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CEO.CA members discuss high-risk penny stocks which can lose their entire value. Only risk what you can afford to lose.
@tommyGold mining startup Leagold resumes trading as $LMC this morning after a nearly four month trading halt. It has just completed one of the TSXV's largest raises and acquired the Los Filos gold mine in Mexico (produced 231koz of gold at an AISC/oz of $878 during 2016) from Goldcorp.
Leagold bought the mine for US $350 million after raising US $183 million equity and US$150 million debt. Here’s the deal closing news release from Friday: @newswire/leagold-completes-the-acquisition-of-the-los-filos
CEO Neil Woodyer was awarded Mining Journal’s 2016 CEO of the Year award for his efforts building Endeavour Mining $EDV, a West African gold miner. Leagold aims to repeat the “acquire and optimize” strategy of Endeavour but with larger mines and in Latin America.
@CriticalInvestor has the full story: @criticalinvestor/leagold-mining-woodyer-giustra-are-buildingendeavour-mining-20
@CriticalInvestorWithout independent reports how to value the project: "MGX is advancing its petrolithium projects into production without first establishing mineral resources supported by an independent technical report or completing a feasibility study."
@CriticalInvestorCOO John Key just returned the first part of his answer on the water subject $DBL: Receivership Tamerlane was because of the financial crisis fall out and low zinc price and not because of water issues, it just took too long to get out of the bear market to repay a $10M loan.
GNWT provided only a permit for one UG high grade mine with a 1Mt LOM production and a Water License which allowed for construction and operation of the concentrator. The permitted mine tonnage was too small to be economic on its own, plus it needed the freezing concept. All this didn't convince interested Japanese investors at the time.
JK: Tamerlane applied for a Land Use Permit from the GNWT that included six underground deposits covered in their 2008 Feasibility all using the freeze wall technology.
When still owned by Cominco in the eighties, Cominco choose to proceed with the much higher grade Red Dog mine, when they had to build a new concentrator at Pine Point, and kept the Pine Point reserves in the books for years but wrote everything off when the mineral leases were dropped in about 2000.
Thyssen designed the freezing concept, which was planned to use underground with the prismatic (vertical) deposits.
JK: In 2013 Thyssen mine engineers told Tamerlane that they would strongly consider grouting, as grouting technology in the oil fields had advanced significantly since the 1980’s.
Nowadays grouting has evolved, and polymer grouting is taken into account as well, as it sets quicker, expands and doesn't get washed away that quickly compared to cement grouting > thresholds of groundwater flow for both concepts?
Groundwater is flowing from south east to north west, and as Cominco already successfully pumped and mined every single open pit mine with a ring of pump wells, the idea is now to create a pump wall at the south west end of each operation (3) or collection of pits, so you don't have to pump every separate pit at the same rate but can work much more efficiently. Knight Piesold is working on the PEA with their most senior personnel so quality should be good.
The North Trend is wet in general, the Main and South (north of J69, see p. 385 http://www.miningnorth.com/_rsc/site-content/library/NWT_Mines_History_RSilke2009.pdf) trend are perceived to be dry or semi dry.
PEA will be used on the current 43-101 compliant deposits, and will determine what hydrogeological, explorational, geotechnical etc testing will need to be done in order to proceed to FS in mid 2018. In between PFS is being discussed at the moment, as a lot of the other historic deposits are aimed to be included, to increase the open pit part of production. Now it is anticipated to be a 15y LOM based on 91% OP and 9, goal is to convert this in the FS into a 100% open pit operation base case scenario to avoid any doubts/dependency on UG water risks, and have the high grade UG operations as a nice to have bolt on, when the economic situation allows this.
JK: This goal is dependent on adding additional reserves from known Cominco deposits and through exploration of high potential areas.
***This is probably the most important set of data you can provide, and would get this whole story out of the realm of theoretical concepts: Flow rates ground water, when grouting is possible, cost of grouting, needed dewatering capacity for pumping and costs per tonne of ore mined vs total opex (mining, processing, transport) are numbers for you John to find out. Maybe also a global estimate to what degree such a pump wall would lower the remaining groundwater flows, how this would impact flow rates, enable mining without grouting at all, or allows grouting etcetc
JK: To be answered by KP after they completed the PEA which should be soon
Comments from ceo.ca which I think are very good, and how would you John react to them:
Comment ocotilloredux (Doug Beatty, retired mining engineer, zinc/uranium) #1: wrt to $dbl , if it is any consolation the Kipushi NI 43-101 does not address the H2O issue there although their predecessors found it necessary to install 4,200 m3/h of dewatering capacity. Grouting static water is ten times easier than grouting flowing water since the grout tends to flush out before it is set in flowing situations. There are cheaper quick setting grouts these days though. So if that option is used, grout off around the mining targets first (before any area groundwater table activation to ensure a static environment), put a couple depressurization holes in the middle of the target once done and pump down the water table inside and watch for rebound to see how effective the grouting has been. wrt to dewatering there was a mention in the pdf of 60,000 gpm dewatering rate but I do not know the specifics and how applicable that would be for some of the mining targets.
JK: I agree with the comment about static water versus flowing water although the multiplier would depend on the flow velocities. Cement grouts in flowing situations is very difficult and unreliable. Evaluation of new polymers is very early stage for DBL but will be the focus going forward. Ocotilloredux’s plan to grout prior to pumping is an option that will be investigated along with other options. DBL has only had the property for less than 4 months and although Cominco and Tamerlane did good work in regard to water, the historic data we have available to us does not currently allow us to make a definitive plan. The PEA will help define the work required to minimize the risk and develop a plan with refined costs. Water is the best reason for doing a PFS. Zinc, lead, metallurgy, mine design and markets are all solid. The outlier is water and it must be the focus going forward. Since DBL’s initial production is in pits close to pits mined by Cominco 35 years ago there is great confidence that these can successfully be mined and that water handling will occur more efficiently than before. DBL is not under-estimating the fact that it is a cost that will be taken into full consideration. Cominco did move a lot of water but their mine plan called for operating up to 4 pits at the same time. That was 4 distinct pits that had to be de-watered at the same time. DBL’s current plan is to focus on one pit at a time which means one is being held at a low level and one is being pumped down. This is viable since the total quantity of ore mined per year is in the 50% category compared to Cominco.
Comment ocotilloredux #2: If my memory is not failing, Cominco tried the grouting option and it was not successful and I think a lawsuit came about because of it. Also, the comment about moving water is a little puzzling but I guess correct when you think about it. You cannot freeze flowing water if it is moving at more than 2 m/day. So if a few dewatering wells are in use somewhere in the area the entire flownet is activated hence the groundwater over an extensive area is moving. So straight drawdown of the water table by a series of dewatering wells is likely the only surefire way of dry mining but I do not know what sort of pumping rate hence cost this would imply.
JK: Your memory is not failing you. N81 was discovered very late in the Pine Point mine life. I do not know for sure but I believe they went to Cementation to find a fast solution so they could get in and out quickly. N81 was a very high grade prismatic which means it was in a very karsted zone. The highly karsted areas would have greater flow velocities than would the lesser karsted zones related to the tabular deposits. There was a lawsuit but I do not know the particulars. In terms of flow velocities, Tamerlane did extensive work around the R190, highly karsted, and Thyssen determined that the water was freezable to develop a curtain. The underground Westmin deposits are well separated and will not be influenced by any groundwater pumping to the north.
@CriticalInvestorFor some reason white lines disappear, make reading this an effort but ok. @HRA-Coffin they could do more in presentations etc, agreed, but at caesarsreport.com it was discussed, not familiar with other public platforms featuring $DBL. They have a lot of work to do after the PEA, but the jury is still out there, nobody can say with any credibility that it will not work at this moment. I'm biased but John's concepts sound realistic and doable.
@CriticalInvestor@HRA-Coffin Yes lessons learned for them I guess. Especially since some solutions sound pretty basic, I was surprised Cominco didn't use them at the time, having to pump much more water than strictly needed etc.
@VaughanThanks for the info @CriticalInvestor. Its interesting to note that mgmt is well aware of this panel and as @tommy mentioned they felt the participants here were giving $dbl a hard time. Considering the caliber of commentors on here, you would think they might consider engaging the community, if only briefly. As posting is limited to those with the right to do so, i dont think there would be much fear of anon "bashing" during the exchange.
@CriticalInvestorWhat were they thinking, having the lake as a viable brine source? Economic brine is always underground as you need size/depth "While this new information reduces the potential lithium brine resource that can be defined within surface lake-brine, other publically available geophysical and geological information opens up a new conventional brine exploration target in the basin-filling sediments underlying the lake."
@CriticalInvestor@DanO Just read your notes on Neo Lithium again. Looks like they have very low impurities after drilling, so those geothermal springs on a fault line next to the lake were somehow separated from the brines regarding iron and manganese sources. The pilot ponds were easily permitted in about 6 months if I'm correct, and already constructed. Shows you things can be more nuanced instead of critically flawed. $NLC
@DanO@CriticalInvestor Your handle says critical. I do the same :) It's just that as promised I will give them time to develop the project and then I will take another snapshot to see how it goes. In a couple of months most likely. Until then no comment.
@CriticalInvestor@DanO Of course, but stating certain things and seeing the opposite happening afterwards shows the need for taking into account different scenarios/possibilities when you can't be sure.
@CriticalInvestorMy guess is after close to 7 years in this industry, that 99% of all mining companies do release results 30-45 days before they file their reports, as results are usually known before the report is finalized, are therefore material knowledge and have to be announced. Arizona Mining did a very quick job as they filed it within 10 days. So releasing results the same day as filing the report is bordering on suspicious in my view.
@CriticalInvestor@Newton Took a while, but here is the answer from Glenn: "After we closed the bought deal financing from Cantor Fitzgerald last summer we decided to begin drilling the El Tigre portion of the deposit right away and use that drilling data with the legacy data to expand the pending resource estimate as the person posing the question surmised."
@CriticalInvestor@Goldfinger$MIN is probably also trading lightly as most people familiar with/interested in the story are positioned now for the latest stages of permitting, various news releases about this should start to come out (very) soon.
@CriticalInvestorWell he hired a new geo at the PDAC so I can imagine new drill results could take a few months at least, that guy has to study all data, determine strategy and targets, contract and mobilize rigs, drill, assay. But agreed, an update on this halfway (for example commencing drilling) wouldn't hurt.