Vancouver – Some musings by an ancient mineral explorationist after flying to Vancouver to attend the Vancouver Resource Investment Conference (VRIC), presented by Cambridge House (CH) International and the Cordilleran Roundup, presented by the Association for Mineral Exploration (AME).
In a temporary state of insanity, I decided to take a flight to Vancouver with Westjet to attend these two conferences and return late Wednesday night. Why anyone would leave their warm bed at 5 am, on a wintry Sunday morning, defies logic.
To keep current on exploration techniques, to see old friends, to find a couple of good exploration speculative stocks, or some combination of all?!
Anyway these doubts were doubled when I arrived at Pearson at 6 am to find that my flight had been cancelled due to mechanical issues and the only alternative was to go through Winnipeg (aka as WinterPeg) with a 6 hour stopover in that lovely city.
So Day 1 was ruined.
I have been going fairly steadily to the Roundup since it started some 35 years ago and to the CH conferences for 25 years.
I first went to Vancouver in February 1962 to scout out an office for the Keevil Mining Group (now Teck Corp.) It had been a frigid winter in the east and the tulips were blooming in Vancouver so it was a fairly easy decision.
In the early 1960s, there were only a handful of major companies there and a couple of juniors. I explored in BC for two years and kept an office in Vancouver with several companies for the next 30 years. So I had a real attachment to the geology (despite the politics) and made many friends.
Now on to conference business.
Monday, January 20, 2020
A very busy day. Somehow, I had received an invite from a group called Oxygen Capital to attend a breakfast session starting at 7 am to listen to presentations of four companies that they were sponsoring.
Normally I would have passed but as I owned two of the companies and had to have breakfast anyway, I showed up expecting 30-40 suckers. There were seats for about 200 and latecomers stood around the walls.
Following a stirring speech by the president of Oxygen, the four companies Pure Gold (TSXV:PGM), Liberty Gold (TSX:LGD), Discovery Metals (TSXV:DSV), and Sun Metals (TSXV:SUNM) gave 15 minute presentations on their great projects. I will not try to summarize these companies or others mentioned at the conference as they all have excellent websites. Just my recommendations.
I own both Pure Gold and Liberty Gold and will likely hold them for a long time.
Pure Gold is developing a high grade gold project at Red Lake (around the old Madsen mine) and Liberty is developing two large heap leach gold deposits in Nevada and Idaho.
Discovery Metals has the 1 billion ounce Cordero silver deposit in Mexico and Sun Metals owns a new high grade copper-gold (Stardust) project north of Prince George, BC with an average grade of 3% Cu equivalent over an average width of 34 metres. Both are interesting speculative companies.
Finally, I approach the dragon’s den. There were some 800 booths with often 3 companies in one booth (highest was ten). There must have been 1200 companies represented.
Gold companies were dominant with base metals next and then companies exploring for virtually every metal in the periodic table in most countries in the world. In addition, there were 7 presentation rooms plus the main speakers’ hall where the letter writers held court and spouted enthusiastic remarks, mainly about their clients.
I felt like Ulysses trying to get past the Sirens who beckon you in saying: hear our story, buy our shares, get rich. Generally, I stopped at the booths of companies I own and know the principals just to get an update, so some quick thoughts:
Globex (TSX:GMX) – I like and own. My old friend Jack has some 170 projects and if there were any rationale in the market, the stock would be at several dollars, not $0.35 cents.
Chibougamau Copper (TSXV:CBG) – I also like and own. They hold half of the Chibougamau district and will be drilling a high-grade copper zone soon. I think a buy at 13-14 cents.
Wolfden Resources (TSXV:WLF) – I stopped by to see my old friend Don Hoy and get an update. They own a high-grade smallish zinc deposit in Maine. The company just received US$3 million by selling some timber and now have funds to drill some nearby anomalies. I made an investment at 0.14 cents.
EMX Royalty (TSXV:EMX) – I like and own. They use a three-prong approach. They are a royalty generator by acquiring prospects and farming out and retaining a royalty, by buying royalties directly and by making strategic investments. They focus on copper-gold (70%), operate worldwide, and have $75 million to play with.
Novagold (TSX:NG) – I have to mention Novagold as their 50/50 JV with Barrick on the Donlin Creek deposit in Alaska is the largest undeveloped gold deposit in the world with an open pit grade of 2.2 grams per tonne versus world average of 1.1 grams per tonne. Reserves of 40 million ozs, on private land, have federal permits and $150 million in cash and $100 million receivables. Market cap of $2.9 billion.
Probe Metals (TSXV:PRB) – I like and own. The company has 3 million ounces of gold in the resource category at their Val d’Or East project, $35 million in cash to drill two nearby gold zones and excellent management and I think a bargain at $1.20.
Midland Exploration (TSXV:MD) – A great junior project generator focused on Quebec. Six active JVs spending OPMs. Low cap of 70 million shares and $14 million in the treasury. Check out their website,
FPX Nickel Corp (TSXV:FPX) – The company holds the large low grade Decar nickel deposit in central BC. Projected to be among the world’s 10 largest nickel mines by annual output. Potential for lowest quartile operating costs ($3/lb). Unique NI-Fe mineral. A target for anyone looking for a big nickel project. A good buy at 12-14 cents. Kaiser likes as well.
Equinox Gold (TSX:EQX) – With the merger with Lea Gold, 12.7 million ounces in 2P reserves and 700 K ozs production in 2020. The letter writers love the story and Ross Beatty. Yamana owns 20%.
Murchison Minerals (TSXV:MUR) – Stopped by for an update from JC. Drilling started on Monday with 12 good targets on their Brabant Lake project in N. Sask. I like and own a lot. A great buy at $0.13.
Generation Mining (CNSX:GENM) – My favourite Palladium (Pd) stock with its giant open pit project near Marathon, Ontario. During the conference, with Pd prices soaring, the shares rose from $0.50 to 0.75 and they raised $8 million. I still like but am giving some back and will hold the warrants. Review their new PEA for details.
Lundin Group of companies (TSX:LUN) – I attended a one-hour presentation on 4 of the Lundin companies moderated by Rick Rule (loves the Lundins). For 50 years, the Lundin family have been serial financiers and developers in the resource area in unfavourable jurisdictions. The companies were Lundin Gold, Filo Mining Corp., Josemaria Resources and Denison Mines. The family usually owns 25-30%.
- Lundin Gold (TSX:LUG) – Owns the famous high grade gold deposit in Ecuador just starting production at an estimated rate of 310,000 ounces/year. Reserves of 5 million ounces at 8.6 grams per tonne. Shares rose from $9 to $10 during the conference. O/S shares are 225 million. Big unknown is Ecuador that has been politically challenged for generations. Great exploration potential.
- Josemaria Resources (TSX:JOSE) – Owns a large porphyry copper deposit in San Juan province, Argentina. Expecting a FS by 3rd quarter for a 170,000 tpd operation. Stock is at 0.80 and market cap is $200M.
- Filo Mining (TSXV:FIL) – Owns the Filo del Sol Cu-Au-Ag deposit in Argentina near Josemaria with 4.4 M oz gold cap overlying a sulphide deposit. Four drills on site. Big potential but in Argentina?
- Denison Mines (TSX:DML) – was the 4th company and a buy if you like uranium.
Miscellaneous:
Forum Energy (TSXV:FMC) – I talked to Rick Mazur, president and old friend, at the Roundup. Rio just announced a 100 km winter road to be built into their Janice Lake sedimentary copper property in Sask. for a major drilling program. Rio can earn an 80% interest for spending $30M. They spent $3M last year. Forum also has a suite of other properties. The shares rose from 8 to 11 cents on the announcement. A good bet.
Northern Shield Resources (TSXV:NRN) – I missed their booth but geologists were talking about a new epithermal gold system in Nova Scotia called Shot Rock, Root and Cellar.
Apparently there is a large silica cap and a number of gold bearing quartz veins. Drilling immediately. I bought a position at 9 cents.
Garibaldi Resources Corp. (TSXV:GGI) – Were not at the conference but issued a PR announcing some short high grade intersections. The local geos are not impressed. I have not owned for a year now.
Manitou Gold (TSXV:MTU) – Not at the conference but Alamos presented a paper on their activities at their River Gold Mine. In 2019 they added a million ounces of gold and announced a $28M drilling and development budget for 2020 with a major drilling effort along strike towards Manitou. So with their investment in Manitou, a pretty good clue to buy. Manitou also announced a small drilling program ASAP.
The letter writers had some favourite stocks:
Rick Rule – EMX Royalty, Mag Silver, Cardinal Resources and Equinox
Frank Holmes – Lundin Gold, Equinox Wesdome and Gran Colombia
John Kaiser – Zephyr Minerals, Taiga Gold, Azimuth, FPX Nickel, Niobay
Gold – Everyone thinks gold is going higher $1700-1900 and plus $2000 for Kaiser. That worries me as the majority are usually wrong but I hate to bet against Eric.
Resource markets – A lot of enthusiasm that we are at the bottom and the start of a bull market in the mineral company markets. The consensus is there is a lot of money to be made in the next few months. Caveat emptor.
Good luck,
Ed
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