Gold Stocks Raise Cash as Production Grows

By CanadianMiningReport.com Staff Writer / July 05, 2019 / Article Link

With the gold price jumping uncertainly around the $1,400 an ounce mark, it was left to the gold miners themselves to ensure a positive newsflow that supported their stocks this week.

 

Starting with the majors, Barrick Gold (NYSE:GOLD) (TSX:ABX) and Newmont Goldcorp (NYSE:NEM) (TSX:NGT) successfully concluded the long-awaited transaction establishing their new joint venture which will run the world’s largest gold-producing complex by far in North-eastern Nevada.

 

Nevada Gold Mines will be operated by majority owner Barrick, with Newmont Goldcorp holding a 38.5% interest. The new joint venture includes three of the world’s top 10 Tier One gold assets (Goldstrike/Carlin, Cortez and Turquoise Ridge/Twin Creeks), and potentially another one in the making (Goldrush). The new gold mining company is targeting production of between 1.8 and 1.9 million ounces for the second half of 2019.

 

Barrick President and CEO Mark Bristow added to his list of titles by becoming chairman of the new entity. He said: “The company now has one team that shares one vision, and who are more than ready to race out of the starting blocks.  We have also identified the very significant synergy opportunities which are immediately available and those which have been targeted for the future.”

The news came as figures showed that Newmont overtook Barrick as the world’s top gold producer last year, despite both companies mining less of the metal. Both have since carried out mega-mergers with other gold mining companies, with Newmont Goldcorp now looking like the undisputed king based on joint production of 7.4m ounces in 2018. In another record year, global gold production hit just shy of 109m troy ounces in total in 2018.

At the other end of the scale, Canada’s junior gold mining stocks were also on the front foot thanks to corporate activity, with Great Bear Resources (TSXV:GBR) announcing that it had closed an over-subscribed “bought deal” private placement financing that saw it raise C$10.9m towards its exploration plans.

Chris Taylor, president and CEO of Great Bear, said: “Interest in this placement was overwhelming, and we’ve successfully raised double the funding we were initially looking for. We’d like to sincerely thank our new and existing shareholders for their continued interest in our company’s success and growth, and we look forward to delivering a wealth of new exploration results from our flagship Dixie project throughout 2019 and 2020.”

The proceeds will be used to firm up Great Bear’s projects in the Red Lake district of Ontario, including Dixie. Great Bear is currently engaged in a 90,000-metre drill hole program at its flagship Dixie property, which is expected to continue through 2019 and 2020.

 

Meanwhile Canada’s Chantrell Ventures acquired a number of gold mining assets from Australia’s Chalice Gold Mines in a deal worth $C12m in shares that also sees the seller retain a 1% royalty right. The deal will see Chantrell re-invent itself as O3 Mining. The new company will be backed by established digger Osisko Mining (TSX: OSK) and will set out to use about C$30m in cash and liquid investments to exploit a portfolio of resource-stage gold projects and significant exploration potential in the Val-d’Or district.

Chalice managing director Alex Dorsch said the deal provided the logical next step to build on the company’s exploration and consolidation effort in the Val-d’Or district in Quebec.

“Osisko is one of the most recognised names in the Quebec gold industry, led by a highly regarded team with a track record of success in the Abitibi gold province. To be involved in Osisko’s new O3 Mining venture is a great opportunity for shareholders,” he said.

Chantrell/O3 has also agreed to acquire non-core assets of Osisko Mining, with the company attempting to raise $C18 million.