REBgold puts to bed first tranche of private placement with Baker Steel

Toronto-based REBgold (CVE:RBG) has closed the first tranche of its non-brokered private placement financing announced earlier this month, with the funds to be used to secure additional project opportunities, as well as to continue investing in its Finnish properties. 

It told investors Tuesday that it has issued $510,000 of 8% unsecured convertible debentures to Baker Steel Capital Managers LLP. 

Baker Steel is currently REBgold’s largest shareholder with a 17.4% stake.

The company said it expects to complete a second tranche of the placement in the next few weeks, and the final third tranche after its annual shareholder meeting on June 17. 

Aside from new projects, and the continued investment in its existing properties, the company will also use the new funds for general working capital needs. 

REBgold's Rantasalmi gold project in Finland is a joint venture with Belvedere Resources (CVE:BEL), formed in 2011, whereby REBgold has the right to earn an interest in two of Belvedere's properties, Kiimala and Rantasalmi. REBgold can earn a 50-per-cent interest in the properties by spending C$6 million over a four year period. 

Under the terms of the joint venture, a completed feasibility study would result in an increase of between 55 and 75 per cent to REBgold’s stake, depending on the level of Belvedere's contribution to the study. 

Pivotal Therapeutics narrows losses on first sales of Vascazen as product build-up continues

Pivotal Therapeutics (OTCQX:PVTTF) (CNSX:PVO), a pharmaceutical company focused on Omega-3 therapies for cardiovascular disease, has unveiled its year-end results, narrowing its loss from a year earlier as sales increased and expenses were reduced. 

For the 12 months that ended December 31, 2012, the company reported a loss of $3.6 million, or 5 cents per share, compared with a slightly bigger loss of $3.8 million, or 6 cents per share, in 2011. 

It told investors on Monday that the decrease in loss resulted from an increase in sales, netted against a reduction in operating expenses. 

“The company is pleased to report the realization of revenues in it’s first year of commercialization of VASCAZEN®,” said CEO and CFO, Eugene Bortoluzzi, in the statement. 

“As the second prescription only Omega-3 to the market, VASCAZEN® has seen positive growth into the first quarter of 2013. We at Pivotal continue to expand our sales and marketing efforts to increase awareness of our products throughout the medical community.”

The company's product, Vascazen, is an FDA-regulated medical food product developed to lower cardiovascular health risks in Omega-3 deficient cardiac patients, including high triglycerides, or fatty substances in the blood that are associated with coronary disease. 

The 90 percent-pure product, which was introduced in the U.S. in November 2011, provides those suffering from heart disease with levels of the most important Omega-3 fatty acids in fish oil – EPA and DHA – that the company says are ideal, and cannot be achieved just through simple changes in diet alone. 

Eicosapentaenoic acid (EPA), which has strong anti-inflammatory properties, and docosahexaenoic acid (DHA) are found in cold water fish such as salmon, mackerel, halibut, sardines, tuna, and herring, but without enough fish, supplements are needed to fill the body’s needs. 

The dual-listed company says its medical food product has carved out a niche, for the dietary management of patients with cardiovascular disease that are deficient in Omega-3 fatty acids - a much broader market than for Lovaza, the first prescription Omega-3 to market, after which Vascazen followed.  

Lovaza, which is owned by GlaxoSmithKline, is indicated exclusively for the reduction of "very high" - 500 mg/DL- triglyceride levels in adults. For 2012, GlaxoSmithKline reported worldwide Lovaza sales of $1.4 billion, up from $876 million in 2011. 

Vascazen, which avoided the lengthy FDA pre-approval process that is required with drugs, is available with a prescription in all major pharmacies throughout the U.S.

Currently, the company's sales reps are focused on the eastern seaboard in the U.S., which contains the highest prevalence of cardiovascular disease-related illness in the nation.

With plans to close a financing for some $5 million in proceeds, the company says it can build out its dedicated sales force to more than 35 people. Its sales reps are compensated “heavily on commission”, which Pivotal says drives sales and higher volumes. 

At year-end, Pivotal's working capital position came out to $452,914, a drop from $1.9 million at the end of 2011 as the pharmaceutical company builds out its sales and marketing efforts. 

In a recent research report, analyst Juan Noble of Taglich Brothers wrote that by 2017, he expects Pivotal's revenue should ramp up to around $61 million, with the company anticipated to be cash flow positive by late this year. Supported by FDA-approved material suppliers and contract manufacturers, as well as selling organizations, the company started U.S. distribution in the second quarter of 2012. 

Quick growth is not unprecedented for the company. Pivotal was founded by veteran healthcare execs Dr. George Jackowski, Eugene Bortoluzzi and Rachelle MacSweeney in October 2010, with the team already able to finance the start of its commercialization plan for Vascazen in 2011. 

This year, the company said it plans to advance the commercialization of its product even further in the U.S., including the expansion of the sales and marketing team, the initiation of new clinical trials, publication of existing scientific data, and the bolstering of its intellectual property portfolio and product offerings, among other goals. 

Rathdowney Resources confirms expansion potential with encouraging Chechlo results from Olza project

Rathdowney Resources (CVE:RTH) unveiled Tuesday new results from core drilling on the Chechlo concession at its Project Olza in southern Poland, seeing zinc, lead and silver mineralization of "significant grades and thicknesses". 

Results from Checlo included 41.4 metres at 7.67% combined zinc and lead, and 23.5 grams per tonne (g/t) silver in hole OLZ-224, including 19 metres at 12.41% zinc and lead, and 40.7 g/t silver. 

Hole OLZ-225 hit 6.40 metres of 14.24% combined zinc and lead and 11.9 g/t silver, including 3.5 metres of 22.09% zinc and lead and 18.2 g/t silver. 

Olza is a Mississippi Valley Type (MVT) zinc-lead-silver project situated in the historic Silesian mining district,  a Brownfield historical mining district with access to mining and logistical infrastructure. 

Last September, the company released an initial resource estimate for the project consisting of 21.2 million tonnes in the inferred category grading 7.42% combined zinc and lead, at a 2% zinc cutoff. 

The resource covers just the Zawiercie and Rokitno exploration concessions, within a 9-square kilometre area of the large and  prospective Olza property.

More recent drilling, however, has taken place at the Chechlo prospect,  about 15 km southeast of the initial resource-area. 

Rathdowney said that it drilled two holes in an area where widely-spaced drilling took place in the past. The results were found to be particularly "compelling", it said Tuesday, as a new  style of mineralization was found. 

"Our drilling shows that the Chechlo prospect hosts zinc, lead and  silver mineralization of significant grades and thicknesses within  underlying older dolomite units that we have not previously explored," said president and CEO John Barry in the statement released on Tuesday. 

"Importantly, the presence of  this new style of mineralization in the Devonian strata at Chechlo  indicates the opportunity for its discovery in other parts of Rathdowney's exploration concessions."

Last month, equities research firm PI Financial initiated coverage on Rathdowney Resources with a “buy” recommendation, citing the company’s proximity to infrastructure, exploration upside and near term catalysts.

PI analyst Aleem Ladak said in the report that Rathdowney’s proximity to excellent infrastructure, means options. 

“The deposit sits 10 kilometres north of the Pomorzany underground zinc mine and 15 kilometres north of its concentrator, refinery and smelter. In addition, the region contains extensive logistical infrastructure such as railways, rail-spurs, roads and power lines.”

Rathdowney CEO Barry said in the release today that the project is "strategic and expandable", and could help Europe, Poland and the Silesian region in terms of security of indigenous metal supply.

"Our work has confirmed that the Olza concessions host a significant mineral resource with excellent expansion potential. The project is located in a brownfield setting, connected by rail to the fully-integrated mining infrastructure at nearby Boleslaw that is currently supplied by mines nearing the end of their operating life," he said, adding that there are data collecting, engineering and community engagement activities now underway at the site. 

PI Financial noted in the research report that key near-term catalysts for Rathdowney include full deposit delineation, which could be accompanied by a “substantial increase” in the resource size.

Timmins Gold sees encouraging results from ongoing drilling program

Timmins Gold Corp (TSE:TMM )(NYSE:TGD) has announced success in the ongoing drilling program at its San Francisco gold mine, highlighting the results of 72 metres of 1.6 grams per tonne (gpt) gold, 15 metres of 4.2 gpt gold and 14 metres of 3.2 gpt gold at the site.

The company says that its ongoing drill program continues to extend and expand the mineralization at the site in the Mexican state of Sonora, which is comprised of two pits, the San Francisco Pit (SF Pit) and the La Chicharra Pit (LC Pit), approximately 1.5 km distant.

From October 2012 to the end of February 2013, a total of 107,315 metres were drilled across 476 holes with a further 42,000 metres drilled in March and April mainly at the larger SF Pit, and an additional 30,000 metres to be drilled again at the SF Pit to the end of May.

An updated technical report based on the drilling results is expected by August.

The drilling program was designed as infill drilling to both fill in voids in the block model and convert existing previously drilled inferred ounces into the measured and indicated categories. In both cases, assay results received to date indicate that the programs were successful in reaching these goals.

At the San Francisco pit, a total of 28,170 metres were drilled across 125 holes by reverse circulation drill. Findings include 72 metres of 1.6 gpt gold in hole TF-3115, 6 metres of 3.6 gpt gold in hole TF-3035, 15 metres of 4.2 gpt gold in hole TF-3003 and 14 metres of 3.2 gpt gold in hole TF-3029.

At the La Chicharra pit, 51,949 metres were drilled across 229 holes, also by reverse circulation drilling. Findings include 13.7 metres of 2.3 gpt gold in hole TF-2990, 13.7 metres of 1.35 gpt gold in hole TF-2977, and 4.6 metres of 6 gpt gold in hole TF-2939.

A limited core drill program of four holes was also drilled approximately a kilometre to the east of the SF Pit and returned results confirming gold mineralization to a depth of more than 1,000 metres, and the continuity of the mineral trend along a strike length of at least 4,000 metres.

One hole, drilled to a depth of 1,304 metres, intersected numerous lenses of mineralization including 1.5 metres of 15 g/t gold at a depth of 147 metres, 1.5 metres of 6.76 g/t gold at a depth of at 274.5 metres, and 9.00 metres of 8.166 g/t gold, which includes 1.50 metres of 47.6 g/t gold at a depth of 288.0 metres.

“The size of the gold mineralization zone, its presence within large shear zones and the continuous nature of the gold within these zones form the basis of management's belief that the ongoing drill program could lead to a significant increase in the estimated mineral resources at the San Francisco mine and could potentially also lead to the discovery of additional satellite deposits within Timmins Gold's existing land package,” said the company in the statement. 

“The orogenic nature of the deposit may provide the potential for the discovery of high grade feeders at depth.”

Shares in Timmins Gold were trading on the TSX at an intraday high of $2.55 from an open of $2.50.

Madalena Ventures validates massive upside potential of Argentina assets based on "high quality" figures

Madalena Ventures (CVE:MVN) impressed analysts at Casimir Capital today, resulting in a sharp boost in the company's share price target on the back of "strong validation" of its Argentina assets and massive upside potential, as it released a resource report uncovering an estimated 34.8 billion oil equilvaent barrels of petroleum initially in place. 

The junior oil and gas play continues to ramp up production through its horizontal resource plays in Western Canada, while also driving forward plans to further unlock value across its shale assets within the Neuquen basin in Argentina. 

Indeed, on Tuesday, Madalena released a resource statement on its unconventional shale resources on its three land blocks within the Neuquen basin. 

The report, done by Ryder Scott Petroleum Consultants, showed a best case scenario of 34.8 billion barrels of oil equivalent total petroleum initially in place, 51 per cent of which is made up of crude oil and natural gas liquids. 

Of this, in the best case, 257.4 million barrels of oil equivalent were "discovered petroleum initially in place", while 34.6 billon barrels of oil equivalent were termed "undiscovered". 

Best case contingent plus prospective recoverable resources were estimated at 2.9 billion barrels of oil equivalent - 4 times higher than Casimir Capital's forecast - comprised of 19.4 million barrels of "contingent" recoverable resources, and 2.8 billion barrels of "prospective" recoverable resources. 

Madalena holds 135,000 net acres on the Coiron Amargo, Curamhuele and Cortadera blocks within the Neuquen basin. The company's exposure to multiple, high impact tight sand plays in the Neuquén Basin is key, specifically the Vaca Muerta shale - which the company calls the most tangible shale play outside of North America.

The main zones of interest for the independent resource evaluation focused on the Vaca Muerta shale, the Lower Agrio shale and Basal Quintuco, the company said, with the report based on data from 19 delineation and discovery wells on the blocks, as well as 3D or 2D seismic coverage.

"With 34.8 billion net barrels in-place resource and 2.9 billion net recoverable, (8.3% RF), Madalena has provided solid results to support the value of Argentine assets," wrote Casimir Capital analyst Ryan Galloway in an emailed research report on Tuesday. 

"This is the first major resource report provided to the market since YPF and Andes Energia provided figures a year ago, and is also the first report with resource assessments for the Agrio Shale (373 mmboe) and Basal Quintuco (503 mmboe)."

The Coiron Amargo block, where Madalena is now working on a drill program with partners, is located within the heart of the Vaca Muerta oil play and is also within kilometres of the recently announced Chevron and Bridas proposed billion dollar farm-in deals on Argentina-based YPF’s lands.

Shell also recently announced a Vaca Muerta shale oil discovery in Argentina, which is the first shale discovery in the country. The discovery well, which tested at 465 barrels per day of 35 degree API oil, is located directly south and adjacent to Madalena's Coiron Amargo block.

Galloway also highlighted in his report that the resource evaluation was prepared by Ryder Scott - "who has been involved in most resource reporting to-date and is considered an expert in the Vaca Muerta". 

"Figures are high quality, based on substantial drilling and delineation by both Madalena and insights Ryder gained from other players, but represents only a portion of Madalena’s total acreage," he adds. 

The analyst makes note of the fact the resource report provides a "high level of credibility" for Madalena to pursue further joint venture arrangements, or options including a partial or entire sale. "We see this worth many multiples of current stock price even at conservative valuations," Galloway wrote. 

He calculates that even using a conservative $1 per barrel of oil equivalent just on Coiron Amargo, the most delineated block, this yields an incremental value of $0.90/sh. 

As a result of the improved joint venture prospects and the validation of potential for the Argentinean assets, Galloway raised his price target by more than double to $3.50 from $1.30 previously. Madalena's shares rose as high as 29 cents on Tuesday Morning, up from an open of 26 cents. 

The Canadian oil and gas company also released its 2012 financial results on Tuesday, showing a strong balance sheet with positive working capital of around $30 million and zero debt. 

Oil and gas revenue last year rose sharply to $5.55 million from $2.60 millon in 2011, as net losses narrowed to 3 cents per share in 2012 from 6 cents per share. Total average daily production increased to 258 barrels of oil equivalent per day, up from 108 barrels in the prior year. 

Meanwhile, the company said that at its Canadian assets, total company proved plus probable reserves of 3.894 million barrels of oil equivalent more than doubled from the equivalent figures at year-end 2011. The reserve net present value of proved plus probable reserves before tax, discounted at 10 per cent, was $33.7 million. 

It said in the release that a large inventory of horizontal locations on Madalena's western Canadian lands remain unbooked. In Canada, Madalena has a current base production of roughly 1,200 boe/d, with more than 1,200 boe/d of tested volumes behind pipe from the recently completed horizontal development wells its Greater Paddle River area, expected to come on stream in the second quarter. 

Looking ahead, for the rest of the year, the company plans to have ongoing operations on its Argentinean and Canadian assets, focused mainly on horizontal development work in both jurisdictions, high impact unconventional shale drilling, and the acquisition of 3D seismic on key exploration acreage internationally.

“With high impact unconventional shale drilling [in Argentina] planned for this year and billion plus dollar joint ventures taking place surrounding Madalena’s acreage, we are focused on unlocking significant value from our international activities in 2013 onward," CEO Kevin Shaw told Proactive Investors in emailed comments this morning. 

“Driven by the Vaca Muerta and Lower Agrio shales, the prize in-country for Madalena is considered home run territory within the international E&P sector, with the size and scalability which the major E&Ps are looking for from a resource in-place and reserve replacement perspective."

Castle Peak's Apankrah target shows 76,000 ounces of contained gold

Castle Peak Mining (CVE:CAP) has revealed that the Apankrah target at its Akorade project in Ghana is estimated to house 76,000 ounces of contained gold.

The firm announced a major milestone on Tuesday - a preliminary resource estimate for this part of the project.

SEMS carried out the inferred resource estimate, which shows 275,000 tonnes with 76,000 tonnes of contained gold at a grade of 8.6 grams per tonne (g/t).

The company's president and chief executive Darren Lindsaytold investors: "This is one of only a handful of high grade projects in West Africa, and one of only a few in Ghana.

"This is a major milestone for Castle Peak shareholders, and I look forward to further drill evaluation of these additional structural targets to increase our mineral resource base.

"The high grade nature of this deposit will play a key role in assessing the preliminary economics in an area that is currently known for larger, lower grade mineral resource development and mining."

The Apankrah shoot lies immediately south of two parallel structures named Nana and Scorpio, where high grade mineralisation with visible gold has been hit in drilling.

Both of these structures require further drilling to confirm their potential to host mineral resources, the company said.

In addition, Castle Peak has identified two other structural targets in the area, both of which require drill testing.

These are an IP anomaly lying around 250 metres to the south of the Apankrah structure, which mimics the geophysical characteristics of the Apankrah Shoot, and an artisanal mining operation - the Galamsay Structure - running along an east-north-east trending structure around 700 metres to the north of the Nana structure 

"These targets remain a top priority for further exploration designed to expand the newly defined high grade mineral resource base," said the company.

The company now plans to complete initiall metallurgy testing of samples in order to trigger the preliminary economic assessment for developing the Apankrah target.

"Our goal is to create value by defining a pipeline of economic deposits focusing on strong grades. Staged development of the higher grade Apankrah area with eventual expansion to potentially larger deposits within our key structural corridors provides a solid strategy for increasing shareholder value and attracting potential partnership interest," said Lindsay.

Meadow Bay Gold raises C$513,000 to explore Atlanta Gold mine

Meadow Bay Gold (TSE:MAY) has brought in C$513,000 via a non-brokered placing.

The net proceeds will be used for exploration at the company's Atlanta Gold mine in Nevada, USA as well as working capital.

Of the total 2,530,910 units, 2.19mln units were issued at a price of $0.20 per unit, and 340,910 units were issued at a price of $0.22 per unit to insiders of the company, it said in a stock exchange statement.

Those participating in the financing, included the chief executive, chief financial officer and the chief geologist, it added.

Each unit consists of one common share and one common share purchase warrant exercisable for a period of four years from the closing at a price of $0.30 per share in the first and second years, $0.35 in the third year and $0.40 in the fourth year.

This year an NI 43-101 resource estimate for the project based on 2011 and 2012 drilling has doubled gold ounces.

There are now 572,100 ounces of the yellow metal in the higher measured and indicated category, and 544,300 ounces of gold in inferred.

That compares with the estimate in July last year, of 375,869 ounces in indicated and 166,141 ounces of inferred.

It also contains 5.8 million ounces of silver in measured and indicated and 3.9 mln ounces silver in inferred.

The project lies in Lincoln County, Nevada, in the Atlanta mining district where gold is thought to have been first discovered in the 1860s and still benefits from power, water and roads.

Big Sky Petroleum confident progress in Schleicher Prospect, Texas will continue; aims to expand position significantly

Big Sky Petroleum (CVE:BSP)(OTC:BGKYF) provided late Monday an operational update, saying it plans to continue to expand its leasehold position in the west Texas Permian Basin to a potential 10,000 net acreas by later this year, after capping what it called a "highly active and successful" first quarter. 

The junior oil and gas play has been entirely focused on the establishment of a prospective leasehold position in front of the expanding Wolfcamp/Wolfberry play in the west Texas Permian Basin. 

After reviewing and evaluating the eastern shelf of the Midland Basin, the company completed a leasing program that resulted in the acquisition of a contiguous 2,300 acres, and added another 1,100 net acres, to bring Big Sky's current leashold position in the Schleicher Prospect to 3,350 net operated acres. 

It also in the first quarter drilled the initial Wolfberry test well, Schafer No.1, at its Midland Basin project in Schleicher County, Texas, recovering 348 barrels of oil and 1,266 million cubic feet of gas during the flow back period. The well, which was placed on pump in early April, will continue on pump until the remaining fluid is recovered, the company said, and then put on test for a period of 30 days to establish an initial production rate. 

An NI 51-101 report by Petrotech Engineering estimates a "best" scenario of 100,000 barrels of oil equivalent recoverable net to Big Sky's interest in the Schafer No.1 well, potentially providing $4 million in net revenue per well after recovery of drilling costs, operating costs and production taxes. 

Big Sky said in its release Monday that it currently has spacing for 84 vertical drilling locations, with a possible upside of 168 locations.           

As such, in the second and third quarter, the company plans to continue its focused leasing program within the Schleicher Prospect area, with the main goal of consolidating its interest near existing leasehold positions - targeting what it calls "highly selective" areas for development. 

Specifically, it is aiming to boost its leashold position in the area to a total of 10,000 net acres by the first half of the third quarter. 

"Management is currently reviewing several options to fund this program including the possibility of entering into a joint venture with an industry partner," Big Sky said in the statement Monday. 

Depending on the progress, the company said it could continue the leasing activity into early in the fourth quarter, but the main goal for the period will be to drill and complete another Schleicher Prospect test before the end of the year. 

International Tower Hill Mines, Largo Resources at next Proactive One2One investor forum in New York

International Tower Hill Mines (TSE:ITH) and Largo Resources (CVE:LGO) will take the stage at our next Proactive Investors One2One forum in New York on May 14th, where investors will hear about both companies' exciting plans to develop their resources. 

We are offering investors a rare opportunity to hear from Mark Brennan, president and CEO of vanadium and tungsten developer Largo Resources, as well as from Don Ewigleben, president and CEO of International Tower Hill, which is developing the multi-million ounce Livengood project in Alaska. 

The Proactive Investors One2One forums promise to provide direct access to the bosses of some of the nation’s most dynamic growth companies. 

Indeed, this time is no different, with International Tower Hill and Largo Resources set to take the podium on Tuesday May 14th 2013 in New York, at the Connolly's Pub - 14 East 47th Street - Dining Room Entrance (Back room). The presentations will start at 6:00pm and finish at 8:00pm.

It promises to be an interesting affair, with two compelling investment opportunities on hand for attendees.  

In six years, Proactive has organized more than 300 events and introduced investors to some of the stock market’s best-performing stock market listed companies.

International Tower Hill Mines and Largo Resources will make a 20 minute pitch followed by a 10 minute inquisition by a roomful of potential investors. Once the companies have presented, complimentary canapés and beverages are available for 90 minutes during a break-out session, where attendees can mingle with other guests, or ask more questions to the presenters. 

To register for the event, please click here. 

We look forward to seeing you there! (See mini bio on ITH and Largo Resources below)

International Tower Hill Mines (TSE:ITH) (AMEX:THM) is keeping a weather eye on the recent activity in the gold market, but the Canadian mining exploration and development company has no fear of the vagaries of the market costing it big.

The company has said that it developed an alternate work program at its flagship Livengood gold project – termed by the company “North America’s greatest gold opportunity” -- in preparation of the possibility of on-going lower gold prices.

Under the program, ITH will require nothing beyond the capital currently on hand to continue to fund corporate activities, compliance matters and essential environmental baseline activities to support the permitting process of the 125 kilometre square Alaskan property.

Accordingly, the company, which maintains a 100 per cent interest in the Livengood project, does not anticipate raising additional capital in the near term and will continue to seek strategic alliances to fund the future development of the project once the feasibility study currently underway is completed.

The Livengood gold project, with a resource size of 16.5 million ounces in the measured and indicated categories and another 4.1 million ounces in the inferred category, ranks as among the largest gold deposits discovered globally in decades. 

The project not only has the distinction of having large gold resources in a mining-friendly jurisdiction, it also has the advantage of being close to the city of Fairbanks, a mere 70 miles distant, and – crucially -- is accessible by paved highway. Other items of necessary infrastructure are available to the site in the shape of power, water, and a nearby highly skilled labour force in an area with a storied history of mining.

Largo Resources (CVE:LGO), meanwhile, is a Canadian strategic mineral company focused on developing its vanadium and tungsten projects in Brazil and Canada.

The primary focus is to continue to advance its flagship Maracas vanadium project with the company targeting a production start date in the fourth quarter of this year. The project, which is fully funded, permitted and in construction, is slated to be the world's "premier producer of vanadium", according to the company, due to its high grade and low operating costs.

The 27,000-hectare property is located 813 kilometres northeast of Brasilia, the capital of Brazil, and 250 kilometres southwest of Salvador, the capital of Bahia State.

Largo, which is modeling average annual production of 11,400 tonnes of vanadium pentoxide equivalent over a 29-year mine life at Maracas, already has an off-take agreement in place with Glencore International for 100 per cent of material for six years.

Horizonte Minerals readies for PFS as in-fill grades please

--adds broker comment--

Horizonte’s (LON:HZM) (TSE:HZM) in-fill drilling at its Araguaia nickel project in Brazil has shown more high grades with the contract for a pre-feasibility study now set to be awarded soon.

Best results from the latest holes at Villa Oito East and Villa Oito showed nickel grades ranging from 1.79% to 1.75% at widths of up to 12m.

Horizonte drilled 299 holes for a total of 8,688 metres in this latest program, which targeted the Jacutinga, Vila Oito West, Vila Oito, Vila Oito East and Pequizeiro West targets  

The program will be fully completed by the end of April and the results will feed into the pre-feasibility study.

Jeremy Martin, Horizonte’s chief executive , added: “The project continues to deliver high nickel grades with good vertical thickness, as demonstrated from these recent results from the Villa Oito East and Villa Oito targets.  

“Once drilling is complete Snowden Mining Consultants will commence work on the updated mineral resource  estimate.  

“We are still reviewing the options for the consortium of consulting groups who will undertake the Pre-Feasibility study and aim to be in a position to award the contract imminently.“

Martin added that the aim of the in-fill drilling was to convert sufficient resource material to the Indicated category to provide a minimum of 20 years mine life.

Horzionte’s Social Environmental Impact Assessment (SEIA), a key requirement in obtaining a mining licence, is also on track he said.

The aim is to have the SEIA report filed with SEMA, the Brazilian Environmental Agency, in the third quarter of this year.

Horizonte’s Araguaia project is located to the south of the Carajas mineral district of northern Brazil and has an estimated mineral resource of 39.3Mt grading 1.39% Ni (Indicated) and 60.9Mt at 1.22% Ni (Inferred) at a 0.95% nickel cut-off.

The in-fill drilling program nickel used a cut-off of 1% with a minimum intercept length of 2.0 metres and a maximum length of internal waste of 2 metres.

House broker finnCap said the once the current drilling completes this month, the resource will then have been drilled off at 100 metre centres and that should convert sufficient resource to the Indicated category to cover the first 20 years of mining. 

The broker has a target price of 50.8 pence, which was unchanged by today’s news.

Shares rose to 7.55 pence today in London afternoon trade.

Transeuro Energy mulling several strands for future growth

Transeuro Energy (CVE:TSU) is pursuing a number of low risk oil opportunities.

It came as part of a wider update following up on its strategy, announced previously, of growing the company by monetising assets or securing revenue through existing or new assets or a combination of those.

Such projects should deliver near term oil revenues as well as low entry and development cost and also low risk exploration opportunities.

One such project in particular is well advanced, it said, while a second is maturing but is less certain, but it is possible that both new ventures may be concluded within six months.

"The board has also considered mergers and acquisitions and this remains a possibility," it added in today's statement.

Transeuro also added today that it was in discussions with third parties interested in developing the substantial resource potential at Beaver River gas project in Canada and is hopeful of progressing these discussions through the summer.

It is also reviewing the possibility of independently resuming investments to further appraise the conventional and shale potential before introducing a partner.

The firm announced it was carefully managing its cash reserves and expects to complete the sale of the Armenia rig in the second quarter and to utilise the Yorkville Share Purchase Agreement as previously announced.

"The board believes that one of the above paths alone or the paths combined will provide the company with the required sustainable short term revenues and the optimal financial alternatives in the best interest of the company and its shareholders. 

"The company will report as appropriate but the board emphasises that the completion of these activities contain numerous and various risks and successful outcomes are not assured."

Kootenay Silver’s CEO sees Agnico-Eagle investment as affirmation of promise to come

Kootenay Silver (CVE:KTN) has just put to bed a $4.75 million strategic private placement with established miner Agnico-Eagle Mines (TSE:AEM), a deal the Canadian junior’s chief hails as “very beneficial” for the company, which is developing the flagship Promontorio silver mine in Mexico. 

Kootenay issued 6.25 million units at a price of 76 cents each to Agnico-Eagle, with each unit made up of one common share and one half of one share purchase warrant. Each whole warrant allows Agnico-Eagle to buy an additional common share at $1.08 apiece until April 26, 2015. 

As a result of the financing, Agnico-Eagle now owns 9.96 per cent of Kootenay on a non-diluted basis, or 14.23 per cent if the warrants are exercised. 

“We started to talk to Agnico-Eagle several months ago, and they completed quite an in-depth due diligence process, which included a site visit and a review of our geological model,” president and CEO James McDonald told Proactive Investors in an interview last week, citing Agnico-Eagle’s “selective process”. 

“This is big news for us. [Agnico-Eagle] is a very highly regarded mining company that boasts technical expertise and that is bullish on the potential in Sonora State, Mexico. They like that exposure there, and our whole land package in addition to Promontorio.”

Earlier this month, the Canadian junior company commissioned SRK Consulting to provide an updated resource estimate for Promontorio, which will include and quantify gold content. The decision to include gold assay results followed extensive metallurgical testing and technical analysis, which confirmed that up to 94.5 percent gold recovery rates from pyrite concentrates at Promontorio can be achieved through a pressure oxidation process.

“The updated resource is very close to being complete. The report will use the pre-existing drilling data prior to the 30,000 metre program underway,   to estimate the gold component. The recent oxidation work on the gold indicates there are some real possibilities to be able to extract the yellow metal economically that need to be evaluated,” says McDonald. 

“It’s quite promising – there is a lot of gold in the system that occurs with the silver. In other words,  most of the gold will be lying within the current resources, potentially providing a significant benefit to the resource. It’s not as if the gold is alone and has to pull its own pit.”

The most recent NI 43-101 mineral estimate on Promontorio from last August contains a measured and indicated silver resource of 61.68 million silver equivalent ounces, as well as another 14.47 million silver equivalent ounces in the inferred category. The resource is stated above an 15.00 grams per tonne (g/t) cut-off grade and contained within potentially economically mineable pit shells. 

The updated resource estimate, which is due out in approximately three weeks, will not include any information from the 30,000 metre program underway at the site - the largest and most expansive drilling campaign conducted at Promontorio so far. 

“We don’t expect anything from that [the 30,000 metre campaign] until later this year, likely in the third quarter, after which a preliminary economic assessment report is planned,” says McDonald. 

Kootenay’s CEO also highlights the company’s 80,000 hectare contiguous land package in Sonora, which provides it with “excellent upside potential” for high grade discoveries well within the complex, as well as separate from it. 

“We have a great resource we are working on expanding backed by a whole pipeline of potential new discoveries within the same land package,” he adds. 

Indeed, Agnico-Eagle clearly saw evidence of this potential before deciding to become the company’s strategic partner. 

“It’s a very good deal for us. It doesn’t preclude Kootenay from being taken out by another company and gives us a relationship with Agnico-Eagle for strong shareholder support,” McDonald affirms, adding that Agnico-Eagle was also a strong shareholder ofQueenston Mining before that company was bought out by Osisko Mining (TSE:OSK).

“They [Agnico-Eagle] view this as a strategic and long-term type of investment.” 

Kootenay’s chief says the investment puts the company’s cash position at over $8 million, “funding us comfortably well into next year.” The new funds will of course be used for the advancement of Promontorio as well as for general working capital needs. 

McDonald is not surprisingly bullish on precious metals, despite their recent price rout. “The recent correction in gold is disconcerting to everyone in the sector. We don’t know where it will settle out, but fundamentally, the economic environment we’re in, and the continual injection of new currency all over the world is very supportive of a continued strong gold and silver price.

“My expectations continue to be strong going forward, even moving upward from where we are now. The volatility in the market is natural, but I am comfortable with the fundamentals that support a bullish trend.” 

Gold for June delivery rose $12.6 to $1,466.20 an ounce on the Comex this morning, while the silver contract for July gained 48 cents to $24.27 an ounce. High precious metals prices will certainly benefit Kootenay as it develops its high grade Promontorio project. In March, the company unveiled the results of 11 more holes from its 30,000 metre drill program, which hit values as high as 246 grams per tonne (g/t) silver equivalent in a newly discovered oxide zone. 

Gold Resource modifies monthly dividend, still on track to return a third cash flow from mines

Shares are holding steady on the news Monday that Gold Resource Corp (NYSE:GORO) has modified its monthly instituted dividend from $0.06 per share per month to $0.03 per share, starting with the April payment. Unpredictability in the precious metals market, which could impact net revenue and a need for capital to fund current expansion activities, was cited as the reason behind the low-cost gold producer’s move.

The board of directors of the company approved the modification of the instituted monthly dividend for the time being, citing the recent and dramatic plunge in the spot price of physical gold and silver as a factor contributing to the change.

The miner, which focuses on production and development of high-grade, low-cost gold and silver projects, is also currently expanding the mill at its flagship El Aguila property, targeting a throughput increase to a nominal 1,500 tonnes per day capacity.  The construction phase on the mill, in the Mexican state of Oaxaca, includes the installation of a second ball mill, new thickener surge tanks, and additional flotation cells to the mill’s flotation circuit.  Construction is targeted to be complete by the end of 2013.  

The dividend reduction also brings the payout ratio more in line with the company’s long-term target of one-third annual dividend distribution from cash flow from mine site operations (CFMSO), a rate Gold Resource Corp reaffirmed as a goal in the statement announcing the dividend modification.

“Multiple factors contributed to the decision to decrease monthly dividend distributions”, Gold Resource Corporation’s president, Jason Reid, said in a company statement.

“Our long-term company objective remains intact to distribute approximately one-third of CFMSO to the shareholders.  The company’s 2012 dividend distribution averaged in excess of 39 per cent CFMSO, and we were pleased to return that higher percentage last year when we could.  

"Current construction capital needs, coupled with the recent market volatility and precious metal spot price pullback, necessitated modifying our dividend.  We are proud of our return to date of $81 million dollars back to our shareholders since commercial production, which demonstrates the company’s shareholder friendly focus.” 

The miner, which has an 100 per cent interest in six high-grade gold and silver properties in the south of Mexico, also offers shareholders the option to convert their cash dividends into physical gold and silver.

Shares in Gold Resource were trading slightly up this morning, at US$9.99 on the NYSE, from an open of US$9.47.

Northern Vertex director buys 200,000 shares of the company

Northern Vertex Mining (CVE:NEE) was given a boost last week after director James McDonald purchased 200,000 shares of the company at 95 cents apiece, showing his confidence in the gold and silver explorer's development plan. 

The share purchase transaction, which was made through the public market, was completed on April 22, and filed on Saturday. McDonald has more than 25 years experience in the international mining sector, having co-founded and successfully developed National Gold, which merged with Alamos Minerals to form Alamos Gold. He also formerly served as president of Genco Resources, during which time it operated the La Guitarra Mine, an underground silver mine located in Mexico.

Late last month, Northern Vertex unveiled its long-awaited preliminary economic assessment report for its Moss gold-silver project in Arizona, showing a whopping 118 percent internal rate of return (IRR), pre-tax. 

The NI 43-101 report, which is based on the updated resource estimate the company put out in March, looked at the economics of open pit mining and heap leach processing for the Moss project. Using a gold price of $1,500 an ounce, the project was estimated to have a net present value of $110 million, pre-tax, at a 5 percent discount rate, with an IRR of 117.9 percent. 

Capex was projected at $26.6 million, with a payback period of 15 months before tax. Cash costs per gold equivalent ounce were pegged at $490 an ounce, for a mine with a life of five years producing at 5,000 tonnes per day for 42,000 ounces of gold equivalent per year. 

Northern Vertex has the right to earn a 70 percent interest in the property from Patriot Gold Corp by spending $8 million and preparing a feasibility study. It has spent a total of $5.6 million so far. 

The Moss project has a three-phase mine development plan, which is designed to move the project forward from conceptual design and lab test work to on-site pilot plant testing and then onto operations, the latter of which would be dubbed phase II. 

The third phase, which the company says is conceptual only and will depend on the success of phase II, would involve mine life extension or expansion, and was not included in the preliminary economic report. 

At a higher $1,700 an ounce gold price, the economics of the project boast an IRR of 150 percent, with a net present value of $137 million pre tax, at the same 5 percent discount rate. 

Shares of Northern Vertex are trading at 80 cents in Toronto, for a market cap of just over $42 million.