nkob1974
5 years ago
https://fioregold.com/fiore-drills-16-8-m-of-1-61-g-t-and-25-9-m-of-0-92-g-t-gold-at-its-gold-rock-project-in-nevada/
Fiore Drills 16.8 m of 1.61 g/t and 25.9 m of 0.92 g/t Gold at its Gold Rock Project in Nevada
October 23, 2019
TSXV–F
OTCQB–FIOGF
Vancouver, British Columbia – FIORE GOLD LTD. (TSXV: F) (OTCQB: FIOGF) (“Fiore” or the “Company”) is pleased to report additional drilling results from its Gold Rock project in Nevada. These latest results continue to show thick intervals of oxide gold mineralization both within and outside of the current resource pit shells. We view this as encouraging in our efforts to expand the resource envelope in advance of a Preliminary Economic Assessment (“PEA”) targeted for year-end 2019.
Highlights from the fifteen holes reported here include:
22.9 m of 0.72 g/t gold in hole GR19-023
25.9 m of 0.92 g/t gold in hole GR19-24
15.2 m of 1.48 g/t gold in hole GR19-026
16.8 m of 1.61 g/t gold in GR19-029
10.7 m of 1.36 g/t gold in GR19-032
Holes GR19-026 and -032 are particularly interesting in that they show strong intercepts with grades well above the average resource grade at the very northern end of the current pit-constrained resource. In the case of GR19-032 the intercept is north of the current resource pit, indicating the deposit remains open along strike to the north. Holes GR19-024 and -025 provide good infill intercepts in the central portion of the northern resource pit, while hole GR19-019 demonstrates continuity of grade through the lightly drilled gap in the current resource south of the northern resource pit. Strong intercepts were also encountered in the southern resource pit, particularly in holes GR19-023 and -029.
Six diamond drill holes have also been recently completed at Gold Rock, although assays for these are still pending.
Tim Warman, Fiore’s CEO stated, “These holes represent the last of the RC holes from the 2019 drilling program at Gold Rock, with the results showing strong, consistent mineralization over approximately 2.4 km of strike length. With the final RC assays in place we can now begin updating the geological and resource model at Gold Rock in support of the upcoming PEA scheduled for the end of the year. Work on the PEA is progressing well and we’re looking forward to the first detailed view of what we hope will be our second operating mine in Nevada. With this first phase of drilling complete at Gold Rock, we’ve begun drilling at the Pan Mine with the goal of growing the resource and reserve base and extending the mine life as we did successfully in 2018.”
Complete results for the fifteen holes referenced in this press release are shown here:
Hole From
(m)
To
(m)
Length
(m)
Grade
(g/t Au)
GR19-018 93.0 102.1 9.1 0.28
GR19-019 196.6 208.8 12.2 1.04
GR19-020 no significant intercepts
GR19-021 83.8 94.5 10.7 0.32
GR19-022 70.1 80.8 10.7 0.25
GR19-023 158.5 181.4 22.9 0.72
includes 160.0 172.2 12.2 1.02
GR19-024 105.2 131.1 25.9 0.92
includes 118.9 129.5 10.7 1.49
GR19-025 112.8 115.8 3.0 0.76
GR19-026 132.6 147.8 15.2 1.48
includes 138.7 143.3 4.6 3.78
GR19-027 193.5 196.6 3.0 0.54
GR19-028 112.8 120.4 7.6 0.31
GR19-029 123.4 140.2 16.8 1.61
includes 126.5 135.6 9.1 2.03
GR19-030 112.8 121.9 9.1 0.34
GR19-031 74.7 89.9 15.2 0.45
GR19-032 214.9 225.6 10.7 1.36
Assay highlights are calculated with a cutoff of 0.006 opt (0.20 g/t) Au. Highlighted intervals contain less than 10 feet (3 m) of material below cutoff grade.
For maps and selected cross-sections from the current program at Gold Rock, please click here: Maps and Section 1, Section 2, Section 3 and Section 4]
About Gold Rock
Gold Rock, which is located approximately 8 miles (13 km) southeast of Fiore’s Pan Mine, is one of the only federally-permitted development projects in Nevada, having received its Record of Decision (“ROD”) in late 2018 from the United States Bureau of Land Management (“BLM”) for the construction of a mine, process facilities and other infrastructure.
Gold Rock currently hosts an Indicated resource of 238,700 gold ounces (9.0 million tonnes at 0.82 g/t gold) and an Inferred resource of 180,900 gold ounces (7.8 million tonnes at 0.72 g/t gold). The mineral resource is centered around the former Easy Junior open pit mine and covers approximately 3.1 km of a 16.5 km-long trend of prospective geology, structure, and alteration with pervasive gold and pathfinder element anomalies in soil and rock samples. The resource at Gold Rock is of approximately 60% higher grade than Fiore’s Pan Mine.
Fiore’s technical team has prepared a detailed development plan for Gold Rock that lays out the drilling, metallurgical testing, engineering, state permitting, and other activities required to advance the project towards production. The plan aims to arrive at a construction decision by mid-2021, assuming successful completion of these activities and a positive feasibility study. Based on its experience operating the nearby Pan Mine, the Company intends to proceed directly from the PEA to a Feasibility Study in order to shorten the development timeframe.
Gold Rock Geology
The Gold Rock deposit is a Carlin-style, sedimentary rock-hosted, disseminated gold deposit within Mississippian limestone and siltstone units, namely the Joana Formation Limestone and the overlying Chainman Formation Shale, located along an eastern spur of the Pancake Range. The primary host is the Joana Limestone, but significant mineralization is also hosted in the overlying Chainman Shale with minor mineralization in the Pilot Shale. The currently identified resource occupies a N12E to N15E trend that extends from 300 m north of the Easy Junior pit to the lower reaches of Meridian Ridge to the south, a strike length of over 3.1 km. Altered bedrock and surface gold anomalies extend well beyond the mineralization envelope defined by drilling to the north and the south, extending nearly the entire 12.9 km length of the property.
Gold Rock Resource Estimate
Category Tonnes Gold Grade
(g/t)
Gold Grade
(oz/st)
Contained Gold
(oz)
Indicated 9,006,900 0.82 0.024 238,700
Inferred 7,787,500 0.72 0.021 180,900
Repricing of Staff Options
Fiore also reports that the Board of Directors has approved the re-pricing of a total of 785,500 stock options held by employees of the Company to purchase common shares (the “Re-Priced Options”) to an amended exercise price of C$0.38 per share, which represents the closing price of the Company’s shares on October 22, 2019 (the “Re-Pricing”). No Re-Priced Options are held by insiders, including the Company’s directors and named executive officers who are insiders. All other terms of the Re-Priced Options remain unchanged. The Re-Pricing is subject to the approval of the TSX Venture Exchange (“TSX-V”).
In accordance with Policy 4.4 of the TSX-V Corporate Finance Manual (the “TSX-V Manual”), the
Company is not required to seek disinterested shareholder approval (“Disinterested Shareholder Approval”) for the Re-Pricing of the Re-Priced Options, as none of the options are held are held by insiders (as such term is defined in the TSX-V Manual) of the Company. None of the Re-Priced Options may be exercised at the revised price until the Company obtains the approval of the TSX-V.
The Board of Directors of the Company determined it was in the Company’s best interest to re-price a portion of the options held by employees in order to assist with employee retention, primarily at its Pan Mine, in the face of an extremely competitive labour market for mining personnel in Nevada.
Annual Option Grants
The Company also approved an annual grant of options, coincident with the end of the Company’s fiscal year 2019, to executives and directors of the company, as well as to several new employees at its Pan Mine in Nevada. A total of 854,831 stock options have been granted in accordance with the Company’s Stock Option Plan. The options are exercisable into common shares of Fiore at a price equal to the closing price on the TSX Venture Exchange (“TSXV”) on the date of grant, being at C$0.38 October 22, 2019, for a period of 5 years, with a 2-year vesting period, subject to TSXV approval.
Corporate Strategy
Our corporate strategy is to grow Fiore Gold into a 150,000 ounce per year gold producer. To achieve this, we intend to:
grow gold production at the Pan Mine while also growing the reserve and resource base;
advance exploration and development of the nearby Gold Rock project; and
acquire additional production or near-production assets to complement our existing operations
Qualified Person
The scientific and technical information relating to Fiore Gold’s properties contained in this news release was approved by Paul Noland (AIPG CPG-11293), Fiore Gold’s VP Exploration and a “Qualified Person” under National Instrument 43-101. Drill intersections are reported as drilled thicknesses. While drill holes are designed to intersect mineralized structures as nearly as possible to perpendicular, true widths have not been calculated because of some remaining uncertainties in the geologic model that the current drilling program is designed to address. Drill samples were assayed by ALS Limited in Reno, Nevada for gold by Fire Assay of a 30 gram (1 assay ton) charge with an AA finish, or if over 5.0 g/t were re-assayed and completed with a gravimetric finish. For these samples, the gravimetric data were utilized in calculating gold intersections. For any samples assaying over 0.20 ppm an additional cyanide leach analysis is done where the sample is treated with a 0.25% NaCN solution and rolled for an hour. An aliquot of the final leach solution is then centrifuged and analyzed by Atomic Absorption Spectroscopy. QA/QC for all drill samples consists of the insertion and continual monitoring of numerous standards and blanks into the sample stream, and the collection of duplicate samples at random intervals within each batch. Selected holes are also analyzed for a 48 multi-element geochemical suite by ICP-MS. ALS Geochemistry-Reno is ISO 17025:2005 Accredited.
Further details of the current resource estimate at Gold Rock can be found in the report titled “Technical Report on the Gold Rock Project, White Pine County, Nevada, USA.” The Report, which is dated October 25, 2018 and is effective July 31, 2018, was prepared in compliance with National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”) and is available under Fiore Gold’s profile on SEDAR at www.sedar.com and on the Company’s website at www.fioregold.com. The Report was prepared by Michael B. Dufresne, M.Sc., P.Geol., P.Geo., and Steven J. Nicholls, BA Sc (Geology), MAIG., of APEX Geoscience Ltd., both of whom are “Qualified Persons” as defined in NI 43-101 and independent of the Company.
On behalf of FIORE GOLD LTD.
“Tim Warman”
Chief Executive Officer
Contact Us:
info@fioregold.com
1 (416) 639-1426 Ext. 1
www.fioregold.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Statements
This news release contains “forward-looking statements” and “forward looking information” (as defined under applicable securities laws), based on management’s best estimates, assumptions and current expectations. Such statements include but are not limited to, statements with respect to the Gold Rock drilling program, expectations and interpretations from drilling results regarding mineralization at Gold Rock, expanding the Gold Rock resource, plans for metallurgical testing, engineering and state permitting, statements regarding the Gold Rock development program, timing of construction decision at Gold Rock, timing and expectations regarding a Preliminary Economic Assessment (PEA), expectations for a feasibility study Gold Rock, timing and expectations regarding drilling at the Pan Mine, expectations to grow the reserve base and extend the mine life at the Pan Mine, goal to become a 150,000-ounce producer, goal to acquire additional production or near production assets, and other statements, estimates or expectations. Often, but not always, these forward-looking statements can be identified by the use of forward-looking terminology such as “expects”, “expected”, “budgeted”, “targets”, “forecasts”, “intends”, “anticipates”, “scheduled”, “estimates”, “aims”, “will”, “believes”, “projects” and similar expressions (including negative variations) which by their nature refer to future events. By their very nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Fiore Gold’s control. These statements should not be read as guarantees of future performance or results. Forward looking statements are based on the opinions and estimates of management at the date the statements are made, as well as a number of assumptions made by, and information currently available to, the Company concerning, among other things, anticipated geological formations, potential mineralization, future plans for exploration and/or development, potential future production, ability to obtain permits for future operations, drilling exposure, and exploration budgets and timing of expenditures, all of which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Fiore Gold to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to vary materially from results anticipated by such forward looking statements include, but not limited to, risks related to the Pan Mine performance, risks related to the company’s limited operating history; risks related to international operations; risks related to general economic conditions, actual results of current or future exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates; increases in market prices of mining consumables; possible variations in ore reserves, grade or recovery rates; uncertainties involved in the interpretation of drilling results, test results and the estimation of gold resources and reserves; failure of plant, equipment or processes to operate as anticipated; the possibility that capital and operating costs may be higher than currently estimated; the possibility of cost overruns or unanticipated expenses in the work programs; availability of financing; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of exploration, development or construction activities; the possibility that required permits may subject to legal challenges, not be renewed, or not be obtained in a timely manner or at all; changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Fiore Gold operates, and other factors identified in Fiore Gold’s filing with Canadian under its profile at www.sedar.com respecting the risks affecting Fiore and its business. Although Fiore has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements and forward-looking information are made as of the date hereof and are qualified in their entirety by this cautionary statement. Fiore disclaims any obligation to revise or update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results, events or developments, except as require by law. Accordingly, readers should not place undue reliance on forward-looking statements and information.
nkob1974
5 years ago
FIORE GOLD MEETS FULL YEAR 2019 PRODUCTION GUIDANCE
October 17, 2019
TSXV–F
OTCQB–FIOGF
Vancouver, British Columbia – FIORE GOLD LTD. (TSXV: F) (OTCQB: FIOGF) (“Fiore” or the “Company”) is pleased to announce preliminary production results for the Company’s fourth fiscal quarter (“Q4”) and the full fiscal year 2019 which ended September 30th, 2019 for its Pan open pit mine in White Pine County, Nevada.
Highlights:
Full-year gold production of 41,491 ounces, a 21% increase over the preceding year and within full-year guidance of 40,000-43,000 ounces. Q4 gold production was 9,282 ounces.
Sales of 40,886 gold ounces for the year with Q4 sales of 8,902 gold ounces.
Full-year mined ore production of 13,923 tons per day at a stripping ratio of 1.8. Q4 mined ore production of 13,156 tons per day at a stripping ratio of 2.3.
Our operations team at Pan received the Small Mine Safety Award from the Nevada Mining Association for the fourth consecutive year.
91,672 man-hours worked in fiscal year 2019, achieving our goal of zero reportable incidents, zero reportable accidents, and zero lost-time injuries. Currently the operation is at 1,230 consecutive days of attaining this Triple-Zero achievement.
Transition from Run of Mine (“ROM”) to 100% crushed ore placement nearing completion with the commissioning of the Pan Mine primary crushing circuit.
A 10,000 m program of resource expansion drilling underway at the Pan Mine in support of a resource and reserve update and a new life of mine plan in mid-2020.
Approximately 10,000 m of drilling largely completed and metallurgical work underway at the federally permitted Gold Rock project in support of a Preliminary Economic Assessment (“PEA”) by the end of calendar 2019.
Tim Warman, Fiore’s CEO commented, “Our team at the Pan Mine had another excellent year, with gold production within our guidance range and 21% higher than 2018 while continuing to maintain our high standards for safety and environmental protection. Gold production in Q4 decreased relative to Q3 in part due to placing lower grade ore as well a slower ramp-up of the crusher than we anticipated. However, tons crushed per day consistently increased through the quarter and as ore placement on the leach pad returns to planned levels, gold production is expected to likewise return to planned levels over the first quarter of FY/2020. The change from ROM to crushed ore marks the last major operational change at Pan, and the focus is now on our adjacent Gold Rock project which we intend to advance rapidly towards development and production. A PEA will be completed by year-end, and our plan is to transition directly from a positive PEA to a full Feasibility Study with the goal of arriving at a construction decision by mid-2021.”
FY/2019 Production
Quarterly and full-year production numbers for the Pan Mine are shown in the table below:
Q1 Q2 Q3 Q4 FY/2019
Gold Production (oz) 9,765 10,759 11,685 9,282 41,491
Ore Tons Mined (tpd) 15,196 13,211 14,114 13,156 13,923
Gold Grade (oz per ton) 0.016 0.015 0.014 0.013 0.015
Total Tons Mined (tpd) 37,792 34,782 38,275 43,005 38,484
Gold production of 41,491 ounces fell comfortably within our full year production guidance of 40,000 to 43,000 ounces. Pan mined 13,923 ore tons per day, also in line with our 14,000 ore tons per day guided target. Total tons mined of 38,484 tons per day reflects a strip ratio of 1.8 which as expected was higher than the 1.6 life of mine average strip. Importantly, the total tons mined per day trended upward through 2019 with Q4 of 43,005 total tons mined per day. This is a positive reflection of improved productivity from a mining perspective.
Q4 gold production was impacted by lower gold grades in the second half of the year in line with the mine plan. Additionally, Q4 ore mining rates and placement of crushed ore on the leach pad were lower than planned as we worked to achieve consistent crusher availability and throughput. Tons crushed per day consistently increased through the quarter. As ore placement on the leach pad returns to planned levels, gold production is expected to likewise return to planned levels over the first quarter of FY/2020. With 2019 production finishing 21% over 2018, we will look to build on the positive momentum heading into 2020 when we expect to see increased gold recoveries and production with a full year of placing predominantly crushed ore on the leach pad.
A new drilling program aimed at increasing the resource and reserve base and extending the mine life at Pan commenced in September 2019. The program will consist of approximately 10,000 m of reverse circulation drilling and may also include some diamond core holes. Once the drilling is complete, a new resource estimate will be carried out by our independent geological consultants and a new life of mine plan will be prepared by mid-2020.
At Gold Rock, work on the PEA continues to progress well with approximately 10,000 m of RC drilling now complete and a further 1,800 m of core drilling expected to wrap up by the end of October. Results for 17 of the 32 RC holes have been released to date, with the remaining holes in process at the assay lab. Drilling has encountered thick intervals of oxide gold mineralization both within and outside of the current resource pit shells and has shown that mineralization continues through a lightly drilled gap in the current resource.
The drilling program, resource update and ongoing metallurgical testing is part of a detailed development plan for Gold Rock that lays out the activities and schedule required to advance the project towards production. The plan aims to arrive at a construction decision by mid-2021, assuming successful completion of these activities and a positive feasibility study. Based on its experience operating the nearby Pan Mine, the Company intends to proceed directly from the PEA to a Feasibility Study in order to shorten the development timeframe.
The Gold Rock development plan will look to leverage the infrastructure and workforce at the adjacent Pan Mine to the greatest extent possible, in particular the existing Pan power line and the access road from Highway 50. We are also evaluating opportunities to reduce capital, operating expenses and environmental impacts by using the Pan ADR plant and assay lab.
Webinar
Red Cloud Financial Services will be hosting a webinar to discuss the above results tomorrow, Friday October 18th at 11AM. To register please visit https://www.redcloudfs.com/fioregoldwebinar/.
Technical Disclosure
The scientific and technical information relating to Fiore Gold’s properties contained in this news release was approved by J. Ross MacLean (MMSA), Fiore Gold’s Chief Operating Officer and a “Qualified Person” under National Instrument 43-101.
Corporate Strategy
Our corporate strategy is to grow Fiore Gold into a 150,000 ounce per year gold producer. To achieve this, we intend to:
continue to grow gold production at the Pan Mine, while increasing the resource and reserve base
advance the development of the nearby Gold Rock project
acquire additional production or near-production assets to complement our existing operations
On behalf of FIORE GOLD LTD.
“Tim Warman”
Chief Executive Officer
Contact Us:
info@fioregold.com
1 (416) 639-1426 Ext. 1
www.fioregold.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Statements
This news release contains “forward-looking statements” and “forward looking information” (as defined under applicable securities laws), based on management’s best estimates, assumptions and current expectations. Such statements include but are not limited to, statements regarding , expectations for future performance of the Pan Mine, that the Pan Mine will transition away from Run of Mine operations toward 100% primary crushing, status drilling and assay results at the Gold Rock project, future expectations at the Pan Mine regarding, ore grades, gold production, strip ratio, mining rates and productivities, performance and benefits expected from the primary crushing circuit, drilling at the Pan Mine, expectations regarding increasing the mineral resources and reserves at the Pan Mine with recently initiated drilling program, plans for drilling and metallurgical testing, plans for a Preliminary Economic Assessment for the Gold Rock project, plans of a Feasibility Study for the Gold Rock project, expectations regarding production at the Gold Rock project, ability to leverage Pan Mine infrastructure to assist in the development of Gold Rock, growing gold production at the Pan Mine while increasing the resource and reserve base, advancing exploration and development of the Gold Rock project, goal to become a 150,000-ounce producer, goal to acquire additional production or near production assets, and other statements, estimates or expectations. Often, but not always, these forward-looking statements can be identified by the use of forward-looking terminology such as “expects”, “expected”, “budgeted”, “targets”, “forecasts”, “intends”, “anticipates”, “scheduled”, “estimates”, “aims”, “will”, “believes”, “projects” and similar expressions (including negative variations) which by their nature refer to future events. By their very nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Fiore Gold’s control. These statements should not be read as guarantees of future performance or results. Forward looking statements are based on the opinions and estimates of management at the date the statements are made, as well as a number of assumptions made by, and information currently available to, the Company concerning, among other things, anticipated geological formations, potential mineralization, future plans for exploration and/or development, potential future production, ability to obtain permits for future operations, drilling exposure, and exploration budgets and timing of expenditures, all of which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Fiore Gold to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to vary materially from results anticipated by such forward looking statements include, but not limited to, risks related to the Pan Mine performance, risks related to the company’s limited operating history; risks related to international operations; risks related to general economic conditions, actual results of current or future exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates; increases in market prices of mining consumables; possible variations in ore reserves, grade or recovery rates; uncertainties involved in the interpretation of drilling results, test results and the estimation of gold resources and reserves; failure of plant, equipment or processes to operate as anticipated; the possibility that capital and operating costs may be higher than currently estimated; the possibility of cost overruns or unanticipated expenses in the work programs; availability of financing; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of exploration, development or construction activities; the possibility that required permits may not be obtained on a timely manner or at all; possibility that the Gold Rock Record of Decision will be appealed and that such an appeal may be successful; changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Fiore Gold operates, and other factors identified in Fiore Gold’s filing with Canadian securities authorities under its profile at www.sedar.com respecting the risks affecting Fiore Gold and its business. Although Fiore Gold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements and forward-looking information are made as of the date hereof and are qualified in their entirety by this cautionary statement. Fiore disclaims any obligation to revise or update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results, events or developments, except as require by law. Accordingly, readers should not place undue reliance on forward-looking statements and information.
nkob1974
5 years ago
Fiore Gold is cheap and I was surprised by the upside
by @SASKEXPRESS on 22 Sep 2019, 00:11
A marketing guru might cringe at that headline but I write what I think and am not going to be a showman in an article. Here are my thoughts on Fiore Gold $F-v. This is a producer of 40k-45k ounces via heap leach in Nevada. Market cap is $42m CAD at market close yesterday. It has shares outstanding of 97.8m. Warrants ($1.70 strike and above) of 22m, CAD options of 4.9m (about half with strike above $1) and USD options of 3.9m (strike of 80 cents and above). The fully diluted share count then is likely in the low 100m range for the effective future.
I spent some time in Vancouver recently and met up with a lot of different people known to the community. One of them was talking about Fiore with a friend and honestly, I mentally shut off my mind to the conversation for about 30 seconds to begin with and thought about the past. I wasn’t really invested in Fiore in 2018 but did have very small exposure to it for a matter of weeks before seeing the chart break down. I took a small loss and moved on. I do recall around that time though that a few friends probably took bigger losses than I did on it and that was that and few people really brought up Fiore afterwards. It happens - we've all got a list of trading mistakes in the past. So that was the first thing that jumped into my brain. But, I will listen to any stock idea and I filed it away and did some work later that night – and I was surprised enough that I wanted to talk about it and see what others thought.
What follows is a bit of a rundown of the chart and recent trading then I will swing into my thoughts on Fiore.
The first thing I did was run a chart of the past couple years to just set the scene in my mind. I was immediately drawn to the 42-43 cent area as an area that has mostly served resistance in the past. The stock was currently trading right around that level with the RSI in low 30s after dropping a lot the past month. Interesting. Current chart attached with line drawn through former resistance. The initial questions I had last weekend were, what has caused the dip and will the current area hold?
I ran a weekly chart as well after this week’s close which follows below. So far, it looks like the 42-43 cent area is holding up nicely. The stock is mostly staying above the 43 week EMA to this point. It did briefly dip below this level once during intraday trading a couple weeks ago. I can tell you that my broker sat on the bid at $0.425 on Monday the 16th and Tuesday the 17th and GMP finally obliged near the end of each day after hitting the 43 cents and higher bids earlier each day. I bought 43 cent shares myself on Thursday being satisfied that any and all bids weren’t immediately getting hit. I of course do not know if the GMP client(s) is out of shares to sell now.
Why is knowing that maybe there was limited supply down around these levels important? Well, I don’t really want to see the chart breakdown much further, even if I feel there is an ace in the hole if it does. What has been responsible for the drop in share price the past month? GMP’s trading is interesting – in the past month, they have sold 800k shares and bought….0 shares. Anonymous has sold ~3.5 million shares while buying ~2.5m. Net -980k. Not typically a great sign that Anon and GMP would be selling. Haywood, on the other hand, has bought ~720k while selling ~50k..net 670k. Okay, that is better. Now, if a big holder still wants to go and blow up the chart they can do so. As one notable non-retail investor once said here “I don’t read charts, I make them.” But, I think this stock is very cheap so let’s file this chart and trading stuff away for now and talk about the story.
I mentioned an ace in the hole. Fiore Gold is not an explorer with a one way downhill path on cash flows. F has working capital of $22.3m USD at the end of June 2019. That is $29.7m CAD when converted. So this producer of 43-44k ounces is trading for $12m CAD above its working capital position. On paper, that further interested me when coupled with my look at the chart.
When you dive into the Pan mine, you quickly realize this isn’t a ultra low cost producer by any means. The produced ore grade is reported as .015 oz/t in the first 9 months of 2019. I think most of us operate mentally in grams per tonne. That is approximately .47 g/t. I’m sure a few people are reading right now and going, wait, you can make money mining at that level of grade? I guess my answer is that you can do okay if your deposit is amenable to heap leach if gold is $1300. But, what if you think $1500 gold might be around for a while? Higher gold prices really benefit those companies that were making $0-$100 an ounce at say, $1300 gold. Their profit per ounce jumps a lot as you move up the gold price food chain. Let’s pretend for a minute that $1500 gold is here now and nothing else changes. Let’s peg 2019 production at 43,000 ounces and say that is the norm. Let’s call that $1500 level a $200 increase over the realized price of $1,287 per ounce in 2019. 43,000 * $200 = $8.6m USD which is ~$11.4m CAD. Note: while financials are USD, I am bringing some numbers back to CAD on occasion to compare to the $42m CAD market capitalization. $11.4m CAD in additional annual revenue would be quite helpful for Fiore.
Sidebar: This would be a good time to discuss Note 10 of the financials for June 30, 2019. Fiore has a gold collar in place which will see them deliver 8,400 ounces from July 1, 2019 to November 25, 2019 at a ceiling of $1,350 per ounce. (Floor is a non-relevant $1300 per ounce) So roughly half the ounces sold during those 5 months will be sold at $1,350 an ounce. Some will not love that and I’m sure no one likes their company to sell at ~$175 below the current gold price. That ends in two months and if the company enters into another collar, at least it would be it would be at much higher terms if $1500 gold has staying power. If I prorate the collar over the days in each fiscal year, then I believe only 3,178 ounces from the collar will affect the 2019-20 fiscal year.
When I look at cash and cash equivalents I am comforted by the fact that in periods of $1300 gold prices and typical strip ratios, that Fiore has increased their cash and cash equivalents by $2.6m over the past year, to $9.7m. The strip ratio this year is 1.6. The LOM strip ratio is 1.6. So the results to date this year could probably be considered to neither be aided not harmed by strip ratios that fall outside the norm. That is comforting to me if gold drops from current levels. Note: Tim Warman (the CEO) has publicly stated that the strip ratio will be closer to 2:1 in the next couple quarters.
What other improvements might Fiore be able to make? There is one that stands out in a very good way, if they execute. Fiore commissioned their primary crushing circuit at Pan at the end of June 2019 which should aid results going forward. This means going from run of mine to running material through the circuit before heading to the pads. If you look at recoveries, the run of mine gold from north pit is only 50% recovered while south pit is 75% recovered. Really low numbers that are worth attempting to improve, right? So what will the crushing circuit do? As they say, “at the present ore mining rate of 14,000 tons per day, the crushing circuit will produce an estimated 6,000-7,000 additional gold ounces per year.” Let’s pretend it does add 6,000 ounces of gold to production – with no changes . At $1,500 gold, that is $9m USD in additional revenue or $12m CAD. Yes, there was a cost of $3.5m to add this circuit and related equipment. Of that, $2.3m was leased over 36 months. Let’s call it $800k USD or $1,100 CAD in annual lease payments versus additional cash flow as noted above. That’s a really good tradeoff if executed properly. Net $10.9m CAD in this crude example. I am impressed but let’s keep in mind there will be expenses associated with running the crushing circuit. I don't know what to peg them at and would have to ask the company. Halve the Net $10.9m CAD advantage for now? I don’t know enough on this specific point. Your comments are welcome on that and anything else I’ve said. $5m Net CAD? The existence of the primary crushing circuit definitely aids management’s goal of getting to 50,000 ounces production in FY 2020.
So if I’m keeping score in my mind of the most obvious details (in my opinion) that’s:
Keep in mind that the last number of $5m is a big unknown to me, right now. But why am I interested in numbers like these? Really, it gives me comfort that my downside is limited. I look at every position through the prism of what is my downside versus upside? If the upside is favoured by enough, I am likely to invest. I think I have that here. Let's pretend the market cap over working capital is all that matters in the world and let's divide it by shares o/s. Result is 12.6 cents. Let's pretend current EPS is $0. Now add $16.4m in additional revenue on a yearly basis and divide into shares o/s. That results in 16.7 cents additional earnings pre-tax. I will just say that gives me comfort that my downside is pretty limited if $1500 gold is the norm, and you can read between the lines if I am happy with that or not. What if annual earnings were say, 15 cents a year? What do you think happens to the share price? This is why I've done this exercise.
I am trying to be clear that those latter two numbers in the table above might not be completely accurate, but they are positives. Anonymous and GMP could sell this stock lower at any time and I want to know, what is my plan if that happens? If I had one in place and my stop loss hit, would it be see ya later? Or, would I dig in and keep adding. I know what my answer is. I’d add. When I read the financials, I don’t view every single thing I read positively. But I see enough that my gut likes here. I mean, I don’t love that the labour market is tight in Nevada for miners right now and that utilization was a bit lower than ideal in the last quarter given Ledcor simply didn’t have enough staff every day. Yet, I don’t think it had a massive impact at the same time.
I need to look at the ounces in the ground, of course.
Pan
The mine life at Pan is top of mind. My table above has two numbers at the bottom that result in a significant shift in earnings capabilities if added to the financials. But that means nothing if your mine life is short. Proven and Probable reserves are 275,600 ounces at Pan. That is 6 years if producing ~45k ounces per year. If we expand this to look at Measured, Indicated & Inferred, we are looking at 532,000 ounces. So it looks like they could expand Proven and Probable with further drilling. Gold grade in that resource is similar at around .014 oz/t to ore grade mined this year. (That is around .44 g/t)
Gold Rock
There was a mine at this location in the early 90s that produced 75,000 ounces at a grade of 0.89 grams per tonne before shutting down. 8 miles from Pan. The idea might be to truck loaded carbon to Pan. A July 2018 Resource Statement said there were 240,000 ounces Indicated at 0.82 g/t and 180,000 ounces Inferred at 0.72 g/t. Fiore announced a $2m program of met work and resource expansion drilling in July 2019, having hit a point where they were comfortable with how Pan was operating. They hope to produce a PEA for Gold Rock later this year. It’s all their ground. All federal permits are in place. Upon producing a PEA they will then proceed to Feasibility. They want to make their construction decision by 2021. Conceptually, they see it as a 50k-75k ounce per year producer. Grades are 60% higher than Pan and any Met work they’ve done thus far has been positive. It will have a higher strip ratio than Pan so let’s not think of it as a relative cash cow.
Overall, that’s 670k ounces M&I at Pan and Gold Rock and a further 290k ounces Inferred.
Summary:
I think there is an opportunity for Fiore to do fairly well over the next 5-10 years. Their stated goal is to get to 150,000 ounces per year production with both operations. We will see. I am a one step at a time person. The above discussion is solely my findings from taking a spin through the financials, MD&A, corporate presentation and watching Tim’s Beaver Creek presentation, over the past week. I am encouraged by what I have read so far. No one has approached me to write these thoughts down. I just felt like doing it once I dove into the story given I was jotting them down on paper as I went and I can barely read my own writing/context weeks later. I am a totally independent speculator. I will post here if I sell any or all of my shares. I think that’s reasonable if I’m going to tell you guys I bought it and write up why I like it.
One question I have not answered is what caused the dip from the 60s to the low 40s in the past month. I don’t know. I mean, I know which houses sold it but I don’t know why they sold it. Sometimes people have to move on from a story. Maybe some people just don’t like that strip ratio might supposedly be closer to 2:1 for a couple quarters. I feel that is advantage to me, in this case, given what I’ve listed. That is especially true if the gold price is higher to help absorb the effects of the extra strip. I had a fleeting thought that maybe Gold Rock drilling wasn’t going well but drilling so far is producing some very nice grades – see August 12th and September 10th news releases.
Thanks for reading if you made it this far.
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