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Element 29 Resources, a Pure-Play Peru #Copper Story with 2 Promising Projects

Source: Peter Epstein for Streetwise Reports   02/09/2021

Peter Epstein of Epstein Research discusses this newly listed company with "two 100%-owned, potentially world-class copper porphyry projects in Peru."There’s been a tremendous amount…

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This article was originally published by Streetwise Reports

Source: Peter Epstein for Streetwise Reports   02/09/2021

Peter Epstein of Epstein Research discusses this newly listed company with “two 100%-owned, potentially world-class copper porphyry projects in Peru.”

There’s been a tremendous amount of attention on gold juniors over the past year, and rightfully so. Gold at $1,846/oz is up +27% from 2020’s March low (down from an all-time high of $2,070/oz. last summer).

Silver is up even more. However, I bet few readers know that copper (“Cu”) at $3.72/lb (near an 8-year nominal price high) has soared +87% from its 52-week low. In the midst of a global pandemic, Cu has been one of the best performing commodities.

Copper fundamentals are strong, not just for this year and next, but for a long time to come. Goldman Sachs believes the world is entering a multi-year commodities super-cycle.

A renewed push for global decarbonization (with the U.S. back in the game and climate change increasingly undeniable) is one of several key factors pointing towards a new super-cycle thesis.

Copper fundamentals are strong for decades to come….

The 2020s will be remembered for massive deficit spending/debt issuance, which is bullish for precious metals—but also for base metals. Tens of trillions of dollars will be spent on giant Cu-intensive infrastructure and green energy projects. Renewable energy projects require 5x the Cu of fossil fuel plants.

The paradigm shift to vehicle electrification will boost Cu demand as well. EVs require 4x the Cu of internal combustion engine cars. Not to mention that Cu soon to be needed for 18-wheelers, delivery vans, construction, mining, military vehicles and equipment, ocean-crossing container ships, etc. Prodigious quantities of Cu will be required to build a vast battery charging infrastructure to make it all work.

Strong Cu demand is all but assured, but global supply is increasingly precarious. Many of the largest Cu mines are also the oldest and deepest—some date back to the 1800s.

Mined Cu grades have been in decline for decades, as has the number of new, blockbuster Cu discoveries. Several well-known open-pit mines are now operating at grades at or below 0.25% Cu. That’s US$19/tonne rock.

….but copper supply is increasingly uncertain

Everything I’ve written points to one critical takeaway. Higher Cu prices are necessary to incentivize mining companies to invest billions of dollars, over 10–20 year periods, to develop reserves—and then plan, permit, fund and build mines, processing plants and tailings facilities.

Adjusted for inflation, the all-time high Cu price breached $6/lb in the mid-1970s. In 2011 it was >$5/lb. The 2020s will likely see a new record high price. That’s great news for up-and-coming Cu juniors with (prospective) mines opening this decade—not so good for old, high-cost, low-grade mines nearing end of life.

Chile is by far the leader in Cu production, accounting for 28% of the world’s mined copper in 2020. But, cost inflation and lower grades are taking a toll. Obtaining water to operate the mines, many of which are at elevations above 3,500 meters, is tremendously challenging, costly and time consuming.

Peru is the second largest Cu producing country, it delivered 12% of last year’s mined copper. It too has mines at high and very high! elevations (>4,000 meters). Northern Peru is widely considered to be more difficult for companies to do business in due to opposition to mining in some areas.

However, in the central and southern parts of the country, which in many cases have less population density, mine operations are better tolerated and permitting is easier to achieve.

In the most recent Fraser Institute Mining Survey, Peru ranked higher than 7 of 12 Canadian provinces and (also) 7 of 12 U.S. states. Overall it ranked near the top of the second quartile.

Chile and Peru (a combined 40% of 2020 mined Cu) have been great jurisdictions to work in. Looking forward, both countries will likely remain Cu powerhouses, but fresh new mines will lead the way as aging, depleted mines shut down.

A newly listed company that’s well positioned with two 100% owned, potentially world-class copper porphyry projects in Peru is Element 29 Resources Inc. (ECU:TSX.V). Both projects are at 4,000 meters.

Element 29 Resources; advancing two promising Cu projects in Peru

Unlike for a growing number of properties in Chile, water is not expected to be an issue for Element 29. In fact, one of the two projects is close to a river. Both are outside of northern Peru, in the more mining friendly southern and central parts of the country. And, both are

The Elida property hosts a recently discovered (2013), untested copper-moly (Cu-Mo) porphyry cluster located ~170 km northwest of Lima, and ~85 km from the coast. Elida sits in a highly prospective porphyry belt in central Peru.

The property consists of 28 mining concessions totaling 19,210 hectares. It’s a cluster of at least four porphyry centers, with only the central target drilled.

The initial focus at Elida is on a sizable 750 meter by 600 meter central porphyry target. Management is pursuing a conceptual exploration target of 200 to 500M tonnes, grading between 0.35% to 0.45% Cu plus 0.03% to 0.05% Mo plus 3.5 to 4.5 g/t Ag.

This is no pie-in-the-sky three-year goal. Element 29 is funded to deliver a NI 43-101 resource that could be >200M tonnes by Q1 2022. Management already has 18 holes, nearly 10,000 meters of historical drilling. The team needs to tighten up the spacing. A 3,600 meter infill drill program is expected to start in April.

In 2014–15, Lundin Mining completed a modern 18-hole / 9,880 meter drill program that intersected a robust porphyry system. All holes hit Cu-Mo-Ag mineralization. Most holes ended in mineralization, (some holes in moderately high-grade mineralization) meaning that the system remains open at depth.

Note: Drilling and sampling was carried out by Lundin Mining Peru SAC (2014-2015). ALS-Global Laboratories in Lima, Peru, analyzed the half-core by ME-ICP41, which includes 35 elements using an Aqua Regia digestion ICP-AES analysis and gold fire assay with an AA finish (Au-AA23). The over limits underwent ME-OG46 for ore grade elements using an Aqua Regia digestion. Reported widths are drill core lengths; true widths are unknown at this time. Assay values are uncut. The calculated Copper Equivalent (CuEq. (%)) grade was used to determine the significant intervals (>0.20% CuEq. and >30 m core length, with higher grade intervals using a >0.40% CuEq. and >15m core length). *CuEq. = Cu(%) + Mo(%) x 2.667 +Au (ppm) x 0.6320 +Ag (ppm) x 0.0097 (no metallurgy has been completed at Elida, therefore no metallurgical recovery was applied in the copper equivalent formula). Cu Price= $3.00 USD/lb, Mo Price = $8.00 USD/lb, Au Price=$1,300.00 USD/oz, Ag Price=$20.00 USD/oz. The numbers correspond to Table 4 in the Elida Technical Report (refer to for the full report).

The best assay at Elida was from hole DDH-15ELID012, which hit a wide intercept of 503 m of 0.42% Cu plus 0.046% Mo plus 3.2 g/t Ag = 0.58% Cu Eq., including 393 m of 0.455% Cu plus 0.048% Mo plus 3.6 g/t Ag = 0.62% Cu Eq.

Drilling confirmed very significant areas of potential mineralization. Management believes there is excellent exploration upside. And, preliminary metallurgical studies are planned with existing core taken from prior drilling done by Lundin. In my view, this is a top-quartile global Cu exploration project.

From Element 29’s NI 43-101 technical report on Elida:

“Elida is a Cu-Mo-Ag mineralized porphyry complex that is part of a cluster of porphyry centres exposed over ~2.0 by 2.5 km. Elida is the first Eocene-aged porphyry system identified in Peru. This suggests a re-appearance of the Eocene magmatic arc present much further south in northern Chile. The world-renowned Chuquicamata and Escondida porphyry copper deposits reside in the Eocene belt of northern Chile.”

The property and surrounding areas are mostly uninhabited. Land in the immediate region is not being used. Engagement with locals has been ongoing for years. A community agreement that was set to expire in 2020 was successfully renewed until 2025. Management anticipates few, if any, difficulties in obtaining surface and water rights.

I’m placing a great deal of faith in this leadership team. The chairman, Richard Osmond; CEO, Brian Booth; and VP of Exploration, Paul Johnston have worked extensively in Peru and have considerable large and small mining company experience. The team includes notable experts in copper as well, like Director Peter Espig.

President and CEO Brian Booth (P.Geo) is very impressive; he has over 20 years with mining giant INCO and has held CEO and director positions at other junior miners and is currently a director at SSR Mining and GFG Resources.

Flor de Cobre, a second potential company-making asset

Second, but not last, Flor de Cobre (“Flor”) is an 1,800 hectare property (+127 ha under option) in the Southern Peru Copper Belt. It hosts an under-explored, higher-grade, small past-producing copper mine in southwestern Peru.

The project sits 45 km southeast of the country’s second largest city (Arequipa). It’s 30 km southeast of the fifth largest copper mine in the world, Freeport’s Cerro Verde, and just 7 km northwest of the Nexa Resources’ Chapi mine. Flor is wide open at depth and along strike to the northeast.

In addition to Cerro Verde and Chapi, multiple operating mines and deposits of >10 Mt of contained Cu are in the belt, including Cuajone and Toquepala (Southern Copper) and Quellaveco (Anglo/Mitsubishi).

The Flor area hosts a porphyry copper-molybdenum (Cu-Mo) system called the “Candelaria Porphyry,” with characteristics similar to other porphyry deposits in the belt.

One or more Cu enrichment zones support high-grade potential

The Candelaria zone was outlined by two drill campaigns in the 1990s and includes an enriched Cu zone with pockets of >1% Cu. The dimensions are 850 m x 1,000 m. Rio Amarillo later produced an initial resource estimate based on drilling that covered ~488 ha, and was based on 40 diamond drill holes. {See page 10 of Corporate Presentation}.

In another area, there’s evidence to suggest that the Atravezado target could be a second Cu-Mo porphyry system, bigger than Candelaria at roughly 1.2 x 1.0 km. A geophysical resistivity signature at 400 m depth is similar to other porphyries in the belt, making it a compelling target for testing.

In 1994, there were 60 drill holes completed at Flor, totaling 5,960 meters. The best hole, K-008, returned 124 m at 1.37% Cu (from an enriched Cu zone). Preliminary metallurgical test work was completed to investigate recovery by leaching and flotation. The reported Cu recovery was 89.5%.

Phelps Dodge followed that year’s program with 36 holes totaling 5,882 meters. Drill hole CD-128 returned the best intercept, with 40 m at 1.0% Cu.

Well funded to advance two top-quartile Cu exploration projects

Flor has higher-grade potential, but if Elida demonstrates 200M+ tonnes at a Cu Eq. grade of 0.40%-0.45%, then Element 29 Resources (TSX-V: ECU) could be sitting on two 100%-owned, top-quartile, (global) Cu exploration projects.

Both projects are funded through most of the year. New resource estimates, then third-party Preliminary Economic Assessments (“PEA”) in 2022 could re-rate this exciting new story, especially if the Cu price moves north of $4/lb. Readers take note, the current price of $3.72/lb is just 7% away from that important $4/lb threshold.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

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Disclosures / Disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Element 29 Resources., including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Element 29 Resources are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this article was posted, Element 29 Resources was an advertiser on [ER].

Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events and news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

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( Companies Mentioned: ECU:TSX.V,

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Collective Mining Makes a Significant New Discovery at the San Antonio Project, Drilling 710 Metres at 0.53 g/t Gold Equivalent from Surface

Collective Mining Ltd. (TSXV: CNL) (“Collective” or the “Company”) is pleased to announce that it has…

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Collective Mining Ltd. (TSXV: CNL) (“Collective” or the “Company”) is pleased to announce that it has made a significant grassroot discovery at the Pound target (“Pound”) within its San Antonio project, Colombia. Pound is one of three targets the Company has generated at the San Antonio project and assay results reported herein are from the recently completed Phase I reconnaissance drill program, which tested two of these targets.

Highlights (Tables and Figures 1 to 5)

  • Continuous gold (“Au”), silver (“Ag”) and base metal (copper and molybdenum) mineralization hasbeen intersected from surface, over the full core lengths of two reconnaissance diamond drill holes at Pound as follows:
    • 710 metres at 0.53 g/t gold equivalent from surface including 133 metres at 0.92 g/t gold equivalent from 470 metre depth (SAC-8); and
    • 750 metres at 0.41 g/t gold equivalent from surface including 187 metres at 0.59 g/t gold equivalent from 60 metre depth (SAC-6).
  • Importantly, both drill holes ended in mineralization with copper and molybdenum grades increasing at depth including:
    • 70 metres at 0.12% copper and 89 ppm molybdenum from 681 metre depth (SAC-6); and
    • 133 metres at 0.15% copper and 27 ppm molybdenum from 470 metre depth (SAC-8).

Pound mineralization is related to hydrothermal breccia and highly altered, quartz diorite intrusive which have been overprinted by late stage, polymetallic veins. Pound is located within a NE-SW trending corridor, as defined by mineralized breccia and altered intrusive, which is open in alldirections and has been mapped to date over a strike length of approximately 1.3 kilometres.The alteration system associated with Pound (advanced Argillic litho-cap) is related to the upper and peripheral portions of a porphyry system. The Company is currently reviewing its options for follow up exploration which would include initiating a Phase II diamond drill program and a high-resolution and deep penetrating IP survey as has recently and successfully been undertaken at the Guayabales project.

“The wide and continuous zones of mineralization intersected from surface at Pound are exciting and suggest we are either peripheral to or above a very large porphyry system,” commented Ari Sussman, Executive Chairman. “It is extremely pleasing that we have made brand new significant discoveries with the initial drill holes into grass root generated targets at both our Guayabales and San Antonio projects. With funding in place through 2022, the Company will become aggressive in the short-term with follow up drilling on our new discoveries and testing newly generated targets across the project portfolio.”

Table 1 Initial Diamond Drilling Results at the Pound Target

* AuEq (g/t) = (Au (g/t) x 0.95) + (Ag g/t x 0.013 x 0.90) + (Cu (%) x 1.83 x 0.92) + (Mo (%) x 4.57 x 0.92), utilizing metal prices of Cu – US$4.00/lb, Mo – US$10.00/lb, Ag – $20/oz and Au – US$1,500/oz and recovery rates of 95% for Au, 90% for Ag, 92% for Cu and Mo.
** a 0.1 g/t AuEq cut-off grade was employed with no more than 10% internal dilution. True widths are unknown and grades are uncut.

Geological Details of the San Antonio Project

The San Antonio (“SA”) Project is located in the Middle Cauca Gold Belt (“MCB”), 80 km south of Medellin and 50 km north of Manizales, Department of Caldas, Colombia. The MCB has been the most prolific belt for Miocene aged, porphyry and epithermal vein discoveries within Colombia and multi-million ounce discoveries in recent years include Buriticá, La Colosa, Nueves Chaquiro and Marmato.

The SA covers an area of 3,853 hectares and hosts multiple quartz diorite, diorite intrusive and breccia bodies of Miocene age which intrude basement schists and younger volcano-sedimentary packages.

Three specific grassroots exploration targets have been outlined by surface mapping, sampling, soil geochemistry, geophysical modelling, and shallow scout drilling. These are referred to as the Dollar, COP and Pound targets.

The Pound target is located in the northern portion of the project, is defined by multiple hydrothermal breccia bodies hosted within highly altered diorite and quartz diorite intrusive and overprinted by late stage, polymetallic veins. This zone of altered intrusive and breccia bodies trends NE-SW and has been mapped for a strike length of plus 1.3 kilometres.  The zone is still open to the NE and SW. Outcrop exposures on the southern border of this target area include epithermal vein systems within a preserved lithocap of advanced argillic alteration which is superimposed on hydrothermal breccia bodies which grades laterally and downwards into intermediate argillic alteration assemblages. These rocks are interpreted to reflect preservation of the shallow levels of the porphyry system. The initial two reconnaissance diamond drill holes, SAC-6 and SAC-8, were drilled to respective downhole depths of 750 metres and 710 metres and intersected various hydrothermal breccia (pyrite matrix), altered quartz diorite intrusive and late-stage polymetallic veins. All the rock units have been hydrothermally altered with an earlier sericitic event overprinted by a strong, advanced argillic phase with various aluminosilicates. At depth, various diorite phases display disseminations and aggregates of chalcopyrite and molybdenite in contact with large blocks of metamorphic schist. The target remains open in all directions and further work is envisaged and will commence with a deep penetrating, high-resolution, induced polarization survey down to minimum depths of 900m below surface followed by a Phase II expanded diamond drilling program. Exploration targets include the mineralized breccia and a porphyry system postulated to occur below the lithocap.

The COP target is located 800 metres south of Pound and is defined by highly anomalous molybdenum (8 ppm to 108 ppm) and gold (up to 2.74 g/t) in soils in association with altered diorite porphyry and quartz veinlets over an area of 650 metres x 350 metres. The surface expression of the COP target is coincident with geophysical anomalies, at 200-300 metres depth which include a positive magnetic anomaly and IP chargeability and resistivity highs.  COP has not been tested, other than a single historical borehole drilled just south of the target area, returned an intercept of 99 metres at 0.42 g/t gold and 4.9 g/t silver within unmineralized country rocks partially intruded by mineralized porphyry quartz veins at a depth of 608 meter downhole. The mineralization encountered in the drill-hole is interpreted to be leakage from the COP target directly to the north.

The Dollar target is located 400 metres south of COP. At surface various outcrop of quartz diorite porphyry host stockwork and sheeted quartz-magnetite vein systems associated with disseminated pyrite covering a 500 metre radius. Shallow scout drilling (6 holes) to cover the target area, identified the main mineralized porphyry. Holes SAC-1 to SAC-5 and SAC-9 returned gold intercepts of 0.1 to 0.3 g/t over various angled intercepts of 100 metres to 600 metres length within or across the various outcrops of the mineralized stockwork system. Based on the shallow intercepts a deeper hole was drilled into the mineralized stockwork and returned the intercepts outlined in Table 2 below. Gold, copper and molybdenum grades improve with depth and further deeper drilling is warranted, particularly as the project area is located approximately 300 metres above an accessible valley floor.

Table 2 Initial Deep Diamond Drilling Hole at the Dollar Target

* AuEq (g/t) = (Au (g/t) x 0.95) + (Ag g/t x 0.013 x 0.90) + (Cu (%) x 1.83 x 0.92) + (Mo (%) x 4.57 x 0.92), utilizing metal prices of Cu – US$4.00/lb, Mo – US$10.00/lb, Ag – $20/oz and Au – US$1,500/oz and recovery rates of 95% for Au, 90% for Ag, 92% for Cu and Mo.
** a 0.1 g/t AuEq cut-off grade was employed with no more than 10% internal dilution. True widths are unknown, and grades are uncut.

The San Antonio project benefits from favorable topography with approximately 600 vertical metres of elevation change from the mountain peaks to the various flat lying valleys. Additionally, the topography is not overly steep, lending itself to multiple potential infrastructure development scenarios should an economic deposit be discovered in the future.

Qualified Person (QP) and NI43-101 Disclosure

David J Reading is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same. Mr. Reading has an MSc in Economic Geology and is a Fellow of the Institute of Materials, Minerals and Mining and of the Society of Economic Geology (SEG).

Technical Information

Rock samples have been prepared and analyzed at SGS laboratory facilities in Medellin, Colombia and Lima, Peru; and Actlabs laboratory facilities in Medellin, Colombia and Toronto, Canada. Certified reference standards are inserted into the sample stream to monitor laboratory performance. Crush rejects and pulps are kept and stored in a secured storage facility for future assay verification. No capping has been applied to sample composites. The Company utilizes a rigorous, industry-standard QA/QC program.

About Collective Mining Ltd.

Collective Mining is an exploration and development company focused on identifying and exploring prospective mineral projects in South America. Founded by the team that developed and sold Continental Gold Inc. to Zijin Mining for approximately $2 billion in enterprise value, the mission of the Company is to repeat its past success in Colombia by making a significant new mineral discovery and advancing the projection to production.  Management, insiders and close family and friends own approximately 40% of the outstanding shares of the Company and as a result are fully aligned with shareholders. Collective currently holds an option to earn up to a 100% interest in two projects located in Colombia. As a result of an aggressive exploration program on both the Guayabales and San Antonio projects a total of eight major targets have been defined. The Company is fortuitous to have made significant grass root discoveries on both projects with discovery holes of 104 metres @ 1.2 g/t gold and 12 g/t silver and 710 metres @ 0.53 AuEq at the Guayabales and San Antonio projects, respectfully.

Contact Information

Collective Mining Ltd.

Steve Gold, Vice President, Corporate Development and Investor Relations

Tel. (416) 648-4065



This news release contains certain forward-looking statements, including, but not limited to, statements about the drill programs, including timing of results, and Collective’s future and intentions. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, Collective cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and Collective assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Figure 1: Plan View of the San Antonio Project and the Pound Target

Figure 2: Plan View of the Pound Target

Figure 3: Cross Section of Pound Drilling

Figure 4: Core Photos: Pound: SAC-6 and SAC-8

Hydrothermal breccias, cemented by sericite, carbonates, and sulphides are overprinted by strong advance argillic alteration with pyrite and chalcopyrite and molybdenite mineralization.

Carbonate base metals with galena, sphalerite and pyrite mineralization. Microdiorites and quartzodiorites with secondary biotite alteration with magnetite chacopyrite and pyrite mineralizattion.

Figure 5: Core Photos: Dollar, SAC-7. Clay Alteration Overprint Decreases With Depth

Quartz Diorites porphyry overprinted by strong Sericite alteration, quartz veinlets with magnetite, pyrite, and chalcopyrite.


Author: Resource World

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Precious Metals

Equinox Gold Breaks Ground For Greenstone Mine, Targets First Gold Pour In H1 2024

Equinox Gold Corp. (TSX: EQX) announced today the groundbreaking for the construction of the Greenstone gold mine in Ontario. The
The post Equinox Gold…

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Equinox Gold Corp. (TSX: EQX) announced today the groundbreaking for the construction of the Greenstone gold mine in Ontario. The mine is being developed in a 60-40 partnership with Orion Mine Finance Group.

The initial capital cost is expected to be $1.23 billion, including $50 million spent to date and a $177 million contingency budget. It is estimated that 10% of the construction will happen for the rest of 2021, 40% in 2022, 35% in 2023, and the remaining 15% in 2024. The mining firm plans to finance its attributable portion of the capital expenditure through its existing treasury worth $330 million as of June 2021, cash flow from its producing mines, and a $400 million revolving credit facility.

Greenstone mine is reported to have an initial mine life of 14 years and total gold production of 5.05 million ounces. For the first five years, the average annual production is estimated to be 400,000 gold ounces, then it becomes 360,000 gold ounces annually for the rest of the mine’s life.

The mining is expected to start in Q4 2022 and the first gold pour is targeted in H1 2024.

Equinox Gold last traded at $9.86 on the TSX.

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 Equinox Gold Breaks Ground For Greenstone Mine, Targets First Gold Pour In H1 2024 appeared first on the deep dive.

Author: ER Velasco

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The Bond Market “Paradox”

The Bond Market "Paradox"

Authored by Peter Tchir via Academy Securities,

I don’t remember a lot from the 90’s, but one memory has come…

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The Bond Market “Paradox”

Authored by Peter Tchir via Academy Securities,

I don’t remember a lot from the 90’s, but one memory has come back with vivid clarity.

Working with friends and colleagues, who were taking start-up projections and being “conservative” yet completely impossible.

Yes, in their models, users slowed from 200% growth to 50% growth a few years down the road, but their projections still gave them more users than humans within a few years.

That reminds me of legend about grains of rice and a chessboard. According to legend, a ruler asked a servant what they wanted as a reward for some incredible deed. The person asked for one grain of rice to be placed on the first spot on the checkerboard. Two on the second. Four on the third and so on. Doubling the number of grains for each new space on the checkerboard. While that seemed like an absurdly low reward to the ruler, who was probably expecting to be asked to pay his weight in gold (too bad we didn’t have bitcoin back then), but it turns out to be an impossibly large number.

Which brings me to Tesla’s recent price action. Up 12% on Monday, up 7% on Tuesday morning before falling by almost 9% from that level. While at a glance, the percentage moves are on the high side, it is the market cap moves that are simply astounding. 100’s of billions of market cap are being created and sometimes lost, in hours. Even as someone who doesn’t believe in efficient markets, that seems bizarre, at best. According to the WSJ, $16.1 billion of option premium was traded on Monday on Tesla. Which was more than the next 99 most actively traded option tickers combined! What is amazing about that is it includes contracts on S&P and Nasdaq futures and ETFs like SPY and QQQ. I assume they only publish the top 100, so if the value of Tesla option contracts wasn’t more than the value of every other option contract traded on Monday, I’d be surprised.

Whether we are at a blow-off top or not, remains to be seen, but

  • Those sorts of market cap swings seem inexplicable

  • Those sorts of option trading volumes seem inexplicable

But since they happened, the inexplicable must be explicable, I just wish I had a good explanation other than it is a gambler’s market and true liquidity, low at the best of times, is being severely tested by gamma squeezes and portfolios need to be hardened against that (or positioned to take advantage).

The Bond Market “Paradox”

We went into more detail on this in Sunday’s “Clear as Mud” but the following seems to be happening:

  • The market is pricing in the Fed hiking sooner. This is causing yields at the front end to rise. I think it is the wrong thing for the market to do, but I think the headlines will help that trade move along (so I’m betting on something happening that I don’t think should happen, but it is also too early to get in the way of the theme). I continue to believe that the next act in the play of not hiking will be to switch from talking “transitory” to talking “long term averages” but that isn’t the narrative the market is fixated on, at least not yet.

  • The long end rallies on Fed hikes. The simple narrative would be that the Fed is going to raise rates, which causes bond yields to rise. That is currently not the reaction, as bond investors are sniffing out the potential for the Fed to slow growth too early, or at exactly the wrong time. So fears of a more hawkish fed are driving curves flatter in a “pivot” sort of format (this morning, the pivot point is around 5 years, with bonds less than 5 years to maturity are seeing yields rise, while those longer than 6 years, are seeing yields fall).

  • Stocks No Longer “Love” Lower Long-Bond Yields. Parts of the stock market that had been positively correlated to bond prices are now “normalizing” and trading as though they are negatively correlated. That makes sense, because if longer dated bond yields are going lower because of fear of the Fed snuffing growth out, it just isn’t good for the market (unlike when yields are going lower because the Fed is buying so much and there is no material threat of sustained inflation).

Longer dated bond yields could benefit from a “risk-off” type of move, which the market seems far less positioned for today, than they were a few weeks ago.

I do miss the 90’s, but those are stories for another day.

Tyler Durden
Wed, 10/27/2021 – 10:46

Author: Tyler Durden

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