It’s easy to forget, what with all the craziness in the weed space and tech space, that the mining space is having a renaissance of its own.
We’ve watched mining client companies in the Cobalt, Ontario region popping nicely this week, and lithium explorers are having a run of their own.
But – shh! Gold prices have started to make an upward move.
Sure, that’s not a Bitcoin-like run, but it’s a solid one year stretch with a defined direction.
You know what else is having a total run?
COPPER.
So a smart gold explorer, dedicated to pounding out their ground work and proving out their mining claims has two options right now:
- Do your gold work and expect that gold prices will come along.
- Hedge.
Prize Mining (PRZ.V) is a gold explorer and is doing the work on the ground that you’d hope they’d do.
Drill crew mobilization was initiated last week, and drilling has commenced on the first of four high-priority targets. A total of 1,700 metres of diamond drilling on seven drill pads is being planned. This program is expected to be completed by Dec. 15, 2017.
They’re not just shoving drills into the rock. They’ve got some serious targets.
The location of a rock sample from the Gold Eagle showing within the Toughnut property, taken during the summer 2017 program, that assayed at 2.8 grams per tonne gold, will be tested as a high-priority target. The location of historical drill hole VTN11-010 will also be tested. This hole returned 1.22 g/t gold and 2.71 g/t silver over 29.72 metres and included a higher-grade zone of 4.4 g/t and 6.1 g/t Ag over two metres (2011 diamond drilling assessment report on the Toughnut property). A soil anomaly from the company’s summer program that returned 8,000 parts per billion gold (eight g/t Au), with several corroborating samples taken in the summer 2017 exploration program that returned assay values of in the range 200 ppb Au, will also be tested as a high-priority target.
And how are they financing this?
They’re talking flow-through dollars, which can only be used to drill.
Prize also announces that it intends to complete a non-brokered flow-through private placement financing for proceeds of up to $1.15-million. The private placement will consist of the sale of up to 2.3 million units at the price of 50 cents per unit. Each unit will consist of one common share issued on a flow-through basis for the purposes of the Income Tax Act (Canada) and one-half common share purchase warrant.
This is good, honest, salt of the earth mining exploration work, the likes of which are so often neglected by companies that are run purely to raise stock value. They do this by not risking bad drill results by actually, you know, drilling anything. Instead they talk about what they’re going to do one day.
Prize is doing it, and they’re doing it in no uncertain terms.
But remember how I mentioned a hedge?
Prize Mining Corp. has entered into an agreement pursuant to which it has agreed to indirectly acquire a 100-per-cent interest the Manto Negro copper project in exchange for six million common shares.
That’s $2.4 million in value at today’s PRZ.V share price of $0.39.
[…] The Manto Negro copper project consists of seven mining concessions covering a total of 17,959 hectares and is located in the state of Coahuilla approximately 315 kilometres northwest of Monterrey, Mexico, and 100 km west of Monclova.
The project has been the subject of exploration programs consisting of drilling, sampling and trenching over the past number of years and is considered to be a brownfield project. In addition, prior operators have constructed roads on the project, which will facilitate future exploration and development programs.
At least 35 showings on the project have been the subject of the historical work, including metallurgy. The grades of historical sampling, trenching and drilling range from 0.73 per cent to 5.55 per cent copper, 19 to 793 grams per tonne silver, 1.5 to 15 per cent lead and 0.3 to 3.64 per cent zinc.
The project is identified as a stratabound Cu-Ag (plus/minus Pb-Zn) oxidized red-bed-type copper deposit analogous to the Zambian and DRC (Democratic Republic of the Congo) copper belts.
This is no small deal.
“In our search for a great-quality exploration and development copper asset, Prize looked for three key things: good grade and favourable metallurgy, size and exploration upside potential, and the ability to bring the project into near-term production to take advantage of a rising copper market,” stated Feisal Somji, president and chief executive officer of Prize. “The average grade of samples taken from a large number of showings throughout the Manto Negro copper project ranges from 1.5 to 2 per cent Cu and 60 to 90 g/t Ag, with many showings having average grades well above this range.
The project has excellent exploration potential extending over 50 kilometres in length, giving ample opportunity to put together world-class tonnage.
Lastly, this is a near-surface oxidized deposit, and the existing metallurgical information suggests straightforward and relatively inexpensive processing options.”
The deal itself is geared toward the sellers making serious money on the backend – once the mining project has proven out – a deal that would be less likely to be made if there was suspicion it was risky. The sellers receive an extra 2 million shares of Prize if they get an NI 43-101 showing 500m lbs, 2 million more if they hit 750m, and basically double their money if it hits an even 1 billion pounds.
If I’m selling, I don’t to that deal unless the work I’ve already done shows me there’s a high likelihood that I can hit those marks.
On the downside, it spread the company’s attention and resources across two jurisdictions and two sub-sectors. On the upside, if gold drags and copper keeps cranking, and this project is genuinely quick-to-production, as it appears, Prize just slapped a second horse into the race..
The company expects drill results to emerge in December, and I’d suggest the market frenzy around crypto and weed right now may have hidden these news pieces from the greater market, which is an opportunity for those in a value buying mood.
We don’t know what those results will show, but we do know an all-share deal to get in on a potential large copper project, at a time when copper is launching upward, in a part of the world that has significant infrastructure already in place, isn’t a bad start.
When I talked to CEO Feisal Somji earlier this year about his projections for gold prices, he said he loved gold’s potential but wouldn’t be hemmed in on one deal, and the company has shown that to be true.
The bigger question for me is, how quickly will those drills turn?
— Chris Parry
FULL DISCLOSURE: Prize Mining is an Equity.Guru marketing client and we own stock in the company.