Thibaut Lepouttre of Caesars Report describes the profile of an organization that has diversified within the pile sector, along with its gold venture.
2018 was an fascinating 12 months for the Canadian firm Comstock Metals Ltd. (CSL: TSX.V), who appointed Steven Goldman as Interim Chief Govt Officer and entered into an fairness (and three way partnership) settlement with E3 Metals (ETMC.V). , though he has additionally accomplished a drilling program on the Preview SW gold venture in Saskatchewan, the place take a look at outcomes are nonetheless pending.
A recap of 2018
Final 12 months, Comstock started to give attention to battery metals (particularly lithium and cobalt) in its enterprise technique, as an alternative of focusing solely on its gold tasks at QV (Yukon) and Preview SW (Saskatchewan) in Canada. In April, it entered into an choice settlement for the acquisition of 100% Cobalt-Silver Rawhide Property in Cobalt Camp, Ontario, whose complete historic manufacturing exceeds half a billion . 39 ounces of silver, in addition to almost 30 million kilos of cobalt. . Though the quantity of cobalt discovered within the camp might at first appear small, you will need to know that the miners had been primarily on the lookout for cash and never cobalt.
The Rawhide property is an early exploration venture, nevertheless it has already been the topic of sampling packages and trenching. Earlier operators carried out 650 meters of drilling within the 1950s and 1960s in comparatively shallow holes (the common depth was lower than 50 meters), and encountered excessive ranges of silver, copper and cobalt content material. Fascinating to the purpose that Comstock Metals is following up these historic drilling outcomes with a floor exploration program, which has yielded fascinating values for cobalt, copper and silver.
In July, Comstock closed a non-public placement of C $ zero.6 million after issuing 12.15 million models at a worth of C $ zero.05 per unit, every unit consisting of A typical inventory of Comstock and a full warrant entitling the holder of a warrant to buy Comstock share at CAD zero.10 as of July three, 2020.
On the proceeds of this providing, $ 400,000 was instantly reinvested in E3 Metals. Comstock thus acquired 1 million models at a worth of CA $ zero.40. Every unit of E3 Metals consisted of 1 widespread share and one warrant whose present train worth was C $ zero.60 and expiring in August 2019. As a part of the settlement with E3 Metals, Steven Goldman joined E3 as a strategic advisor. We are going to focus on the rationale for Comstock's funding later on this report.
Lastly, on December three, Comstock introduced the sale of two non-essential properties. The Outdated Cabin gold venture in Ontario was offered for nearly C $ 100,000 in money, whereas Fresnillo PLC (FRES.L) exercised its choice to buy the Corona venture in Mexico, by which Comstock owned a contribution. Comstock acquired roughly C $ 215,000 in money for the sale of its 50% curiosity in Mexican property Corona. As well as, Comstock retains a web royalty of zero.5% on foundries at Corona.
Lowering the variety of properties to give attention to the primary properties is normally a very good factor.
One of many Stage 1 property is the Preview SW gold venture in Saskatchewan. Final month, Comstock accomplished a drill program within the northern space of Preview SW, the place it deliberate to comply with by way of with its 2017 exploration program on the north finish of the mineralization. The drilling program final month was designed to check the extent of gold veins within the northeasterly structural development zone, which was explored through the summer season and fall 2017. The drilling program outcomes for the autumn of 2017 included 17.98 g / t Au over 5.71 m from 10 m beneath the floor, 5.96 g / t Au over 5.66 m at 19 m underneath floor and 1.88 g / t Au over 21.26 m from 29 m beneath floor.
The northern zone is positioned a couple of kilometers north of the present useful resource at Preview SW (158,300 ounces at 1.89 g / t within the indicated useful resource and 270,800 ounces at 1.48 g / t within the presumed class ). Drilling within the North Zone has been accomplished and the outcomes of the evaluation are anticipated to be launched shortly.
The current sale of the QV property to White Gold
The corporate additionally signed a definitive settlement with White Gold Corp. (WGO.V), a Yukon firm, to promote its QV gold property. White Gold pays $ 375,000 in money and situation 1.5 million new shares to Comstock Metals, giving this deal a complete worth of roughly $ 2.6 million utilizing a worth of $ 1 million. motion of $ 1.5 per share for White Gold. Along with cost in money and shares, Comstock Metals can even obtain 375,000 warrants with a $ 1.50 train worth that may be exercised for 3 years.
Finishing the sale of QV means that it’s the third asset offered by Comstock in current months and weeks. The corporate is now focusing solely on its Preview SW gold venture in Saskatchewan (the place we anticipate to see assay leads to the approaching weeks), and on the Ontario Rawhide Cobalt-Silver start-up venture. C $ 375,000 money circulation will assist Comstock fund its potential work packages on Preview and Rawhide, whereas White Gold's 1.5 million shares give it some publicity to the success of exploration within the US. massive district of White Gold, which is able to undoubtedly stay one of many hottest districts of the territory.
The venture, valued at $ 2.6 million, was valued at a worth that seems to be a very good worth for an early-stage gold exploration venture, with a present estimate of sources of 230,000 ounces. Some had been upset to see the Yukon venture come to an finish, with your complete area seemingly attracting new consideration now and again, however we consider that Comstock administration felt it will generate the most effective returns per greenback spent on tasks additional south, the place exploration prices are decrease.
Comstock's plans for 2019
Comstock Metals has not but set a definitive exploration price range for 2019 as a result of it expects some updates (and outcomes from the Winter Drill Preview SW program) earlier than deciding of its work packages in 2019. The QV venture has now been put in place. offered, the Comstock administration staff should now allocate exploration funds to solely two tasks.
At Preview SW, the outcomes of the December 2018 drilling program are anticipated to be launched later this month or early February, which is able to assist determine subsequent steps for Comstock Metals.
On December 23, Comstock acquired a three-year exploration license for the Rawhide Venture. Comstock has additionally begun discussions with native First Nations to make sure they’re properly knowledgeable and to debate any potential considerations to make sure that each First Nations are current.
Comstock might design extra exploration packages and maybe an inaugural drill program at Rawhide, which is predicted to happen later in 2019. Any potential drilling program clearly depends upon whether or not the corporate has sufficient money, however after current gross sales of non-core properties. and the QV Gold venture, Comstock Metals is in fairly fine condition.
Investee E3 Metals is making good progress in its oil venture (1945)
We had been slightly shocked to see Comstock Metals making an fairness funding in E3 Metals final summer season as a result of it’s a bit unconventional for a pure exploration firm to spend cash on it. cash on shares in different firms. That being mentioned, we consider this initiative is a part of Comstock's battery metals efforts. It owns a cobalt venture (Rawhide) and its stake in E3 Metals additionally provides it publicity to the lithium sector.
E3 Metals superior its massive oil venture within the Leduc reservoir in Alberta, the place it reported a complete lithium carbonate equal useful resource of 6.7 million tonnes primarily based on three separate stories in accordance with the Laws 43-101, making it one of many largest lithium tasks on the planet. .
In December, E3 Metals launched a significant replace on its patented petrithium extraction and focus know-how after 4 laboratory assessments. The typical degree of petroleum brine within the Leduc reservoir is usually very low (72 mg / L for the brine used within the E3 take a look at work, which is considerably decrease than that for lithium brines in, for instance, Argentina or Chile). the common grade was a necessary a part of the plan to realize a viable lithium oil processing venture in Alberta as a result of an evaporation pond is completely out of the query.
The outcomes of the E3 laboratory assessments truly exceeded our preliminary expectations provided that the common lithium restoration was 90%, whereas the lithium content material elevated on common by 1700% (!) At 1308 mg / L. It was simply the common, and E3 Metals was additionally capable of display a restoration of as much as 99% whereas decreasing volumes by 20-fold to realize a remaining rating of 1498 mg / L, indicating that the common consequence might be additional improved. after extra assessments. And within the course of, the ion change sorbent eliminated 99% of the impurities, which can be an essential issue for the potential events.
It is a main advance for E3 Metals (and Comstock Metals), as the rise in lithium content material is a key factor in defining the financial viability of the venture. The upper the grade, the extra economical the extraction potential and the decrease the price of manufacturing per tonne of LCE.
We mentioned these take a look at outcomes with Steven Goldman, Performing CEO of Comstock, who appeared very optimistic concerning the future prospects of E3 Metals: "Due to the numerous potential of E3 Metals within the carbonate of Lithium and lithium hydroxide and its know-how, we now have begun to see essential lithium gamers present a eager curiosity within the property and technological potential of the petrolithium of E3 Metals Assuming that 39; E3 Metals continues to show its patented know-how for petrolithium (together with the development of a prototype plant), 2019 or 2020 might permit E3 Metals to discover a strategic accomplice or enter into an settlement to taken to supply carbonate or lithium hydroxide. "
And though the inventory worth of E3 Metals has fallen by about 20% because the acquisition of its million shares by Comstock Metals, we consider that E3 has considerably progressed.
Comstock Metals has now streamlined its portfolio of property and monetized two non-core exploration properties in addition to the QV gold venture within the Yukon Territory, Canada. This allowed CSL to extend its liquidity and give attention to its two principal mining tasks: Rawhide (cobalt / silver) in Ontario and Preview SW (gold) in Saskatchewan. She additionally nonetheless has her three way partnership with and her funding in E3 Metals (oil). Comstock is now awaiting drilling outcomes from final month's drilling program on its Preview SW gold venture in Saskatchewan, and the outcomes of those analyzes are anticipated to be launched shortly.
Seeing a small firm within the exploration section corresponding to Comstock investing in one other junior in lithium area was an fascinating initiative. We admit that at first, we weren’t fully satisfied of this resolution, however that the potential in oil sources, enormous potential of E3, in addition to the lately printed laboratory outcomes regarding its means of know-how d & rsquo; Extraction and focus patented to "enhance" the common lithium The oil brine content material has helped scale back our considerations a bit. It’s now as much as E3 Metals to evolve its patented know-how to make sure that Alberta-based petrolithium brines can compete with low-cost brine manufacturing in Argentina and Chile. 2019 ought to be an thrilling 12 months for E3 Metals and Comstock.
Thibaut Lepouttre is the editor of Caesars Report, a publication and mining portal primarily based in Belgium, which covers a number of younger mining firms and extra notably treasured metals and base metals. Mr. Lepouttre holds a Bachelor of Legal guidelines and two Masters levels in Economics who’ve cast his analytical strategy to the mining sector. Thought of a vital issue, Lepouttre focuses on enterprise valuations and is consistently on the lookout for the following undervalued mining firm.[NLINSERT]
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