Gold Prices Respond to Global Disruptions

|Apr 1|magazine34 min read

NEW YORK, April 1, 2020 /PRNewswire/ --  Gold futures were lower Tuesday, as a better-than-expected U.S. consumer confidence data and a rise in Chinese manufacturing activity put some pressure on the prices of the metal. China's manufacturing gauge for the March official purchasing managers survey rose to 52, according to a report by MarketWatch, from a record low of 35.7 in the previous month as factories resumed work following a month-long shutdown. Yet, despite the positive developments from China, many parts of the world, including Europe and the United States, still struggle to contain the pandemic. Therefore, gold prices for the April contract, which is currently among the more active, had increased by 9.5% last week for the biggest weekly jump since September 2008, according to FactSet data. Since gold is often considered as a safe-haven asset, the current economic instabilities around the world create the right environment for demand to grow. Blue Lagoon Resources Inc. (OTC: BLAGF) (CSE: BLLG), Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX), AngloGold Ashanti Limited (NYSE: AU), Kinross Gold Corporation (NYSE: KGC) (TSX: K), Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM)

Various financial services, through which gold can be purchased, have shared recent statistics that paint an interesting picture of how demand for gold has spiked. For example, the British-based Glint Pay Services reported that it had seen a 718% increase in customers buying gold over the last five weeks. And trading volumes at Goldex have also increased 125% in 2020 compared with last year; a month-to-month comparison to March 2019 shows the amount of gold buys and sells had increased by a staggering 1,600% with a week left to go in the month. "Overall we're seeing a substantial increase in gold demand in the first three months of the year, with this month already surpassing our previous record which was set in January 2020. We're also seeing a significant increase in customers, with user registrations up 35% since the beginning of the year as investors flock to safe-haven assets amid plummeting stock markets," Goldex told MarketWatch.

Blue Lagoon Resources Inc. (OTCQB: BLAGF) (CSE: BLLG) announced yesterday breaking news, "that it has completed the acquisition of Metal Mountain Resources Inc. in exchange for 12,151,220 common shares of the Company (the "Transaction").  Concurrently with the Transaction, Blue Lagoon issued 1,372,000 common shares of the Company to acquire 27.44% of Gavin Mines Inc. 

Following the transactions, the Company will hold, through its ownership of Metal Mountain, a 78.28% interest in Gavin Mines Inc. and a100% interest of Lloyd Minerals Inc. Gavin Mines owns the Dome Mountain mine, a high-grade gold project located in northwest British Columbia.  Lloyd Minerals Inc. ("Lloyd Minerals"), holds the Big Onion property, a porphyry copper project also located in northwest British Columbia.

The Blue Lagoon shares issued pursuant to both transactions will be subject to an initial hold period of 12 months from closing, and thereafter the hold period will expire in installments over a period of 30 months. 

"In a very short time, management's focus has lead Blue Lagoon from being a newly listed junior mining exploration company to one that just acquired a very promising high grade gold property in British Columbia that holds both a Mining Permit for up to 75,000 tonnes annually and an Environmental Management Act Permit," said Rana Vig, President and CEO of Blue Lagoon Resources.

Bill Cronk, the Company's Chief Geologist added, "This is a very exciting and pivotal moment for the company that will take it one step closer towards transforming into a development stage gold company in a time when gold is maintaining near 5 year highs during unprecedented times of economic turmoil." The Company notes that no decision to proceed to production has been made at this time, and a future production decision will be based on a full technical and economic review of the project.

DOME MOUNTAIN PROJECT INFO & HISTORICAL ESTIMATES

The Dome Mountain Project is the subject of a NI 43-101 technical report entitled Technical Report on the Dome Mountain Gold-Silver Project dated April 2010, prepared by Gary Giroux, P. Eng., Giroux Consultants Ltd. for Gavin Mines.  The technical report provides the following historical resource estimate for the Boulder Vein System based on 285 surface diamond drill holes and 37 underground diamond drill holes (the "2010 Historical Resource Estimate"):

 

Historical Indicated Resource within the Mineralized Veins

Au 

Cut-off (g/t)

Tonnes > 

Cut-off (tonnes)

Grade>Cut-off

Contained Metal

Au (g/t)

Ag (g/t)

Au (ozs)

Ag (ozs)

5.00

138,000

15.10

73.93

67,000

328,000

Historical Inferred Resource within the Mineralized Veins

Au Cut-off (g/t)

Tonnes > Cut-off (tonnes)

Grade>Cut-off

Contained Metal

Au (g/t)

Ag (g/t)

Au (ozs)

Ag (ozs)

5.00

154,000

13.42

60.63

66,500

300,200

This resource occurs principally at and above the 1290 level and has been adjusted to remove the volumes previously mined.  The 2010 Historical Resource Estimate is considered historical in nature by the Company, is provided for background information purposes only, and is not a current resource estimate due to significant additional exploration work conducted subsequent to the date of the report. A qualified person (as defined in NI 43-101) has not done sufficient work to classify the historical estimate as a current mineral resource. The Company is not treating the historical estimate as a current mineral resource.

Subsequent to the 2010 Historical Resource Estimate, Gavin Mines conducted 7,210 meters of infill drilling in 2016 to upgrade the inferred resource. Four new veins were discovered within the Boulder Vein System during the 2016 drill program. The 2016 drilling program added 330 meters of strike length to the Boulder Vein which remains open along strike to the west, east and at depth.

Gavin Mines engaged Roughstock Mining Services LLC of Bozeman, MT to prepare an internal estimate based on the additional data from the 2016 drill program, as follows (the "2016 Historical Resource Estimate"):

Historical Dome Mountain Mine Indicated Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 2017


Tonnes

Grade (g/t)

Grams

Ounces

Boulder Vein

164,735

12.76

2,102,654

67,601

Boulder East Vein

8,736

22.22

194,137

6,241






TOTAL

173,471

13.24

2,296,791

73,843

Historical Dome Mountain Mine Inferred Resource at 3.42 g/t Cut-off (undiluted) as at December 30, 3017


Tonnes

Grade (g/t)

Grams

Ounces

Boulder Vein

171,611

8.96

1,538,017

49,448

Boulder East Vein

166,852

8.17

1,362,590

43,808

Argillite Vein

75,486

12.97

979,050

31,477

Boulder HW Vein

46,079

7.62

351,222

11,292

TOTAL

480,028

9.20

4,230,879

136,025

The scientific and technical data contained in this news release was prepared and reviewed by William Cronk, P.Geo., a qualified person as defined in NI 43-101 and a consultant to the Company." 

For our latest "Buzz on the Street" Show featuring Blue Lagoon Resources Inc. recent corporate news, please head over to: https://www.youtube.com/watch?v=szDn59MPMLk

Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX) announced last week a report for Barrick's 10-year production plan, which showcases a modern gold mining business capable of sustainably producing around five million ounces of gold per year and delivering significant free cash flow. President and chief executive Mark Bristow says in the report that Barrick's new leadership started 2019 with a long and challenging to-do list and succeeded in ticking all the boxes, and more. Highlights included gold production at the top end of the guidance range; copper production which exceeded its forecast; the consummation of the Nevada Gold Mines joint venture, majority-owned and operated by Barrick; the consolidation of the Tanzanian mines; and the disposal of some non-core assets. 

AngloGold Ashanti Limited (NYSE: AU) announced last year that  AngloGold Ashanti (Ghana) Limited ,a wholly owned subsidiary of AngloGold Ashanti, has achieved its first pour of gold from the Obuasi Gold Mine, signaling the successful redevelopment of the mine into a modern, mechanized mining operation since mining activities were suspended five years ago. The Obuasi Redevelopment Project, which seeks to access Obuasi's 30-million-ounce ore body over the next two decades and beyond, has completed the first phase of construction on time and on budget. Refurbishment of an existing plant and construction of new infrastructure and underground development, in line with a new mine plan, has taken place over the past 18 months. 

Kinross Gold Corporation (NYSE: KGC) (TSX: K) announced last month that it has filed a new technical report for its Paracatu operation in Brazil. Paracatu is a cornerstone, long-life operation in Kinross' portfolio that is expected to produce an average of approximately 540 Au koz. annually over 12 years from 2020 to 2031. Total production over the remaining mine life is expected to increase approximately 24% compared with the prior technical report that was published in 2014.The new technical report is based on an asset optimization program that commenced in 2018 and was completed in late 2019 with the successful implementation of a comprehensive grade control program. The results of the program include better characterization of the orebody, an improved ability to predict and react to ore variability, and better mill efficiency with improvements in throughput and recovery.

Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) provided last week a further update on its Quebec and Nunavut operations. Today the Company held discussions with representatives from the Government of Quebec to get additional clarity in regard to the order by the Government of Quebec to close all non-essential businesses in response to the COVID-19 outbreak issued on the afternoon of March 23, 2020 (the "Order"). Pursuant to the Order, mining operations were directed to minimize their activities until April 13, 2020. Based on today's discussions, and in response to the Quebec decision, the Company will take steps to ramp down its operations in the Abitibi region of Quebec (the LaRonde Complex, the Goldex mine and the Canadian Malartic mine (50%)) in an orderly fashion while ensuring the safety of employees and the sustainability of the infrastructure.  Each of these operations are to be placed on care and maintenance until April 13, 2020, and as instructed, minimal work will take place during that time. In addition, the Company will reduce activities at the Meliadine and Meadowbank mining operations in Nunavut, which are currently serviced out of Mirabel and Val d'Or, Quebec. Exploration activities in Canada will also be suspended during this period.

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