TSX Venture wobbles, March 19-23

Worries of a possible U.S.-China trade war spooked investors on the TSX Venture Exchange, sending the S&P/TSX Venture Composite Index down 1.90% to 817.80.

Goldex Resources posted the largest gain, rising 37¢ to $2.56 per share. The junior updated the market on its new Korokoro joint-venture gold project in Mali, 54 km from Randgold Resources’ Morila mine. The company unveiled more details about its partners, RexMetal Sarl, which owns 10%, and Geo-Sys-Tech Sarl, which owns 39%. According to Goldex, the Mali government awarded the licence to REX, whose president, Djeneba Samake, is also president of the Mali Mining Association. Geo-Sys-Tech’s key shareholders are a group of five European experts on geology, mining, ore processing, maintenance, logistics and security (92%), and two Malian citizens (8%). Both sets of shareholders, Goldex says, “have a deep insight [and] understanding of [the] political situation and family relations in the Republic of Mali, and in the local environment.” Under the terms of the joint-venture, GEO and REX will transfer their interests to a new company to be incorporated, and Goldex will become the operator with a 51% stake.

Goldex notes that GEO’s development plan for the property calls for a conventional open-pit operation with gravitational processing. So far GEO has completed exploration drilling to a depth of 30 metres. In a March 12 release, Goldex reported that a “recent discovery area” on the joint-venture’s 143 sq. km gold licence area had attracted interest, and “more than a thousand artisanal miners visited the property to investigate the discovery.” The press release included a link to a YouTube video, and Goldex noted that its joint-venture partners, working with local chiefs and mayors, “are closing off the area with a protective grid.”

Shares of Gold Reserve fell 36¢ to $3.14 in the wake of a preliminary economic assessment (PEA) on its project in Venezuela. The Siembra gold-copper-silver deposit is located in the Kilometre 88 mining district of southeastern Venezuela’s Bolivar State. Gold Reserve owns 45% of the project and the other 55% is held by the Venezuelan government. The PEA envisions an open-pit operation with a 45-year mine life and two plants: a smaller, 15,000-tonne-per-day cyanidation plant, designed to recover gold from oxide saprolite and sulphide saprolite that contains low concentrations of copper; and a larger, 140,000-tonne-per-day flotation plant that processes hard rock material with high gold and copper concentrations. Initial capex is estimated at US$2.6 billion; working capital, US$195 million; and total life-of-mine capital costs, US$4.7 billion. The study outlined a post-tax net present value at a 10% discount rate of US$3.93 billion and average life-of-mine annual sales of 836,000 oz. gold, 71 million lb. copper and 369,000 oz. silver.


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