First Majestic inks $50M Forward Sale, Buys Orko Silver
First Majestic Silver Corp T.FR announced a US$50-million contract with Bank of America Merrill Lynch on a portion of its future lead and zinc production. The contract runs from January 2013 to June 2016 at prices of US$1.01 per pound for lead and US$0.96 per pound for zinc and will result in the sale of approximately 26% of the company’s total estimated lead production and 33% of its estimated zinc production over this period.
President and CEO Keith Neumeyer commented, “We are pleased to have entered into this agreement to forward sell a portion of our base metal production from both our Del Toro and La Parrilla silver mines. Management considers this arrangement to be very favorable at current market prices and it allows our treasury to be topped up without having to dilute our shareholders. Furthermore, First Majestic remains committed to being unhedged on its silver production in anticipation of higher silver prices in the future, while only forward selling a minor portion of our lead and zinc base metals.”
On December 16, First Majestic announced a $387-million, friendly takeover of Orko Silver Corp V.OK. The agreement values Orko’s shares at $2.72, a 69% premium. The takeover will add La Preciosa, in Durango State, Mexico, to First Majestic’s portfolio of Mexican silver assets.
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Hana reports Botswana Assays up to 1.26% Copper, 19.8 g/t Silver over 37.3m
Hana Mining Ltd V.HMG announced assay results from its Ghanzi Copper-Silver Project in Botswana. Highlights include
1.26% copper, 19.8 grams per tonne silver (1.55% copper equivalent) over 37.26 metres
(includes 2.95% copper, 49.5 g/t silver (3.67% CuEq) over 12.1 metres
0.83% copper, 11.9 g/t silver (1% CuEq) over 60 metres
(includes 4.17% copper, 68.8 g/t silver (5.18% CuEq) over 2.64 metres
0.72% copper, 6.8 g/t silver (0.82% CuEq) over 27.75 metres
1.06% copper, 8.7 g/t silver (1.19% CuEq) over 19.22 metres
(includes 2.18% copper, 18 g/t silver (2.44% CuEq) over 8.15 metres
1.52% copper, 15.7 g/t silver (1.75% CuEq) over 14.05 metres
1.03% copper, 7.9 g/t silver (1.14% CuEq) over 18.73 metres
President/CEO Marek Kreczmer commented, “The drill program this year has been very successful. We satisfied our primary infill drilling objectives for advancing the quality and confidence of the known mineralized areas. As well, we were very pleased to also discover high grades from the infill drilling and a brand new area of consistent high-grade copper-silver mineralization at Zone 5, which will increase the resource size and positions Zone 5 as a valuable source of high-grade mineralization to a mining operation. Zone 5, and the results received so far from Zone 6 have shifted our vision for a mine plan at the Ghanzi project. While our PEA demonstrated an economically viable mine plan rooted at the Banana Zone, the quality of the mineralization emerging at these zones suggest that the economics would improve with shifting the mine plan to commence production at these deposits. As well, the proximity of Zone 5 and Zone 6 to the operations at the Boseto processing facility contribute to the concept of a long and lucrative mine operation as predicted for the Kalahari Copper Belt.”
According to a May 14, 2012, 43-101 preliminary economic assessment, Ghanzi will produce an average of 66.4 million pounds copper and 878,000 ounces silver annually over the minelife of 13 years. Based on US$3.40 per pound copper and US$30 per ounce silver, its initial CAPEX is US$285.5 million, and its total CAPEX of US$399 million. The project has an aftertax net present value (NPV) of US$262.5 million, an aftertax internal rate of return (IRR) of 19.3% and a five-year payback period.
Sutter pours California Gold
Sutter Gold Mining Inc V.SGM announced December 17 the first gold pour conducted at its Lincoln Mine Project in Amador County, California.
President/CEO Leanne Baker commented, “This represents a key milestone for our company, and I wish to thank our board of directors, shareholders, management team, employees and contractors who made it possible. We still have much to do to achieve commercial production and become cashflow positive in 2013, and we plan to build on the successes of this year. Our new mill has begun the commissioning process, and underground development is proceeding to provide the necessary ventilation and secondary access for the production stopes that will follow”
The Lincoln-Comet and Keystone Zones at Lincoln have 43-101 indicated resources of 612,400 tonnes grading 11.3 g/t gold for 223,000 ounces gold and inferred resources of 2.16 million tonnes grading 6.6 g/t for 458,900 ounces gold. Sutter controls approximately 4.6 miles of the Mother Lode of Amador County, with 90% of the property still unexplored. The 120-mile long Mother Lode Gold Belt produced over 13 million ounces of gold historically with 7.9 million ounces originating from the 10-mile long segment between Jackson and Plymouth where Lincoln is located.