U.S. stocks rallied, driving the Standard & Poor’s 500 Index to its best weekly gain since March affirming the old Wall Street adage that “markets climb a wall of fear”. The equity markets surged ahead on strong corporate earnings despite negative international news, almost across the board.

On Friday, it was reported that the Chinese economy grew at its slowest annual pace in nearly three years at 8.1 percent in the first quarter of 2012.

“There are some favorable factors to ensure steady growth in trade, but we should also note that the year of 2012 may be a quite challenging one for China’s trade,” the Commerce Ministry said in an assessment.

China continues to forecast a 10 percent growth rate for imports and exports in 2012 although both targets were missed in March. Imports expanded just 5.3 percent from a year earlier while exports grew 8.9 percent.

A slowdown was also reported by China’s big banks. Eager to escape the negative real interest rates that are centrally set by Beijing, many depositors have reportedly taken to investing in other areas such as real estate or wealth management products.

Chinese banks are only allowed to lend out 75 percent of the deposits they take in so any outflow in capital limits the banks’ ability to meet credit demands.

The cycle of fear continued this week in Europe as well. Although, European stocks advanced for a second straight week after better-than-forecast earnings outweighed disappointing economic data, political uncertainty in France and economic concerns in Spain.

On Friday, Spanish government bond yields rose to the 6 percent danger level a day after Standard & Poor’s cut Spain’s credit rating by two notches to BBB+. The agency maintained a negative outlook on Spain citing a deterioration of government finances and a weakness in the Spanish banking sector.

Here in Canada, the benchmark stock index posted its second straight weekly gain after seven consecutive weekly losses rising 0.74 percent.

News this week in the mining sector saw Iamgold (Stock Profile – TSX:IMG) offer to buy Trelawney Mining and Exploration (Stock Profile – TSXV:TRR) for $585.3 million in cash. The $3.30 per share offer represented a 42% premium over Trelawney’s share price. Iamgold has its sights set on Trelawney’s Cote Lake gold deposit in northern Ontario. In September 2011, MiningFeeds featured Trelawney as 1 of the 10 Most Interesting Gold Stocks – CLICK HERE – for the article.

TSX-Venture listed Gold Canyon Resources (Stock Profile – TSXV:GCU) tacked on a 30.8% gain after the company held its AGM earlier this week. Gold Canyon is a gold exploration and development company whose assets include the notable Springpole Gold project in the Red Lake Mining District of Ontario. The company has also been nurturing a rare earth element project in Malawi, Africa.

While on the senior TSX board, Atna Resources (Stock Profile – TSX:ATN) was up 20.6% after the company reported on the development progress of its 100 percent owned Pinson Mine project near Winnemucca, Nevada. Atna’s President & CEO, James Hesketh stated, “Work at Pinson is proceeding as planned and we are on target to begin sustained production by the end of 2012”.

NEWS RELEASE.

April 26, 2012: Littleton, Colorado – Ur-Energy Inc. (Stock Profile – TSX:URE & AMEX:URG) released its annual letter to shareholders from President and CEO, Wayne W. Heili. 2011 marked some major developments at the company’s flagship Lost Creek property in Wyoming.

Lost Creek Property

• Regulatory Advances: The principal focus of the Company continues to be the advancement of the Lost Creek Project to final licensing.  We were pleased to announce the receipt of our Nuclear Regulatory Commission License for the Lost Creek Project in August 2011.  This accomplishment was followed by the receipt of the Wyoming Department of Environmental Quality Permit to Mine in October.  The Company also received from the US Environmental Protection Agency the approval of an aquifer exemption that allows Class-III injection into the mineralized horizon.  We had been granted our Class-I UIC permit for the necessary waste water disposal wells in 2010.  With the successful conclusion of these major permitting actions, the Company now awaits the only remaining authorization required to commence facility construction from the US Bureau of Land Management (BLM).  While the progress of the BLM’s environmental review did not track with the other major licensing actions, steady progress has been made.  Current guidance from the BLM suggests that the Final Environmental Impact Statement and Record of Decision will be issued during the summer of 2012.
• Uranium Resource Base Increases:  Efforts initiated in 2011 and reported in early 2012 have resulted in a 58% aggregate growth of the Lost Creek Property Measured and Indicated resources from 5.3 Mlbs U₃O₈ to 8.35 Mlbs U₃O₈. We have also added over 2.0 Mlbs U₃O₈ to our Inferred resource inventory. Our work leads us to conclude that there is significant potential for the continued definition of additional resources through exploration on the Lost Creek Property.  The resource growth was realized through our two-pronged approach to demonstrate the scalability of the Lost Creek Property:

1. Resource Expansion Drilling: We completed a successful drill program in 2011 that allowed our technical team to upgrade the resources defined on the Lost Creek Property. In February 2012, we completed an update to the NI 43-101 Preliminary Economic Assessment (PEA) of the Lost Creek Property. The PEA expanded the Lost Creek Property Measured and Indicated Resource by 11%.  For the first time, we reported resources that are located within our Lost Creek Property holdings but outside of the Lost Creek Project area.  Our LC North and LC South Projects now each have reported Inferred mineral resources.  As a result, the Inferred Resource at the Lost Creek Property increased by 159%.
2. Property Acquisitions:  In February 2012, the Company acquired approximately 5,250 acres (2,124 hectares) of property adjacent to the Lost Creek Project in an asset exchange with Uranium One Americas.  The acquired property interests, along with 253 newly staked federal mining claims encompassing approximately 4,430 acres (1,792 hectares) were incorporated into the Lost Creek Property, primarily as our new LC East and LC West Projects.  The Company owns an historic database containing over 1,100 drill holes located on these new project areas.  The database has been utilized to estimate the mineral resources for LC East and LC West without incurring drilling expenses.  On April 4, 2012 the Company announced a 45% increase (from the February PEA) in Measured and Indicated Resources along with a 42% increase in Inferred Resources for the Lost Creek Property.

• Economic Assessment: Our February 2012 update to the PEA for the Lost Creek Property continues to demonstrate that Lost Creek is technically and economically viable.  The PEA estimates direct operating costs of less than $20/lb which places Lost Creek in the lowest quartile of all uranium production facilities. Note: Cautionary statement pursuant to NI 43-101: the Preliminary Economic Assessment is 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. The estimated mineral recovery used in this PEA is based on site-specific laboratory recovery data as well as Company personnel and industry experience at similar facilities.  There can be no assurance that recovery at this level will be achieved.
• Project Design Engineering: Current indications are that the final BLM authorization will be on hand in time to begin construction in the summer of 2012.  Ur-Energy is prepared to break ground very soon after this final permitting action.  Our technical group has continued to prepare the detailed engineering and design work for the project facilities along with the initial uranium recovery areas.

 

NEWS RELEASE.

April 26, 2012: Vancouver, BC – Strike Graphite Corp. (Stock Profile – TSXV: SRK) announced the following appointments to its Advisory Board:

Jerry Janik (Ontario)

Mr. Janik has over 20 years experience in the mining industry.  He has extensive experience in quality control, mine planning/ tailings deposition, production, project management, process improvement, and permitting and new product development.   Mr. Janik holds dual diplomas in geology and mineral processing from Sir Sandford Fleming College School of Natural Resources in Peterborough, Ontario.

Most recently, Mr. Janik has been fulfilling the role as General Manager for Ontario Graphite’s mine in Kearney, Ontario, where after 16 years under care and maintenance, he is overseeing an operational plan that contemplates re-commissioning the mine.  Production is expected to resume by the fall of 2012 with an aim of producing 20,000 tonnes annually of natural large flake high carbon graphite concentrate at >95% Cg in 4 different size ranges.

Ontario Graphite (a private company) has a mineral resource of 43.5 million tonnes measured and indicated (2.34% Cg average, Jan 2010).  Ontario Graphite’s Kearney Mine has the largest confirmed mineral resource of any North American graphite prospect and is one of the largest individual deposits outside of China and North Korea.

Jody Dahrouge – B.Sc., Sp.C., P.Geo. (Edmonton)

Mr. Dahrouge contributes over 20 years of leadership experience with mineral exploration and resource development projects worldwide.  He has served as senior executive officer, director and/or geologist with a number of publicly traded companies, including Pacific Potash Corporation, Commerce Resources Corp., Quantum Rare Earth Developments Corp., Fission Energy Corp. and Equitas Resources Corp.  Mr. Dahrouge is a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta and British

Geoff Balderson, President of Strike remarks, “As stated previously, the Company is committed to assembling a first-class executive and management team in the graphite space. Mr. Daroughe and Mr. Janik both have a wealth of experience.  Their addition further demonstrates the Company’s commitment to achieving its objectives and rapidly maturing its graphite assets for the benefit of all shareholders.”

To learn more about graphite – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 25, 2012: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR) reported results from four additional holes testing the eastern portion of the Martiniere gold system. The Martiniere gold system is a broad (250-325 metres wide), open-ended corridor of structural deformation and gold mineralization which has now been traced for approximately 1,500 metres along strike across the Company’s Martiniere Property. Localized within the Martiniere gold system are several high-grade gold zones, including the Martiniere West Zone, associated with broader haloes of strongly anomalous gold mineralization.

Today’s results provide additional confirmation for three styles of gold (+/- silver) mineralization in the Martiniere East area, located approximately one kilometre northeast of the West Zone, and continue to expand the overall scale and scope of the Martiniere gold system.

Results are highlighted by an intercept of 6.40 g/t gold over 6.30 metres in hole MDE-12-23 from a previously unidentified quartz-carbonate vein system. Holes MDE-12-22 and 12-24, drilled to depth from the same set ups as holes MDE-12-21 and MDE-12-23 respectively, both intersected broad zones of anomalous gold mineralization including 1.00 g/t gold over 54.00 metres gold from hole MDE-12-24, representing the down dip extension of a series of similar intercepts reported from the 2011 program.

To read more – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 24, 2012: Vancouver, BC – Strike Graphite Corp. (Stock Profile – TSXV: SRK) announced it has begun mobilizing field crews to commence an exploration drill program at its wholly owned Simon Lake Graphite Property, located in Northeastern Saskatchewan.

Drilling is anticipated to begin on or about April 24, and expected to require from 35 to 40 days to complete.  The exploration will test both historic showings and those identified from the recently completed VTEM program.  Approximately 2,500 to 3,500 m within ten holes, will be completed along the 25 km long conductive trend.

Initial drilling will focus on testing known graphite mineralization along the original 5.5 km long, Simon Lake conductive trend; with approximately 2-3 holes.  Up to 7 additional holes will test the recently identified 25 km long conductor, located southwest of Simon Lake, proximal to Saskatchewan Highway 905.

To read more on Strike’s initiatives – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 19, 2012: North Vancouver, BC – Stornoway Diamond Corp. (Stock Profile – TSX: SWY) announced the closing of a private placement with Stornoway’s largest shareholder, Diaquem Inc., an indirect wholly-owned subsidiary of Investissement Québec, for aggregate gross proceeds of $5,097,950 (the “Private Placement”).

The Private Placement was completed as a result of the exercise by Diaquem Inc. of its pre-emptive right, and upon the same terms as the units issued by the Corporation pursuant to a public offering which closed on March 28, 2012. Under the Private Placement, a total of 5,097,950 units of the Corporation (the “Units”) were sold at a price of $1.00 per Unit. Each Unit consists of one common share and one-half of one common share purchase warrant of the Corporation. Each whole warrant entitles the holder to purchase one common share of the Corporation at a price of $1.20 per share at any time on or before April 21, 2014. As a result of the Private Placement, Diaquem Inc. now holds 25% of the Corporation’s issued and outstanding common shares. The closing price of the common shares of the Corporation on the TSX on the date of this announcement is $0.86.

To read more – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 18, 2012: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR) amd GTA Resources and Mining Inc. (Stock Profile – TSXV:GTA) jointly announced follow-up drill results from the Northshore Property located in the Hemlo-Schreiber Gold Belt of Ontario. Drill hole WB-12-14 returned the broadest intersection of gold mineralization to date from the Afric Zone – 240.00 metres grading 1.41 g/t gold. The high-grade Caly Zone, intersected near the top of the hole, returned an intercept of 12.00 metres grading 7.82 g/t gold.

Hole WB-12-14, one of two drill holes completed before drilling was paused for spring break-up, was collared 40 metres behind, and on section with, previously reported holes WB-11-11 and -12, (see NR12-03, Feb. 14, 2012). The results from this hole add to both the lateral and vertical extents of the Afric Zone and continue to demonstrate the continuity of the high-grade Caly and Audney vein systems which are included in the Afric Zone.

Hole WB-12-13, collared approximately 70 metres northeast of WB-12-14 and drilled in the opposite direction, to the southeast, intersected 0.77 g/t gold over 80.00 metres. This includes a higher grade section of 4.27 g/t gold over 8.00 metres within the broader Afric Zone with similarities to the Audney and Caly systems. The Afric Zone has now been intersected by the current phase of drilling for over 200 metres along strike and to a vertical depth of 190 metres.

“The initial two holes of the 2012 program at Northshore build on the impressive initial results from the property providing lateral and vertical expansions to the Afric Zone and high-grade sub-zones,” said Darin Wagner, President and CEO of Balmoral. “The style of gold mineralization on the Northshore Property displays similarities to other porphyry hosted/related gold deposits, including portions of the large Canadian Malartic gold deposit currently being mined in similar aged rocks in Quebec and the Fort Knox deposit in Alaska.”

To read more about the results – CLICK HERE.

CompanyFeed™

In 2012, gold bulls have plenty of room to graze in the stockyard these days as the investing herd migrated to other assets during the market’s steep climb. For the fourth time in the past year, gold bears outnumbered the bulls in Bloomberg’s weekly Gold Bull/Bear Sentiment Survey. In fact, the bears had the bulls outnumbered by almost 2-to-1.

Today’s growing sloth of gold bears is a “buy” signal for contrarian investors like U.S. Global. Research from the gold team at Canaccord Genuity found that gold rallied about 10 percent on average during the month following each of these sentiment “cross-overs.” This historical increase means that gold could potentially rally to the “high $1,700’s per ounce,” which Canaccord believes “would breathe some new life into the gold equities.”

After a year of neglect from investors who favored bullion, gold equities need resuscitation. Going back to April of last year, gold stocks have been undervalued compared to bullion. This trend has been accelerating recently: At the end of March, the spread between the NYSE Arca Gold Miners Index and gold bullion was at the same extreme level it was during the 2008 credit crisis despite a much rosier global economic outlook. Going back the full decade of gold’s bull run, this is quite a rare event.

It hasn’t been a complete drought for gold equity investors though, as there have been occasional spurts of relief over the past year. From the beginning of 2011 through the middle of the year, the S&P/TSX Global Gold Index declined by 14 percent. The index then quickly reversed course upward during the market’s volatile period last fall. Now, the index has been declining for four months now, dropping 28 percent, while gold bullion has only fallen 9 percent over that same time period, says Canaccord.

Believe it or not, the four-month selloff is a bullish sign for gold stocks. Canaccord says that, “sector weakness (less than one year) in the gold equities over the last six years has typically ended with “V” shaped corrections to the upside.”

Will There be a Stampede to Buy Undervalued Gold Miners?

If you plan on shopping for bargains in the gold miner department, you may have to fight a crowd. Numerous global investors have been pounding the table for gold stocks, including Dr. Marc Faber who said “gold shares have become extremely oversold and could rebound in the next few days” in his April market commentary and Global Portfolio Strategist Don Coxe, who reiterated that gold equities are undervalued compared to the precious metal on his weekly conference call last Friday.

Another big buyer has been the miners themselves. Mergers and acquisitions in the mining sector have been at an all-time high over the past two years. Large gold miners such as Barrick, Goldcorp and Kinross have been taking advantage of these cheap valuations by snatching up small miners with proven deposits.

And they’ve been willing to pay a premium too. According to Desjardins Capital Markets, over 2010 and 2011, a total of 26 mergers and acquisitions have taken place to the tune of more than $30 billion. In this time period, the buyout or purchasing premium has averaged more than 40 percent.

Desjardins says the M&A trend in the gold sector should continue, given “growing cash hoards and a lack of new discoveries” of the precious metal. As one example of this ongoing worldwide trend, Bloomberg News reported that, “Chinese gold producers are vying for domestic and overseas mining resources,” with two companies competing for two different gold mining companies located in the eastern province of Shandong.

Big miners have historically purchased the known assets of their rivals as a way to increase reserves rather than deal with the heartache and headache of drilling core samples and filling out permit applications. Large-scale gold production is a complex and costly process involving digging, transporting, crushing and chemically treating massive quantities of rock to get at small amounts of gold. In fact, a commercially viable deposit could contain just a tiny fraction of an ounce of gold for every ton of mined rock.

With the signals there for a bounce and stocks undervalued, what’s stopping investors from buying gold equities?

One reason could be margin pressure. Rising energy costs, reduced supply and currency swings can quickly erase a gold company’s margin. It takes a great deal of diesel fuel to run the shovels and dump trucks that haul ore to the mill for processing and rising energy costs can affect the profitability of a mine substantially. These variables are the project’s cash costs, or how much capital must be spent to pull an ounce of gold out of the ground.

From the first quarter of 2008 through the third quarter of 2011, the global average cash cost has been rising for miners at a rate of about 8 percent year-over-year. Desjardins says costs will “likely remain under pressure, especially on the energy and labor fronts.”

However, as Desjardins points out, at the level that gold is at now, “most producers will be generating significant cash flow and earnings,” using this cash to fund takeovers, build out development pipelines and pay higher dividends.

The cold shoulder from investors has also given way to a promising trend in the gold space—growing dividend payouts. We believe this is one can’t-miss trend. We’ve been paying close attention to this as it has developed over the past few years, because through monthly or quarterly dividends, investors can receive income while they wait for share prices to appreciate.

Frank Holmes is chief executive officer of U.S. Global Investors – a registered investment adviser that manages approximately $2.8 billion. The information provided herein has been provided to MiningFeeds.com by the author and, as such, is subject to our disclaimer: CLICK HERE.

Notes: The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver.

The world has been experiencing the largest liquidity boom, as the central banks’ seven-month easing binge continues. Over this time, ISI counted 127 different stimulative policies, such as printing money, lowering interest rates and other easing measures, taken by governments around the world.

The policy shifts helped carry the equity market a long way from the low on March 9, 2009. At the time, we noted in a special Investor Alert that there were significant government policy changes that signaled the market had hit rock bottom. According to USA Today, from the 2009 bottom through the end of the first quarter, the S&P 500 Index increased more than 100 percent. No wonder U.S. equity investors are singing.

However, the side effect of the abundance of printing by the central banks in the U.S., Europe, Japan and England has bloated balance sheets amounting to nearly $9 trillion. This is double the amount that it was three and a half years ago, says Ian McAvity in his recent Deliberations on World Markets, as the printing presses have pumped our monetary system full of liquidity. This is merely “kicking the can down the road,” as central banks will have to deal with the overhang later, says Ian.

This has historically been a strong positive catalyst for gold. An analyst at the Economics and Finance Fanatic blog put together a visual that illustrates just how strong of a catalyst the nonstop printing of money is. The chart compares the U.S. adjusted monetary base since 1990 with the “surging” price of gold. As you can see above, the amount of money in the U.S. system climbed to extraordinary heights since 2008, with gold following the same path.

The economic challenges of the U.S. and eurozone “promise to be a prolonged one with sluggish economic growth,” says McAvity, and easy monetary policies will likely be the remedy for awhile. This provides a strong case that any pullback in the gold price may be a buying opportunity. Ian says, “Tax uncertainty, festering toxic debt that’s out there but out of sight and impossible debt service ability looming? I’ll stick with gold and sleep better at night.”

U.S. investors might sleep better at night with an allocation to gold in the face of continued negative real interest rates. Gold has historically climbed when interest rates fell below zero percent, with a “strong correlation from 1977-84, and again recently when rates turned negative in early 2008,” according to Desjardins Capital Markets.

The U.S. has not made any cuts in entitlements which make up 60 percent of the deficit. There have been no changes in fiscal policy and no change in current monetary policy. Ian McAvity says these factors together make “the most powerful argument in favor of converting that paper into gold.”

What would have to change to make me turn bearish? I believe the following three actions would need to be taken:

1. Real interest rates would have to increase 2 percent above the CPI in the U.S. and Europe;

2. GDP per capita in Chindia would need to fall, negatively affecting the “love trade”;

3. Substantial fiscal cuts would need to be made in entitlement programs in the U.S.and Europe.

I believe there is a low probability of these events occurring any time soon. In this environment, gold should thrive.

For the MiningFeeds list of publicly traded gold companies ranked by market cap – CLICK HERE.

Frank Holmes is chief executive officer of U.S. Global Investors – a registered investment adviser that manages approximately $2.8 billion. The information provided herein has been provided to MiningFeeds.com by the author and, as such, is subject to our disclaimer: CLICK HERE.

Perhaps we should call this article, “PDAC Revisited”. While meeting with mining company executives at the annual Prospectors and Developers Association of Canada (PDAC) convention in Toronto in March, we wanted to know what was coming up in Q2, 2012?

For some companies, it was business as usual, but a number of companies were expecting to reach major mining milestones in the upcoming quarter (April – June) of this year.

In alphabetical order, here’s what we learned.

Allana Potash Corp. (Stock Profile – TSXV:AAA) is looking to provide a Resource Update based on data from the last eight months of drilling at the company’s Ethiopian potash project sometime in April.

Balmoral Resources Ltd. (Stock Profile – TSXV:BAR) has an ongoing drill program underway on its gold project in Northern Quebec and expects to continue to release results this month.

Copper Mountain Mining Corp. (Stock Profile – TSX:CUM) is hoping to optimize their design/production capacity. There have been some issues with the gates and the company hopes to resolve these issues and reach a 92% production target (35,000 tonnes per day) this quarter.

Eastmain Resources Inc. (Stock Profile – TSX:ER) expects to announce the drill results from a 26,000 meter drill program on the Clearwater property. Along with the results, the company plans to update its 43-101 Resource Estimate in May.

Eldorado Gold Corp. (Stock Profile – TSX:ELD) in April, the company is planning to provide detailed information regarding plans for their new mines in Greece and Romania acquired during the takeover of European Goldfields.

Goldgroup Mining Inc. (Stock Profile – TSX:GGA) is looking to release an Environmental Impact Statement this quarter. The company also hopes to secure a debt financing in Q2 for their gold projects in Mexico.

Lithium Americas Corp. (Stock Profile – TSX:LAC) is expecting to deliver a Full Feasibility Study in May.

North American Palladium Ltd. (Stock Profile – TSX:PDL) plans to release a 43-101 Report to update the reserves and resources for both of its mines this quarter. The report will include the results from 2011 drill programs. The company also hopes to see commercial production from its Vezza gold mine in Quebec.

Orbite Aluminae Inc. (Stock Profile – TSX:ORT) anticipates more details on the rare earth component and the potential energy source for its project in Quebec this quarter.

Silvercorp Metals Inc. (Stock Profile – TSX:SVM) is set to release an Updated 43-101 Report in Q2.

Stornoway Diamonds Corp. (Stock Profile – TSX:SWY) will be announcing grassroots exploration programs and budgets for the upcoming year this quarter.

Strike Graphite Corp. (Stock Profile – TSXV: SRK) expects to commence drilling on their Simon Lake graphite property in Saskatchewan later this month.

Sunridge Gold Corp. (Stock Profile – TSXV:SGC) is set to release a Prefeasibility Report in April. Also, expect to see drill results from the Adi Rassi property in May.

Ucore Rare Metals Inc. (Stock Profile – TSXV:UCU) anticipates that a 43-101 Resource Estimate will be ready in Q2 that will convert inferred to indicated at their Bokan Mountain project in Alaska.

Volta Resources Inc. (Stock Profile – TSX:VTR) is working on a Prefeasibility Study and expects to have that completed this quarter.

Witwatersrand Consolidated Gold Ltd. (Wits Gold – Stock Profile – TSX:WGR) expects to release a Prefeasibility Study for their DBM gold project in May. The company also looks to close the acquisition of Evander Gold Mines, which includes a producing mine, with joint venture partner Pan African Resources in Q2.

NEWS RELEASE.

April 4, 2012: Littleton, Colorado – Ur-Energy Inc. (Stock Profile – TSX:URE & AMEX:URG) reported an upgrade to the National Instrument (NI) 43-101 Mineral Resource estimate on the Lost Creek Property.  This resource update has been achieved by reviewing the Company’s historical drill-hole database related to property interests recently incorporated into the Lost Creek Property through acquisition and claim staking.  The resource estimate was completed as a part of an update to the Preliminary Economic Assessment now underway for the Lost Creek Property.

The updated compliant resource estimate of 8.35 Mlbs U₃O₈ in the Measured and Indicated categories represents a 45% increase from the previous estimate dated February 29, 2012.  Resources reported in the Inferred category have also been increased by 42% to an updated total of 2.87 Mlbs U₃O₈.  The new total resource for the Lost Creek Property is shown in the table below:

 Lost Creek Property Mineral Resources as of April 4, 2012

 

To read the full release – CLICK HERE.

CompanyFeed™

With the first quarter of a new year in the books we step back this month, take stock if you will, look towards the future and ponder what’s in store for the balance of 2012. This year has been marked by volatility in both the commodities sector and the equity markets in general. Crude oil is north of $100 per barrel again, natural gas is hitting year lows while metals and minerals are all over the map.

So far, 2012 has been completely unpredictable. For mining stocks, uncertainty reigns supreme and rapid recoveries are marked by quick sell-offs. Already this year, uranium stocks recovered sharply after 2011 tax-loss selling season but have since given back some gains. It hasn’t been much better for the major metals – gold, silver and copper stocks have also seen big capitulations this year.

A new star in the commodities sector, graphite, was born. The emergence of graphite as a strategic mineral and the success of Northern Graphite (Stock Profile – TSX:NGC & OTC:NGPHF) spawned the arrival of new public graphite companies in the first quarter of 2012. MiningFeeds was ahead of the graphite curve. In 2011, we connected with Greg Bowes, President & CEO of Northern Graphite – CLICK HERE – to read the exclusive interview.

The critical nature of the rare earth sector was also back in the headlines to start the year as Barack Obama joined forces with Japan and other nations to oppose China’s policies on domestic rare earth elements with the World Trade Organization. The news solidified a bottom for many rare earth stocks as investor confidence in these enigmatic tech metals was assured.

So what will the balance of 2012 bring investors? Well, we don’t know but we can certainly identify a few companies that are worth keeping an eye on for the rest of this year.

Last year, we featured numerous “Stocks to Watch” on our site and, even though 2011 was a difficult year for the mining sector, there were some great outcomes. A number of companies profiled by MiningFeeds received takeover offers (Minefinders, Lithium One and Grande Cache Coal) while many others reached major milestones (financings, partnerships and buy-ins).

In alphabetical order we feature five stocks to watch in 2012:

1. Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF)

We first met Darin Wagner over a year ago shortly after the launch of his new company Balmoral Resources. Previously, Mr. Wagner served as the President and CEO of West Timmins Mining from the discovery of a high-grade gold zone in Timmins, Ontario to the acquisition of West Timmins by Lake Shore Gold in an all share deal valued at $424 million in 2009.

Coming off the heels of a successful acquisition, Darin partnered with Henk Van Alphen and his team at the Cardero Group and looked at over 100 properties in not less than 8 countries before they decided to settle on two projects in an area they knew well: Eastern Canada in the provinces of Quebec and Ontario.

Since then, the company has been  actively drilling and developing their project portfolio both individually and through partner programs. Recently, the company announced drill results from their Detour gold project in Quebec including, an intercept of 9.30 metres grading 11.42 g/t gold from drill hole MDE-12-20 from the Martiniere Property. This compared favourably with the original discovery hole MDE-11-16 which returned 9.33 metres grading 12.93 g/t gold.

The ME-16 is the third high-grade gold zone discovered on the Martiniere Property where the Company is outlining a significant new high-grade gold system located less than 50 kilometres from the massive Detour Gold development project. Balmoral controls over 85 kilometres of this emerging gold belt and shares the neighbourhood with Detour Gold (Stock Profile – TSX:DGC) and Osisko Mining (Stock Profile – TSX:OSK).

In addition to an expanding high-grade discovery, Balmoral’s partnership with GTA Resources and Mining Inc. (Stock Profile – TSXV:GTA) created some real excitement earlier this year. Shares of both companies took-off in mid-February when they jointly announced results from a drilling program on the Northshore property near Schreiber, Ontario. Results included 149.5 metres grading 3.21 g/t gold (uncapped) or 1.20 g/t gold (capped).

On the news, GTA Resources and Mining closed the week at $1.22, up 480%, while trading more than 15 million shares – more than the issued and outstanding common shares of the company. Under the terms of the option agreement, GTA can earn a 70% interest in the Northshore project from Balmoral by spending $5.5-million on exploration expenditures, issuing 3.5 million shares to Balmoral and making cash payments totalling $150,000.

Balmoral’s shares are currently trading at $0.75, down from highs of $1.25 that followed the frenzy of the impressive holes from Northshore in mid-February.

2. Cap-Ex Ventures Ltd. (Stock Profile – TSXV:CEV & OTC:CPXVF)

Cap-Ex Ventures is a Canadian based iron ore company with significant landholding in Labrador, Quebec near the mining town of Schefferville. The company is focused on the development of its wholly owned Block 103 property. And for this junior, perhaps more aptly named the “blockbuster” property.

In October 2011, Cap-Ex announced the results from a step-out drilling program. At the time, the company shares were trading at $0.325. The step-out drilling extended the strike length of the Green Bush high-grade magnetite zone from 3.5 kilometres to approximately seven kilometres. Initially, the Green Bush zone, an intense magnetic anomaly on the company’s wholly owned Block 103 property, was tested by 10 drill holes spaced at 500-metre intervals, over a 3.5-kilometre strike length and a width of at least one kilometre. Including 125.13 m of 30.4% total Fe at Block 103.

Since then, to quote Casey Kasem, “the hits just keep on coming”. The company released a string of results on par with the original step-out program and the progress was reflected in its share price. After reaching a high of $1.25, the shares have since settled back to the $0.85 range.

In December, 2011, Cap-Ex announced an $0.85 per unit financing (share with full warrant at $0.95 for 2 years) for $10,200,000. Mining investment group Forbes & Manhattan (F&M) and its associates agreed to subscribe for the majority of the financing including 2 million units purchased by F&M insiders.

Forbes & Manhattan is a leading private merchant bank with a global focus on the resource-based sectors.  F&M is headquartered in Toronto, Ontario with offices, operations and assets across the globe. Recently, F&M had a substantial win with iron ore. Portfolio company Consolidated Thompson Iron Mines, also with operations in northern Quebec, was acquired by Cleveland Cliffs in May 2011 for $4.9 billion or $17.25 per share representing a return of over 7700% to shareholders. F&M effectively “incubated” Consolidated Thompson from a grassroots exploration stage iron ore company in 2005, raising approximately $1 billion while completing a scoping study and 3 feasibility studies.

The landscape for Quebec iron ore may be improving – indirectly. In late March, the Australian Parliament passed legislation to impose 30 percent tax on iron ore mines. Iron ore prices may see a rise in the global markets impacting margins of steel companies, according to some analysts.

“As far as tax on iron ore is concerned, there may be some kind of price rise globally, as miners will pass on the cost to importers,” said Federation of Indian Mineral Industries (Fimi) Southern Chapter Chairman Basant Poddar.

In the short-run, some feel that with slowing growth in China iron ore prices may ease a bit. According to the Australian Burea of Resources and Energy Economics, “Over the remainder of 2012, iron-ore prices are forecast to ease as production increases from new projects in Australia and growth in Asian steel production weakens (while) further price decreases are expected to be limited by an expected reduction in exports from India.”

For 5 Mining Stocks to Watch in 2012 – Part 2 – CLICK HERE.

3. Geologix Explorations Inc. (Stock Profile – TSX:GIX & OTC:GIXEF)

Perhaps it’s finally time for Geologix to change its name. After years of exploration and development the company is getting close to transitioning into the business of mining.

On March 27th, 2011 Geologix reported an updated gold and copper resource estimate for its Tepal project in Michoacán state, Mexico. The estimate, which incorporated the results from drilling over 40,000 metres at the North, South and Tizate zones during 2011, resulted in a 324 percent tonnage increase in the resource Measured and Indicated categories. Collectively, the M&I resource estimate at Tepal is 4.04 million gold equivalent ounces consisting of 1.8 million ounces of gold and over 800 million pounds of copper.

With the recent sell-off in gold and the uncertainty facing many junior miners, the news didn’t impact the company’s share price. Shares of the company are quietly trading in the $0.30 range.

Going forward, this quarter Geologix is set to release its long-awaited prefeasibility study which will incorporate the new resource estimate. Management stated the new resource estimate will significantly “de-risk” the project and hopes to have the study completed by the end of June.

In line with their name, Geologix is still very much focused on exploration. The company has identified 7 new targets, through airborne geophysics and fieldwork, at the Tepal project that warrant drilling. With $6.8 million in cash on hand as reported in the company’s most recent December, 2011 financial statements, the company has sufficient working capital to reach its prefeasibility milestone and then some. The company last financed at $0.66 on a straight share offering (no warrants) in March, 2011 raising gross proceeds of $23 million.

Toronto mining analysts Gary Bashuk from Raymond James and Philip Ker from Union Securities have price targets of $1.10 and $1.25 respectively on Geologix shares. After the company’s new M&I resource estimate was announced, Philip Ker stated, “With the announcement of today’s resource update, Geologix continues to demonstrate the quality of Tepal and supports our thesis that it can become a producing mine which we estimate commencing in late 2014.”

4. International Northair Mines Ltd. (Stock Profile – TSXV:INM & OTC:INNHF)

After many years of mixed results, on February 24th, 2011 the fate of International Northair Mines changed dramatically. The company proved that persistence pays off when they announced drill results from their La Cigarra silver project located in north-central Mexico. The numbers included 80.45 metres of 123.5 grams per tonne silver in hole CC-11-002 at the San Gregorio zone.

In response, the company’s shares took flight from under $0.15 to an intra-day high of $1.00 per share a few months later. Since then, International Northair has continued to release strong drill results from the project, and the company has been garnering support from the investment community, receiving coverage from brokerage firms and a significant investment from Pinetree Capital.

On February 28th, 2012, Canadian investment firm Pinetree Capital (Stock Profile – TSX:PNP) announced it acquired another 500,000 shares of International Northair. As a result of the transaction, Pinetree and its joint actor now hold 9,845,500 shares of the company.

Most recently, on March 28, 2012, mining analyst Michael Fowler at Loewen, Ondaatje, McCutheon in Toronto initiated coverage of International Northair and issued a Speculative Buy recommendation with a 12-month price target of $1.00 on the company’s stock. Fowler wrote, “We believe International Northair should be able to outline a 70 million ounce silver resource at its La Cigarra property in an upcoming 43-101 report due in Q2, 2012.” Talking to the company, management confirmed they are working diligently to have the report ready for the end of June but noted the delivery date could spill over into July.

The La Cigarra Project is located in the same mineral belt that includes Silver Standard’s (Stock Profile – TSX:SSO & NASDAQ:SSRI) Pitarilla and Pan American Silver’s (Stock Profile – TSX:PAA & NASDAQ:PAAS) La Preciosa project. Shares of International Northair are currently trading at $0.275.

5. Uranerz Energy Corp. (Stock Profile – TSX:URZ & AMEX:URZ)

Uranerz Energy has been at it for a while now. The company was formed after its namesakes, Uranerz Exploration and Mining Ltd. and Uranerz U.S.A. Inc. (Uranerz Group), were acquired in 1998 by Cameco (Stock Profile – TSX:CCO & NYSE:CCJ). At the time, the Uranerz Group was the world’s third largest uranium producer.

Uranerz Energy has a strong team of mining personnel and advisors, many of whom are former officers, senior management and employees of the original Uranerz Group. The team came together years after Cameco’s acquisition. Experienced management has helped the company navigate a “Long and Winding Road” including inception in 2005, public listing on the NYSE Amex in 2006, and inter-listing on the TSX in 2007. The company has raised close to $100 million.

Today, seven years later, Uranerz Energy is approaching near term commercial uranium production and is currently constructing its first in-situ recovery mine in the Powder River Basin of Wyoming. Uranium production from the mine is expected to commence in the second half of 2012. Already in place, the company has two long-term uranium sales agreements for a portion of its planned production with U.S. based utilities, negotiated when long-term uranium prices were between $65 and $70 per pound. Still outstanding, Uranerz is waiting for a license on its deep disposal well from the Wyoming Department of Environmental Quality.

From the company’s most recent letter to shareholders:

“The United States is the largest market in the world for uranium; it has the largest nuclear fleet of any country with 104 reactors. U.S. uranium mines produced four million pounds of U3O8 in 2011, but annual uranium consumption far exceeded that, at over 50 million pounds.”

Dundee Securities Vice President and Senior Mining Analyst David A. Talbot has a $4.25 price target on Uranerz Energy. Talbot states, “Hopefully, (Uranerz) permitting process is coming to a close as well. It plans to build an ISR plant in Wyoming and ramp up to about 1.6 million pounds of uranium.” Uranerz shares closed today at $2.53 on the TSX Exchange.

For 5 Mining Stocks to Watch in 2012 – Part 1 – CLICK HERE.

NEWS RELEASE.

April 2, 2012: Vancouver, BC – Strike Graphite Corp. (Stock Profile – TSXV: SRK) announced it has appointed Blair Way as Chief Executive Officer.

Mr. Way is a seasoned management professional with a career spanning over 25 years within the precious metals, petroleum exploration and development, and mining construction sectors throughout Australia, Asia, Canada, the United States and the United Kingdom. In the past several years, Mr. Way has demonstrated success in building and managing teams through to achieving either a major resource milestone or advancing development projects into production.

Mr. Way’s recent career path is highlighted as follows:

• Most recently — vice-president project development for Ventana Gold (Vancouver), advancing projects in Colombia and recently acquired by Brazilian billionaire Eike Batista for $1.4-billion;

• Just prior — president and project director, Oceanagold Philippines, overseeing the construction of the Didipio gold copper project;

• As well as — project manager non-ferrous group with Hatch Associates (Brisbane), providing project management support for various mining and metal related projects in Australia, South Africa, China, Papua New Guinea and Southeast Asia;

• Earlier — project director for BHP’s major projects division (QNI Pty. Ltd.) in Townsville, Queensland.

Mr. Way holds a bachelor of science (petroleum eeology) from Acadia University in Nova Scotia, Canada, as well as an MBA from the University of Queensland, Australia.

To read more on Blair Way’s appointment – CLICK HERE.

CompanyFeed™

There is always a sector among the raw materials on the verge of a period of “euphoria“. On the chart below, each resource is represented by a company, because the indexes do not exist for all of the individual resources. Notice that, for 10 years, there is always a sector that is in a phase of “boom“, apart from the systemic crisis of 2008-2009. But then, all raw materials experienced a strong upward phase after the crisis.

Gold and silver have demonstrated for 10 years they are not barbarous relics and they still offer excellent protection against inflation. However, platinum and palladium are often forgotten in the family of precious metals. It is wrong to overlook these metals. Platinum and palladium have many industrial uses, reserves are limited and geographically concentrated.

Industrial metals like copper, zinc and iron, also remain under the radar of many investors. However, these three metals have had excellent price appreciation over the past 10 years. Today, all deposits of iron, zinc, and copper that are close to production or in production are potential candidates to takeover bids and participation buy-ins by Chinese, Japanese, and Korean companies or large industrial groups wishing to secure their supply. Vertical integration is no longer limited to just large groups, wholesalers are also in acquisition mode.

Another growing natural resources sector is agriculture. Agriculture is an essential sector due to the loss of agricultural land, global warming, rising energy costs and increasing world population. It is no coincidence that hundreds of thousands of hectares of farmland are being purchased by China in Africa, Korea, the countries of Middle East, from large industrial or agro food. Potash, a required element in the manufacture of fertilizers, peaked in 2008 and saw a second “rush” in 2010 when BHP Billiton Ltd. (Stock Profile – NYSE:BHP & ASX:BHP) made an unsuccessful takeover bid of Potash Corp. (Stock Profile – NYSE:POT & TSX:POT).

Another investment opportunity that often remains in the shadows is the diamond. There is no call, putt, or good financial product that’s connected to the price of diamonds. Yet in India, China and across Asia in general the diamond is experiencing double digit growth. BHP Billiton, the world’s largest diamond miner, announced its intent to leave the industry late last year, not because of a lack of opportunity but because of the difficulties associated with finding new world class mine. And last week Australian mining giant Rio Tinto Ltd. (Stock Profile – NYSE:RIO & ASX:RIO) announced its interest in selling their diamonds business to focus on their core areas. Rio Tinto is the world’s third largest producer of diamonds.

Finally, in Asia and the United States there is a growing recognition that the mining sector is a strategic and vital part of the economy. Metals and minerals like lithium, cobalt, niobium, rhodium and molybdenum are gaining international importance.

By Dr. Thomas Chaize. Dr. Chaize is the author of the Mining and Energy Newsletter. The information provided herein has been provided to MiningFeeds.com by the author and, as such, is subject to our disclaimer: CLICK HERE.