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Palladium One Extends High-Grade Mineralization 250m SW of Kaukua Open-Pit Resource

2021.11.27
Palladium One Mining (TSXV: PDM) (FRA: 7N11) (OTC: NKORF)  
continues to advance its Läntinen Koillismaa (LK) platinum group element-copper-nickel…

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This article was originally published by A Head of the Herd

2021.11.27

Palladium One Mining (TSXV: PDM) (FRA: 7N11) (OTC: NKORF)  

continues to advance its Läntinen Koillismaa (LK) platinum group element-copper-nickel property in Finland — this week announcing that initial down plunge drilling has extended mineralization 250 meters southwest of the open-pit constrained resource estimate at the Kaukua deposit.

Hole LK21-101 intersected 1.5 g/t palladium equivalent (PdEq) over 74.5 meters starting at 273 meters down hole, and returned a higher-grade 2.2 g/t PdEq over 19.6 meters.

Other high-grade intercepts included:

  • Hole LK21-102, @ 3.2 g/t PdEq over 13.7 meters, within 1.6 g/t PdEq over 113.6m, with individual samples grading up to 9.6 g/t PdEq over 1m;
  • Hole LK21-100, @ 3.3 g/t PdEq over 9.6m, within 1.5 g/t over 113.4m, with individual samples grading up to 5.9 g/t PdEq over 1.5m.

“The high-grade ‘Core Zone’ of the Kaukua deposit has been extended to the southwest and remains open for expansion. These are among the thickest intercepts to date within the Kaukua deposit and will add significant tonnage to our existing resource endowment,” said Palladium One’s CEO, Derrick Weyrauch, in the Nov. 23 news release.

The news from Kaukua alters the geological model, in a good way. As Palladium One explains,

Previous geological interpretations suggested that the Kaukua deposit was cut-off by a northwest trending fault, occupying a distinct magnetic low and topographic lineament. Drilling has demonstrated that the magnetic low is the result of a later cross cutting dyke (now referred to as the high-titanium gabbro dyke) and that the Kaukua deposit remains open to the south.

Resource definition drilling at Kaukua and the western half of Kaukua South (together known as the Kaukua area) is complete, with an updated NI 43-101 resource estimate scheduled for the first quarter, 2022.

While the Haukiahio trend is more copper-nickel rich, the Kaukua deposit contains mostly platinum group elements, with two-thirds of the value in palladium and platinum.

Historic and current drilling in the Kaukua and Kaukua Southwest area. Assays have been received for holes up to LK21-103, the remainder are pending. Background is induced polarization (IP) chargeability.
Cross sections showing holes LK21-102, 107, along with historic holes KAU07-005, KAU12-057 and 068, and their position with respect to the 2019 Kaukua open-pit resource estimate.

The Kaukua mineralized system is also much larger than previously understood, as evidenced by last year’s major discovery about 500m away at Kaukua South, which hosts a >4 km-long IP chargeability anomaly, of which 3.5 km had never been tested prior to Palladium One’s drilling work.

Initial drilling last year, therefore, focused on expanding known mineralization to the east of existing drill intercepts in the Kaukua South Zone, taking priority over the planned drilling to upgrade and convert the historical resource estimate at Haukiaho.

(As announced in a Sep. 7 news release, results from a 2,000m drill program at the Haukiaho Zone significantly increased this area’s resources (NI 43-101-compliant) to 32.7 million tonnes grading 1.15 g/t PdEq for 1.21 million ounces of contained PdEq. This resource update essentially doubles the resource endowment of the entire LK project, which now boasts 11 million tonnes of indicated resources grading 1.60 g/t PdEq (600,000 oz PdEq) and 44 million tonnes of inferred resources grading 1.19 g/t PdEq (1.7 million oz PdEq))

Kaukua South drilling successfully confirmed the eastern extension and the over-4 km strike length, insinuating the presence of a large-scale, shallow mineralized system with significant continuity.

Phase 2 drilling by Palladium One this year continued to return significant PGE grades and widths, including 47m at 2.3 g/t PdEq and 53m @ 2.1 g/t PdEq, and was successful in extending the strike length of the Upper Zone mineralization.

These results added to the company’s belief that it could add a significant amount of open-pit resources to the upcoming NI 43-101 resource estimate upgrade.

Last month the company announced the highest-grade hole to date at LK, which intersected 4.07 g/t PdEq over 24m within 2.08 g/t Pd_Eq over 112m, starting at 171.5m depth.

The question is not if, but by how much, the Kaukua drilling will add to the already doubled mineral resources at the LK property.

The Kaukua Zone at LK is mostly a palladium-platinum-gold play, however it may surprise readers to learn there are significant base metal values particularly at Haukiaho, where two-thirds of the zone’s value is in nickel and copper compared to Kaukua where 66% of the value is in palladium and platinum.

Indeed Haukiaho hosts some of the highest nickel grades on the LK project. At 17 km in length, the Haukiaho trend currently represents the largest continuous patch of blue-sky potential.

The latest resource estimate of 1.2 million ounces PdEq grading 1.15% g/t, comprises only 3 km of strike length; 2 km of strike extent, immediately east of the Haukiaho resource estimate, contains two significant IP chargeability anomalies with sufficient historic drilling to potentially be upgraded to inferred resources with modest additional drilling.

The remaining 12 km of the Haukiaho trend has not been drill-tested by the company, though widely spaced historic drilling has demonstrated that the trend is mineralized. This drilling provides a high level of confidence for potential additional nickel-copper resources to be delineated, Palladium One said.

Also worth noting is the fact that the Haukiaho Zone’s resource estimate contains cobalt. There is a reasonable expectation that the next resource estimate update at the Kaukua Zone where PDM is concentrating its drill program, will also contain notable values of the crucial lithium-ion battery component.

Tyko

As for Palladium One’s Tyko nickel-copper project in Ontario, in a Nov. 16 project update the company says geophysical crews are on site conducting ground-based electromagnetic surveys on key areas; three new exploration permit applications have been filed for drill-testing the newly identified EM anomalies; and a fourth exploration permit application has been made to expand upon the existing Smoke Lake exploration permit, to allow for additional step-out drill pad locations.

“We eagerly await receipt of new exploration permits for Tyko so that we can get back to drilling and make additional discoveries.” said Derrick Weyrauch, President and CEO.

The project known for its high sufide nickel tenor, received the Bernie Schnieders 2020 Discovery of the Year Award, presented by the Northwestern Ontario Prospectors Association (NWOPA).  

It covers approximately 24,500 hectares within the highly prospective Mid-Continent Rift nickel province, including over 7,000 hectares of the mafic-ultramafic Bulldozer intrusion, which has seen virtually no geological mapping nor exploration.

The Tyko project is located 25 km north of the Hemlo mining complex, in northwestern Ontario.

The Archean-aged mafic-ultramafic intrusion is rich in nickel, containing twice as much the battery metal as copper, and equal amounts of platinum and palladium.

According to the company, the high tenor of the sulfide minerals suggests a valuable concentrate could be produced, and that even if the sulfides are disseminated, the deposit could still be economic.

Drilling in 2020 primarily focused on the Smoke Lake target, an EM anomaly identified through geophysical surveying. Magnetic survey undertaken shortly before drilling helped to refine the anomaly, resulting in the successful discovery of massive magmatic sulfides.

The first discovery of massive sulfide mineralization at Tyko was confirmed in January, when the company announced drill intercepts from massive magmatic sulfide of up to 9.9% nickel equivalent. Subsequent drill results reported from the 2020 program were a resounding success, confirming the high-grade nature of the deposit.

A second-phase, 2,000m drill program was initiated in April to follow up on these high-grade hits. The assays to date have been excellent, including massive magmatic sulfide intercepts grading up to 10.2% nickel equivalent, demonstrating a robust mineralization spread over a distance of at least 18 km.

In addition to the high-grade Smoke Lake Zone, Palladium One believes there are new zones of nickel-copper mineralization yet to be discovered.

Preliminary results of the recently completed airborne EM survey have identified as many as four significant multi-line EM anomalies on the Tyko nickel-copper project, which further support this hypothesis.

Of particular interest are two anomalies in the Bulldozer Intrusion. These are the first EM anomalies identified in this large mafic-ultramafic intrusion and hint at potentially large tonnage targets.

Assay results from the Phase 2 drill program at Smoke Lake are pending.

Palladium One Mining
TSXV: PDM, FRA: 7N11, OTC: NKORF
Cdn$0.18, 2021.11.26
Shares Outstanding 248m
Market cap Cdn$43.4m
PDM website

Richard (Rick) Mills
aheadoftheherd.com
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Author: Gail Mills

Precious Metals

Oklahoma to Consider Holding Gold and Silver, Removing Income Taxes

Legislators in Oklahoma aim to protect state funds with physical gold and silver and remove capital gains taxes from gold and silver transactions  ?…

(Oklahoma City, Oklahoma — January 20, 2022) – An Oklahoma state representative introduced legislation today that would enable the State Treasurer to protect Sooner State funds from inflation and financial risk by holding physical gold and silver.

Introduced by Rep. Sean Roberts, HB 3681 would include physical gold and silver, owned directly, to the list of permissible investments that the State Treasurer can hold. Currently, Oklahoma money managers are largely relegated to investing in low-yield, dollar-denominated debt instruments.

Other than Ohio, no state is currently known to hold any precious metals, even as inflation and financial turmoil accelerate globally. Yes, Oklahoma’s own investment guidance prescribes safety of principal as a primary objective for investment of public funds.

“Currency debasement caused by federal monetary and fiscal policies has created an imminent risk of a substantial erosion in the value of Oklahoma’s investment holdings,” said Jp Cortez, policy director of the Sound Money Defense League.

“With most taxpayer funds currently held in debt paper carrying a negative real return, Oklahoma would be prudent to hedge today’s serious inflation risks with an allocation to the monetary metals.”

HB 3681 simply adds the authority to hold physical gold and silver bullion directly – and in a manner that does not assume the counterparty and default risks involved with other state holdings. Rep. Roberts’ measure does not grant authority to buy mining stocks, futures contracts, or other gold derivatives.

Additionally, HB 3681 prescribes safekeeping and storage requirements. The State Treasurer would hold the state’s bullion in a qualifying, insured, and independently audited depository, free of any encumbrances and physically segregated from other holdings.

Oklahoma has become a sound money hotspot, already earning 11th place on the 2021 Sound Money Index.

The Sooner State ended sales taxes on purchases of precious metals long ago. This week, Sen. Nathan Dahm introduced SB 1480, a measure to remove Oklahoma state income taxes from the exchange or sale of gold and silver sales.

The Sound Money Defense League and Money Metals Exchange strongly support these pro-sound money measures in Oklahoma and are actively working to ensure their success. Tennessee, MississippiKentucky, and Alabama are just a few of the other states fighting their own sound money battles in 2022.

      

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Precious Metals

Gold Uptrend Confirmed

It’s been a turbulent start to the year for the major market averages, with many sectors like Retail (XRT) and Staples (XLP) being hit by inflationary…

It’s been a turbulent start to the year for the major market averages, with many sectors like Retail (XRT) and Staples (XLP) being hit by inflationary pressures and continued supply chain headwinds while worries about rate hikes leading to a cool-down in valuations in tech. However, one asset class that is holding its ground is gold (GLD), which is up 1% year-to-date, outperforming the Nasdaq by 700 basis points. This outperformance appears more than overdue, with gold typically performing its best when real rates are deep in negative territory, in line with the current backdrop. Let’s take a closer look below:

(Source: YCharts.com, Author’s Chart)

Looking at the chart above, we can see that real rates continue to trend lower and are now sitting at their lowest levels in decades, spurred by continued high single-digit inflation readings. This backdrop has typically been very favorable for gold, given that investors are not getting interest elsewhere, meaning there is no opportunity cost to holding the metal, and there is an opportunity cost to holding cash. The one impediment to gold’s performance, though, has been the fact that the major market averages have been climbing higher with a relentless bid, allowing investors to park their cash safely in the market.

Chart, line chart

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However, since the year began, this does not appear to be the case, and gold is massively outperforming the S&P-500, as well as growth and value ETFs. This has created a perfect storm for the metal, and its outperformance can be highlighted by the above chart, which shows gold recently breaking out to new multi-week highs vs. the S&P-500. A new trend upwards following a period of significant underperformance has typically led to sustained rallies in the gold price, with the most recent example being February 2020 ($1,500/oz to $2,050/oz). Hence, this is a very positive development for the gold bulls.

The key, however, is that gold’s outperformance vs. the S&P-500 is not simply due to the S&P-500 being in a bear market and gold trending lower, but just losing less ground. The good news is that this is not the case, with the monthly chart for gold showing that it is building a massive cup and handle, with much of its handle being built above its prior resistance. This is a very bullish long-term pattern, and a successful breakout above $2,000/oz would target a move to at least $2,350/oz. 

Chart

Description automatically generated

(Source: TC2000.com)

Meanwhile, if we look at the yearly chart above, we can see an even better look at the cup and handle pattern and why the discussion that gold is dead or in a deep downtrend is simply incorrect. While one can certainly make the case that gold has gone nowhere over the past 18 months and the daily chart remains volatile, the big picture has rarely looked better in the past several decades, and zero technical damage has been done. So, for investors looking for an asset with a favorable fundamental backdrop that’s also sporting a very attractive looking long-term chart, I am hard-pressed to find anything as attractive as gold among the 150+ ETFs and assets I track. 

Chart, line chart

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(Source: TC2000.com)

So, what’s the best course of action?

One of my favored ways to play the gold sector is Agnico Eagle Mines (AEM). The reason is that it has one of the best margin profiles sector-wide; the potential to increase production by more than 30% over the next nine years, and it operates out of the most attractive jurisdictions globally. This is evidenced by the fact that AEM should be able to grow annual gold production from ~3.4 million ounces to ~4.5 million ounces between now and 2030 and has 50% margins at a $1,800/oz gold price. 

Chart

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(Source: TC2000.com)

As the chart above shows, AEM’s technical picture continues to improve, with the stock building a 10+ year cup and handle base atop its prior multi-decade breakout level. This is a very bullish pattern, and a breakout above $70.00 would target a move above $95.00 in the next two years. So, with the stock consolidating near the right side of its cup and trading at a very attractive valuation of 1.0x P/NAV, I see this as an attractive entry point. Notably, AEM also pays a ~2.7% dividend yield, double that of the S&P-500. For those preferring to invest in gold, I continue to expect a trend of higher lows, with the $1,750/oz – $1,780/oz area representing a very low-risk buy zone. 

It’s no secret that GLD has massively underperformed other ETFs over the past 18 months, and with many focused on the last shiny thing and having recency bias, it’s no surprise that gold remains out of favor. However, the best time to buy the metal is when it’s been hated and has corrected sharply from its highs, making this an attractive entry point. Given that most other ETFs could use a rest, and the fundamental backdrop remains very favorable for gold, I remain medium-term and long-term bullish, and I would not be surprised to see gold above $2,080/oz this year. 

Disclosure: I am long GLD, AEM

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

The post Gold Uptrend Confirmed appeared first on ETF Daily News.

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Economics

Buy Sofi Technologies Stock If There’s Another Rate Hike Selloff

The Sofi Technologies (NASDAQ:SOFI) pullback, which started in November, has carried on into the new year. Since the start of 2022, SOFI stock has taken…

The Sofi Technologies (NASDAQ:SOFI) pullback, which started in November, has carried on into the new year. Since the start of 2022, SOFI stock has taken another 5% plunge, changing hands now for around $15 per share.

Source: rafapress / Shutterstock.com

What has caused this continued decline for the fintech play? The prospect of higher interest rates in 2022. The U.S. Federal Reserve plans to raise interest rates at least three times this year. Generally, higher rates mean lower valuation multiples for growth stocks.

Worse yet, another selloff caused by rate hikes could occur soon. That is, if the Fed’s response to inflation ends up happening at a faster pace, as some analysts are starting to predict. That steeper climb in interest rates will likely cause more multiple compression. But while bad for the near term, this isn’t a reason to skip out on SOFI stock entirely.

Like I’ve discussed before, further volatility caused by interest rate changes could push Sofi to a “can’t miss” entry point. Not only that, a larger increase in interest rates will bode well for the company’s underlying business. SOFI may not be a buy today, but it’s one to keep an eye on in case it takes another dive.

The Latest with SOFI Stock

With recent news suggesting the Fed would raise rates faster and sooner this year, growth plays found themselves under pressure. That resulted in another round of declines.

This factor and, to a lesser extent bearish forecasts for fintech from the sell-side, has caused the additional drop in SOFI stock. Interest rate fears could cool off again in the immediate term. For now, the market may believe it has readjusted valuations to reflect likely rate increases. However, between now and when the Fed officially raises rates in March, we may see another wave of volatility.

Why? Well, there could be more than just three interest rate increases in 2022. Even worse, the size of each increase could be greater than just 25 basis points (0.25%). Of course, that’s not to say the Fed is ready to heed outspoken billionaire Bill Ackman, who recently called for an initial 50 basis point (0.5%) jump in interest rates. Still, when it comes to upcoming rate hikes, it may be wise to expect the unexpected.

Given that inflation is at multi-decade highs, the central bank may end up taking drastic action. A big spike in interest rates could mean another round of big declines for the stocks that thrived during the pandemic’s near-zero interest rate environment.

Higher Interest Rates Have a Silver Lining

If the scenario described above plays out, SOFI stock could plunge again, even as it continues to have a very high rate of projected annual revenue growth (43.3% this year). Of course, a potential plunge to under $10 per share may appear discouraging on the onset. Many other former special purpose acquisition companies (SPACs) have fallen below their intial $10 per share price and haven’t returned to double digits. However, I wouldn’t view a move to under $10 as any sort of “game over” moment. In fact, I would view it as an opportunity.

Unlike some other SPAC deals, the underlying business here is strong. Based on Sofi’s last reported quarterly results, the fintech firm appears set to continue scaling up. Someday it could become one of the top digital-first financial supermarkets like Block (NYSE:SQ) and PayPal (NASDAQ:PYPL).

After the market absorbs interest rate changes, continued strong results will enable SOFI stock to start bouncing back. Along with this, other positive developments could help fuel it to higher prices —  including a development enhanced by higher interest rates.

The development? When Sofi obtains a bank charter. This is expected to happen sometime in 2022. Getting a bank charter is already seen as a game-changer for Sofi. But investors should also take into account how rising rates are a positive for banking profitability. Sofi’s move into more traditional lending operations could enable it to get out of the red much sooner.

Sofi Is a Buy if It Drops Again

All told, my take on Sofi Technologies is largely unchanged from past articles. In a nutshell, waiting for another pullback is the best move here. Sure, there is a risk that its current price is the bottom. Shares could bounce back and see investors missing out on the recovery.

Then again, as it appears more likely that the market will have at least one more negative reaction to rising interest rates? The opportunity to lock down a long-term position in SOFI stock at lower prices looks likely. When it comes to this name, wait for that moment before buying.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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