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Platinum is a poor substitute for palladium

2021.08.20
Discovered by English chemist William Wollaston in 1803, palladium was named after the asteroid ‘Pallas’. The silvery-white metal is one…

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This article was originally published by A Head of the Herd

2021.08.20

Discovered by English chemist William Wollaston in 1803, palladium was named after the asteroid ‘Pallas’. The silvery-white metal is one of six platinum group elements (PGEs) found in the Periodic Table of the Elements. The others are iridium, osmium, platinum, rhodium and ruthenium.  

Of all the PGEs, palladium is the least dense and has the lowest melting point.

Palladium is an uncommon element in the Earth’s crust. Deposits of palladium and other PGEs are rare, with the largest occurring in South Africa’s Bushveld Igneous Complex covering the Transvaal Basin, the Stillwater Complex in Montana, the Sudbury Basin and Thunder Bay District of Canada, and the Norilsk Complex in Siberia. Recycled catalytic converters are also a source of palladium supply.

About three-quarters of palladium demand comes from catalytic converters. Also known as autocatalysts, these devices reduce noxious emissions, and have been an important reason for internal combustion engines (ICEs) polluting up to 90% less than they did in the 1970s, along with the tightening of US tailpipe emissions regulations, led by California. 

Catalytic converters are supplied for diesel-fueled and gasoline engines. Both contain a mix of PGEs and other metals including platinum and palladium. A higher percentage of platinum is used in diesel autocatalysts, whereas gasoline autocatalysts have more palladium.

The lustrous metal is also used in electronics, surgical instruments, jewelry, watch making, aircraft spark plugs, hydrogen purification and groundwater treatment. 

As the world transitions from fossil-fueled “ICEs” to battery-powered electric vehicles, the internal combustion engine is unlikely to be resigned to the scrap heap, just yet. Gasoline vehicles and gas-electric hybrids will gradually displace more-polluting diesels, the former equipped with catalytic converters to filter out pollutants like NoX and particulate matter.

This means growing demand for materials that go into gas-powered autocatalysts, including palladium.

The platinum group metal is set for a supply squeeze for the 10th straight year. Driving palladium demand are higher sales of gasoline vs diesel units and tighter pollution controls.

Palladium use in hybrid vehicles, seen as a bridge between gas-powered cars and pure electrics, is a growing source of demand.

(In Europe, second-quarter registrations of hybrid vehicles jumped by 240%, compared to Q2 2020, while plug-in hybrid registrations more than tripled. Diesel’s share of the European market slipped from 28% in last year’s quarter, to 18.4% in Q2 2021, according to S&P Global).

Supply, meanwhile, has been disrupted by the covid-19 pandemic and flooding at Arctic mines. According to a recent analysis by Sprott, A primary driver of higher palladium prices remains the structural deficit in which demand continues to greatly exceed combined primary and secondary supplies, despite record recoveries of palladium from automotive scrap and sharply higher output in South Africa. 

On May 4 palladium hit a new record high of $2,890/oz. Despite a recent pullback, over the past year Pd is up 14%. Palladium has mainly traded above gold since 2019. 

Source: Kitco

‘Diesel-gate’

The “diesel-gate” scandal at Volkswagen put tailpipe emissions on the radar of policy makers especially given that the rigging of diesel cars to fraudulently meet emissions came amid reports of the dangers of air pollution to human health. 

Such concerns led the EU to set a target of cutting emissions by at least 40% by 2030, from 1990 levels.

China, whose major cities are often cloaked in a thick fog of air pollution, has also implemented tougher vehicle emissions standards. The country is targeting a reduction of between 26 and 28% of emissions from 2005 levels by 2030. The new rules demand that vehicles emit fewer pollutants such as nitrogen oxides, particulate matter and ammonia.

The greater loadings of palladium per vehicle versus other metals, due to tighter emissions regulations in the EU and China, are helping to keep a solid floor under palladium prices. A diesel engine requires 5 to 10 grams of PGEs, with the majority being platinum. A gasoline engine uses 2 to 7 grams of PGEs, relying more on palladium.

Palladium vs platinum

According to Sprott, Palladium demand is highly concentrated in automotive uses, with about 84% of yearly demand coming from auto production. While palladium’s “sister metal” platinum is used in a range of industrial applications and has investment demand and jewelry production, palladium use is far more focused on the auto sector and autocatalysts.

The platinum market is currently suffering from demand destruction, with prices trailing both gold and palladium. Earlier this month Pt slumped to a seven-month low, as the spread of the Delta variant hurt the outlook for industrial commodities, particularly in top commodities consumer China.

Platinum, which also serves as a monetary metal, has also been sideswiped by rumors that the US Federal Reserve could begin tapering its $180 billion per month stimulus program. A third factor behind trailing prices is the global chip shortage, which has curbed auto production. Since this year’s peak in February, platinum has tumbled more than 20%.

Source: Kitco

Production challenges

Palladium is extracted as a by-product of nickel mining in Russia, and platinum mining in South Africa. These two countries control three-quarters of global production. 

However, platinum mining in South Africa is frequently interrupted by labour unrest. In 2014 workers at the country’s three major producers — Lonmin, Anglo American Platinum and Impala Platinum — downed tools for five months demanding that wages be doubled. The strike was the longest and most expensive in South African history, shutting down about 40% of the world’s platinum production.

The country’s platinum miners are under constant pressure to contain costs, because their mines are some of the deepest and most labor-intensive in the world. High temperatures are also a serious issue. Platinum is being mined in reefs up to two kilometers deep, where virgin rock temperatures have been measured at 70 degrees C; 75 degrees is considered to be the limit for mining.

There are significant infrastructure constraints, too. The country has limited processing capacity and water is a constant concern. In 2018 Cape Town came dangerously close to running out of water and was only saved from “Day Zero” by stringent water restrictions.

Power in South Africa is notoriously unreliable — blackouts are frequent. In 2008 the country’s electricity grid nearly collapsed due to a shortage of coal for power stations and system faults. Eskom, the main utility, ordered all mining operations to evacuate underground staff and to stop mining for five days, then cut electricity supply across South Africa to minimum levels; the mining industry uses about 15% of Eskom’s output. The stoppage, affecting roughly a quarter of generating capacity, cost the industry billions in lost production. 

With palladium prices at record highs, it makes sense for platinum and nickel companies to ramp up production to take advantage. Problem is, there is limited scope for producers to increase supply, especially in South Africa. Just as important, a boost in output could add to the glut in platinum, which is these miners’ bread and butter. 

To the first point, despite high palladium and rhodium prices extending the life of mine shafts in the Rustenburg platinum belt, producers are not keen to invest in new mines. 

Impala Platinum, a major industry player, expects output from South Africa’s mines to decline over the next few years. New projects in South Africa would take years to develop, while those in neighboring Zimbabwe may be stymied by political and economic uncertainty, according to a company spokesman, Bloomberg reported.

The second point, about flooding the platinum market, thereby depressing prices further, is due to the fact that for every ounce of palladium mined, 2-3 oz of platinum comes with it. The dilemma South African miners face is one of robbing Peter to pay Paul — in this case, extracting cheap platinum ounces in order to be paid more for palladium and rhodium, currently priced at USD$17,831/oz.

Source: Kitco

No substitutes

Some have suggested that platinum could be substituted for palladium if palladium continues to trade significantly higher than platinum.

A recent Bloomberg article posits that the rally in palladium that has seen it more than triple in value since 2018, is nearing its end as demand headwinds build.

The piece notes that BASF, the German conglomerate, has come up with new autocatalyst technology that allows for partial substitution of palladium with platinum.

“We see the beginnings of platinum being substituted back into gasoline catalytic converters,” Bloomberg quoted David Jollie, head of sales and market insight at global miner Anglo American Plc. “This will bring palladium back from its fundamental supply deficit and closer to balance.”

Another headwind for palladium is the increasing popularity of electric vehicles. With EVs expected to account for a third of global auto sales by 2030, compared to just 4.3% in 2020, according to BloombergNEF, the need for autocatalysts would gradually decline along with palladium demand.

At AOTH, we are not so sure.

For one thing, car makers have for the most part switched over to palladium-heavy autocatalysts. They did so in the 2000s because palladium was much cheaper than platinum. 

Re-tooling them back to platinum would be unproductive and expensive — likely negating the money saved by purchasing cheaper platinum.

It took several years for car-makers to switch from platinum to palladium, so reversing the process would also take time. Moreover, over the past 20 years, autocatalyst technology has advanced, so it wouldn’t just be a case of reviving old designs.

Geoffrey Caveney, a contributor to Seeking Alpha, explains the hesitancy of automakers to go back to platinum-dominant autocatalysts, despite a significant price discount. 

The reason he argues, is due to a greater diversity of countries that mine palladium, versus those that produce platinum. The latter market is almost completely dominated by South Africa, whereas some palladium, albeit in relatively small quantities, is mined in Canada, the US, Zimbabwe and a handful of other countries. 

Source: USGS

Caveney writes: 

Looking at the production gap another way, the U.S. produces more than three times as much palladium as it does platinum, and Canada and other countries produce almost twice as much palladium as they do platinum.

Therefore, in case of a significant temporary or prolonged supply disruption from South Africa in particular, or from Russia and Zimbabwe as well, automakers and other manufacturers in North America and the rest of the world could potentially have much more difficulty dealing with supply shortages in platinum, than they would with palladium.

In other words, the threat of a supply disruption just isn’t worth the risk. 

In 2014 the five-month-long platinum mining strike caused Ford and Toyota to temporarily suspend operations at its South African car plants.

The current micro-chip shortage which has significantly impacted the auto industry, is a more recent reminder of how reliance on a handful of semiconductor manufacturers can come back and bite you. The industry is currently dominated by just three companies — TSMC of Taiwan, Samsung of South Korea and US company Intel.

It has also been said that palladium-heavy catalytic converters perform better than platinum under extreme-conditions emission tests. According to Johnson Matthey Plc, which makes the devices, technological advances are needed before platinum can match the performance of existing palladium-based autocatalysts.

Finally, the above-mentioned Sprott report says that the volume of palladium currently going into autos is so much higher than platinum, that there would be a marginal impact from platinum substitution:

Annually, about ~9.5 million ounces (Moz) of palladium are used in autos, compared to ~2.9 Moz of platinum.

With palladium prices shooting higher and sourcing struggles ongoing, automakers are slowly shifting back to platinum. Analysts are projecting about 1.5 Moz of current annual palladium usage will revert to platinum by 2025. Still, that’s a slow process and a marginal amount compared to the total volume of palladium (which still faces higher future loadings to meet clean-air emissions targets).

Palladium One Mining

Tight market conditions for palladium will remain so for the foreseeable future in the absence of new palladium deposits, and as long as gasoline-powered vehicles keep rolling off assembly lines.

Considering the difficulty the world’s palladium miners, especially those in South Africa, are having increasing production, the onus is on smaller companies to find and develop new deposits.

Palladium One’s (TSXV:PDM, OTC:NKORF, FSE:7N11) LK (Läntinen Koillissmaa) copper-nickel-PGE project in Finland is one of very few palladium-dominant plays, meaning it stands to benefit greatly from continued palladium price strength.

The company is making great progress at two targets, Kaukua South and Haukiaho, the latter where a maiden resource is expected by the end of the third quarter.

In early July PDM announced that two Induced Polarization (IP) surveys expanded the 4-km-long Kaukua South IP anomaly to a strike length of more than 7 km. According to the news release,

Drilling to date has confirmed extensive mineralization over the initial 4-kilometer Kaukua South anomaly; the 3-kilometer expansion suggests a much large resource endowment is possible.

With a treasury of $15 million, Palladium One is well funded to carry out planned exploration activities at its LK PGE-copper-nickel project in Finland and its Tyko copper-nickel project in Ontario. An Aug. 17 corporate update shows there is plenty of news left to come from PDM before the end of the year, generated from: resource definition drilling at Kaukua and Kaukua South; a maiden resource estimate at the Haukiaho zone and an updated resource at the Kaukua areas; metallurgical testing; and a preliminary economic assessment (PEA) planned for mid-2022.

Palladium One Mining
TSXV:PDM, OTC:NKORF, FSE:7N11
Cdn$0.21 2021.08.18
Shares Outstanding 248m
Market cap Cdn$50m
PDM website

Richard (Rick) Mills
aheadoftheherd.com
subscribe to my free newsletter


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Articles

Can Deep-Sea Mining Solve The Battery Metals Supply Crisis?

Can Deep-Sea Mining Solve The Battery Metals Supply Crisis?

Authored by Tsvetana Paraskova via OilPrice.com,

The key metals necessary to…

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Can Deep-Sea Mining Solve The Battery Metals Supply Crisis?

Authored by Tsvetana Paraskova via OilPrice.com,

The key metals necessary to advance the global energy transition will likely drive the next commodity supercycle.

Soaring demand for lithium, copper, nickel, cobalt, and aluminum could lead to a battery metal supply crunch as early as this decade, while surging prices could reverse a decade of cost declines, analysts say.  In a world increasingly focused on sustainability and ethically-sourced raw materials, some players in the metal mining industry believe that deep seabed mining operations in remote ocean areas could have a lower impact and lower costs than the land mining of key battery minerals - minerals associated with child labor in the Democratic Republic of Congo, for example, the world’s top producer of cobalt.  

However, deep seabed mining is years away from commercial operations, at best, due to a lack of international regulations and concerns about the environmental impact of mineral extraction from the seabed in areas and ecosystems that are yet to be studied by marine biologists. 

Some companies are betting on starting deep-sea mining in a couple of years. The Metals Company, for example, which just began trading on the NASDAQ, said last week it is working to “move the world’s largest estimated source of battery metals into production.” 

“We believe we have a solution that is more scalable, secure, lower cost and lower impact than mining these minerals on land: We can produce battery metals from high-grade polymetallic nodules found on the seafloor in the international waters of the Clarion-Clipperton Zone,” Gerard Barron, Chairman and CEO of The Metals Company, said. 

Polymetallic nodules contain four essential battery metals—cobalt, nickel, copper, and manganese—in a single ore, and they have been formed over millions of years by absorbing metals from seawater. Those nodules lie unattached to the seafloor, and The Metals Company plans to use a robotic collector to gently dislodge the metal-containing rocks from the seabed with minimal disturbance to the ocean floor. 

TMC has exploration and commercial rights to three contract areas which host an estimated 1.6 billion tons (wet) of polymetallic nodules containing high-grade nickel, copper, cobalt, and manganese, in the Clarion Clipperton Zone of the Pacific Ocean—between Mexico and Hawaii—regulated by the International Seabed Authority.  

The company says its studies have estimated that the polymetallic nodules within its exploration areas are enough to electrify a quarter of the world’s passenger vehicle fleet, or would be enough for around 280 million EVs.

TMC says its proposed method of retrieving battery metals generates much less carbon dioxide than conventional mining and is more environmentally friendly. 

“It’s like picking up golf balls on a driving range,” CFO Craig Shesky told the IEEE Spectrum magazine edited by the Institute of Electrical and Electronics Engineers. 

With access to funding and the listing on the NASDAQ, TMC expects to be able to complete pilot nodule collection trials in 2022, complete environmental impact studies by 2023, and file to move from exploration phase to exploitation phase in the third quarter of 2023, CEO Barron said in the statement last week. 

Yet, TMC and other companies vying for deep-sea mining face strong opposition from environmental organizations that say disrupting the ocean would lead to losses of biodiversity and change the carbon cycle in the waters. 

Moreover, the International Seabed Authority (ISA) has not yet agreed upon regulations on how to manage and supervise the exploration and extraction of minerals from the ocean floor. 

The Clarion-Clipperton Zone (CCZ) is a “biodiversity hotspot,” Craig Smith, an oceanography professor at the University of Hawaii at Manoa, told IEEE.

Smith has led research expeditions to the CCZ, which have found species new to science. It’s not possible to mine polymetallic nodules without causing ecological damage “over tens of thousands of kilometers,” the oceanography professor says. 

“Deep-sea mining may irreparably harm ocean ecosystems before we even have a chance to fully study its impacts,” the Center for Biological Diversity says

Even some potential customers of metals extracted from the ocean supported earlier this year a call for a moratorium on deep seabed mining.  

Automakers BMW and Volvo, as well as Google and Samsung SDI, vowed not to buy metals produced from deep-sea mining until the environmental risks of the activity are “comprehensively understood.” 

Tyler Durden Sun, 09/19/2021 - 08:10
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Articles

Falcon Gold continues acquisition spree around central Newfoundland’s mineral belts

2021.09.18
Area plays, where one company makes a discovery then other companies rush in to stake ground nearby, are often the main driver of growth in…

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2021.09.18

Area plays, where one company makes a discovery then other companies rush in to stake ground nearby, are often the main driver of growth in junior resource markets.

Noteworthy Canadian area plays in recent history include Eskay Creek in 1990, Voisey’s Bay in 1995 and the Yukon’s White Gold Rush in 2010, just to name a few.

At present, the central Newfoundland region is making a strong case for the next area play of the 21st Century. Specifically, the Exploits gold belt area has become the hunting ground for Canada’s next major discovery of gold and other important metals.

Ever since New Found Gold made a blockbuster discovery in late 2019 (one of Newfoundland’s best drill intercepts ever) at its Queensway project, the Exploits Subzone has turned into an attractive destination for gold explorers, with many having found exploration success within a short period of time. NFG, too, continues to report significant drill results to this day.

One up-and-coming explorer that is continuously expanding its land position in central Newfoundland is Falcon Gold (TSXV: FG, Frankfurt: 3FA.G, OTC: FGLDF), which recently acquired two additional properties in the province, both located in strategic locations close to known mineral zones and/or producing mines.

Baie Verte Property

The first deal, announced on August 18, comprises the staking of 548 claims totaling 13,700 hectares located along the Baie Verte Brompton Line (BVBL) of the central Newfoundland belt, home to some of the province’s largest defined gold deposits.

Regional location of Falcon’s claim groups

There are more than 100 gold prospects and zones, many of which are orogenic-style, related to major splays and associated second-order structures linked to the BVBL. Falcon’s new property covers a 50 km corridor along the BVBL.

The Baie Verte Peninsula currently hosts all of Newfoundland’s gold production.

Producing mines in the region are headlined by Anaconda Mining Inc.’s Point Rousse gold mine and Rambler Metals & Mining operations. Former producing mines include the Terra Nova mine, and deposits of the Rambler mining camp. All of these mines are in close proximity to the BVBL.

Falcon’s new claims are also 13 km southwest of the Glover Island Trend, an 11 km mineralized corridor that hosts 17 base metal and polymetallic mineral prospects as well as numerous gold showings and anomalies.

These include the Lunch Pond South Extension (LPSE) deposit owned by Mountain Lake Resources, which has indicated and inferred resources of 120,000 ounces of gold (June 2017).

The new land acquisition is also proximal to the Four Corners project held by Triple Nine Resources (see map below).

Location of the new Falcon Gold land along the BVBL

The Four Corners project consists of iron-titanium-vanadium mineralized rock that has been outlined for 3,000m in strike with intercepts 200m wide and 600m vertically. This project is said to contain sufficient tonnage and grades to warrant developing a world-class mineral resource.

Great Burnt Property

Then, in early September, Falcon announced it has acquired through staking 91 claims totaling 2,275 hectares in the Great Burnt greenstone belt of central Newfoundland, which is rich in base metals.

Regional location of Falcon’s Great Burnt copper property

The Great Burnt greenstone belt is host to the Great Burnt copper zone that contains an indicated resource of 381,300 tonnes at 2.68% Cu and inferred resources of 663,100 tonnes at 2.10% Cu.

Recent drilling by Spruce Ridge Resources in the area has returned some of the best copper results across the board, highlighted by 8.0% Cu over 27.2m and 6.9% Cu over 22.7m.

The Great Burnt greenstone belt also hosts the South Pond A and B copper-gold zones and the End Zone copper prospect within a 14 km mineralized corridor.

The greenstone belt is characterized by Besshi-type massive sulphide deposits, which generally occur in thick sequences of marine sedimentary rocks. Sulphide lenses can be several metres thick and extend for several kilometres. Besshi-type massive sulphide deposits are generally copper dominant and can contain precious metals such as gold and often cobalt.

As shown in the map below, Falcon’s Great Burnt property is located right in the middle of Spruce Ridge’s land package. It is also situated 4 km west of the Crest Resources-Exploits Discovery joint venture project within the Exploits Subzone.

Location of the Falcon Gold acquisition proximal to Spruce Ridge Resources

The Exploits Subzone is known to contain deep-seated gold-bearing structures of the Dog Bay-Appleton Fault — GRUB Line deformation corridor, and is home to the high-grade Keats gold zone of New Found Gold. Falcon’s new property is located just 20 km west of the Queensway project held by NFG.

“This property not only has the potential to host important Exploits Subzone orogenic gold mineralization but also copper-rich massive sulphides that contain gold,“ Karim Rayani, CEO of Falcon Gold, stated in a news release.

Since acquiring the claims, the company has received two joint venture offers, both of which were turned down as it believes the value of the property could only go up, seeing as most of the land in the Great Burnt belt has already been tied up.

“If right next door on the same fault line these guys are hitting up to 90% Cu, and this is a VMS system, Newfoundfound is going to have multiple discoveries,”  Rayani stated in a Proactive interview.

Falcon now intends to perform a high-resolution airborne magnetic and electromagnetic survey over the entire property, integrating mineralization trends and historical results to vector its exploration efforts.

As the company tends to do extensive research before picking up a project, there’s a good chance that multiple areas of interest could emerge from exploration work.

Flagship Gold Project

Central Newfoundland is just one of the many mineral-rich areas in Canada where Falcon holds a prominent land position.

With a total area of 10,392 hectares, Falcon presently has the largest land position in Ontario’s Atikokan gold camp — bested only by Agnico Eagle and its 32,070-hectare Hammond Reef exploration project.

Central Canada project and surrounding properties

The company’s flagship project — known as the Central Canada gold mine — is located approximately 20 km southeast of Agnico’s Hammond Reef gold deposit, which has an estimated 3.32 million ounces of gold (123.5Mt grading 0.84 g/t Au) in mineral reserves, and 2.3 million ounces of measured and indicated mineral resources (133.4Mt grading 0.54 g/t Au).

The Hammond Reef property lies on the Hammond shear zone, which is a northeast-trending splay off of the Quetico Fault Zone (QFZ), and may be the control for the gold deposit. Falcon’s Central Canada property lies on a similar major northeast-trending splay of the QFZ.

The Central Canada gold mine has an interesting mining history dating back to the beginning of the 20th Century.

Between 1901-1907, a shaft was sunk to a depth of 12m, and 27 ounces of gold from 18 tonnes were mined using a stamp mill. During the 1930s, the shaft was deepened to 40m, with about 42m of crosscuts, and a 75 t/d gold mill was installed.

Diamond drilling by Anjamin Mines in 1965 returned a 0.6m intersection of 37 g/t Au. Another hole assayed 44 g/t Au over 2.1m.

A more aggressive drill program in 1985 saw Interquest Resources punch in 13 holes for a total of 1,840m, the highlight being a 1.1m intercept of 30 g/t Au.

In 2012, further diamond drilling was completed by TerraX Minerals, consisting of three holes totaling 363m, spaced 55m apart to test a 110m strike length of the main Central Canada structure. The first hole of that program cut 10.61m averaging 1.32 g/t Au, including 1.82m of 4.77 g/t Au.

Central Canada Exploration Plans

Under Falcon Gold’s ownership, an initial seven-hole, 1,055m program completed in July 2020 featured a 3m interval of 10.17 g/t Au at 67m downhole. Falcon also intersected a new mineralized zone, untested by previous operators, at 104m depth, which sampled 18.6 g/t Au over 1m.

A second round of drilling took place in November-December, with another 10 holes totalling 1,890m to complement the previous seven holes plus the three holes done in 2012 by TerraX.

By March 2021, all assays from Falcon’s inaugural drill program have been received, from which continuity of the mineralized trend containing the historical shaft was confirmed.

Encouraged by these results, the company has undertaken additional work programs on the property this year, with initial focus on the outcrop exposures and trench areas. There, the geological team will be conducting detailed structural mapping along the 275m long strike of the Central Canada mine trend. The team will also expand its attention onto the other high-priority gold targets along strike and paralleling the mine trend.

For the 2021 drill program, Falcon is planning to complete up to 20 diamond drill holes for approximately 2,000m of core. The goal is to target gold mineralization in the shaft area, and to test other excellent gold zones such as mineralized quartz-feldspar porphyries and the northern vein, also known as the No. 2 vein.

Other Properties

In addition to the Central Canada gold mine and the two newly acquired projects in Central Newfoundland, Falcon currently has five additional projects across Canada, plus one project in Argentina.

In Ontario’s Red Lake mining camp, the company has acquired a strategic land package at the Springpole West project. This property is directly tied onto First Mining Gold Corp.’s Springpole gold deposit, reported as one of the largest undeveloped gold projects in Canada, and Falcon’s property contains the same geological terrain as that world-class gold deposit.

Near Sudbury, Ontario, Falcon also has a 49% interest in the Burton gold property, located 38 km northwest of IAMGOLD’s Cote Lake deposit, which has an indicated resource of 35 million tonnes averaging 0.82 g/t for 930,000 oz of contained gold, plus an inferred resource of 204 million tonnes averaging 0.91 g/t for 5.94 million ounces of contained gold.

Falcon’s first land position in central Newfoundland was established in July 2021 with its acquisition of the Hope Brook gold property. This property is hosted within the Exploits Subzone of the central Newfoundland gold belt, contiguous to First Mining Gold, the Sokoman Minerals-Benton joint venture and Marvel Discovery Corp.

In British Columbia, the company has further work planned for the Spitfire-Sunny Boy project and the Gaspard gold claims, the latter was acquired earlier this year.

Falcon’s acquisition of the Esperanza gold-silver-copper property in La Rioja province, Argentina, was announced around the same time as the Gaspard project. Consisting of 10 mineral concessions covering 11,768 hectares, the Esperanza property is located within the Sierra de Las Minas district, which hosts a number of past-producing gold and silver mines.

Conclusion

Falcon Gold has all the elements we like to see in an exploration-stage gold junior. The company is a large landowner in a past-producing mining district, with a mid-tier gold producer, Agnico-Eagle Mines, exploring just off its northern boundary.

We also like the recent acquisitions, especially the recently staked claims in central Newfoundland. The properties are all strategically located near areas with potential to grow into a world-class gold resource, and thus could well be a game-changer.

With projects also in BC and Argentina, Falcon has a diversified portfolio of projects with a rich mining history and potentially even richer endowment of mineral resources that can be rapidly generated.

Falcon Gold Corp.
TSXV:FG, OTC:FGLDF, FSE:3FA.G
Cdn$0.105, 2021.09.16
Shares Outstanding 100.2m
Market cap Cdn$10.5m
FG website

Richard (Rick) Mills
aheadoftheherd.com
subscribe to my free newsletter

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Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.

Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.

Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

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Marvel expands land position in Central Newfoundland, next to 4Moz Valentine gold project

2021.09.18
Marvel Discovery Corp (TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF) is a junior gold explorer active in the Central Newfoundland Gold Area Play.
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2021.09.18

Marvel Discovery Corp (TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF) is a junior gold explorer active in the Central Newfoundland Gold Area Play.

The Vancouver-based company has assembled a sizeable land position, over 60,000 hectares, right in the thick of the Exploits Subzone of Central Newfoundland — potentially one of the world’s last easily accessible, district-scale gold camps. 

See below for Marvel’s map of the area including the major faults shown as heavy black lines.

This summer, Marvel has been busy snapping up claims and adding to its land package.

Exploits Subzone

The Exploits Subzone of Central Newfoundland

Running from Dog Bay southwest for 200 km to Bay d’Espoir, Newfoundland’s Exploits Subzone has been neglected since the last major exploration campaigns in the 1980s. However, the last 40 years have seen incremental advancements in the understanding of gold mineralization in the camp.

The sum of this knowledge is now coming together in effective exploration models that have delivered new discoveries.

What makes the Exploits Subzone such a prime target for gold discovery? Prominent regional thrust faulting shows evidence of a long tectonic history including fluid migration.

During a period known as the Taconic orogeny that lasted from 480-430 million years ago, the continental plates of Laurentia and Gondwana collided, closing the Iapetus Ocean between them. The islands we now know as Newfoundland, Ireland and Great Britain, were crushed between the continental plates, and deep crustal breaks were created that remained as active fluid conduits for millions of years. These five major tectonic breaks are important mineralizing structures for numerous multi-million-ounce gold deposits, including Marathon Gold’s (TSX:MOZ) Valentine Lake deposit, which lies just southwest of New Found Gold’s (TSXV:NFG) Queensway discovery.

Consider that the majority of Newfoundland’s gold occurrences and exploration lie within the Exploits Subzone and are in the vicinity of the Gander River Ultramafic Belt, better known as the GRUB Line.

Fact is, to stand out from among the 30-odd gold juniors that are presently combing the island, your property had better overlie one of the deep-seated structures Newfoundland is famous for, and have a secondary structure that provides a trap for the gold mineralization. 

Victoria Lake project

The Victoria Lake project is among the most prospective of Marvel Discovery Corp’s seven Newfoundland properties.

Located within the Exploits Subzone, the property is bolted onto Marathon Gold’s 4-million-ounce Valentine gold project, which is Atlantic Canada’s largest undeveloped gold resource.

Victoria Lake and Valentine exhibit a similar style of gold-bearing veins and have structural and geological settings in common. Preliminary work on Victoria Lake identified several quartz-arsenopyrite veins returning grab samples ranging from 15.5 to 24.9 g/t gold and 18.6 to 139.3 g/t silver.

In 1995, grab samples from Vein #3 featured 162.7 g/t gold and 220 g/t silver.

Regional geological and structural location of the Victoria Lake gold project.

This week Marvel announced it has acquired an additional 53 mining claims at Victoria Lake comprising 1,325 ha, increasing its land position to 7,650 ha. The company says the acquisition is located along the Exploits Subzone and covers a large, highly prospective structural zone proximal to the Valentine Lake Shear Zone hosting Marathon Gold’s (TSXV:MOZ) Valentine Gold Project with resources of 4M oz. of gold…

Victoria Lake Gold Project is host to interpreted extensions of the Valentine Lake Shear Zone and two major thrust faults, a wide structural corridor interpreted to play an integral part in the Marathon Gold Deposit.

The project is contiguous to Marathon’s Valentine gold project which has a 4Moz resource.

In fact the claims, acquired via an option agreement with a vendor, contain the highest regional gold-in-till sample — 785 parts per billion (ppb) Au. This high-grade surface gold area was never followed up with additional exploration, making it a juicy target for Marvel Discovery Corp.

“These claim additions were a strategic move, not only in expanding the size and potential, but tying up ground with the highest gold till-in-soil samples in the province of Newfoundland,” Marvel CEO Karim Rayani commented in the Sept. 14 news release. “This shows we are in the right place for a potential discovery adjacent to what will likely become Newfoundland’s next and largest gold mine.”

In a recent video interview, Rayani noted that the vendor, Roland Quinlan, is the same owner who sold part of the Queensway project to New Found Gold, the first mover in the Central Newfoundland Gold Area Play. 

“He’s one of the bigger names in the game,” Rayani told Proactive Investors’ Steve Darling, adding that Quinlan is heading up prospecting on Marvel’s Slip property claims and will also be in the field at the Victoria Lake project.

“If we do this right we could be sitting on a very large system. We’re just looking forward to getting crews on the ground as soon as possible,” Rayani said in the video interview. 

Under the option agreement, Marvel will make a series of cash payments over the next three years, and issue the vendor up to 500,000 shares and 300,000 warrants. Marvel also agreed to spend at least $60,000 exploring the property before the three years is up. The vendor retains a 2% NSR, of which Marvel has the right of first refusal to purchase 1% for $1.5 million.

Recent successes

The Central Newfoundland Gold Area Play continues to deliver great results to the market during a busy summer of drilling.

Earlier this year Marathon Gold updated the resource at its Valentine gold project, in a technical report outlining 3.14 million ounces in measured and indicated, and 1.65Moz inferred. (proven and probable reserves of 2.05Moz)

The feasibility study envisions an open-pit mine with average annual gold production of 173,000 ounces, over a 13-year mine life.

Marathon Gold trades on the Toronto main board at $3.23 per share with a market capitalization of $785.1 million. The latest fire assay results from ongoing in-fill drilling at the 1.5-km-long Berry deposit include 22.97 g/t Au over 6m, 25.38 g/t Au over 4m, 2.50 g/t Au over 27m, 1.73 g/t Au over 39m and 3.04 g/t Au over 22m.

Labrador Gold (TSXV:LAB) is another company piquing interest in Newfoundland gold exploration. Earlier this year the Toronto-based company released an impressive half-meter (0.5m) intercept of 276.56 g/t gold at its Kingsway project located near Gander, NL. The company followed that up with a 128.51 g/t over 1.12m hit at the Big Vein zone, part of a collection of assays delivered from the current 50,000m drill program. LAB currently trades at $0.78 per share and has a market value of $118.1 million.

Exploits Discovery Corp (TSXV:NFLD) reported 194 g/t visible gold at its Little Joanna prospect, along with 613 g/t Au and 189 g/t Ag at the Quinlan Veins target of its Dog Bay gold project. A large vein system with historical grab samples (700 g/t Au) containing visible gold is being drill-tested at Jonathan’s Pond, with prospecting, soil and rock sampling taking place at NFLD’s Mount Peyton, Dog Bay and True Grit projects. Results from the initial round of drilling are expected in early October. Exploits Discovery closed on Friday at 64 cents share @ a market cap of $53.4M.

Trading at just 13 cents, MARV has impressive accretive value compared to its peers.

Conclusion

The Exploits Subzone of Central Newfoundland is on its way to becoming the world’s next large gold district.

Companies are busily drilling the area and the first movers, including New Found Gold, Marathon Gold and Labrador Gold, are banking high-grade intercepts worthy of investor interest.

The area’s faults and subfaults have shown a long history of fluid migration. Central Newfoundland’s five major tectonic breaks can be traced back some 400 million years.

These deep crustal breaks are important mineralizing structures for hosting multi-million-ounce gold deposits. The potential is evident in Marathon’s Valentine deposit and at New Found Gold’s Keats, Lotto and Golden Joint zones.

Today, Central Newfoundland is home to a number of up-and-coming gold explorers looking to become the next Marathon or NFG, and competition for land is growing fierce.

Having established itself as a major landowner with seven projects in this highly prolific region, Marvel represents an intriguing opportunity for investors looking for the next gold play in Central Newfoundland.

Marvel Discovery Corp.
TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF
Cdn$0.13, 2021.09.17
Shares Outstanding 73.8m
Market cap Cdn$10.2m
MARV website 

 Richard (Rick) Mills
aheadoftheherd.com
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AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

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You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments.

Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.

AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks.  Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security. Richard does not own shares of Marvel Discovery Corp. (TSXV:MARV). MARV is a paid sponsor of his site aheadoftheherd.com

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