Gold production is an industry more people should be buying stock in. Mining and other companies that focus on the production of gold are great to invest in because they’re not as directly affected by the price of gold as if you were to invest in gold itself. “Gold saw a rocky time in price value in 2018, but quickly bounced back in the final weeks before 2019, with some gold mining companies seeing significant gains in stock” – says Well Hello CEO Mike Malkavich, an industrious CEO and gold investor. In 2019, gold mining companies have the highest potential to The value of gold continues to rise above the cost of production for gold mining companies, allowing profits to scale up.
If you’re interested in investing in some gold mining companies, here are some you should consider.
Barrick Gold
Barrick Gold is merging with Newmont Mining, after already merging with Randgold Resources of South Africa, to create the largest gold-producing company in the world. Doing so makes them more stable in the market, and hold better-quality earnings to deliver to their investors. The stock-for-stock transaction is worth $10 billion and will be called Newmont Goldcorp, making it an exciting time to invest in Barrick Gold.
AngloGold Ashanti Ltd.
Being the third-largest gold mining company in the world, AngloGold Ashanti Ltd. is a South African company formed by the merging of AngloGold Limited and Ashanti Goldfields Company Limited in 2004. This company promises to show more significant gains than they saw for the month of January in 2018 this year and is one to keep an eye on.
Franco Nevada
If you take a look at history, Franco Nevada is one of the top performing gold stocks of all time. Since their IPO of over a decade ago, Franco Nevada has returned 400% to its investors while outperforming the price of gold. They’re a gold streaming/royalty company rather a mining company themselves, meaning they finance other companies’ mines. This company is also completely debt-free, so I’d highly recommend investing in them.
Sandstorm Gold
Another gold streaming/royalty company to consider is Sandstorm Gold, and while they’re not on the same level as Franco Nevada, they have more upside potential and is also debt-free, with lots of growth potential. Sandstorm Gold also has a stake in the Hot Maden gold development project in Turkey, which is expected to be one of the most profitable mines in the world. If all goes well, this could make for a substantial outsized positive impact on Sandstorm and double their cash flow.
Kinross Gold Corp.
If you’re on the lookout for a company on the come-up, Kinross Gold Corp. of Ontario, Canada is an excellent choice. They oversee mining operations in six different countries, and the company is continuously growing. Kinross expects to open multiple new mining operations to begin to produce ore in 2019.
Newmont Mining Corp.
Again, as previously mentioned, Newmont Mining Corp. is forming the world’s largest gold mining company with Barrick Gold, but it has a rich history of its own. It’s been around for almost 100 years, and it’s the only gold mining company listed in the S&P 500. Investing in this gold mining company
Kirkland Lake Gold
Although lesser-known than other gold mining companies, Kirkland Lake Gold is an underrated company you should invest in. With four gold-producing mines in Canada and Australia, Kirkland Lake Gold is a company growing at an astounding pace. The company has plans to exceed its record-high production of 596,405 ounces of gold, and their capital expenditures are expected to peak in 2019. This will allow for greater cash flow that they can give back to shareholders as higher dividends.
While investing in mining stocks isn’t quite as popular as investing in tech, it still accounts for over 45% of the world GDP – mostly because natural resources are essential to the human experience.
Investing your money in a steady stock like mining is a great way for an average Joe like you to make some decent cash – especially in 2019. Let’s jump in and find out why mining stocks are so hot this year.
Shiny Objects
Since the beginning of time human have been obsessed with shiny objects. Kings emassed vaults of golden objects, pirates scourged the seas in search of jewels and assorted treasures – hell, even Jesus of Nazareth got a few fine metals for his birthday.
Even today, men and women all over the world use jewelry to displaying status, bring attention to victory, or in the form of self-expression. And thanks to more people gaining access to these fine items, the stocks just keep getting better.
Investing in gold-mining companies is almost always a safe bet for this reason. Gold-mining is a practice that can be traced back to 7000 years ago, so I don’t think it’s going away any time soon.
Steel
It should come as no surprise to you that steel is one of the most widely used metals in the world. Steel is perfect for building structures large and small, crafting knives, sculptures, tools, and just about anything else you can imagine.
Last year steel stocks gained an 8.9% increase in value over the last half of the year, and the streak hasn’t slowed down much. See, that’s the thing about mining stocks – you always know when they’re on the upwards trajectory, and you always know when they’re on the downward.
Steel isn’t the only metal that shifts in value, affecting the stock price for the mining companies. Aluminum and copper are good examples of metals that aren’t exactly stationary. And while steel is the most stable out of the three, it’s not immune to dips in value.
With construction companies expanding and repairing every city and road in the country, you know the price of mining stocks is about to go right up with it.
Deregulation
I don’t know if anybody out there has heard of Donald Trump, but he is the sitting president of the United States at the moment, and while the average citizen hates him – the mining companies love him. I don’t know if it’s the desire to turn America back into one big coal mine, or the money these mining companies are (allegedly) paying him, but Donnie has done away with a lot of the rules set in place by the previous president.
The Internet Privacy Rule, Dental Mercury Waste Rule, and Net Neutrality are among the list of repealed regulations issued by President Trump. Another one that he is particularly proud of is the coal mining regulation – the same regulation that kept most coal mining companies out of the U.S.
With this new change has come an opportunity for new investors, much like yourself, to start making serious money by investing in mining stocks. Coal mining companies are popping up all over the U.S. now that these regulations have been repealed, so start thinking about which ones you want to invest in. There’s no telling how long this presidency is going to last – or its changes for that matter. Hop on and ride the wave while you can!
There are an insane amount of variables to think about when committing your funds to an investment. Even a $20 investment must be carefully thought-out and painstakingly reviewed if you want to make some real money.
Investing in mining stocks isn’t much different than investing in something like soap or agriculture. It provides a recourse humans cannot live without – metal. In fact, mining stocks in 2018 made up over 45% of the global GDP, so I think it’s safe to say they’re doing pretty well. Let’s tackle some of the pros and cons of investing in a mining company.
Gold
Gold is a very unique metal, in terms of investment characteristics. I mean, it’s literally gold – the thing we literally use as the benchmark for value on the planet Earth.
In the world of mining stocks, gold mining seems to be a very safe bet for anybody trying to get their foot in the door. It’s considered a good first step for people that are trying their luck at investing in stocks for one reason; people aren’t going to get tired of shiny objects any time soon.
Another great pro for gold mining is its ability to gain value when everything else is doing poorly. You see, investors seem to like flocking to gold when things like stocks are tanking. Because it is literally value itself, gold tends to increase in value when most other stocks are on a downward spiral. That’s why all those goddamned ‘cash for cold’ commercials started airing when the down took a plummet in the recession.
Cobalt
Out of almost every metal on the market, cobalt is, without a doubt, one of the most unpredictable. Its value will fluctuate up and down depending on the day of the week, and that’s why so many people are interested in it.
On top of that – cobalt, lithium, and graphite are all predicted to rise in value in 2019 because of our new and intense desire for batteries. Phones, laptops, and even cars already run on these precious metals, and in the coming years, the price is just going to keep going up thanks to our ground-breaking innovations in hardware and production all over the globe.
Some people will buy stocks in cobalt and sell them the next day for a half-decent profit, and I think that’s the way to go. If you’re a real high-roller and you’ve got a little extra cheddar to spend, you should invest in a few cobalt companies and sell as soon as it goes back up, just like it always does.
Platinum
We all know how the order of value goes – bronze, silver, and gold. It’s a basic tier of value we have created over a long time, but it seems to be missing something; platinum.
You might know it as the most precious metal on the planet, but not much else other than that. Something you probably didn’t know about platinum is that it’s not very economically efficient to mine. Platinum is mostly found in areas that are very difficult to mine – like the desert. In Africa lies 70% of the worlds platinum deposits.
And with the 15% of it in the Russian snow, and another 15% scattered across the globe, platinum has a minimal global availability. That’s why you should invest in a few old platinum mining companies that have been there since England left. They are the ones with the means to collect all of that precious metal.
There is no better way than to make a ton of cash than to make some smart investments in stocks. A lot of people compare investing in the stock market to gambling, but if you’re making smart and educated decisions about where you’re putting your money, then it’s nothing like gambling whatsoever.
While a lot of people are investing in stocks like Apple and Amazon, there is plenty of money to be made by investing in an older industry: mining.
Investing in mining is something that is overlooked in favor of hipper, sexier stocks, but you can make just as much money – if not more – by investing in mining.
You do need to know what you’re doing though! Here are a few tips on how to be successful in your mining investments!
Politically Vulnerable
Keep in mind that mining is a politically vulnerable stock. Because a lot of mining happens all over the world in different countries with different political climates, you can’t be sure that investing in Venezuela will have a high payout.
While some politically vulnerable areas might seem like viable choices because their prices are low or because that area has been known to have a high output of whatever your chosen company is mining, it’s never a good idea to invest in a company whose operations are based in a company that’s dealing with political unrest.
Consider ETFs (Gold and Silver)
Investing in precious metals like gold and silver is a great way to diversify your portfolio and to help you reach your investment goals especially through the investing in ETFs.
Think like an environmentalist
When it comes to choosing the right company to invest in, you need to think like an environmentalist! Do some research into what makes particular regions good for mining gold, silver, oil, what have you! Then invest in companies that have operations in regions with similar characteristics.
It’s also a smart idea to invest in established areas that are already known to produce product.
Don’t believe the hype
When it comes to stock, there can be a certain amount of hype surrounding a company or what a company is mining for. While it’s always smart to keep up on trends, you shouldn’t believe the hype if you have no reason to!
Make sure you do research and consult an expert before investing potentially volatile stocks.
gold stocks > gold bullion
When it comes to reliability, gold bullion is not the stock for you. It’s always a much better idea to invest in gold itself than bullion!
Consider stocks that are already producing
While you might want to get in while the share price is low, it may be a bad idea to invest in stocks that aren’t already producing. It may be more expensive to invest in a stock that’s already on the upswing, but it could be more beneficial in the long run.
Low Debt
While a company may be producing a lot of product on paper, make sure that they don’t have more debt than a newly graduated medical student!
It’s always a good idea to invest in something, but just what to invest in? Well, that’s up to you, but one of the best industries to invest in right now is mining. Whether it be gold, silver, or any other material, mining is a big business and an opportunity to invest in something profitable. If you’re looking to invest in mining, here are a few tips on what you should look out for and what you need to know to make the wisest decisions.
Know the two types of stocks
In mining, there are two distinct groups of stock, which are major and junior stocks. They’re exactly what they sound like, where majors are companies that are well-capitalized with a long history, often world-spreading operations with a slow and steady cash flow, while juniors tend to have little capitals, a short history, and high aspirations for huge returns in the future.
One thing you should be aware of when it comes to junior mining stocks is that there’s always the possibility of failure. Many junior companies receive this fate, unfortunately, but at the same time there are those that achieve success, and a major becomes interested and pay a premium to absorb the company, leading to decent returns to investors all year-round.
Understand the risks and rewards
Since both types of mining companies are different, they have different risks and rewards you should consider when investing. Major companies, for example, are the sum of all their deposits being staked or mined plus their history, while junior stocks depend on the results of its feasibility studies.
What does this mean?
The contents of any major mining company’s single deposit that is being staked or mined aren’t likely to shake its stock value much, but if a feasibility study is positive for a junior mining company, they see its value shoot up, but if it is negative, then the opposite will happen. In major mining companies, a change in market value for a mineral of a more significant percentage of deposits has a larger effect than a new or failed deposit, and junior mining stocks don’t typically mine a feasible deposit to the end, but instead either sell the deposit, or themselves, to a major and move on to find another. As such, the biggest risks and rewards lie with junior mining companies.
Choose how you invest
With this information, you should be able to choose what type of company you want to invest in. If you’re looking for a company with a lot of potential and don’t mind being patient in seeing returns, junior mining companies are great for their potential to offer a lot in the right market and for their risk capital, while major mining companies are lower-risk and have the potential for dividends with some appreciation. Both stocks, however, follow a business model that is based on using up all the resources they own in the ground. But because they aren’t aware just how much resources they have in a given deposit, the value of a mining stock roughly follows the market value of its reserves, paying a premium to companies with a long history of providing those reserves to the market.
Despite dismal nickel prices as of late, there’s no stopping nickel exploration and development companies on all sides of the globe from pushing forward with their projects.
Australian company Poseidon Nickel has announced that it has upgraded its indicated resources at its Lake Johnston project in Western Australia by 50 percent as a result of a geological review of its Maggie Hays and Emily Ann deposit.
The resources are now estimated at 3.5 million tons with an average 1.49%, or 52,000 tons of nickel.
The report noted that this is welcome news for the company because Lake Johnston is “considered to be a near-term production project” and re-opened just recently. “The upgrade is a key step in the definition of the likely project life by increasing confidence in the shape, grade and position of the mineralisation to be mined.”
Poseidon is planning to make the Lake Johnston its second production project this year if ore sales targets are met at the Winadarra project. The project is reported to cost only A$8.3 million.
The report added that Poseidon aims to move Lake Johnston, Windarra and Black Swan into production as it will allow it to run the second largest sulphide nickel operations in Au
Lake Johnson possesses “excellent advanced exploration targets from the Maggie Hays mine”, according to company literature. The project’s tenure is supported by 10 exploration licences, two general purpose licences, four miscellaneous licences, 11 mining leases and one prospecting licence. The company also holds an underlying tenure for the project that is equivalent to a vacant crown land.
The Lake Johnston assets also encompass a modern 1.5 million tons per annum treatment plant and large ground position, with numerous life extension exploration targets.
Robin Young
Elsewhere, in August of last year, Amur Minerals Corporation (OTC:AMMCF), another mineral resource and development company based out of Russia reported to having upgraded its reserves by as much as 25 per cent. That increase means that the company’s Kun-Manie project now ranks as one of the top 20 sulphide projects in the world.
Amur announced that month that it had upgraded ore reserves in the project site from 31.5 million tons to 39.2 million tons of ore containing 219,000 tons of nickel and 58,100 tonnes of copper which represent a rise of 28 percent and 22.3 percent respectively.
“Having nearly a three quarter of a billion dollar EBITDA at today’s metal prices is highly encouraging and supports the board’s belief that Kun-Manie will ultimately become one of the largest nickel sulphide projects in the world”, said chief executive Robin Young.
The company forecasts that the upgrade would allow it to earn some US$726 million based on a nickel price of US$8.50 per pound, and a little over US$1billion if nickel prices reach US$9.50 per pound.
Noting data from Citi Research, Platts reported that nickel prices should rebound by the second half of 2015 as nickel pig iron production level, rising demand from the European stainless steel market, and dwindling nickel ore sources.
African Gold PLC announces that Guy S. Young has been appointed as a Non-Executive Director of the company as of 07 December 2004.
Guy Young was an Executive Director of Minorco S.A. between 1995 and 2000. Prior to this he worked at Anglo American Corporation for three decades in a series of roles, finally as Executive Chairman of Anglo American South America Ltd. He has had experience of mining exploration and production across the major mining continents and is a well known figure throughout the industry.
Oliver Baring, Chairman of African Gold, commented on the news: “We are very pleased to welcome Guy Young to the Board of African Gold. He has vast expertise in the mining business and will be of great assistance with our plans to build a leading focused African natural resources business. Guy will have a central role in the continuing broadening of our investor base and development of our management team. He is a great asset to have on the Board.”
2nd December 2004 – Updated Drilling Results from Konongo / Owere and completion of acquisition of 70% equity holding in project
African Gold is pleased to announce further positive drilling results from the Konongo / Owere gold project in Ghana. Economic gold grades have now been obtained in all twenty one drill holes analysed to date.
The latest seven results are shown in the table below. Fourteen drill hole results have previously been reported from Konongo and assays from a further seventeen holes are awaited.
Hole Number
From(m)
To (m)
(m)
Au (g/t)
OBAPC-015
197.0
201.0
4.0
3.58
205.0
207.0
2.0
4.25
OBAPC-016
105.0
107.0
2.0
4.27
113.0
121.0
8.0
6.09
149.0
151.0
2.0
2.55
153.0
155.0
2.0
5.63
160.0
162.0
2.0
2.30
OBAPC-021
177.0
182.0
5.0
6.40
183.0
185.0
2.0
1.57
191.0
192.0
1.0
5.73
OBAPC-023
133.0
142.0
9.0
1.90
OBAPC-024
146.0
148.0
2.0
2.20
174.0
177.0
3.0
3.68
191.0
194.0
3.0
23.45
200.0
202.0
2.0
4.64
205.0
208.0
3.0
7.07
OBAPC-025
146.0
154.0
8.0
2.97
OBAPC-027
167.0
169.0
2.0
1.94
176.0
180.0
4.0
3.85
African Gold recently made the final payment of $1 million to the vendors of the Konongo mining lease and now holds 70% of the total equity with Talos, a local Ghanaian company holding 20% and the Ghanaian government holding 10%. Ministerial approval from the Government of Ghana for the necessary transfer of the Mining leases has also now been granted.
Oliver Baring, co-chairman of African Gold, commented “The continuing strong drilling results from Konongo are very encouraging. This news puts us on track to proving up more than 1 million ounces of gold from our operations in Ghana in 2005”.
17th November 2004 – Holding in Company
The Company was notified on 15th November 2004 by Merrill Lynch Investment Managers Group Limited that it holds 22,000,000 Ordinary Shares in the Company (representing 7.7 per cent. of the total issued share capital of the Company), all of which shares are held on behalf of certain discretionary clients through nominees names
Highland Gold is pleased to announce that on 30 November 2004 it was awarded the licence for the Taseevskoye Deposit by the Russian Ministry of Natural Resources. This award follows the public auction held on 23 September 2004, where Highland Gold acquired the rights for 100% of the Taseevskoye Deposit with a bid of 742.35 million roubles (US$26.5) million. The licence provides Highland Gold with the rights to develop and mine the deposit for an initial term of 20 years.
2005 Plans
Highland Gold’s immediate plans for Taseevskoye include re-estimating the resources and financial parameters in accordance with current standards and economic conditions. Highland Gold has engaged Snowden Associates of Perth, a company specialising in ore reserve definition, to complete the resource re-estimation. On completion of this work, which is expected during the first half of 2005, Highland Gold plans to engage a new mining consultant to assist the company in defining the appropriate scope and size of the project that will be the subject of a new, detailed feasibility study.
As announced on 23 September, the resources currently approved by The State Committee for Resources are 1.7 million ounces of gold (C1 and C2). Following completion of the study by Snowden Associates, a revised resource statement will be submitted for approval by The State Committee for Resources.
Barrick Participation
In January 2004, Highland Gold and Barrick Gold exchanged reciprocal participation rights on certain new acquisitions, which includes Highland Gold’s acquisition of the Taseevskoye licence. Barrick has expressed its intention to exercise its 50% right to the Taseevskoye deposit.
Taseevskoye Overview
The Taseevskoye gold deposit is located two kilometres south of the town of Baley (Population: 15,000) in the Chita region, Eastern Siberia. It lies 56 kilometres south by paved road from the Trans Siberian Railway station at Priiskovaya. Chita, the regional capital, is located 285 kilometres to the west of Baley.
The deposit was discovered in 1941 and during the period 1948 to 1994 the Taseevskoye mine produced 6.4 million ounces of gold from 16.3 million tonnes of ore at an average grade of 12.2 g/t Au. This was produced from a swarm of epithermal gold bearing quartz fissure veins located within a circular area 1000m in diameter. The predominantly underground mining operation concentrated on three principal vein systems, leaving un-mined a large lower grade mineralized envelope contained within an argillic alteration halo surrounding the fissure veins. Highland Gold’s acquisition of Taseevskoye is rooted in the potential for open pit mining of this large lower grade resource, which was also the subject of a 1997 bankable feasibility study commissioned by the former licence holders.
Historical Production from the Taseevskoye Deposit
Period
Location
Ore (000t)
Grade (g/t)
Gold (tonnes)
Gold (k ozs)
1948 – 1992
Underground
14,372
13.6
195.0
6,270
1984 – 1994
Open pit
1,918
1.8
3.4
109
Total
16,290
12.2
198.4
6,379
Historic Bankable Feasibility Study
Between 1995 and 1997, Kvaerner Metals was commissioned to deliver a bankable feasibility study on the Taseevskoye project. The scope of this study covered Geology/Ore Reserves, Geotechnical/Hydrology, Survey Control, Mine Design, Metallurgical Testwork, Environmental, Mine Waste Management, Process Design, Engineering, Cost Estimates and Scheduling. The mine process facilities and infrastructure were to be developed for a process plant with a throughput rate of 1.75 million tonnes per year over 16 years, while mine production was optimised at 2.5 million tonnes per year with selective stockpiling of mine production for treatment of higher grade ore in the initial 10 years and lower grade ore to be treated in the last 6 years. The study was completed in October 1997 and is summarised briefly below.
1997 JORC Resource Estimates
In addition to The State Committee for Resources’ estimates, as shown above, Snowden Associates prepared an historic geological resource study for the Taseevskoye deposit in June 1997. The resource classifications assigned were based on underground channel sampling on drifts, cross cuts and “orts” on the levels at a maximum spacing of 40 m and more frequently 20 m or less. Drill hole spacing, both underground and surface, was basically 40 to 50 m on section and from 40 to 80 m down dip. The database contains assay results from approximately 23,000 underground channel samples, 1,113 (643 from Surface; 470 from Underground) historical Russian holes and a further 82 holes drilled in 1996-97.
1997 JORC Resource estimates
0.3 g/t Cutoff
1.0 g/t Cutoff
2.0 g/t Cutoff
Ore Mt
Au g/t
Ounces Million
Ore Mt
Au g/t
Ounces Million
Ore Mt
Au g/t
Ounces Million
Measured
13.8
4.76
2.11
13.7
4.80
2.11
11.1
5.55
1.98
Indicated
104.8
1.05
3.54
28.1
2.38
2.15
9.9
4.34
1.38
Sub total
118.6
1.48
5.65
41.8
3.17
4.26
21.0
4.98
3.36
Inferred
20.8
1.53
1.02
7.8
3.14
0.79
4.0
4.84
0.62
Total
139.4
1.49
6.67
49.6
3.17
5.05
25.0
4.96
3.98
1997 JORC Reserve
An historical pit optimization analysis by Snowden defined an optimum shell with dimensions of 1,100 metres by 1,200 metres with a maximum depth of 260 metres containing 232 million tonnes of ore and waste.
Using a cutoff grade of 0.88 g/t Au and a gold price of US$380 per ounce, diluted, recoverable, proven and probable reserves totalled 28.2 million tonnes of ore at an average grade of 3.23 g/t Au and containing 2.9 million ounces of gold. The stripping ratio to recover these reserves is 7.25 t of waste per tonne of ore. Within this pit design is 3.6 million tonnes of Inferred Resource grading 3.66 g/t Au that has been treated as waste.
1997 Process
The grinding circuit was to consist of a jaw crusher, a semi-autogenous grinding (SAG) mill and a ball mill operating in closed circuit with cyclones. After grinding 80% of the ore coming in, 53 microns, the slurried ore was to flow by gravity to the flotation circuit where a gold rich sulphide concentrate containing about 85% of the gold values would be produced and thickened before being pumped to a pressure oxidation circuit. The oxidized sulphides would then be leached in a carbon-in-leach (CIL) circuit to recover about 97% of the gold contained in the concentrate, thus 82% of the total contained gold was to be recovered in the concentrate circuit.
Flotation tailings were to be thickened and leached with cyanide in a second CIL circuit to recover an additional 5% of the gold. Loaded, activated carbon from both CIL circuits was to be treated separately by elution in a single carbon stripping vessel, followed by electrowinning to recover the gold in a sludge which was then to be refined in a furnace to produce doré bullion. Tailings from both CIL circuits after cyanide destruction and the neutralized solution from pressure oxidation were to be pumped to the tailing impoundment area in a natural valley, located about 4 kilometres from the plant.
Overall recovery of gold in the first 10 years was to be about 87% of the values contained in mill feed reducing to 82% in the last six years.
1997 Estimated Capital and Operating Costs
Total capital costs of the project were estimated to be US$170 million as of the third quarter of 1997. Total estimated operating costs for the first 10 years of the project were to average US$20.94/t of ore milled. For the last 6 years of the project, total operating costs were expected to reduce to an average of $9.84/t milled.
Commenting on today’s announcement Ivan Koulakov, Managing Director, said:
“Given that Taseevskoye is a very well known and well developed deposit that was subjected to a full Bankable Feasibility Study in 1997, we view it as an acquisition that is complementary to our existing assets and that fits firmly within our core strategy.
“Taseevskoye will create new economic opportunities for the people of the Chita region and will create value for Highland Gold shareholders as our company continues its impressive record of growth in Russia and takes yet another step closer to an annual production goal of 1 million ounces of gold.”
Carpathian Gold Inc. (TSX:CPN) is a mineral exploration company that is focused on the development and exploration of two advanced gold and gold + copper projects with the goal of becoming a gold producing company in mid 2012.
Currently, Carpathian has an advanced gold project in the state of Minas Gerais, Brazil and a gold + copper project within the Apuseni Mountains of Central Romania, which combined host +12 million gold equivalent ounces in all resource categories.
The project in Brazil is referred to as the RDM Gold Project which hosts a NI 43-101 resource of 1.5 million ounces (in all resource categories) of which 1.0 million falls within an open pit. A completed Preliminary Economic Assessment in August 2009 on the open pit portion of the resource only, indicated the project can be 6,000 t/d, convention CIL operation producing an average of 102,000 ounce per year for an initial mine life of 7.1 years. At a gold price of $1000 gold the project has an after tax NPV7.5 of US$143.0 million and an after tax IRR of 41%. Carpathian is in to feasibility and production stage with management expectation of commencing production in mid 2012.
In Romania, Carpathian has discovered a world class size gold-rich, copper porphyry system referred to as the Rovina Valley Project (RVP). The global mineral resource (NI 43-101 compliant) of this system, based on drilling results from 2006 through 2008, totals 10.7 million gold equivalent ounces (all resource categories) of which 7 million is gold only. The preliminary economic assessment (March 2010) for the RVP Project has been released and is very positive.
Carpathian has extensive exploration and operation teams in both Brazil and Romania working towards the advancement and development of these two projects.
Current Operations
Romania Romania is particularly well endowed with metallic ore deposits: gold has been mined in Romania since pre-Roman times and the country has been one of the most important producers of precious metals in Europe. Carpathian Gold, through its Romanian subsidiary, holds the Rovina license in the Golden Quadrilateral mining district of Romania.
The richest concentration of gold in Romania has been in the Apuseni Mountains, in this area which has historically produced in excess of 55.0 million ounces of gold from epithermal deposits, and ranks as one of the richest epithermal gold producing regions of equivalent size in the world.
Recent exploration within the Golden Quadrilateral by Gabriel Resources at their Rosia Montana deposit has identified a proven plus possible gold reserve of 16 million ounces. Also within the Golden Quadrilateral, European Goldfields has recently announced a drill-indicated gold resource of 3.5 million ounces on their Certej deposit.
Rovina Valley Au-Cu Project, Romania
Located in Romania’s Golden Quadrilateral with historic Au production of over 55 M oz.
NI 43-101 Mineral Resource (Colnic, Rovina & Ciresata porphyries) of: – Measured + Indicated: 3,070,000 oz Au & 759 million lbs Cu – Inferred: 3,890,000 oz Au & 663 million lbs Cu – Global Resource*: 10,750,000 oz Au eq***
Deposits still open and not yet been fully delineated. – Positive Preliminary Economic Assessment – 40,000 tpd mining with standard flotation processing – Ave. 343,600 Au-eq1ounces/yr over a 19 yr mine life – NPV5 $1.130 billion (@ US$1000/oz gold price & US$3.00/lb Cu) – IRR, 24% (@ US$1000/oz gold price & US$3.00/lb Cu)
All infrastructure, including road, power and water, adjacent to the deposit
Still open in all directions, Drill Hole RGD-17, 716 m at 1.14 g/t Au &0.16% Cu.
20,000 metres of drilling started in Dec 2010 on Ciresata deposit and satellite targets on RVP licence
Exploration license to be converted to Mining license in early 2011
Brazil The Riacho dos Machados (RDM) Gold Project is in southeastern Brazil approximately 540km north of Belo Horizonte in Minas Gerais State, one of Brazil’s oldest and most important mining states. The project consists of a single 1000 – hectare mining concession and 12 exploration areas totaling 21,000 hectares. The mining concession includes surface rights ownership for 266.6 hectares and has significant mining infrastructure inherited from an open-pit oxide heap leach gold operation (Mina de Ouro Fino) that was operated from 1989-1997 by Companhia Vale do Rio Doce (“Vale”), Brazil’s largest mining company.
This permitted brownfield gold project has an historical resource (from Vale) consisting of 560,000 ozs Au with 3.8 million tonnes at 4.6 g/tAu and an upside exploration target potential of 5-15 million tones of 3.0 to 4.5 g/tAu.
Riachos dos Machados Gold Project (RDM)
Permitted brownfield gold project with an updated NI 43-101 Mineral Resource (July 2010) of: – Measured + Indicated: 812.3 koz Au (200% increase) – Inferred: 692.9 koz Au – Global Resource*: 1,505,200 oz Au
Robust Preliminary Economic Assessment & Near-term OP production (July 2009) – An initial open pit operation at 6,000 tpd – Avg. 102,000 ounces/yr over initial 7.1 yr mine life – NPV7.5 ,143.0 million (after tax @ US$1000/oz gold price) – IRR, 41% (after tax @ US$1000/oz gold price) – Low start-up capital, attractive “economic grades” with excellent cash flow and short payback period.
Existing infrastructure, roads, power, water & ownership of surface rights.
Currently in the feasibility stage , expected Q4 2010
Exploration upside: Deposit open at depth and along strike with identified extension targets along strike (drilling currently in progress).
Additional Address/Key ContactInvestor Relations Mike O’Brien – Ext 238, mobrien@carpathiangold.com
BRAZIL OFFICE Alameda da Serra, 1021 Office 211 Nova Lima – Minas Gerais Brazil CEP:34.000-000 Phone: +55 (31) 3286 5703 ROMANIA OFFICE SAMAX Romania S.R.L. Str. Aleea Viitorului, nr. 2A, Sala 6 Cod 330075, Deva Jud. Hunedoara , Romania t: (+40) 254-232-070 office@samax.sintec.ro
CapitalBasic Shares Outstanding: 385.4 MM 21,110,000 options outstanding at a weighted average exercise price of $0.40 and maturity by May 13, 2013. 11,944,130 warrants at $0.33, maturity May 6, 2012. 10,889,376 wt at $0.45 maturity Dec 3, 2011. 1,339,296 Brokers wt at $0.23 expiring May 6, 2011 and 1,197,381 Brokers wt at $0.34 expiring Dec. 3 2011. Fully Diluted: 430.6M
Canadian registered Caledonia is a mining, and exploration company with assets in Southern Africa. The Company’s current focus is its producing Blanket gold mine in Zimbabwe, the Rooipoort and Mapochsgronde platinum-nickel exploration projects in South Africa and the Nama cobalt-copper exploration project in Zambia.
The Blanket gold mine re-started production in April 2009 after a temporary suspension of activities in October 2008 due to the lack of foreign exchange in Zimbabwe. Blanket is currently ramping- up production to its current capacity of 24,000 ounces of gold per annum and is also completing an expansion project to increase annual production to 40,000 ounces of gold per annum.
The Rooipoort platinum-nickel exploration project is located on the northern limb of the Bushveld complex, about 300kms north of Johannesburg. The Mapochsgronde platinum group metal exploration project is located on the eastern limb of the Bushveld complex, about 175km north-east of Johannesburg.
The Nama Project is an advanced cobalt-copper exploration project in north-west Zambia. Caledonia has 4 mining licences covering approximately 860 square km. Exploration continues with a view to identifying an oxide resource of sufficient size and grade to support the large scale production of cobalt hydroxide.
Caledonia has a strong, experienced management team and Board of Directors with diverse expertise in gold production, exploration, mine development, finance and marketing.
Current Operations
Blanket Gold Mine
Background Located in the south-west of Zimbabwe Blanket Mine is wholly owned and operated by Caledonia, having been acquired from Kinross Gold Corporation in June 2006. The mine is 560 kms from Harare, the capital city and 150 kms from Bulawayo, the country’s second largest city. The provincial capital of Matabeleland South, Gwanda town is 16 kms from the mine.
Property Geology The geology consists of a basal felsic unit of no known mineralisation presence.
It is generally on this lithology type that the various tailings disposal sites are located. Above this unit are the ultramafics that include the banded iron formations hosting the eastern dormant cluster and the ore bodies of the nearby Vubachikwe complex. The active Blanket ore bodies are found in the next unit, the mafics.
An andesitic unit caps this whole stratigraphy. A regional dolerite sill cuts the entire sequence from Vubachikwe through Blanket to Smiler.
Ore bodies at Blanket are epigenetic. They are associated with a later, regionally developed deformation zone characterized by areas of high strain, wrapping around relatively undeformed remnants of the original basaltic flows. It is within the higher strain regime that the wider of the ore bodies are located.
Property In 2002, Caledonia acquired the Rooipoort PGE/Ni/Cu Project from Anglo Platinum Limited. The property is in an area that is presently undergoing a surge in platinum group elements (“PGE”) exploration along a well-mineralized feature known as the “Platreef”. An additional 342 hectares on the farm Grasvally, immediately adjacent to and south of the Rooipoort property was optioned in 2004 and granted a New Order Prospecting Right in May 2005 (3 year period), with a further 43 hectares portion granted in April 2006 (5 year period). Application for conversion of the Rooipoort property into a new order right in terms of the Mineral and Petroleum Development Act (“MPRDA”) was granted in November 2006.
In March 2006, Caledonia concluded an agreement, with Falconbridge Ventures of Africa (Pty) Ltd (“Falconbridge”) to acquire a 100% interest in Falconbridge’s prospecting rights covering a total area of 4,315.81 hectares contiguous with the Company’s Rooipoort property and effectively doubles the area of Caledonia’s Rooipoort Project property underlain by Bushveld Complex rocks with PGM potential. The Falconbridge properties were granted New Order Prospecting Rights in April 2006 (3,099 hectares, for a period of 5 years) and September 2006 (1,217 hectares, for a period of 5 years). The total area of Caledonia’s New Order Prospecting Rights in the Rooipoort PGE/Ni/Cu properties is now 8,473.39 hectares.
Exploration: To date, Caledonia has drilled a total of 18,450 meters in 54 holes on the Rooipoort PGE/Ni/Cu Exploration Project. This drilling covers the full 6 km strike length that makes up the project area.
Falconbridge has drilled a total of 7,393 meters in 22 holes on the portions of Grasvally and the farms Jaagbaan and Moordrift that comprise most of the property purchased from Falconbridge.
Stratigraphy: The drilling to date has enabled compilation of a revised stratigraphic subdivision for the area containing five mineralised horizons.
Metallurgy: A very preliminary composite of the five mineralised units on the property containing intersections above 0.5 g/t combined platinum/palladium/gold values was assembled for preliminary metallurgical test work. These composites were tested at the SGS Lakefield laboratory in Johannesburg to evaluate their metallurgical characteristics. A simple coarse grinding followed by standard Bushveld platinum flotation showed that platinum/palladium/gold/copper and nickel could be readily concentrated at a very low mass pull. Despite the low head grade of the composite mineralised units the concentrate grades produced were extremely encouraging.
Nama Cobalt Property
Nama Group of Licences – Zambia
Caledonia Nama Limited, a wholly owned subsidiary of Caledonia, holds four contiguous Large Scale Mining Licences, which cover an area of 806 square kilometres on the northern extension of the Zambian Copperbelt and host open-pittable near-surface low grade cobalt /copper mineralization.
This area lies immediately north-west of the operating Konkola Copper mine and adjoins the extensive holdings of what was formerly Teal Mining and Exploration Limited (now a joint venture between African Rainbow Minerals and Vale).
Work Completed: The 2001/2002 soil sampling program carried out jointly by Caledonia and BHP Billiton was completed over the majority of the original licence areas. This program identified a number of high priority anomalous targets within the required geological setting. These targets have been followed up in the search for copper/cobalt oxide and sulphide bodies. The top priority targets established by follow up drilling in 1996/7 were determined to be anomalies A, C, and D.
In the second quarter of 2004, a mini bulk sample of 30 tonnes was excavated at Nama A (Discovery) site and underwent successful screening tests and heavy media/gravity separation tests in South Africa. Following encouraging results, further one-tonne samples were sent for additional test work to fine tune the extraction process for the cobalt oxide.
During 2006 metallurgical test work has provided a proposed metallurgical flow-sheet. Two further bulk samples were taken from Anomaly A to enhance and refine the metallurgical processes and cost parameters for producing a marketable and economically viable cobalt product.
Also in 2006/2007 a Technical Report, compliant with NI 43-101 was prepared for Anomaly A at Nama by Mr. David Grant, C.Geol., FGS, Pr.Sci.Nat., an independent consultant who is the “Independent Qualified Person” for Nama’s resources as required by National Instrument 43-101 of the Canadian Securities Administrators.
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