SmallCapPower | March 4, 2016: Mining-Journal.com recently wrote about what it considers to be the best undeveloped projects in North America. Here’s a few of its top candidates to become the next mines in this continent.
Barrick Gold Corporation’s (TSX: ABX) Goldrush project: Located just 9.6km from the more than 900,000 ounce per annum Cortez gold mine in Nevada, this is considered one of the largest discoveries by a senior gold producer in decades. The deposit has 15.5 million ounces of resources and has grades averaging about 5 g/t gold. A 2015 report from BMO Capital Markets suggested annual output at just over 400,000 ounces per year of gold, but other analysts have pegged it even higher. A pre-feasibility study estimates a $1 billion initial capital investment with all-in sustaining costs of $665 per ounce.
Talon Metals Corp.’s (TSX: TLO) 18.45% owned Tamarack Nickel-Copper-PGE project: Situated in Minnesota, with the remainder held by Rio Tinto, it is already being mentioned in the same breath as Voisey’s Bay in Canada and Nova in Australia, with an estimated Indicated resource of 3.75 million tonnes grading 2.35% nickel equivalent with another 3.4Mt grading 2.11% nickel equivalent in the Inferred category. According to Stefan Ioannou of Haywood Securities, it is the occurrence of a “tadpole’s head,” which shows up as a massive anomaly on geophysical surveys and, if drilled out, could uncover large-scale potential. Late last year Resource Capital Funds provided Talon with a loan to secure its stake in the project, but what is more interesting is Rio’s continued backing. The major has aggressively cut its exploration, but Tamarack is still on its books.
Ucore Rare Metals Inc.’s (TSXV: UCU) Bokan-Dotson Ridge REE project: Located in Alaska, Ucore’s 100% owned rare earth project has extractable heavy rare earth oxides, the most lucrative of the family, representing about 40% of resources, which could fill a hole left by Molycorp and its Mountain Pass mine in California. The Alaska government has already backed the US$221 million project – by Ucore’s reckoning the largest heavy rare earth deposit in the U.S. with a NI 43-101 resource to its name – with US$145 million of bond funding.
Fission Uranium Corp.’s (TSX: FCU) Patterson Lake South project: One of the richest undeveloped mineral deposits on the globe, Fission’s PLS project in Canada’s Athabasca Basin has been generating interest ever since the plus-100 million pound high-grade uranium resource at its Triple R prospect emerged. A merger with Denison Mines broke down last year, but it now has a Chinese partner. The preliminary economic assessment from September estimates a C$1.1 billion open pit and underground operation, producing on average 7.2MIbpa of uranium oxide over a 14-year mine life, with strong economics at a long-term uranium price of US$65/Ib. The company has recently been drilling out shallower zones around Triple R for a potential access route into the orebody requiring less initial capital.
Kaminak Gold Corporation’s (TSXV: KAM) Coffee Gold project: A PEA back in June 2014 showed a glimpse of the potential at this Yukon gold project, but the January 2016 feasibility study confirmed it. Beating the gold price drop that occurred in the 19 months between studies, the company effectively trebled the NPV and more than doubled the IRR. The project now stands to produce 184,000 ounces of gold per year over a 10-year mine life from heap leach operations. Requiring C$318 million of capital, the project could generate an NPV (5% discount) of C$295 million and an IRR of 27%, at a gold price of US$1,000/oz, showing its viability at even lower yellow metal prices.
Note: An honourable mention went to NexGen Energy Ltd. (TSXV: NXE) with its Arrow deposit in Saskatchewan’s Athabasca basin. NexGen Energy recently released its maiden Mineral Resource estimate for Arrow, which showed 201.9 M lbs grading 2.63% U3O8.
