Benzinga - by The Gold Report, Benzinga Contributor.
Source: Streetwise Reports 05/13/2024
Metallic Minerals Corp. says mining major Newmont Corp. is exercising its "top-up right" to purchase additional shares of the company. Read to see the other ways the companies are working together.
Metallic Minerals Corp. (OTC: MMNGF) announced that mining major Newmont Corp. (NYSE: NEM) is exercising its "top-up right" to purchase additional shares of the company.
With the purchase, Newmont will continue to own 9.5% in Metallic Minerals by purchasing an aggregate of 342,750 common shares at CA$0.33 per share to "adjust for certain non-cash transactions completed by the company in the last six months.
"We are very pleased with the ongoing collaboration and support from Newmont on the La Plata project" Metallic Minerals President Scott Petsel said. "Our latest drill results demonstrate the potential of the La Plata project to be a district-scale, precious-metal-rich porphyry system with multiple holes returning from 500 to 900 meters of continuous mineralization starting from surface and including some of the highest grade-times-thickness values for copper drill holes in the U.S. over the last year."
Exploration at its La Plata copper-silver-gold-platinum group element (Cu-Ag-Au-PGE) project in southwestern Colorado was funded with Newmont's initial CA$6.3 million investment. In addition to capital, Newmont also provided technical support and expertise for the project through a joint committee with Metallic Minerals, including multiple site visits.
"These contributions are expected to continue in 2024 and may include Newmont providing experienced personnel to the project for enhancing surface data acquisition, geologic mapping, and geophysics" Metallic Minerals said in a release.
The new placement is subject to final approval by the TSXV.
The Catalyst: 2024 Exploration Campaign
The main Allard deposit at La Plata remains open to expansion at depth and along trend, and more than 20 new surface targets have been identified, which may represent additional porphyry centers, Petsel noted."Final planning is in progress for the 2024 exploration campaign, which is anticipated to include resource expansion drilling with a focus on the higher-grade porphyry units at the Allard deposit and first drill testing of new priority targets outside of the Allard resource area" he said.
Last month, Metallic Minerals released the final results from its 2023 drilling campaign at La Plata, noting that all four holes intersected porphyry-style mineralization from the surface and over their entire lengths.
Three of four holes in the 4,530-meter program intercepted continuous porphyry style Cu-Ag-Au-PGE mineralization over 500 meters in width at 0.3% Cu, including significant intervals exceeding 0.5% to 0.7% Cu Eq (copper equivalent) with associated Ag, Au and PGEs. Drill hole LAP23-05 intersected 909 meters of continuous mineralization from surface, grading 0.26% Cu Eq over the entire hole length with a 550-meter-wide higher-grade zone.
"Our emerging vision for the La Plata project is that we have the potential for a district-scale system with multiple porphyry centers in addition to the Allard resource area" Petsel said. "This is supported by the multi-kilometer scale metal-in-soil values that extend well beyond the area of drilling and correspond with strong alteration responses in our detailed district-scale airborne hyperspectral survey."
The company announced an expanded NI 43-101 resource in July 2023 for La Plata of 1.2 billion pounds Cu and 17.6 Moz Ag at an average grade of 0.41% Cu Eq, 0.37% Cu, and 3.72 g/t Ag, using a 0.25% Cu Eq cutoff grade.
The inaugural resource was based largely on historical drilling from which gold and platinum group element assays were not available. Metallic has stated it expects to add the full suite of precious metals to future resource updates.
According to the company, the U.S. Geological Survey has identified the La Plata mining district as a potential critical minerals resource area under the Earth Mapping Resources Initiative program and, in 2023, completed significant geologic and geophysical studies to enhance understanding of the critical mineral occurrence in the district.
Those resources and results, combined with those from its flagship Keno property in the Yukon and an alluvial gold production royalty agreement signed with Parker Schnabel of the Discovery Channel's "Gold Rush" led Couloir Capital to rate the stock a Buy last year. In an updated research note on September 27, it set a fair value per share estimate of CA$0.74.
Copper Big Part of Energy Transition
Despite some cooling due to slower-than-expected EV sales, the global copper market was worth US$304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2032 to US$496.8 billion, Acumen Research and Consulting reported."The increasing demand for copper could be met through developments in mining technology, well-organized designs for ore processing, and the discovery of new copper reserves" Acumen's report noted. "According to the United States Geological Survey (USGS), international copper reserves rose by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated to be approximately 3,500 million tons."
Haywood Securities noted in a January 2024 report that based on the long time it takes for new copper supply to come online, the market for the metal "will be tightening for the foreseeable future [and] that could eventually lead to a new copper cycle." Haywood noted predictions are for a copper deficit this year, marked by supply shortfall of about 500,000 tons.
CNBC reported in January that copper supply is low, and the world's ongoing transition to renewable energy will continue to drive high demand for the metal.
"The incredible growth in the number of electronic gadgets such as laptops, cell phones, smart devices, and television sets across the globe is increasing the demand for the product" Acumen's report said.
Ownership and Share Structure
About 17% of Metallic Minerals is owned by management and insiders, including CEO Greg Johnson with 4.15 %, Independent Director Gregor Hamilton with 0.92%, and the president, Petsel, with 0.5%.About 34% is owned by strategic investors, including Newmont's 9.5% and mining financier Eric Sprott, who owns 14.5%.
About 22% is owned institutionally. The rest, 27%, is retail.
Its market cap is CA$49.3 million, with 166.99 million shares outstanding, 123.02 million free-floating. It trades in a 52-week range of CA$0.44 and CA$0.24.
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