WGX x 2, KTRIm SVB, MAI, TUO, EDV
Two days after releasing a scoping study for a major expansion of processing at their Higginsville mill, West Australina gold miner Westgold Resources aka WGX released their quarterly results (Q3 for them, Q1 for me) in two parts
First up are the overall company results, which I would in general call as expected. Production and costs were flat from the previous quarter at 88107 oz Au, with increases at Beta Hunt due to expected higher grades offset by a slower than expected ramp up of production at Bluebird South. On the financial side, helped of course by the high PoG, the news was better, as they were able to add $80M to their cash stash, increasing it to $232M, while WGX as of Mar. 31 had $50M debt and over $400M in available liquidity.
Full year guidance was maintained. (Remember their FY runs from July through June.) If they can meet that guidance, they will be set up for a very good year to come.
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A key underpinning of WGX's value at this point is its exploration upside, which is why they spent $11M in the last quarter while drilling almost 83km. They currently have 17 rigs operating.
Part of the drilling was focused on resource definition, part part was aimed at defining new resources to be exploited in future, and the rest on a programme of exploring 20 new targets. They pulled many impressive intercepts across a number of targets, far too many to even select highlights from. I invite you to peruse the PR itself, which has plenty of maps, figures, and photos.
Bottom line: I would call this quarter's exploration programme a success, as it helped build the path to future production increases. Exploration continues apace...
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Kooteny Resources aka KTRI released another set of results from historic drilling by KTN and CG on their Two Times Fred property on BC's Nechako Plateau. The drilling has defined an area of 3km x 1.5km which features two sets of veins, one trending NNE, the other NE. Each includes dozens of veins, with the best historical drill results being 14.95m @ 1.28 g/t Au and 14.6 g/t Ag, and 20.6m @f 1.32 g/t Au and 17.2 g/t Ag (ironically from the very last hole drilled).
Even with over 8km of historical drilling, the vein swarms remain lightly drilled, and based on past experience there are likely to be a number of blind veins yet to be discovered.
In due course KTRI will announce a drill programme of their own.
Message 35120804
Silver Bull Resources aka SVB released an update on its case against Mexico for refusing to act against an illegal blockade of SVB's Sierra Mojada project in Mexico,. The blockade has been in place since September 2019 and SVB commenced this action under NAFTA and CUSMA in 2023. The case has proceeded through a number of steps and has a few more to go through before it proceeds to an arbitration hearing in October.
BTW, SVB has increased the size of their claim to $US374.9M
Message 35121945
Minera Alamos aka MAI released their 2024 annual results and a look forward into 2025.
Thanks to the permitting issues in Mexico, gradually improving but still a problem, it was a bit of a difficult year for MAI. At their producing Sanatana mine, they managed to come up with a new plan to maximize production using their current permits, but the resulting construction interfered with production. However, by Q4 these modifications were starting to bear fruit, as MAI was able to produce and sell 1393 oz Au during the quarter, plus another 500 oz for which the revenue will not be recognized until Q1 2025.
As a result, MAI was able to report a net profit in Q4, and also was able to build its cash stash to $11.8M at year end. They remain debt-free.
This year MAI will have a fourfold focus. They will continue to work to maximize production at Santana while waiting for permits to expand the leach pads. At their next Mexican project, Cerro de Oro, they will continue to optimize and prepare for permits. They will also be attempting to add to their Mexican copper properties, which they hope will become a production hub either as part of MAI or as a standalone company. And they will continue to aggressively push forward the recently acquired Copperstone gold mine in Arizona towards production, with the financing package expected to be completed soon.
Message 35122050
Some good news for Teuton Resources aka TUO: JV partner Tudor Gold has received a five year extension to its work permit for the Treaty Creek property in BC's Golden Triangle. Most immediately TUD is waiting for further permits to begin construction of a 3 km tunnel which will allow year-round access to the gold-rich zones which have become the economic core of the project.
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Now that west African gold miner Endeavour Mining aka EDV has completed multiple mine builds and upgrades, it was expected that they would have a strong Q1, and the expectations were more than met, particularly on the financial side.
Gold production was down slightly from Q4 at 329k oz, but cash costs were also markedly down to $929/oz. Both production and costs beat consensus estimates, while EPS and CFPS came in well above consensus/ As a result, in spite of spending $40M on share buybacks during Q1 and slightly reducing debt, EDV was able to almost double its cash stash to $737 at the end of Q1.
As long as EDV can continue production at these levels before beginning their next build, Endeavour should be able to continue to pay down debts, pay dividends, and buy back shares while still continuing to increase cash on hand.
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FWIW, in response Scotia issued a new analyst report on EDV. Calling the results Positive, they kept EDV with a target of $43.
FWIW, in response BMO issued a new analyst report on EDV. Also calling the impact Positive, they kept EDV at Buy with a target of $45.
FWIW, in response TD issued a new analyst report on EDV. Calling the results Positive, they kept EDV at Outperform while raising their target to $50.
Saville opines that gold has set a multi-week top and perhaps a multi-month top, so the current correction could be weeks long or months long, with the signal being whether the POG closes a week below $3167. He sees silver as ready for catch-up. He also expects HUI to top 500 at some point this year. |
