Gold Seeker Report #32: This Week in Mining; A Much Needed Healthy Correction

Gold Seeker Report #32: This Week in Mining; A Much Needed Healthy Correction by Chris Marchese Chief Mining Analyst,

This was a volatile week to say the least but in a bull market this should be expected, especially after the metals essentially went straight up from March through early September. The mining equities sold off far more heavily and are trading with implied gold prices around $1,550-$1,625/oz. (depending on the company). If you learn to embrace these violent pullbacks, your returns could higher. For example, had you taken some profits in August or so, you would have been able to buy back the same companies today but get more shares. That is one strategy, with another being sit tight! If you can block out all the noise and understand why you bought precious metals and the underlying mining companies, this will be a much more enjoyable ride. As expected, with the metals getting smashed this week, especially silver, most companies likely held back news they would have otherwise released. Waiting for better market conditions increases the likelihood the market will react positively to a given piece of news. This could explain why this week’s news was so light.

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Abitibi Royalties: The company received conditional acceptance from the TSXV to conduct the normal course issuer bid. Under the 2020 NCIB, Abitibi may purchase for cancellation, from time to time at its discretion, up to 624.145k shares of its issued and outstanding, which represents 5% of the Abitibi Royalties’ issued and outstanding common shares.

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Bear Creek Mining: has approved, and will shortly commence, construction of several capital projects in the Corani region to support the long-term health, education and economy of local communities and provide early construction infrastructure for the Corani mine. These projects include:

  • Completion of the Antapata electrical substation started by the Company in 2018. Antapata will direct electrical power to communities and essential infrastructure within the Carabaya province, such as the forthcoming COVID treatment center, and will eventually connect the Corani mine to the existing Peruvian electrical grid.
  • Installation of transmission towers from the Antapata substation, initially to the community of Isivilla, to deliver medium tension electrical service to the Carabaya Province, including the town of Macusani and communities within the Corani district and, eventually, high tension electrical service to the Corani mine site.
  • Construction and upgrading of roads from the Interoceanic Highway, through the communities of Tantamaco, Huiquisa and Corani and eventually to the Corani mine site, which will increase security and accessibility for residents, reduce road hazards and traffic accidents and provide a route for the transport of heavy construction equipment to the Corani site.
  • These projects will benefit the Carabaya Province residents and communities as well as the Corani mine. They will provide much needed infrastructure improvements and will generate local employment, helping families re-establish income lost to the economic downturn caused by the COVID-19 pandemic. They are additionally necessary for construction and operation of the Corani mine. All of the programs described above will be funded from Bear Creek’s existing cash balances and are expected to total approximately US$6.0 M.

Bluestone Resources: Reported additional high-grade drill assays received from its infill drilling activities currently underway at the Cerro Blanco gold project. After a brief hiatus where the drilling activities were suspended to comply with COVID-19 related restrictions in Guatemala, a total of five drill rigs are now operational, located in the underground workings and on surface. The company is advancing the project rather quickly and we expect the mine plan to be updated, likely accommodating higher output.

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Gold Seek

Various authors presenting analysis and commentary on the precious metals, economy and precious metals mining markets.