Small Miners Starting the Year With a Bang

Written by Gerardo Del Real
Posted January 16, 2017 at 9:14PM

Gold rallied nearly 2% this week and closed in the $1195 per ounce level.

Technicians cited the failure to breach the $1200 level on a closing basis as an indicator that lower prices may be on the horizon.

Gold benefited from a softer dollar, which closed approximately 0.7% lower for the week.

Silver also traded higher this week, closing at $16.71 per ounce, up approximately 1.2% for the week.

Copper rallied for a weekly gain of nearly 5%, closing at $2.67/lb.

Platinum managed a slight gain of approximately 1%, closing at approximately $979 per ounce for the week while palladium closed at $753 per ounce for a weekly loss of approximately 0.7%.

Uranium held up well this week, trading near the $23 level, further bolstering the case that we may be at a 12-year bottom.

Brent Crude oil was down approximately 3%, closing in the $55.40 range.

The Week in Juniors

Auryn Resources Inc. (TSX: AUG) (OTC: GGTCF)

Auryn Resources started the year off with a bang.

On January 9, 2017 the company announced that it had entered into an Investment Agreement with Goldcorp for a strategic equity placement whereby Goldcorp will purchase directly and indirectly in two tranches 9,542,402 common shares of Auryn for C$3.67 per share.

Goldcorp will own 12.5% of Auryn’s outstanding common shares.

In addition, Auryn and Goldcorp have entered into an Investor Rights and Obligations Agreement whereby, as long as Goldcorp maintains a 5% or greater equity ownership interest in Auryn:

  • Goldcorp will have the right to participate in future Auryn equity issues in the amount necessary to maintain up to a 12.5% interest;
  • Goldcorp will have a right to match certain non-equity financings; and
  • If Goldcorp chooses to sell more than 2% of Auryn’s shares, Auryn will have the right to designate buyers and Goldcorp will vote its shares to elect the Auryn recommended director nominees.

Shawn Wallace, president and CEO, commented that:

“We are very pleased to have secured an important investment with an industry leader such as Goldcorp, on favourable terms that minimizes dilution to our shareholders. Auryn is now fully funded to complete one of the most extensive, globally significant exploration programs in 2017. The program will include a planned 55,000 meters of exploration drilling across six projects in Canada and Peru and expect to make a number of advances that could potentially contribute to the realization of multiple major gold discoveries.”

The transaction is an interesting one since on January 12, 2017 Goldcorp announced the sale of its Los Filos Mine.

Auryn will be launching one of the most aggressive drill programs of 2017.

The proposed drill plan for 2017 is to drill a total of 55,000 meters, of which 25,000 meters will be drilled across 17 multikilometer-long targets in the Committee Bay project, 15,000 meters across the Homestake Ridge project and another 15,000 meters across the Sombrero, Huilacollo, and Baños del Indio projects in southern Peru.

Keep an eye on Auryn as the team has a history of making discoveries and monetizing those discoveries in quick order.

Arizona Mining Inc. (TSX: AZ)(OTC: WVLDF)

On January 12, 2017 Arizona Mining announced the results of five exploration drill holes from its current program on the Taylor zinc-lead-silver sulfide deposit located on its 100%-owned Hermosa Project in Santa Cruz County, Arizona.

The project recently came under criticism due to what some perceived was a lack of disclosure by the company regarding the potential interest in concentrates from the deposit.

Arizona has followed that with its best hole to date and an update on the concentrates.

HDS-396 intersected eleven distinct mineralized CRD horizons with a total cumulative mineralized thickness of 947 feet.

Several mineralized zones were intersected in the drill hole, including a 524-foot thick interval assaying 8.5% zinc, 6.9% lead, and 2.5 ounces per ton (“opt”) silver. Within the larger interval several higher-grade zones were intersected, the best of which was a 104-foot thick interval which assayed 22.1% zinc, 14.6% lead and, 5.6 opt silver.

Arizona Mining also wishes to announce that it has received interest from several groups regarding the potential sale of concentrates from its Taylor Deposit.

CEO Jim Gowans commented:

“HDS-396 is one of the best holes I have seen in my career.”

Now for the update on the concentrates:

Arizona Mining also wishes to announce that it has received interest from several groups regarding the potential sale of concentrates from its Taylor Deposit.

Oskar Lewnowski of Orion Mine Finance said:

“Having our own zinc mine and being in the industry, we have reviewed the assays and specs of the work done to date on the zinc concentrates at the Taylor Deposit of Arizona Mining. We would be prepared to purchase as much of the zinc concentrates, at market, without penalty, as we could. The Taylor Deposit is shaping up to be a world class deposit and Orion would welcome any opportunity to be involved.”

The company is completing further metallurgical work and its preliminary economic assessment (“PEA”) by end of the first quarter 2017.

TerraX Minerals (TSX-V: TXR)(OTC: TRXXF)

On January 11, 2017 TerraX Minerals announced assay results from the remaining 23 holes (6,422.6 meters) from the 2016 drill program at multiple zones on the Yellowknife City Gold Project ("YCG"), immediately north of Yellowknife in the Northwest Territories.

Highlights included 129.35 m @ 0.52 g/t Au (includes 32.13 m @ 1.24 g/t Au) at Sam Otto and 2.40 m @ 9.89 g/t Au at new Dave's Pond Zone, Yellowknife.

Below are additional highlights from several zones:

SAM OTTO — Main Zone

Drilling at Sam Otto Main Zone (2 holes totaling 728.6 meters) intersected 100 130 meter wide zones of +/- 0.50 g/t Au within broad zones of lower grade gold mineralization. Highlights include:

  • 129.35 m @ 0.52 g/t Au, including 32.13 m @ 1.24 g/t Au, including 3.42 m @ 4.77 g/t Au in hole TSO16-010
  • 102.00 m @ 0.53 g/t Au, including 38.00 m @ 1.04 g/t Au, including 6.15 m @ 2.89 g/t Au in hole TSO16-013

Hole TSO16-010 intersected the heart of the Main Zone approximately 220 meters below surface and extends this zone 100 meters deeper than previous drilling. Hole TSO16-013 extends the zone 50 meters farther north of previous drilling by TerraX.

SAM OTTO — Hanging Wall

The drilling on the Hanging Wall Zone (4 holes totaling 572.3 meters) was the first drilling by TerraX into this zone leading to the discovery of 85 125 meter wide zones of +/-0.50 g/t Au within broad zones of lower-grade gold mineralization similar to the Main Zone.

The drilling tested 100 meters of strike on the zone, which is approximately 50-75 meters east and 100 meters north of the Main Zone drilling. Hole TSO16-007 intersected the zone under hole TSO16-006 and tested down to a vertical depth of 100 meters below surface. Highlights include:

  • 85.00 m @ 0.53 g/t Au, including 25.60 m @ 1.13 g/t Au, including 4.00 m @ 3.82 g/t Au in hole TSO16-006
  • 100.25 m @ 0.51 g/t Au including 30.75 m @ 1.29 g/t Au, including 6.50 m @ 3.79 g/t Au in hole TSO16-007
  • 126.23 m @ 0.46 g/t Au including 13.40 m @ 1.14 g/t Au and 21.05 m @ 1.16 g/t Au in hole TSO16-009

SAM OTTO — Dave's Pond

The drilling on the Dave's Pond Zone (4 holes totaling 584 meters) was the first drilling by TerraX into this zone. The first hole, TSO16-005, led to the discovery of a quartz vein shear system with a high-grade core. This hole is approximately 150 meters west and 400 meters north of the Sam Otto Main Zone drilling. Hole TSO16-011 also intersected a quartz vein shear zone 600 meters south and interpreted to be along strike from TSO16-005, generating a long strike potential for this zone. Highlights include:

  • 11.50 m @ 2.42 g/t Au including 2.40 m @ 9.89 g/t Au in hole TSO16-005
  • 2.00 m @ 2.43 g/t Au in hole TSO16-011

Joseph Campbell, the CEO of TerraX, stated:

”TerraX has envisaged the Sam Otto area as a potential bulk tonnage target that could take advantage of the excellent infrastructure in the Yellowknife area and supplement the potential mine development of our previously reported high grade gold zones. These drill results certainly confirm the bulk tonnage potential with the Main/Hanging Wall Zones, extending gold mineralization for at least 350 meters of strike and 250 meters of depth, with 30-50 meter wide zones of greater than 1 g/t Au. These zones remain open in all directions. Additionally, the higher grade multi-gram intersections reported here are indicating that the area may also host classic high grade lode gold targets common to Archean gold systems in Canada. This large mineralizing system will be tested along strike, dip and plunge directions when drilling resumes in January 2017."

The Yellowknife City Gold project ("YCG") encompasses 129 sq km of contiguous land immediately north and south of the City of Yellowknife in the Northwest Territories.

Through a series of acquisitions, TerraX now controls one of the six major high-grade gold camps in Canada. Being within 15 km of the City of Yellowknife, the YCG is close to vital infrastructure, including transportation, service providers, hydro-electric power, and skilled tradespeople.

The company is an interesting exploration play but would be more interesting with a better share structure.

To your wealth,


Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

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