- Miners' Wingman
- Posts
- Mondays are not always fun days
Mondays are not always fun days
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
If ever compensated for an article, it will be mentioned here.
Monday proved to be a challenging day for the junior mining sector, with numerous companies facing significant selloffs.
In the current market climate, it seems everyone is quick to hit the sell button.
CEO.ca Biggest Loser’s Page, November 27, 2023 @ 4:15 PM ET
One of today's worst performers caught our attention, especially considering the selloff was accompanied by some rather good news. Lavras Gold announced a substantial 204 meters of continuous gold.
There are a few key points to note here:
The gold mineralization starts only 31 metres at depth.
Gold mineralization remains continuous.
However, it's essential to consider the relative significance of these findings. For mining enthusiasts, Lavras Gold might ring a bell as one of the few companies that made a genuine discovery in 2023.
$LGC.V made headlines on Tuesday, August 29th, revealing a remarkable blind discovery at Fazenda do Posto—340 meters grading 1.09 g/t gold. Shareholders rode an impressive paper gain of 330%, closing at C$1.70 on September 13th, just two weeks later.
Last Friday, with speculative buying some must have predicted drill results early this week. $LGC.V closed the week strong at C$1.25.
However, today marked a notable shift as the stock closed at C$0.87, reflecting a significant paper loss of 30.4%. Speculators clearly were anticipating more.
Despite today's downturn, it's crucial to note that $LGC.V is a thinly traded stock (in which we have no position), making this potentially a compelling entry point.
At a market cap of ~C$44 million and an exceptionally tight share structure, this stock can be quite temperamental.
If you are comfortable speculating in Brazil, it is an interesting play with multiple gold targets and projects as well as a 2% net smelter royalty (NSR) on Mara Rosa.
The royalty was created as part of the arrangement agreement between Amarillo Gold Corporation and Hochschild Mining PLC that resulted in the sale of Amarillo and the creation of Lavras Gold. It applies to exploration concessions at Mara Rosa, where Hochschild is developing the Mara Rosa Mine, and does not include the Posse Gold Deposit.
Hochschild has committed US$200 million to building Posse Gold Mine, which is expected to start producing gold in the first half of 2024.
For a silver deposit, surpassing the 200 million ounce mark is significant. This Mineral Resource Estimate from AbraSilver was released after hours. Tomorrow's market reaction will be telling, although it's no secret that $ABRA.V was already known to have a sizable deposit.
Reply