Germany Chancellor plans lithium deal with Serbia after Rio ruling
Olaf Scholz plans to visit Serbia this week to secure supplies of lithium that are critical for the nation’s energy transition and auto industry.
When Agnico-Eagle (TSE:AEM) was forced to shut down production at its Goldex mine in Quebec last month due to unstable ground conditions, many in the industry considered it a death-sentence for the mine.
But while the indefinite stoppage is certainly a loss for Agnico-Eagle (Goldex was supposed to account for 17% of the company’s gold output in 2011), the situation could provide a (pardon the pun) silver lining for other gold companies mining in the Val d’Or area.
A key beneficiary could be NioGold (CVE:NOX), which has properties adjacent to seven producing mines. NioGold has an agreement with Aurizon Mines (TSE:ARZ) to develop the Marban Block, a past-producing property that yielded some 600,000 ounces. Drilling and historical data has proven up indicated and inferred resources of 960,000 ounces.
NioGold’s share price enjoyed a nice 3% bump in September after drill results from Marban showed an intersection at depth of 7.0 grams of gold per tonne (g/t Au) over 10.9 metres, and shallow intersections of 5.9 g/t Au over 15.7 metres and 906.2 g/t Au over 2.6 metres.
Northern Securities said in a research note today that the death of Goldex will leave the Val d’Or area with excess mill capacity that could be filled by a decent-sized producer such as NioGold:
Goldex’s sizable 8,000 tpd capacity plant will soon sit idle and add to other spare capacity at plants operated by Wesdome, Richmont, Century and Alexis in the camp. We believe this puts NioGold in a good position when it eventually looks at options for developing the Marban block.
Northern Securities is also projecting considerable upside for Marban.
A new NI 43-101 report could push the resource to between 1.4 and 1.5 million ounces, says the note, and could even prove amenable to open-pit mining if additional drilling indicates sufficient mineralization near surface.
NioGold shares were changing hands at 33 cents on Thursday. Shares of Agnico-Eagle have shed nearly half their value in the past year, closing at $42.59 today from a high of $88 back in December 2010.
