Metals Update 28/05/2021

Norzinc closes $1-million private placement

Norzinc Ltd. has closed an equity financing agreement with RCF VI CAD LLC previously announced on May 3, 2021. Pursuant to the equity financing, the company issued an aggregate of 14,713,455 common shares of the company to RCF on a non-brokered private placement basis, at a price of 6.7965 cents per share for gross proceeds of approximately $1-million.

Rohan Hazelton, president and chief executive officer of Norzinc, stated: “The financing highlights RCF’s commitment to its longstanding partnership with Norzinc and their ongoing participation in advancing the Prairie Creek project, to deliver a world-class mine.

“We would also like to take this opportunity to extend our support for the communities in Fort Simpson, Jean Marie and Hay River in light of the disastrous flooding that has devastated the communities. Norzinc is working with local staff and government agencies to ensure appropriate aid and supplies are getting to those impacted.”

The proceeds from the equity financing will be used for working capital purposes. Common shares issued in the equity financing will be subject to a four-month hold period under applicable Canadian securities laws.

Surface drill program

On Dec. 23, 2020, the company raised $1.58-million of flow-through financing to be used to finance a surface drill program in 2021. The company plans to complete hole PC-20-226 which was started late last year, as well as target additional exploration of main-quartz-vein-style mineralization to the north of the existing mine plan, by way of four 700 metre plus diamond drill holes to be drilled from the same pad, using the company-owned HTM-2500 hydraulic diamond drill rig.

Early on-site preparations are currently under way to start drilling operations in the coming weeks, and will include water-line setup, equipment maintenance, inventory and supplies ordering, and crew training.

Early warning disclosure

RCF is providing the following additional information pursuant to the early warning requirements of applicable Canadian securities laws.

RCF acquired 14,713,455 common shares for an aggregate purchase price of $999,999.97, which increased RCF’s aggregate shareholding percentage in the common shares (together with its affiliates) by approximately 1.34 per cent.

Immediately prior to the closing of the equity financing, RCF (together with its affiliates) beneficially owned an aggregate of 267,328,995 common shares, representing approximately 47.79 per cent of the issued and outstanding common shares. Immediately following closing of the equity financing, RCF (together with its affiliates) beneficially owns an aggregate of 282,042,450 common shares, representing approximately 49.13 per cent of the 574,117,259 common shares that are issued and outstanding as of the closing date of the equity financing.

The common shares were acquired for investment purposes. RCF may from time to time acquire additional securities, dispose of some or all of the existing or additional securities, or may continue to hold the securities of the company. Pursuant to a second amended and restated investor rights agreement dated April 24, 2020, between RCF and the company, RCF has the right to participate in future equity financings of the company to maintain its then current equity ownership in the company on terms no less favourable than those offered to other investors in such financings (subject to certain exceptions).

Multilateral Instrument 61-101 disclosure

RCF is an insider of the company. Accordingly, the equity financing is considered to be a related party transaction for purposes of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. Pursuant to MI 61-101, the company will file a material change report providing disclosure in relation to each related party transaction on SEDAR under Norzinc’s issuer profile. The company did not file the material change report more than 21 days before the expected closing date of the equity financing as the details of the equity financing and the participation therein by the related party of the company were not settled until shortly prior to the closing of the equity financing, and the company wished to close the equity financing on an expedited basis for business reasons. The company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25 per cent of the company’s market capitalization. Additionally, the company is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(1)(b) as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25 per cent of the company’s market capitalization.

FP/wire say Noront Resources to adopt poison pill

The Financial Post reports in its Friday, May 28, edition that Noront Resources is looking to adopt a poison-pill plan to thwart a potential takeover by Australian Andrew Forrest’s Wyloo Metals. A Reuters dispatch to the Post reports that Wyloo’s unsolicited bid for the remaining shares of the firm values Noront at $133-million or 31.5 cents per share. Reuters says Wyloo is Noront’s top shareholder, with a 23-per-cent interest as of December. “The rights plan is designed to ensure that all Noront shareholders are treated fairly in connection with any takeover bid and to protect against ‘creeping bids,'” the Toronto-based miner said. The firm said it would issue one right for each outstanding share, effective May 26, to allow shareholders, other than the acquiring person and its related parties, to purchase additional shares at a 50-per-cent discount to the then prevailing market price. Poison pills prevent other companies and investors from amassing ownership interests above a certain threshold by authorizing the targeted company to sell new stock to its shareholders at a discount. Wyloo is a subsidiary of Forrest’s Tattarang, one of Australia’s largest private investment groups.

Altus Strategies talks balance, omits P&L from NR

Altus Strategies PLC has published its unaudited financial results, and its management’s discussion and analysis for the three-month period ending March 31, 2021. These documents have been posted on the company’s website and are also available on SEDAR.

Highlights

Operational highlights

  • Expansion of activities into Egypt through award of four gold exploration licences totalling 1,565 square kilometres located in the Eastern Desert through a competitive international bidding process.
  • Grant of three new copper and silver exploration projects totalling 252 square kilometres within the prospective western Anti-Atlas belt of Morocco.
  • Completion of strategic review of Bikoula iron project in southern Cameroon by Mining Plus UK Ltd. to determine next steps for development.
  • Drilling at Tabakorole joint venture gold project in southern Mali, extending the strike length by 150 metres to over three kilometres.

Corporate highlights

  • Completion of oversubscribed private placement raising 7.70 million pounds sterling/$13.35-million at an issue price of 75 pence/$1.30 per ordinary share, with net proceeds to be primarily used to accelerate gold exploration programs in Egypt and Mali as well as potential acquisition opportunities.
  • Receipt of second tranche of 10 million shares in Canyon Resources Ltd. with a value of 600,000 pounds sterling/$1.1-million.

Financial highlights

  • Cash balance of 7.4 million pounds sterling/$10.3-million as at March 31, 2021.
  • Cash outflow for operating activities of one million pounds sterling/$1.7-million for three months ending March 31, 2021.
  • Balance of listed equity holdings of two million pounds sterling/$3.4-million as at March 31, 2021.

Post period

  • Grant of three new exploration projects as well as licences adjacent to existing projects totalling 221 square kilometres in central Morocco.
  • Commencement of 17,500-metre reverse circulation and air core drilling program at Diba gold project in western Mali.

Steven Poulton, chief executive officer of Altus, commented: “This was another exciting quarter for Altus, in which the company significantly expanded its exploration project portfolio, including its first projects awarded in Egypt. Altus also ended the period in a strong financial position following the completion of an oversubscribed placement raising 7.5 million pounds sterling/$13-million after expenses. The company currently has cash in hand equating to 11.1 million pounds sterling/$18.9-million and listed equity holdings with a market value of 2.4 million pounds sterling/$4.1-million.

“Following a competitive international bidding process, Altus was awarded four gold exploration projects in Egypt, comprising nine licence blocks totalling 1,565 square kilometres in the Eastern Desert. All four projects are considered highly prospective, with over 100 interpreted historical hard rock gold workings identified by our remote sensing program.

“In addition, as part of a competitive tender process, the company was awarded three new copper and silver projects in Morocco. The projects total 252 square kilometres and target sedimentary copper-silver mineralization within the prospective western Anti-Atlas mountains. With this award, the company has doubled its land holding and increased its portfolio of base and precious metals projects in Morocco to seven.

“Drilling continued at three of the company’s gold projects in Mali. Encouraging results were reported from the company’s 100-per-cent-owned Diba project in western Mali, with the discovery of a new coherent series of shallow-dipping, near-surface lenses of gold mineralization at the Diba NW prospect. Positive results were also received from a 6,300-metre RC drilling program at the Tabakorole project in southern Mali, undertaken by the company’s JV partner, Marvel Gold. That program extended the potential strike of the Tabakorole deposit to the southeast and defined a potentially parallel minealized zone. A 3,800-metre RC drilling program and passive seismic survey at the Lakanfla project in western Mali, also under JV with Marvel, successfully proved the presence of a karst system and defined a number of encouraging targets.

“We look forward to another exciting quarter ahead, including the commencement of fieldwork in Egypt and the further drilling programs in Mali.”

FPX Nickel shareholders elect six directors at AGM

FPX Nickel Corp. has released the results of its 2021 annual general and special meeting held on May 27, 2021.

At the meeting, the shareholders voted to set the number of board members at six, and elected Peter M.D. Bradshaw, James S. Gilbert, Peter J. Marshall, William H. Myckatyn, Robert B. Pease and Martin E. Turenne as directors of the company to hold office for the ensuing year. The shareholders also voted in favour of the appointment of DeVisser Gray LLP as the auditor of the company for the ensuing year and approved the company’s 10-per-cent rolling stock option plan.

The company notes that John A. McDonald, who had served with distinction on the board since 2009, did not stand for re-election at the meeting.

“On behalf of the company’s board, our shareholders and myself, I would like to extend my very great appreciation to John for his many years of dedicated service,” said Mr. Bradshaw, chairman of the board. “John has been instrumental in the evolution of the company over the years and he will be missed. We wish him very well indeed in his future endeavours.”

GoviEX hires drilling contractor for Mutanga

GoviEX Uranium Inc. has executed a drilling contract with Hydro Tech Drilling & Exploration (Z) Ltd. to undertake exploration and resource delineation drilling programs focused at the company’s Mutanga uranium project in Zambia.

“With the reissued Chirundu mining permit we are keen to get back to advancing our Zambian assets with the development of Mutanga. The project benefits from very simple and straightforward operations due to low-waste stripping, low acid consumption and potentially one of the lowest capital expenditure requirements of its African peers needed to get into production. The mine plan currently forecasts an 11-year mine life and the drill targets identified through trenching, in known uranium intersections, indicate potential for resource extension making this a potential long-life project. Furthermore, considerable metallurgical test work has already been undertaken to a prefeasibility study standard, providing considerable confidence on the process route considered,” stated Daniel Major, chief executive officer.

GoviEX has planned an 8,000-metre downhole percussion drilling program, focused on the Dibwe East deposit and new areas defined by previous trench sampling east of Dibwe East. The objectives of the program are:

  1. To upgrade the mineral resource associated with the Dibwe East deposit from an inferred to an indicated category, allowing its inclusion in a feasibility study. Drilling will be carried out based on a 100-metre-by-50-metre grid to an average depth of 110 metres. The Dibwe East deposit currently contains 43.1 million tonnes of ore at an average grade of 304 parts per million U3O8 for 28.9 million pounds U3O8.
  2. To undertake exploration drilling on three trenches on strike and to the east of Dibwe East, which have previously shown anomalous uranium.

Hydro Tech is a Zambian-based drilling company that specializes in groundwater and exploration drilling and has been operating for seven years. Terratec Geophysical Services Namibia will provide downhole logging services including calibrated gamma log, used to estimate the uranium grade, hole deviation, and conductivity log, to interpret the geology.

In addition, the company will start the installation of water points in the nearby village of Hachibozu, which will include: drilling a water well, installation of a wind pump and a water tank. This is part of the company’s CSR program and aims to help facilitate access to water within the village.

In 2017, the company filed the “NI 43-101 Technical Report on a Preliminary Economic Assessment of the Mutanga Uranium project in Zambia,” dated Nov. 30, 2017. The PEA was prepared by qualified persons from SRK Consulting (U.K.) Ltd.

Highlights of the PEA include the following:

  • The project development plan envisions an average annual production rate of 2.4 million pounds of U3O8 yellowcake over an initial 11-year mine life, with an 88-per-cent ultimate uranium recovery rate.
  • Key benefits of the project are the low stripping ratio (3.4:1) and low sulphuric acid consumption (three to nine kilograms per tonne ore).
  • Initial capital costs are estimated at $123-million (U.S.), with estimated cash operating costs of $31.1 (U.S.)/lb U3O8, excluding royalties. Total life-of-mine costs are forecast at $37.9 (U.S.)/lb U3O8.
  • The PEA is based on measured and indicated mineral resources of 15 million pounds (million pounds) U3O8 and 45 million pounds of inferred mineral resources.
  • At a long-term uranium price of $58 (U.S.)/lb U3O8, the base case project economics for this project are positive, and indicate an after-tax net present value of $112-million (U.S.) (at an 8-per-cent discount rate) with an internal rate of return of 25 per cent and total life-of-mine net free cash of $268-million (U.S.).

The PEA is considered preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all, or any part of an inferred mineral resource, will be upgraded to an indicated or measured mineral resource as a result of continued exploration or mineral reserves once economic considerations are applied; therefore, there is no certainty that the production profile concluded in the PEA will be realized.

Anaconda Mining closes $8.5-million private placement

Anaconda Mining Inc. has completed the private placement under an agreement with Raymond James Ltd. announced on April 28, 2021, and later upsized on April 30, 2021. Pursuant to the offering, the company issued 10,241,000 common shares in the capital of the company for aggregate gross proceeds of $8,500,030. The shares were issued as flow-through shares with respect to Canadian exploration expenses within the meaning of the Income Tax Act (Canada).

“We are very pleased with the strong institutional support received on this recent offering. We are excited to aggressively move forward with our growth programs at our projects in Atlantic Canada, including: the significantly expanded Goldboro gold project; the highly prospective Tilt Cove project in Newfoundland; and near-term opportunities for extending mine life at our Point Rousse operation,” commented Kevin Bullock, president and chief executive officer, Anaconda Mining.

The gross proceeds from the offering will be used by the company to incur eligible Canadian exploration expenses that will qualify as flow-through mining expenditures (as such terms are defined in the Income Tax Act (Canada)) related to the company’s projects. All qualifying expenditures will be renounced in favour of the subscribers of the FT shares, effective no later than Dec. 31, 2021.

Each FT share issued under the offering is subject to a hold period under Canadian law that will expire on Sept. 29, 2021. The offering remains subject to the final approval of the Toronto Stock Exchange. In addition, the company paid to Raymond James a cash commission.