David Erfle - Gold Market Commentary – Tue 12 Sep, 2017

A look behind the Alamos acquisition of Richmont

The Junior Miner Junky David Erfle shares his thoughts on the Alamos Gold acquisition of Richmont Mines. The deal comes in at almost C$1billion and is an all share transaction.

A side note of the deal that is most noteworthy to us is where Richmont’s Quebec properties are going. Monarques Gold is taking these Quebec properties which changes that overall company.

We also look at the factors driving gold and gold stocks and the relationship between the two.

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Comments:
  1. On September 12, 2017 at 3:39 pm,
    CFS says:
  2. On September 12, 2017 at 3:41 pm,
    CFS says:
  3. On September 12, 2017 at 3:46 pm,
    CFS says:

    Speaking of Mcewen, he recently bought 3.3 mil shares of Inventus IVS.

    • On September 12, 2017 at 3:51 pm,
      CFS says:

      Inventus Mining Exploration Update, Drilling Intercepts 22.9 gpt gold over 1.25 m

      and Mcewen almost doubled his money.

      • On September 12, 2017 at 8:02 pm,
        CFS says:

        Well,Ex, the market doesn’t seem to agree with you as Monarques dropped 18% on the news of quebec purchases.

        • On September 13, 2017 at 9:44 am,
          Excelsior says:

          CFS – The acquiring company always drops in price when it makes acquisition since they are the ones doing a large capital spend. I read nothing into the price action on the acquiring company for the few days after the news breaks.

        • On September 13, 2017 at 9:52 am,
          Excelsior says:

          P.S. – The news broke Monday morning and the shares shot up nicely, but I don’t read much into that either. We’ll see how things look in a month or two, once things balance out and the strategy is digested by the marketplace.

          • On September 13, 2017 at 9:54 am,
            Excelsior says:

            I’d recommend watching the BNN video below on how Monarques believes that they can drop the costs down at Beaufor (which has traditionally has been a bit higher cost the way that Richmont was running it).

          • On September 13, 2017 at 1:43 pm,
            Excelsior says:

            Also, as mentioned below, the real score was acquiring a fully permitted and build MIll.

          • On September 13, 2017 at 4:14 pm,
            Excelsior says:

            In the interview above they made it seem like Monarques was just just an explorer, but they already had a mill and were advancing their Croinor Gold into development and already had a PEA in place. I’ve had them in my Developers list and posted news and their drill results a number of times on here, along with their corporate presentation a few times over the last year here on the KER. They are much further along than just an explorer…. they were going to be a producer eventually unlike most of the moose pasture parading around as “explorers”.
            ___________________________________________________________________________

            Croinor Gold an integrated gold project with high exploration potential
            • NI 43-101 high-grade gold reserves and resources
            • Excellent discovery potential along strike and at depth
            • Additional blue sky targets, including Gold Bug and Simkar Gold
            • Ongoing +10,000-metre drilling program (results are pending)
            • Monarques owns the fully permitted 750 ton-per-day Beacon mill
            >> Strong support from institutional investors, including Rob McEwen and
            Greg Chamandy

            May 2016: $3 million institutional investment by Rob McEwen (Evanachan
            Limited) and Greg Chamandy (Oxbridge Groupe Inc.)
            Nov. 2016: Acquired the Beacon property, which includes a fully permitted
            750 ton-per-day ore processing plant
            Feb. 2017: Signed gold royalty agreement and completed $500,000 private
            placement with Osisko Gold Royalties Ltd
            Feb. 2017: Retained InnovExplo to update prefeasibility study on Croinor
            Gold deposit (currently ongoing)
            Mar. 2017: Completed $5.1 million bought deal private placement
            Apr. 2017: Announced substantial increase to its 10,000 drilling progam on
            Croinor Gold and Gold Bug
            Apr. 2017: Featured in The National Investor newsletter

  4. On September 12, 2017 at 4:05 pm,
    Excelsior says:

    I’m a shareholder and big fan of Monarques Gold.

    Here’s the recap on that transaction:

    (MQR) Monarques Gold Enters Into A Definitive Agreement To Acquire All The Mining Assets Of (RIC) Richmont Mines In The Province Of Quebec
    September 11, 2017

    – Monarques will acquire all of Richmont’s mining assets, properties and claims in Quebec.
    – Monarques will become the owner and operator of the Beaufor mine and the Camflo mill.
    – Monarques to retain Richmont’s highly experienced Quebec-based site teams.
    – Richmont will hold a 19.9% interest in the Corporation, inclusive of a $2.0 million investment by Richmont.
    ** Monarques’ profile after the transaction
    – A gold producer with the Beaufor Mine (gold production of 19,562 ounces in 2016; source Richmont 2016 annual report) located in one of the best mining jurisdictions in Canada.
    – A large portfolio of mining assets, including the Beaufor Mine, two mills (Camflo and Beacon), two advanced projects (Wasamac and Croinor Gold) and eight exploration projects covering more than 240 km2 in the Abitibi region.
    – Upside potential and leverage to the gold price with the Wasamac project.
    NI 43-101 proven and probable reserves of 162,790 ounces of gold, measured and indicated resources of 1.76 million ounces and inferred resources of 1.67 million ounces (see table below).
    – Over 150 highly experienced, qualified employees will join the Monarques team.
    – A strong financial position, with over $12 million in cash and cash equivalents.

    https://www.monarquesgold.com/news-releases/monarques-gold-enters-into-a-definitive-agreement-to-acquire-all-the-mining-assets-of-richmont-mines-in-the-province-of-quebec

    • On September 12, 2017 at 4:06 pm,
      Excelsior says:

      Monarques Gold CEO: We have a few tricks up our sleeves to cut costs at Beaufor

      “Jean-Marc Lacoste, president and CEO of Monarques Gold, joins BNN to explain why the company is interested in purchasing Richmont’s Quebec assets. Under Richmont’s ownership, the Beaufor Mine has been a high-cost asset. But Mr. Lacoste says he has a few tricks up his sleeve to bring costs down.”

      >>> Video of the BNN interview:

      http://www.bnn.ca/commodities/video/monarques-gold-ceo-we-have-a-few-tricks-up-our-sleeves-to-cut-costs-at-beaufor~1206072

  5. On September 13, 2017 at 9:59 am,
    Greg says:

    So Manarques Gold acquires Beaufor Mine which only has year and half Mine supply and produces at a loss, do I have this right?

    • On September 13, 2017 at 1:40 pm,
      Excelsior says:

      They’ll be lowering the costs and extending the mine life. That’s why they bought it from Richmont, since Richmont was executing properly on it.

      • On September 13, 2017 at 3:13 pm,
        Excelsior says:

        Richmont was not executing…..

        • On September 13, 2017 at 4:21 pm,
          Excelsior says:

          However, Monarques will benefit from some of the milling initiatives that Richmont put in place (with their custom milling agreement), but the big savings will be in lowering the overhead costs and personnel costs.

          They also got a 3 million ounces of gold in the ground at the Wasamac project. I’d say that is quite a score, if you think how much money explorers burn through just to get

          • On September 13, 2017 at 4:24 pm,
            Excelsior says:

            just to get to 1 million ounces.

    • On September 13, 2017 at 1:41 pm,
      Excelsior says:

      The real value is in the fully permitted and build Mill though, as those are hard to come by and they’ll develop the resources to feed that mill.

      • On September 13, 2017 at 4:16 pm,
        Excelsior says:

        In the BNN interview above, the CEO feels the biggest score is with the skilled personnel that they needed to develop their already existing Croinor Gold development project. That intellectual knowledge and experience is worth quite a bit after further consideration.