Mining Brief: Gold Demand Much Higher In Light of Economic and Pandemic Crisis

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Oct 21, 2020, 08:45 ET

PALM BEACH, FL, Oct. 21, 2020 /PRNewswire/ -- Over the last decade, global demand for gold has increased constantly. Worldwide gold demand amounted to 4,356 metric tons in 2019. Demand has been noticeably higher since the Financial Crisis. Many investors look to gold in periods of market turmoil because they believe that it holds value through recessions better than other assets. The supply of gold depends largely on mine production. Production, in turn, depends on two factors. The countries with higher reserves of gold work harder to extract their gold when the price of gold increases, following standard theory that quantity supplied increases with price. Similarly, the expectation of higher prices in the future prompts speculators to explore for new reserves. As they discover new lodes, the supply of gold increases. Investments in gold always reach higher highs during times of crisis. Gold is subject to cyclical volatility in its rate of return, and many investors speculate on its value. However, for historic reasons many view it as a symbol of price stability. After World War II, the Bretton Woods system tied the price of all major currencies to the price of gold until the 1970s. This legacy means that most countries still maintain large gold reserves. While this can drive gold demand, it also reduces the supply of gold in circulation by locking huge amounts of gold in central bank vaults. More than half of the global gold supply comes from mined gold. Active stocks in the mining markets this week include Kesselrun Resources Ltd. (TSX-V: KES) (OTCPK: KSSRF), New Gold Inc. (TSX: NGD) (NYSE: NGD), Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM), B2Gold Corp. (TSX: BTO) (NYSE: BTG), YAMANA GOLD INC. (TSX:YRI) (NYSE:AUY).

A report from Transparency Market Research said that due to the escalating prices of gold, it is at present being oversold in the bearish market. In times of high inflation, currency fluctuations, and geopolitical crisis, gold is considered to be the safest investment. The growth of the global gold market is likely to be driven by the rising prices of gold across the world. It said: "The purchase of gold is expected to rise as consumers are focusing on long-term investments. As the confidence over bullion as a secure mode of investment is rising, the demand for gold is also rising at a considerable rate. The global gold market is likely to be affected by the fluctuating supply of mined gold as the global gold production is a mix of scrap recovery, central bank supply, and mined gold."

Kesselrun Resources Ltd. (TSX-V: KES) (OTCPK: KSSRF) BREAKING NEWS: Kesselrun Intercepts 15.7 g/t Au over 5.2 m including 52.3 g/t over 1.0 m - Kesselrun Resources Ltd. ("Kesselrun" or the "Company") is pleased to provide the following update on its 100% owned Huronian Gold Project.

The Company reports further results from the Fisher Zone, one of four zones tested in the 2020 Huronian drill program. All results have now been received and assessed from the Fisher Zone drilling. Kesselrun has now extended the high-grade portion of the Fisher Zone to nearly 100 metres down plunge.

Highlights:

Wide zone of intense quartz veining, alteration and sulphides near surface assayed 1.8 g/t Au over 57.0 m including 15.7 g/t Au over 5.2 m and 52.3 g/t Au over 1.0 m in hole 20HUR003.
Extends the core of the Fisher Zone in hole 20HUR002 with two separate sub zones assaying 9.2 g/t over 1.9 m and 9.9 g/t over 1.1 m within a broader zone which assayed 1.1 g/t Au over 57.5 m.

Michael Thompson, P.Geo., President and CEO of the Company, commented, "Our drilling on the Fisher Zone has demonstrated the continuity of the high-grade core. The data collected from this program has enabled us to better model the zone and target down plunge extensions of the known zone as well as new high-grade shoots along strike and down dip. The team is excited to test these targets in the next phase of drilling".

The 2020 Huronian drill program targeted four zones; Fisher, Fisher North, McKellar and Huronian. The four zones are in close proximity along an approximate 1500 m strike length in the area of the historic Huronian Mine. The zones include multiple generations of quartz veins that carry high grade gold values in association with altered, sheared and variably mineralized mafic volcanics, feldspar-quartz porphyries and iron formation.

Previous operators have focused on the Fisher, Fisher North and McKellar Zones where drilling has been concentrated at near surface depths of 75 metres or less, while the Huronian Zone has been mostly unexplored since the closure of the mine in 1936. As a result, Kesselrun believes there to be significant upside potential on all zones. Read this entire release along with charts and images for the Kesselrun Resources news at: https://www.financialnewsmedia.com/news-kes/

Other recent developments in the markets include:

New Gold Inc. (TSX: NGD) (NYSE American: NGD) recently reported its third quarter operational results for the Company as of September 30, 2020 and reaffirms annual production guidance. During this quarter, the Rainy River Mine delivered another strong quarter of operational and technical performance. Mine operations ramped up towards the 2021 target capacity of approximately 150,000 tonnes per day and the mill delivered a record of 27,000 tonnes per day, reaching the maximum monthly average throughput allowable under the existing mill permit. With both the mine and mill operating at capacity, the Company's efforts will now shift to focus on identifying additional opportunities to further optimize mine and mill productivities and unit cost performance.

"We are very pleased with the results from the Rainy River Mine as the operations met, or exceeded, target levels. Supported by the strong operational performance delivered in the quarter and with all deferred site construction capital substantially complete, the operation is well positioned to deliver on its life of mine plan that includes strong production growth at lower costs along with a significant and corresponding reduction in capital requirements." stated Renaud Adams, CEO. "Our improved operational performance has allowed New Gold to complete key corporate transactions during the year that supported the restructuring of our balance sheet and strengthened our liquidity position. As we enter the final quarter of the year, we will continue to build on the progress made during the year as we position the Company for the future and deliver free cash flow generation beginning in 2021."

Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) recently announced that it has agreed to subscribe for 25,838,821 units ("Units") of Maple Gold Mines Ltd. (TSX-V: MGM) ("Maple") in a non-brokered private placement at a price of $0.239 per Unit for total consideration of approximately $6,175,478 (the "Private Placement"). Each Unit is comprised of one common share of Maple (a "Common Share") and one common share purchase warrant of Maple (a "Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of $0.34 for a period of three years following the closing date of the Private Placement, subject to acceleration of the expiry date, at the option of Maple, in the event the Common Shares trade on the TSX-V above $0.60 for a period of twenty consecutive trading days at any time following two years from the closing date of the Private Placement. Closing is expected to occur on or about October 9, 2020 and is subject to certain conditions.

B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) recently announced its gold production and gold revenue for the third quarter and first nine months of 2020. All dollar figures are in United States dollars unless otherwise indicated.

2020 Third Quarter Highlights were: Consolidated gold production of 248,733 ounces from the Company's three operating mines, above budget by 1% (2,929 ounces) and a significant increase of 17% (35,455 ounces) over the third quarter of 2019 (excluding discontinued operations of El Limon and La Libertad); Total gold production of 263,813 ounces (including 15,080 ounces of attributable production from Calibre Mining Corp. ("Calibre")); Record quarterly consolidated gold revenue of $487 million, a significant increase of $176 million (57%) over the third quarter of 2019 (excluding discontinued operations); The Fekola Mine continues to operate unimpeded and no operational days have been lost due to the recent political developments and demonstrations in Mali; No Lost-Time-Injury ("LTI") incidents at the Company's operating mines, extending the number of days without an LTI to 255 days for Fekola, 684 days for Masbate and 918 days for Otjikoto as at September 30, 2020; On August 5, 2020, the Company announced a 100% increase of its quarterly dividend to $0.04 per share (or an expected $0.16 per share on an annual basis), which was reflected in the third quarter dividend payment; On September 10, 2020, the Company announced the successful commissioning of the Fekola mill expansion to 7.5 million tonnes per annum ("Mtpa") (an increase of 1.5 Mtpa from an assumed base rate of 6 Mtpa), ahead of the scheduled completion date of September 30, 2020; the Fekola mill has the potential to run above the annualized throughput rate of 7.5 Mtpa and analysis is currently underway to determine the optimum throughput rate; and B2Gold maintains a strong financial position and liquidity; the Company is now debt-free (other than mining equipment loans and leases totaling approximately $50 million as at September 30, 2020) after fully repaying the outstanding Revolving Credit Facility ("RCF") balance of $425 million during the third quarter of 2020 with the full amount of the $600 million RCF now undrawn and available.

YAMANA GOLD INC. (TSX:YRI) (NYSE:AUY) recently announced strong preliminary third quarter results, with gold production of 201,772 ounces and silver production of 3.04 million ounces. Total gold equivalent production ("GEO") was 240,466 ounces. Jacobina, El Peñón, Minera Florida, and Canadian Malartic all enjoyed standout quarters. With overall production, and production at most of the Company's mines, currently tracking ahead of plan, and in some cases well ahead of plan, the Company increases its 2020 production guidance from the previous guidance of 890,000 GEO to 915,000 GEO, representing an increase of 3%. Gold production and silver production guidance have increased from previous guidance by approximately 1% and 6%, respectively. More specific mine-by-mine and metal-by-metal information will be provided with the Company's financial results at the end of the month. The Company continued to generate strong cash flows in the quarter which strengthened its cash balances and balance sheet. Cash balances at quarter end increased by a further $145 million from $325 million at the end of the second quarter to approximately $470 million.

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