Cash flows into junior miners and gold ETFs

By Staff Writer / August 23, 2019 / Article Link

Silver and nickel miners stole some of the shine in the precious metals sector this week as pundits were split on gold’s next move.


Among the silver stocks, Canadian explorer Kootenay Silver (TSX-V: KTN) closed on a C$5 million private placement this week, funded by the billionaire investor Eric Sprott. The British Columbia headquartered junior miner is actually focused on Mexico at the Monet and will use the cash to advance its two major silver projects in Mexico: La Cigarra in Chihuahua, and the Promontorio and La Negra silver discovery in Sonora. Kootenay says it is also open to pursuing projects in Canada should the opportunity arise.


And another Canadian mining stock with an interest in Mexico, Silvercrest (TSX-V: SIL) was also in the news, as it closed its prospectus offering by raising proceeds of $25,308,855 at a price of $5.85. The silver miner added to the cheer by saying it had been granted an explosives permit and water rights for its Las Chiapas project in Sonora, Mexico.


Meanwhile Sprott, who has made headlines week after week with his investments in Canadian junior mining stocks this summer, also gave Pure Nickel (TSXV: NIC) a fresh cash injection this week. At the same time, Pure Nickel announced a merger with Explor Resources (CVE: EXS ). Sprott invested a C$3 million for an up to 19.9% stake in the new company.  It takes Sprott’s investment in mining stocks to over C$145 million since May - primarily on gold silver and nickel explorers beaded in his native Canada.


Very much at the junior end of the mining stocks, Forum Energy Metals (TSX-V: FMC) announced that it is seeking to raise $75,000 through a non-brokered private placement of up 1,250,000 flow-through common shares to explore the Love Lake mafic-ultramafic complex. The project is located along Highway 905 to the Rabbit Lake-McClean Lake mine sites, approximately 60 km northeast of Forum’s Janice Lake property where joint venture partner Rio Tinto is seeking copper in northeastern Saskatchewan.

Love Lake is described as a “nickel-copper-platinum-palladium-gold project, so Forum Energy Metals seems well hedged against all but a general collapse of the metals market! And whereas industrial metals may be boosted by signs of strength in the world’s leading economies, gold has once again been faring well as a safe haven: data from Bloomberg this week showed that physical holdings in gold ETFs had reached a six year high.

It comes as the gold price endured an up-and-down week that saw some commentators start talking about a ‘correction’. Not Myrmikan Capital founder Dan Oliver, though, who told Kitco News that having breached $1,350 an ounce, gold should to climb to $3,000 as bigger institutional investors and those inclined to follow the trend came on board.


Among the gold stocks, Falcon Gold (TSX-V: FG) launched an exploration sampling program on its Wabunk Bay gold and base metal property located in the Red Lake District of northwestern Ontario. The Vancouver-based miner said the objective of this initial program is to follow-up on historical trenching and drilling activity and entails prospecting and sampling showings that historically have produced encouraging surface and drill core assay values.