Renewable Energy Defining Point Reached As Economies of Scale Kick In And Tesla’s Elon Musk Bets He Can Save South Australia from Power Shortages
Renewable Energy Defining Point Reached As Economies of Scale Kick In And Tesla’s Elon Musk Bets He Can Save South Australia from Power Shortages
Are Cobalt Shortages In The Future?
Image source: WIRED
Tesla billionaire Elon Musk says he can install battery farm within 100 days or it’s free.
There’s more than just a little irony in the air these days. Just as Donald Trump plans to reduce energy efficiency standards for cars in the United States, a defining point in the history of renewable energy has been made in the form of a bet between billionaire Elon Musk and the State of South Australia. It is the moment that economies of scale kick in driving down and making the cost of grid scale renewable energy rollout feasible.
An energy crisis has been brewing for some time in sunny South Australia leading to blackouts and price spikes. As the debate raged on about how to solve it Musk stepped in during early March and offered to solve the problem by installing 100-300 MW hours of renewable energy electric grid scale battery storage within 100 days of signing the contract.
When Mike Cannon-Brookes tweeted to ask if Musk was serious Musk replied that if he couldn’t do it within 100 days of signing the agreement it would be free of charge. Cannon-Brookes was interested because he is Australian. He is also the co-founder of Silicon Valley start-up Atlassian which builds software development tools. Being Australian, Cannon-Brookes asked Tesla for a “mates rate.” Although contract figures have not been released Cannon-Brookes told the Australian media that Musk offered to almost halve the cost of the project.
Tesla has just finished building a battery farm in southern California that can provide 80 MW Hours of storage at a cost of $100 million in 90 days. Musk is a high-tech visionary who has made his visions pay. In February 2017 his net worth was calculated at $13.9 billion. He co-founded PayPal, Tesla Motors, Solar City and founded SpaceX, the commercial space transportation business.
Long a renewable energy advocate Tesla has built a second business in residential, commercial and electric grid storage batteries under the Tesla Powerwall banner and SolarCity, which he cofounded with a cousin to provide residential battery storage solutions. Musk has frequently noted that he is in the process of changing Tesla from a car company into a clean energy company. Tesla has also recently launched a roofing product designed to take the ugly out of solar panels by producing solar panel roofing shingles that look like slate, in a variety of attractive colours.
Musk’s ability to fulfill his promise to South Australia lies in the fact that on January 17th, 2017 Tesla’s Nevada Gigafactory, located near Reno, started production.
The Gigafactory has already supplied the batteries for a battery farm in southern California. Tesla has grid scale battery farm projects on the go in the UK, Connecticut, North Carolina, Hawaii and New Zealand. Only a third of the 4.9 million square foot Gigafactory which will cost $5 billion and is part of a partnership with Panasonic is up and running but by 2018 it will have doubled global lithium-ion battery production. Two of the most commonly used lithium-ion rechargeable batteries, including Tesla’s, use cobalt as part of the mix.
Large scale rollouts of solar, wind and water energy have been held back by the high cost of storing the electricity generated. Tesla’s Gigafactory and his consequent offer to South Australia are a game changer indicating that although battery storage costs have been falling for years, now they are about to tumble, thanks to economies of scale. It is estimated that Tesla’s lithium-ion batteries which also use nickel and cobalt are about a third less expensive than other batteries. This also means that the cost of electric vehicles and hybrids will begin to drop.
Last year IHS predicted the electric grid scale utility storage battery market to hit US$19 Billion during 2017. Taiyou Research predicts a US$ 30 Billion market in rechargeable Li-ion batteries by 2020.
If you don’t believe that clean energy will become a very viable industry in the near future you should bear in mind that if this year’s game changer is Tesla’s Gigafactory and the economies of scale that will play in strengthening the renewable energy rollout then last year’s may very well have taken place when Facebook founder Mark Zuckerberg, Virgin founder Sir Richard Branson, Linkedin founder Reid Hoffman, Amazon founder Jeff Bezos, HRH Prince Alwaleed bin Talal, Chairman of the Board of trustees, Alwaleweed Philanthropies, Saudi Arabia, among others announced the creation of a clean energy investment group, The Breakthrough Energy Coalition. The coalition is made up of 28 high net-worth entrepreneurs from ten different countries.
Entrepreneurs who have changed the fabric of modern life are already on board. Warren Buffet, through Berkshire Hathaway has invested US$1 Billion and Bill Gates is investing US$1 Billion of his personal money and US$2 Billion through the Bill and Melinda Gates Foundation in renewable energy.
Battery and cobalt demand won’t just be driven by smartphones and Tesla. According to Rockstone Research the Germans are building a battery factory twice as large as Tesla’s, the Chinese are building four that are bigger than the Nevada Gigafactory, the Japanese are building two and the South Koreans are building one.
Savvy retail investors may be wondering how to take part in this emerging market and one perspective may be to look at it as a commodity market. Lithium stocks went through a gold rush period a few years ago propelled by the rechargeable battery market and now thanks to the amount of cobalt in a car battery and in laptops and smart phones it looks as if cobalt is set to takeoff. The battery pack for Tesla Model S, for instance, contains an estimated 22.5 Kg of cobalt.
Another factor that comes into play is secure supply and ethical sourcing. The refined product market is largely controlled by China, which has a history of trade embargoes and tariff walls when it comes to protecting resources and products for itself. The majority of raw cobalt comes from the Democratic Republic of Congo where much of the mining is done by child workers.
Nobody wants to drive a car or use a cell-phone powered by child labour and so the hunt is on for ethically sourced, securely supplied cobalt. Elon Musk has said that he is going to source the raw materials for his batteries from North America. At the moment there are no producing cobalt mines in North America. Exploration, however, is being fast tracked. Cruz Cobalt is one of the junior mining companies that may benefit. Commodity research house CRU has predicted cobalt demand to rise by 16{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} annually through 2022.
The LME has predicted that by 2020 the amount of cobalt used in rechargeable batteries could equal the total amount refined in 2015.
In a recent press release announcing the acquisition of the Chicken Hawk Cobalt Prospect in Montana, Cruz Cobalt, (CUZ—TSXV, BKTPF—OTCBB, A2AG5M–FSE), Cruz Cobalt President James Nelson stated:
“This new prospect now makes 9 cobalt prospects within North America that Cruz has secured. Cruz has also secured one of the largest land packages, consisting of 4 separate cobalt prospects, all located in the Cobalt/Silver district of Ontario surrounding the city of Cobalt. Cobalt prices continue to trade to new 5 year highs and have been on a significant uptrend over the past 12 months. Cruz is fully funded to commence operations on all of its 9 cobalt prospects and management expects to be on the ground very shortly.” If Cruz is successful then early investors will benefit accordingly. As of March 17, CUZ traded at $0.205 and has a total of 55,065,386 shares and a market cap of $11,288,404.
Another promising Canadian company exploring for cobalt is Kings Bay, (TSXV: KBG) which over the last year has acquired five prospective cobalt properties, two in Newfoundland Labrador and three in Northern Quebec. Kings Bay was recently reported on in the Financial Post where CEO Kevin Bottomley stated that the company’s Lynx Lake project near Happy Valley Goose Bay had shown initial results with very high cobalt numbers. The company has recently acquired a highly prospective cobalt property on Trump Island in NL. Their three properties in Quebec were worked on by Falconbridge around 2000 and Bottomley describes them as having initial positive results. Bottomley was previously associated with mining incubator Zimtu Resources and as a result has access to a network of European investors eager to invest in Canadian resource projects. Kings Bay traded at $0.18 on March 17, 2017 and has 41 million shares and a market cap of $7 million.
By Noel Meyer
- Published in Blog, Cruz Cobalt, Energy, Green Technology, King's Bay, Mining, Technology
Anfield hires BRS for Wyoming NI 43-101 reports
Anfield hires BRS for Wyoming NI 43-101 reports
Momentum Public Relations
Press Release: March 21, 2017
Mr. Corey Dias reports
ANFIELD RESOURCES COMMENCES ADVANCEMENT OF WYOMING URANIUM PROJECTS
Anfield Resources Inc. has engaged BRS Inc., an engineering firm, to prepare a series of National Instrument 43-101-compliant technical reports for a number of Anfield’s 24 Wyoming uranium projects. The company views resource delineation as the first phase of Anfield’s Wyoming uranium asset advancement. The projects are located in the Black Hills, Powder River basin, Great Divide basin, Laramie basin, Shirley basin and Wind River basin areas of Wyoming.
Further to its news release of Sept. 14, 2016, as a part of the Wyoming project acquisition, Anfield acquired a database containing historic resource estimates that identify significant potential for further development. This includes drilling and geologic work done by Uranium One of 575 drill holes totalling approximately 395,000 feet of drilling. In addition to the Uranium One database, Anfield previously acquired a historic database of geological information pertaining to the acquired projects and of surrounding properties. The company, in conjunction with BRS, is carefully analyzing the current and historic data to identify and prioritize the data to generate NI 43-101 technical reports for Anfield’s acquired projects.
Corey Dias, Anfield’s chief executive officer, stated: “We are delighted to begin the initial phase of our work on these projects in order to both identify and delineate uranium resources. Importantly, many of these projects are in areas of Wyoming in which a number of uranium producers have already established ISR production bases. Moreover, Anfield signed a resin processing agreement with Uranium One in late 2016 whereby Anfield can process up to 500,000 pounds of uranium per year at Uranium One’s Irigaray central processing plant.
“Uranium analysts are now noting that the uranium market is at an inflexion point where prices are bound to rise sharply in 2017. With depressed prices, mine production is being cut while uranium demand is steadily increasing in Asia and elsewhere. And long-term contracts are rolling off with significant uncovered demand being forecast. These market dynamics converges with Anfield’s strategy of acquiring quality assets and proceeding with disciplined, staged development. We are confident that developing these properties will facilitate the execution of our company strategy and will be a significant step towards becoming a top-tier U.S. uranium company.”
Douglas L. Beahm, PE, PG, the principal engineer at BRS, is a qualified person as defined in NI 43-101, with 40 years of professional and managerial experience. Mr. Beahm has a proven record in a variety of mining and mine reclamation projects including surface and underground mining, heap leach recovery, ISR, and uranium mill tailings projects. Mr. Beahm’s experience includes coal, precious metals and industrial minerals, but his emphasis throughout his career has been on uranium.
About Anfield Resources Inc.
Anfield is an energy metals exploration, development and near-term production company that is committed to becoming a top-tier energy-related fuels supplier by creating value through sustainable, efficient growth in its energy metals assets.
We seek Safe Harbor.
© 2017 Canjex Publishing Ltd. All rights reserved.
- Published in Anfield Resources, Mining, News Home
Momentum Reports – Deep South Resources – March 2017
Momentum Reports – Deep South Resources (DSM:tsxv)
[pdf-embedder url=”https://momentumpr.com/wp-content/uploads/2017/03/deepsouthresourcesreport1.pdf”]
- Published in Deep South Resources Inc., Mining
Cruz Cobalt closes prospect acquisition in Montana
Cruz Cobalt closes prospect acquisition in Montana
– Momentum Public Relations –
Press Release: March 21, 2017
Cruz Cobalt Corp. has closed on the recently announced Chicken Hawk cobalt prospect in Montana, United States. This new prospect consists of 64 contiguous lode claims covering approximately 1,300 acres. The Chicken Hawk cobalt prospect claims are located on the western edge of the Boulder batholith and east of the Cordilleran fold and Thrust belt in southwestern Montana. Covering a boundary between a Cretaceous granodiorite and the Lowland Creek volcanics from the Eocene, the eight current claims are in the vicinity of a total of four volcanic rock suites. Cobalt, the primary targeted commodity of the Chicken Hawk, is occurring in the pyritized andesite and as cobaltian arsenopyrite; the sulphides are pnuematolytic in origin. The 64 claims surround four patented claims, no less than 15 unclaimed prospects and three unclaimed adits.
Cruz president James Nelson stated: “We are pleased to have closed on this additional Cobalt prospect. Cruz is focused on acquiring, developing or joint venturing high-quality cobalt prospects. Cruz currently has approximately $1.95-million in cash and securities on hand as of today and we plan to implement multiple work programs across multiple counties and provinces. Cruz has one of the largest land packages in the Cobalt mining district in Ontario and we expect to be one of the most active companies in the district this next quarter.”
Recently Cruz also announced that management has commenced the application for an exploration permit on its Johnson cobalt prospect. This prospect is located in the vicinity of the city of Cobalt, home to one of the largest cobalt/silver districts in North America. This permit will cover the following activities of mechanized drilling, mechanized stripping, the pitting and trenching of bedrock, and line cutting.
Cruz currently has seven cobalt projects located in Canada, one in Idaho and now one in Montana. Cruz’s four separate Ontario cobalt prospects are all located in the vicinity of the city of Cobalt, making Cruz one of the largest landholders in this emerging cobalt district. The 900-acre Coleman cobalt prospect, the 900-acre Johnson cobalt prospect, the 5,500-acre Hector cobalt prospect and the 1,480-acre Bucke cobalt prospect. The 4,935-acre War Eagle cobalt prospect in British Columbia covers a past-producing mine.
The technical contents of this release were approved by Greg Thomson, PGeo, a qualified person as defined by National Instrument 43-101.
© 2017 Canjex Publishing Ltd. All rights reserved.
- Published in Cruz Cobalt, Mining, News Home
Enforcer hires Geotech for Montalembert airborne survey
Enforcer hires Geotech for Montalembert airborne survey
– Momentum Public Relations –
Press Release: March 21, 2017
Enforcer Gold Corp. has selected Geotech Ltd. of Aurora, Ont., to conduct a very high-resolution aeromagnetic survey over the entire high-grade Montalembert gold project using Geotech’s HeliGrad triaxial aeromagnetic gradiometer system.
Steve Roebuck, Enforcer Gold’s chief executive officer, states: “We are very pleased to be working with Geotech, a Canadian and global leader in airborne geophysics. The helicopter-borne survey, set to commence in the coming days, will be flown close to the ground with a very tight 50-metre line spacing. The new high-resolution magnetic plus VLF-EM [very low-frequency electromagnetic] data will be a key tool used by Enforcer Gold’s exploration team to map out folding, shearing and faulting in detail in this structurally controlled gold project.”
The historical geophysical surveys conducted in the past over the Montalembert project form a patchwork of different methods, line spacings and line orientations, and cover only part of the current property. Upon completion of the planned survey, the company will have a uniform, modern data set that allows it to better visualize property-scale geology, to understand and locate important structures controlling gold mineralization, and to rapidly and effectively generate exploration targets. The company will update the market as final plans are completed and the survey is commenced.
About Enforcer Gold Corp.
Enforcer Gold is earning a 100-per-cent stake in the high-grade Montalembert gold project located approximately 120 kilometres west of Chibougamau, Que., and 10 kilometres northwest of the village of Waswanipi.
Recent channel sample assays (please see news release dated Jan. 20, 2017) from the Galena vein included 438.23 grams per tonne gold over one meter and 119.94 grams per tonne Au over one metre.
© 2017 Canjex Publishing Ltd. All rights reserved.
- Published in Enforcer Gold Corp, Mining, News Home
Mobi724 to provide HSBC Argentina with loyalty services
Mobi724 to provide HSBC Argentina with loyalty services
– Momentum Public Relations –
Press Release: March 21, 2017
MONTREAL, QUEBEC–(Marketwired – March 21, 2017) – Mobi724 Global Solutions Inc. (“Mobi724” or the “Company”) (CSE:MOS)(CSE:MOS.CN) – a fintech leader offering integrated EMV payment, card-linked offers and digital marketing – wholly-owned subsidiary Mobi 724 S.R.L., an Argentine corporation, today announced an agreement with HSBC Bank Argentina S.A. to provide HSBC BANK ARGENTINA S.A. services related to technological solutions regarding HSBC BANK ARGENTINA customer loyalty and benefit program.
About HSBC Bank Argentina S.A.
HSBC Argentina Holdings SA is one of the most important financial organizations of the country, with 139 branches in 22 provinces and 4.743 employees.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 4,000 offices in 70 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,375bn at 31 December 2016, HSBC is one of the world’s largest banking and financial services organisations.
About Mobi724 Global Solutions
Mobi724 Global Solutions Inc. (CSE:MOS)(CSE:MOS.CN) is a fintech leader offering integrated EMV payment, card-linked offers and digital marketing. Headquartered in Montreal, Canada, Mobi724 is innovating its market with technology solutions that interoperate seamlessly with any credit/debit card and any mobile device. Mobi724’s solutions increase transaction volumes and average spend while benefitting financial institutions, merchants and cardholders.
For more information, visit www.mobi724globalsolutions.com.
Certain statements in this document, including those which express management’s expectations or estimations with regard to the Company’s future performance, constitute “forward-looking statements” as understood by applicable securities laws. Forward-looking statements are, of necessity, based on a certain number of estimates and hypotheses; while management considers these to be accurate at the time they are expressed, they are inherently subject to significant uncertainties and risks on the commercial, economic and competitive levels. We advise readers that these forward-looking statements are subject to risks, uncertainties, and other known and unknown factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. Investors are advised to not rely unduly on the forward-looking statements. This advisory applies to all forward-looking statements, whether expressed orally or in writing, attributed to the Company or to any individual expressing them in the name of the Company. Unless required by law, the Company is under no obligation to publicly update these forward-looking statements, whether to reflect new information, future events, or other circumstances.
The Canadian Securities Exchange (CSE) has not reviewed this news release and does not accept responsibility for its adequacy or accuracy. This news release does not constitute a solicitation to buy or sell any securities in the United States.
MOBI724 Global Solutions Inc.
Marcel Vienneau
1-514-394-5200 x 413
www.mobi724globalsolutions.com
© 2017 Canjex Publishing Ltd. All rights reserved.
- Published in Financial Technology, Mobi724 Global Solutions, Mobile Technology, News Home, Technology
Aphria Exercises Warrants for Gross Proceeds of $1.3 Million to Further Fund Tetra’s (TBP:CSE) Clinical Trials
Aphria Exercises Warrants for Gross Proceeds of $1.3 Million to Further Fund Tetra’s Clinical Trials
– Momentum Public Relations –
Press Release: March 20, 2017
Tetra Bio-Pharma Inc. (“Tetra Bio” or “the Company”) (CSE:TBP)(CSE:TBP.CN)(OTC PINK:GRPOF) is pleased to announce that Aphria Inc. (TSX VENTURE:APH)(OTCQB:APHQF) has exercised their 5,000,000 warrants for aggregate gross proceeds of $1,300,000. The proceeds from the warrant exercise will be used to advance the clinical trials being developed in PhytoPain Pharma Inc., a subsidiary of Tetra.
“We would like to thank Aphria for their continued support and investment in the research and development being conducted by the science team at Tetra,” said Andre Rancourt, CEO of Tetra Bio-Pharma Inc. “By exercising their warrants ahead of schedule, this further confirms Aphira’s commitment to accelerate Tetra’s development work. I am pleased to report to shareholders that Tetra is in a solid financial position with over $4 million to continue advancing its strategic plan of becoming a leading bio-pharma organization focused on cannabis.”
About Aphria:
Aphria Inc., one of Canada’s lowest cost producers, produces, supplies and sells medical cannabis. Located in Leamington, Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight, allowing for the most natural growing conditions available. We are committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. We are the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters. For more information, visit www.Aphria.com.
About Tetra Bio-Pharma:
Tetra Bio-Pharma is a multi subsidiary publicly traded company (CSE:TBP) engaged in the development of Bio Pharmaceuticals and Natural Health Products containing Cannabis and other medicinal plant based elements.
Tetra Bio-Pharma is focused on combining the traditional methods of medicinal cannabis use with the supporting scientific validation and safety data required for inclusion into the existing bio pharma industry by regulators physicians and insurance companies. More information is available about the company at: www.tetrabiopharma.com.
- Published in Bio technology, Medical Marijuana, News Home, Tetra Bio Pharma
Canamex Resources (CSQ:tsxv) to acquire 100 of the Bruner Gold Project
Canamex Resources and Patriot Gold Agree to Consolidate Ownership of the Bruner Gold Project, Nye County, Nevada
– Momentum Public Relations –
Press Release: March 20, 2017
Canamex Resources Corp. (TSX-V: CSQ) (OTC: CNMXF) (FSE: CX6) and Patriot Gold Corp. (OTC: PGOL) have signed a letter of intent whereby Canamex Resources will purchase Patriot Gold’s remaining 30-per-cent working interest in the Bruner gold/silver mine for US$1.0 million plus the retention by Patriot of a 2-per-cent net smelter returns royalty. The consideration will consist of either all cash or a combination of cash and shares, to be agreed to by both parties, but with the share component not to exceed 9.9{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the issued and outstanding shares of Canamex. Additionally, Canamex will have the option to buy-down half of the NSR royalty retained by Patriot for US$5 million any time during a 5-year period following closing of the purchase and sale agreement. Closing of the transaction is subject to the negotiation and completion of a Purchase and Sale Agreement by both parties, board approval, satisfactory due diligence, and customary stock exchange approval, and is expected to finalize within a month.
Canamex’s Chief Executive Officer, Mark Billings, commented: “This acquisition makes sense for both parties as it will clarify the ownership structure of the project and will make financing the project easier as well and give our shareholders a 100-per-cent ownership stake in the greater Bruner property.”
Patriot Gold’s president, Trevor Newton, said: “Patriot is gratified to see that the Bruner project is now ideally positioned for continued development. Bruner is one of the most exciting gold projects in Nevada, and has consistently delivered exceptional exploration results. It makes strong financial sense for Bruner to be under the control of a single operator in order to advance the exploration, development, and ultimately construction of the project. We believe that the benefit to Patriot’s shareholders of the Bruner royalty interest will, in the long run, be significant.”
Greg Hahn, President and COO of Canamex and a Certified Professional Geologist (#7122) is the Qualified Person under NI43-101 responsible for preparing and reviewing for Canamex the data contained in this press release.
- Published in Canamex Resources Corp., Mining, News Home
Cruz Cobalt to apply for exploration permit at Johnson Cobalt Prospect in Ontario
Cruz Cobalt to apply for exploration permit at Johnson Cobalt Prospect in Ontario
– Momentum Public Relations –
Press Release: March 17, 2017
Mr. James Nelson reports
Cruz Cobalt Corp. is making an application for an exploration permit on its Johnson cobalt prospect. This prospect is located in the vicinity of the city of Cobalt, home to one of the largest cobalt/silver districts in North America. This permit will cover the following activities of mechanized drilling, mechanized stripping, the pitting and trenching of bedrock, and line cutting.
Cruz president James Nelson stated: “We are pleased to have started the process to be able to commence work on another of our cobalt prospects in Ontario. We have now started the process on two separate cobalt prospects in the premier address for cobalt in Canada. Cruz has amassed one of the largest land packages in the cobalt district right around the city of Cobalt and we plan to be active on all of these projects this season. Cruz will be one of the most active juniors in the region and being one of the first entrants in the cobalt space gives Cruz an early mover advantage by being able to hand pick its Cobalt prospects, before most new entrants considered cobalt as a target. Cruz has enough cash on hand to commence operations on all the Ontario cobalt projects.”
Cruz currently has seven cobalt projects located in Canada, one in Idaho and now one in Montana. Cruz’s four separate Ontario cobalt prospects are all located in the vicinity of the city of Cobalt making Cruz one of the largest land holders in this emerging cobalt district. The 900-acre Coleman cobalt prospect, the 900-acre Johnson cobalt prospect, the 5,500-acre Hector cobalt prospect and the 1,480-acre Bucke cobalt prospect. The company’s 4,935-acre War Eagle cobalt prospect in British Columbia covers a past-producing mine.
The technical contents of this release were approved by Greg Thomson, PGeo, a qualified person as defined by National Instrument 43-101.
© 2017 Canjex Publishing Ltd. All rights reserved.
- Published in Cruz Cobalt, Mining, News Home
Sage Gold set on consolidation
Sage Gold set on consolidation
– Momentum Public Relations –
Press Release: March 17, 2017
The aggregation of Kirkland Lake Gold (CN:KL) into a far larger beast over the past two years has left the historic Timmins gold camp, Ontario, without a natural consolidator for its multiple small-deposit companies, but it’s a mantle near-production junior Sage Gold (CN:SGX) is happy to assume in the absence of others.
Sage chief executive Nigel Lees told an investor lunch in London this week he did not expect the market to take much notice of the company in its current state, but it would not be in its current state for too much longer.
The first part of the junior’s transformation will be to bring its modest Clavos brownfields, underground project into production.
Clavos has a 316,000 ounce indicated and inferred resource that it plans to mine at a rate of 25,000oz per annum and truck down the road to a mill owned by precious metals producer, Primero Mining (CN:P), which is running severely below capacity.
The life-of-mine arrangement with Primero underpins an initial capital expenditure of just C$8 million for the Clavos start-up, according to a 2013 preliminary economic assessment.
The mine permit was updated in record time – three weeks – which allowed Sage to secure the equity finance to start mining operations.
Much of that money will be spent on dewatering the previously established decline and updating the PEA to a prefeasibility study. Not that Lees considers a PFS necessary for a decision to mine – that has been made – but it provides greater market confidence.
So far, all work is on time and on budget and so Sage will be expecting to be mining by mid-year with the first ore delivered to the mill by end-September.
That will satisfy Lees’ need to see cash flowing from the business. It will also provide the market with confidence in management’s ability to execute on its plans and reassurance Sage is not a company that expects to be perpetually topped up through equity issues.
Though the commencement of mining operations is seen as the first key step in the company’s evolution, initial work has already started on the Clavos growth strategy.
Surface drilling began this quarter as Sage investigates the potential to grow the resource, which it and former owner Kinross Gold (CN:K) believe has every chance of swelling to 1 million ounces.
That is likely to come from three distinct opportunities.
First and most straight forward will be the inclusion of intercepts that meet the cut-off grade (2.75g/t Au) but fell outside a previous mine plan.
Second, and only slightly more complicated (it will require the drill rig), Sage is testing an untouched area between the Main mineralised zone and the established 960 zone.
And finally, requiring more effort still, will be the pursuit of ounces expected to be delineated at depth below the Main zone, where historic holes have returned exceptional hits such as 65.3g/t Au over 4m, including 374.1g/t Au over 0.7m.
But establishing a 1Moz resource is not going to put Sage on the map in a gold bull market, which is exactly what Lees believes we’re experiencing at the moment, albeit the early stages. He said an element of M&A is inevitable to build the “critical mass” needed to attract institutions.
“We’ll be looking to buy similar size projects to Clavos,” he told Mining Journal, adding there were “five or six” such projects in public and private vehicles in the immediate Timmins vicinity being evaluated.
Asked whether he expected stiff competition for these assets given his assessment of the market as one in a burgeoning bull run, Lees was relaxed. He said Sage was viewed as the district’s natural consolidator, having established itself with the locally “unique” standing as a fully-permitted, fully-financed company.
He said at one point Kirkland Lake may have bought these projects but with that miner having built itself into a position where it is a circa C$2 billion market capitalisation, international producer, few others are left with an appetite for district consolidation at this level.
Meanwhile, playing a supporting role in the Sage development story, is a polymetallic volcanogenic massive sulphide property, which is also in an established mineralised district in Ontario.
The Onaman property is being drilled in tandem with Clavos and is focused on the Lynx copper-gold deposit, though historic exploration results indicate an economic discovery could also include zinc, lead and silver, too. An inferred resource at Lynx was estimated at 1.94 million tonnes grading 1.44{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} Cu, 39.6g/t Ag and 0.58g/t Au.
However, unless Lynx turns out to be a gold-silver project with base metal credits, it is difficult to see it remaining part of the Sage stable. More likely, exploration success could provide Lees with an opportunity to sell the project into what appears to be a parallel, early-stage bull run in both the copper and zinc markets.
A sale at Lynx would then combine with cash flow from Clavos to build the arsenal for Sage’s consolidation bid in Timmins.