, all that work has been done.”


Management team

Andean also benefits from what Howe describes as a well complemented board.

Howe himself has over 40 years’ experience in the mining industry with a focus on mine operations and has lived in South America for 14 years, four years of which were in Colombia.

Independent director Paul Ingram is a geologist with extensive experience in managing exploration programs around the world.

“The other two directors – chairman Dr Phillip Wing and non-executive director James Green – on the board bring long-standing legal and financial skills to the table and they have been associated with the mining industry for a long time,” he added.

Additionally, the acquisition of the Newrange subsidiary company that held the El Dovio project also came with a team of people on the ground in Colombia.

“So we have a team that covers administration, legal and technical that we inherited in Colombia, giving us the ability to operate successfully in Colombia.”


IPO and upcoming activity

Andean’s IPO is currently underway and is seeking to raise a minimum of $6m and a maximum of $7m through the issue of shares priced at 20c each.

The company is looking to spend between $4m and $4.9m on exploration, subject to the full amount raised by its IPO.

Most of this will be spent on a 15,000m drill program that will focus on defining a JORC resource at the Sabana Blanca zone and should allow Andean to take it to a scoping study and eventually a feasibility study.

Holes will also be drilled at Granizales, Sopetrana and Brazo 1 with Howe noting that the latter represents a contact between the volcanics and the sediments that is likely to host the main VMS system.

“We have also designed a very large exploration program to cover the rest of the tenements. So we will do a lot of surface work, trenching, sampling, geophysics, geochemistry and geological mapping,” Howe added.

“There are a number of other areas that will receive some of that drilling, but a big part of the drilling will go into Sabana Blanca to define a JORC resource.”

This article was developed in collaboration with Andean Mining, 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 This company believes high-grade copper-gold in Colombia is a recipe for success appeared first on Stockhead.

Author: Special Report

Precious Metals

Soma Gold Posts Revenue Of $11.3 Million, Net Income In Q3 2021

Soma Gold Corp. (TSXV: SOMA) reported on Thursday its financial results for Q3 2021, highlighting quarterly revenue of $11.3 million.
The post Soma Gold…

Soma Gold Corp. (TSXV: SOMA) reported on Thursday its financial results for Q3 2021, highlighting quarterly revenue of $11.3 million. This is an increase from Q2 2021’s revenue of $8.4 million and Q3 2020’s revenue of $11.1 million.

The mining firm was able to sell 5,048 gold equivalent ounces during the quarter at an average price of US$1,810 per ounce sold. These figures compare to sales from last quarter’s 3,802 ounces at US$1,832 per ounce sold and last year’s gold equivalent sales of 4,427 ounces at US$1,931 per ounce sold.

Gross profit margin from mining operations came in at 44.1%, up from 21.5% last quarter but down from 46.2% last year. The company also managed to end with a net income for the quarter amounting to $1.1 million, coming from a net loss last quarter of $1.1 million and a net income of $0.7 million last year. The quarter’s earnings per share ended at $0.02.

Considering a number of financial items, the firm recorded an adjusted EBITDA of $4.3 million for the quarter, up from $1.1 million last quarter and $3.5 million last year.

The company’s cash position at the end of the three-month period is $0.8 million from a starting balance of $1.3 million. Current assets ended with a balance of $10.9 million while current liabilities came in at $11.8 million.

The firm relayed that the Fenix portal has reached Level 2 and 3 at the Cordero deposit, from which the first ore was processed in August 2021. “As a result, Q3 production and financial results compare favourably to the previous quarter as some of the initial development ore from Cordero was brought to the mill,” explained Soma Gold’s CEO Javier Cordova.

The mining company is still setting its target to achieve full production of approximately 600 tonnes per day at an average grade of 6.5 g/t in Q2 2022. The firm points this as a precursor to start its second mill, el Limon.

Soma Gold last traded at $0.39 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Soma Gold Posts Revenue Of $11.3 Million, Net Income In Q3 2021 appeared first on the deep dive.

Author: ER Velasco

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Precious Metals

Black Friday Bedlam Means Kiss The Taper Goodbye

Black Friday Bedlam Means Kiss The Taper Goodbye

Submitted by QTR’s Fringe Finance

It’s semi-hilarious that when Covid first occurred…

Black Friday Bedlam Means Kiss The Taper Goodbye

Submitted by QTR’s Fringe Finance

It’s semi-hilarious that when Covid first occurred at the beginning of 2020, I couldn’t get a single soul to listen to me when I warned that the market would eventually react negatively.

Now, entire continents stop all travel, immediately consider lockdowns and markets sell off 2% every time a new variant makes its way into the news cycle. 

Just hours after Goldman Sachs made the dumbass move of predicting a quicker than expected taper, index futures are getting destroyed on news of a new Covid variant out of South Africa – days after I warned that the market could wind up getting its salad tossed heading into the new year. That prediction was for reasons other than another Covid variant, but I stand by my analysis. Just three days ago, I wrote:

I’m often one of the first people to joke about how nonsensical the idea of a Santa Claus rally is, but it puts the idea of a rising market over the holidays into everybody’s head, every year. Obviously, it’s just made up bullshit-lingo used to provide an excuse for people to buy overvalued money losing crap in the market, but it seems like a good year to remind market participants that a rally doesn’t always have to happen.

You can read that article here: The Market Could Collapse Heading Into The Holidays

Additionally, I had already detailed several reasons why I believed the NASDAQ could be on the verge of a collapse without warning here: Why We Could Be Staring Down The Barrel of A Catastrophic NASDAQ Crash And Not Even Know It

As mentioned, the overnight panic has been due to a scary sounding report of a new Covid variant out of South Africa. The variant may evade immunity, reports say, but is still being evaluated by scientists. Newsweek summed up the hysteria:

Scientists have voiced concern about a new COVID variant that has a “really awful” combination of mutations that could possibly cause the virus to evade immunity.

The variant, now called B.1.1.529, was reported on just days ago after a small cluster of cases were spotted by Tom Peacock, a virologist at Imperial College London in the U.K.

As of Wednesday this week, the variant had been detected in Botswana, South Africa, and Hong Kong, and there were only 10 cases reported, The Guardian newspaper reported.

Despite the low number of cases, B.1.1.529 has some experts worried due to the mutations it has.

In a Twitter thread on Tuesday, Peacock said the variant had a number of notable mutations such as K417N, S477N and E484A among several others associated with the virus’ spike protein. The virus uses this protein to enter human cells.

Peacock wrote: “Worth emphasising this is at super low numbers right now in a region of Africa that is fairly well sampled, however it very very much should be monitored due to that horrific spike profile (would take a guess that this would be worse antigenically than nearly anything else about).”

As of this morning, the new variant has already been detected in Israel and is likely going to wind up spreading globally, so it’s probably a good idea to just accept that fact now.

While the significance of this variant as it relates to people’s actual health remains to be seen, its significance in terms of macroeconomic policy and certainly today’s trading session shouldn’t be overlooked. If you want to know more about the science, Zero Hedge did an excellent job of summing up the key points of what we know about the new variant in their overnight coverage.

Here’s my wild-ass guess at the path this new variant is going to take us: more than likely back to all time highs, but not before we hit some (potentially large) bumps in the road first. While I happen to think this will be the Delta variant part 2 (in that it drums up a lot of hysteria and then everyone eventually ignores it), that doesn’t mean the government and markets won’t overreact to the news.

Remember, scary sounding words like “mutation”, “spike protein” and “variant” are a prompt to act like hysterical hyenas and usurp power unilaterally for those on the left side of the aisle (read: our entire government right now).

We will have more information over the coming days as to what the government’s response is going to be globally, but if the U.S. follows the lead of the U.K. and the EU overnight, its looking like travel bans, mandates and lockdowns could all once again be on their way.

If the government uses this variant as a an excuse to assert even more control over the country and lock down again:

  1. You can kiss any plans to taper goodbye for the time being. This’ll create political turmoil, as tapering seems to be the only “solution” politicians have explored to inflation running rampant in the country. Expect prices to continue to rip higher and the market to potentially react positively.

  2. We can eventually expect more stimulus checks, as we head further down the path to stagflation and universal basic income. The additionally stimmies will throw a wet blanket onto job growth and make the nation’s labor shortage worse. This should be a massive tailwind for gold, which is up about $25/oz. as of the time of this writing. Bitcoin selling off like a risk asset this morning leads me to believe my long held thesis that BTC is a risk-asset and not a hedge may be correct. I’ll keep looking for rotation from BTC (risk on) to gold (risk off) in the event of deleveraging. Remember, gold also sold off in early 2020 prior to ripping to all-time highs. When margin calls come in, people sell whatever they can get their hands on.

  3. Travel stocks could get pasted and stay-at-home stocks could rip. Of particular interest is oil, which has had a monstrous run over the last 6 months. Even though President Numb-Nuts is failing at actively trying to micromanage the oil market (as the Saudis look on and laugh), oil could still pull back further as perceived demand would crumble in the event of a lockdown. Also of note are names like Peloton (PTON) and Zoom (ZM) – both of which are more than 50% off their Covid-catalyzed highs.

  4. Pfizer, Moderna and Johnson & Johnson could have a heyday again, especially if the new variant spreads (it will) and can evade current vaccines (undetermined). One has to think about whether or not the new variant will be able to evade the vaccines on the market. Should this turn out to be the case, it would not only be the impetus for another round of unilateral power grabs by the government, but could also send the stocks of Pfizer, Johnson & Johnson and Moderna into the stratosphere as it would almost ensure, at the very least, new booster shots, and at the very most, an entire new round of vaccines.

And if the government decides to do nothing about the new variant, we likely wind up going back to all time highs in 2022 anyways, as it’ll probably still be used as an excuse to delay the taper.

I think the only thing that could send the markets moving much lower in very fast fashion would be a lockdown style attitude from the government without clear messaging from the Fed that they’re going to back off the gas when it comes to the taper.

The odds of this are low, in my opinion, but it would be your classic lose/lose scenario.

I’d love to be able to tell my subscribers that I know exactly where the market is going to go today, and in the week ahead, but the fact of the matter is that I don’t, but for my prediction that we could see volatility heading into the end of the year.

With so many unknowns at play (the severity of the variant, how governments and the Fed will react), I’d rather be honest with you and tell you it’s too early to try and analyze than make up some shit to justify why I charge for analysis behind a pay wall to begin with.

The only one true honest inclination that I’ve had so far this morning has been that Gold rising just $20 on this news doesn’t seem like quite enough. It had already started to feel like sentiment was shifting back towards gold as an inflation hedge over the last couple months. A brand new round of stimulus from the government would only act as a tailwind for that thesis. Lockdowns that keep production and labor suppressed would also act as a tailwind, as they’d keep a bid under consumer prices.

If I had to make any bet, I’d say this headline too will pass. And even if it doesn’t, Covid is already over for me in my head – an attitude I suggested many should gift themselves heading into the holidays.

Enjoy your Thanksgiving leftovers, and your long weekend.

*  *  *

Read more from QTR:

1. Covid Is Over (If You Want It)

2. Two Reasons The Market Could Collapse Heading Into The Holidays

3. When The Global Monetary Reset Happens, Don’t Forget Who To Blame

4. Pride Goeth Before The Bitcoin Fall

5. Cathie Wood’s Sweet Superficial Success

This was a free preview of paid content from QTR’s Fringe Finance. Zerohedge readers always get 10% off a subscription to my blog for life by using this link.

Tyler Durden
Fri, 11/26/2021 – 09:40

Author: Tyler Durden

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Precious Metals

Calibre Mining Drills High-Grade Gold at Volcan

Calibre Mining (CXB.TO) is in the middle of an extensive drill program which is aiming to update and upgrade the existing resources at and around the…

[nxtlink id="268557"]Calibre Mining[/nxtlink] (CXB.TO) is in the middle of an extensive drill program which is aiming to update and upgrade the existing resources at and around the Libertad mine in Nicaragua. The company recently released assay results from the Volcan area, which is just about five kilometers from the Libertad mill.

The drill program has now confirmed the continuity of gold mineralization along a 1.5 kilometer strike length while confirming gold mineralization to a depth of 100-250 meters while the vein system itself appears to remain open along strike and at depth. Some of the highlights of the recent drill program are for instance the 4.9 meters of 15.6 g/t gold followed by 3.4 meters containing 7.88 g/t gold just 16 meters below the first interval. But other holes also confirm the high-grade nature of the Volcan veins with for instance 9.2 meters containing 4.13 g/t gold and 1.8 meters containing 8.75 g/t gold.

Granted, these grades aren’t exceptionally high but given the close proximity to surface and an existing mill, Volcan is shaping up to be an interesting satellite zone to the main gold deposits that are feeding the Libertad mill.

Disclosure: The author currently has no position in [nxtlink id="268557"]Calibre Mining[/nxtlink]. Please read our disclaimer.

Author: CR Team

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