Weekly Nugget

Canadian Government Blocks Sale of Arctic Mine to Chinese Gold Miner, Agnico Eagle Swoops In

TMAC Resources (TSX: TMR) efforts to sell its Hope Bay Gold Project to Shandong Gold Mining had been abruptly ended by the Canadian Government, jeopardizing much-needed capital.

TMAC Resources (TSX: TMR) efforts to sell its Hope Bay Gold Project to Shandong Gold Mining had been abruptly ended by the Canadian Government, jeopardizing much-needed capital. 

However, Agnico Eagle (TSX: AEM) the largest gold producer in the Arctic territory offered $2.20 per share (total $286.7M) for the Hope Bay Project in the wake of the government decision.  

Canada’s federal government blocked the takeover after a national security review ordered by federal ministers under the Investment Canada Review Act.

Chinese gold miner Shandong Gold had offered $1.75 per share of TMAC. The deal was approved by 97% of TMAC shareholders on June 26.

At the time, it was framed as an opportunity to bring the necessary capital to develop TMAC’s Hope Bay gold mine property in Nunavut.

The Hope Bay gold project is in Nunavut's Kitikmeot region, about 125 kilometres southwest of Cambridge Bay. The property has been owned by three different mining companies since they were first identified more than 30 years ago. 

In 2012, TMAC acquired it from Newmont Mining and, three years later, signed a 20-year land tenure agreement with the Kitikmeot Inuit Association and the territorial Inuit land claim organization.

The property was not in production until 2017, and in the time since its purchase, TMAC has invested more than $450 million into developing the project. 

Initial production was plagued by poor recovery rates between 62% and 67% which undermined the assumptions of a 2015 feasibility study that envisioned annual production of 160,000 oz. gold for 20 years, at an all-in-sustaining-cost of US$785 per ounce with 92% average gold recoveries.

This resulted in the company taking a $620 million non-cash impairment in the fourth quarter of 2019. Production has declined this year as the company battled with an outbreak of COVID-19 at the mine site. 

A pre-feasibility study published last March explored the possibility of more than doubling its production at a cost of $683 million in the next four years.  The property currently has a resource estimate from December 2019 that outlines 21,816,000 tonnes at 7.2 g/t Au for a total of 5.17 million ounces of gold.

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Global Atomic Receives Mining Permit for its Dasa Uranium Project, Niger

Global Atomic (TSX: GLO)  has received a presidential decree from the Niger government, granting a permit to mine its Dasa uranium project in central Niger. The current resource for the project estimates 3.81 million tonnes at 0.57% U3O8 for 47.71 million pounds of indicated and inferred resources. 

In May 2020, the company filed a preliminary economic assessment outlining a phase one mining development plan. The plan envisions a 12-year life of mine for a total production of 44 millions pounds of uranium at an all-in-sustaining cost of $18.39 per pound. With an initial spend of $203 million the assessment estimates an internal rate of return of 26.6% with a $35 per pound uranium price assumption. 

In 1957, Uranium was discovered at Azelik in Niger by the French Bureau de Recherches Géologiques et Minières (BRGM), looking for copper. The first commercial operating uranium mine in the country started in 1971. 

Today, Niger currently has two operating uranium mines contributing about 5% of total world uranium mining output. Uranium is mined close to the towns of Arlit and Akokan, 900 kilometres northeast of the capital Niamey on the southern border of the Sahara desert.

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Equinox Gold to Restart Los Filos operations, After Protests, Mexico

Equinox Gold (TSX: EQX) reports that a blockade at its Los Filos mine in Mexico has ended and plans on resuming operations. In early September, the company suspended operations after the nearby community complained that the company did not comply with a 2019 agreement from the mine’s previous owners. 

Equinox acquired the mine in early 2020 through a merger with LeaGold Mining as part of an aggressive growth strategy that recently saw it sign a deal to acquire Premier Gold Mines Ltd.

The company is targeting January 2021 for a return to full operations at Los Filos, one of its core mines. According to CEO Christian Milau, the company is looking to build a stable partnership with nearby communities, noting that it wants to make further investments at Los Filos.

The Los Filos mine has 9,773,000 oz. of gold in measured and indicated resources, and accounts for 40% of the company’s total 22,449,000 million ounces in measured and indicated resources across eight projects.

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Yamana Integrates Agua Rica Project with Alumbrera Mine Infrastructure, Argentina

Yamana Gold (TSX: YRI) and its joint venture partner Newmont (TSX: NGT, NYSE: NEM) have successfully integrated the Alumbrera Gold mine with the Agua Rica open-pit copper and gold project, creating the MARA Project, in Catamarca province, Argentina. 

The integration combines existing infrastructure which was used to process ore from the non-operational Alumbrera mine with the future open pit Agua Rica mine, including processing facilities, a fully permitted tailings storage facility, pipeline. 

Agua Rica ore in order to produce copper and by-products concentrate, which will then be transported to port for commercialization. Distance between mine and plant is approximately 36 kilometres and ore will be transported to the plant by overland conveyor.

Yamana is the sole owner of Agua Rica, but a new joint venture was created where Yamana holds a controlling interest of 56.25%, Glencore holds a 25% interest, and Newmont holds an 18.75% interest. 

Yamana will be the operator of the Joint Venture and plans to complete a feasibility study and environmental impact assessment for the MARA Project.

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