Chart by @Schuldensuehner
Gold kicked off $1,800 door wide open this week on its way to the new all-time high in US Dollars this time. More investors are waking up and gold miners are enjoying the rising tide of liquidity. The tsunami is coming. Gold is the ultimate hedge and provides solid values during uncertain times in this Perfect Storm.
Eric Sprott in one of his latest podcasts is talking about his two very important personal observations for us here. He thinks that "The market is buying into the higher sustained Gold prices". Basically, the majority of investors are waking up to the fact that the Gold is up only now. And the valuations for the ounce of Gold resources in the ground are rising exponentially: "Now people pay for that resource... We've put $500 dollars on Gold price since we've used $50 per Au Oz in the ground (of resource)."
It seems now that Eric has invested in every junior miner he can find with a more or less interesting story and his opinion will matter for all other investors looking for the Next Big Thing Eric Sprott may buy one day.
This week Eric Sprott is talking more about the value of metals in the ground, the expanding margins for Gold miners, and his love for "large lower grade ore bodies". He explains the Gold mining economics 101 and how large bulk tonnage systems with relatively lower grades can provide the most leverage with the rising Gold prices.
"The difference in the value of Au Oz in the ground today is very, very dramatic. Because Gold pice is at $1,810 now and added an extra $560 from the level of $1,250. The market has not adapted to it yet."
We are ready at TNR Gold for this Mr. Market Gold price and projects discovery process to unfold with our Shotgun Gold Project in Alaska and on the links below you can find a lot of information for your own research:
With Gold rising above $1,800 on its way to the new all-time highs in US Dollars this time, fireworks can continue even after the 4th of July this year. Eric Sprott is talking in his latest podcast about the majority of investors "who are waking up only now to the fact that Gold is UP" and that he is calculating now "USD $50 per Au Oz in the ground of resources". Buckle up, do your own research, and enjoy the ride. We are getting there.
Alastair Ford: "TNR Gold Has Huge Potential Upside At The Shotgun Gold Project, Plus Significant Potential Cashflow From Two Sizeable Royalties."
"The Company's strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR Gold ("TNR") is actively introducing the project to interested parties," commented Kirill Klip, Executive Chairman of TNR. "We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time."
Proactive:
TNR Gold has huge potential upside at the Shotgun gold project, plus significant potential cashflow from two sizeable royalties
"TNR could have millions of ounces of gold at Shotgun
Could it be that TNR Gold Corp (CVE:TNR) has happened on the perfect model for junior resources companies?
Some years ago TNR made two discoveries in Argentina that were significant enough to attract in major companies who are now moving them to development.
For its part, TNR retained a royalty on each of these projects, the Los Azules copper project and the Mariana lithium project, and now stands to make a tidy annual sum when these projects go into production.
They’re not there yet, but one analyst reckons that the Los Azules royalty could generate around US$3.5mln per year, while the Mariana lithium project could generate upwards of US$1mln.
Recent updates from Mariana may add to that projection too, since the new resource estimate, compiled by Ganfeng, rings in at 4.41mln tonnes of lithium carbonate equivalent, an increase of 250% on the old number. A preliminary economic estimate completed last year gave the first indication of a potential value for the royalty.
Either way, it all adds up to the potential for a healthy income for the company to fall back on, given that it’s still primarily an exploration company.
And, given the attractiveness of the third string to TNR’s bow – the Shotgun Gold project in Alaska, the company is still very definitely an exploration company.
Indeed, according to Kirill Klip, the company’s chief executive, the main focus of effort over the coming months is likely to be on moving Shotgun forward to the point where a major company moves in and begins to help with development work there.
So, is this the same model that proved so successful with Los Azules and Mariana?
Not quite. This time round, with two potentially cash generative royalties in its back pocket, TNR is in a slightly stronger position. Klip’s aspiration this time round is for TNR to retain a much larger stake. The near-term goals are simple enough.
“We need to bring US$10mln in to drill the project very strongly,” says Klip.
“The first US$5mln to take the project from the current 700,000 ounce resource up to the two million ounce mark, the rest to drill out five nearby targets. There’s no reason to suppose that our ground cannot hold multiple mineralised systems.”
At Shotgun the thinking is that there may be upwards of five million ounces of gold in the ground, and there is precedent. At this stage the geology shows remarkable similarity to the 39mln ounce Donlin gold project in southern Alaska, which is owned jointly by Novagold Resources Inc (TSE:NG) and Barrick Gold (NYSE:GOLD).
“We are talking about a high tonnage bulk system,” says Klip. “There are no nuggets, it’s very uniform.”
Among the notable intercepts the company has 242 metres grading 1.25 grams gold per tonne, 209 metres at 1.02 grams, and just under 47 metres at 1.14 grams.
What’s more, the gold that’s been identified thus far sits at the top of a ridge, meaning that the stripping ratio for any mine will be low, which in turn will keep costs down.
So far, so good. The company is now raising a modest amount of money, with Klip coming in for a substantial portion of that, and at a premium.
The next step is to refine the drill targets, and then to go out into the market and see what kind of deal can be cut.
As it stands, the market is taking a fairly dim view of the company’s prospects, valuing the whole package, royalties and Shotgun at just under C$5mln.
Arguably, that’s low for a company that holds a lithium royalty from Ganfeng, one of the biggest lithium names in the business, a copper royalty from McEwen Mining, also a major name, and which may also be sitting on a five million ounce gold project.
The upside is clear. Indeed, Novagold sees it well enough, since it retains a significant stake in TNR, and former Novagold director Greg Johnson now sits on the TNR board. How long it will take the rest of the market to wake up remains to be seen.
Nonetheless Klip is confident that this is a company that’s going places.
“We are not dreamers,” he says. “We did it with the copper. We did it with the lithium. I would like to make it even bigger with the gold. I would like to do better, to keep a 25% stake.”
It’s a vision for growth that makes a lot of sense. In tough markets, where capital is scarce, this kind of approach may well end up being a model that others choose to follow too."
Please read carefully all legal disclaimers. Please note that all opinions expressed in the article, apart from the direct quotes, belong to the author of the article Alastair Ford. Please read carefully all disclaimers on Proactive website. There is no investment advice in any of Kirill Klip's blog posts and on any of his social media feeds. Always consult the qualified financial adviser before any investment decision.
Gold In The USA, The Alaskan Elephant Country: TNR Gold Shotgun Gold Project Presentation.
“The times in which we find ourselves bring the mining industry face to face with some particular challenges, but it is within which lies the opportunity of embracing gold’s unique value through which it reminds us of its ultimate purpose; its solid, dependable reliability throughout uncertain times that makes it such an ultimate hedge. TNR Gold’s strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. The Company is actively introducing the project to interested parties,” commented Kirill Klip, Executive Chairman of TNR. “We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time.”
Kirill Klip continued, “We are building the green energy metals and gold company. Energy rEVolution requires secure supply lines of the critical strategic metals like copper and lithium. Our forward-thinking approach allows us to integrate our company into the international capital markets and mining industry in order to accelerate the development of Shotgun Gold Project and extend our royalty portfolio in Green Energy Metals, potentially adding to our core royalty holdings on the Los Azules Copper Project with McEwen Mining and the Mariana Lithium Project under the management of Ganfeng Lithium.”
Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.
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