I-80 Gold Corp – Exploration And Development Strategy For 2023 At Ruby Hill, Granite Creek, And Cove, And Takeover of Paycore Minerals
Ewan Downie, CEO and Director of I-80 Gold Corp (TSX: IAU – NYSE: IAUX), joins us for a comprehensive exploration strategy update at Ruby Hill, Granite Creek, and Cove, the bid to takeover Paycore Minerals (TSX.V: CORE), a review of the development work and residual heap leach production in 2022, and what the overall work plan is for 2023.
We start off noting the keen investor interest in the series of news releases from last year and early this year demonstrating that a new discovery of bonanza-grade polymetallic CRD mineralization was made at the Hilltop Zone, part of the Ruby Hill Project in central Nevada. This area is now one of the key areas of exploration focus moving forward, returning attractive values of gold, silver, zinc, and lead in a series of drill intercepts. The FAD Deposit, that Paycore Minerals has been delineating, is just south of this Hilltop Zone area, and Ewan outlines the synergies of the 2 projects being combined.
One of the key advantages that i-80 Gold has, is having the Ruby Hill processing center already permitted and most of the sunk cost and infrastructure in place. This leads to a larger discussion about the unrecognized value of all the work, sunk cost, existing infrastructure, permitting, and scarcity of the additional Lone Tree processing center, which alone is worth more than the current market cap of the Company, not even counting the Ruby Hill processing center in addition to that.
This will be a busy year of exploration at all 3 properties, and we start by having Ewan review the definition and resource drilling going on at Granite Creek to open the deposit along 5 levels. This work is building towards an updated resource estimate for this Project, as well as a Feasibility Study for the underground OG Zone, and PEA for the South Pacific Zone of Granite Creek. Next we discuss the 40,000 meters of ongoing drilling at Cove planned to continue to expand high-grade gold resources there. Next, he outlines that the lion’s share of drilling will be ongoing at the Hilltop Zone at Ruby Hill, where there are still 25 holes drilled that have not been reported yet, and plenty more drilling on tap. Lastly, there is also a PEA and Resource Estimate slated for the Ruby Deeps gold deposit at Ruby Hill for later in the year or early next year.
Ewan expects to see substantial growth to the Company’s total current resources of 14.5 million ounces of gold, and an additional 180 million ounces of silver, as all the drilling underway is incorporated into these different resource updates later this year.
If you have questions for Ewan regarding the ongoing work and strategy at i-80 Gold Corp, then please email Shad@kereport.com.
* In full disclosure, Shad is an existing shareholder of I-80 Gold Corp
Much appreciated Lakedweller2. I remain very impressed with the ~ $1.5 Billion worth of assets and sunk cost in both the Lone Tree Processing Center and the Ruby Hill Processing Center, which alone are worth more than the current market cap of I-80 Gold, and would be extremely difficult to get permitted and built in today’s political and lobbyist environment.
As mentioned in the interview, that is like getting all 14.5 million ounces of gold and 180 Million ounces of silver for free…. not to mention… with all this drilling going on at Granite Creek, Cove, and Ruby Hill (both at Ruby Deeps for the gold and at the Hilltop Zone for the CRD mineralization) I’d assume a nice bump higher in resources in a year’s time. Its possible they could be pushing 18-20 million ounces of gold once they get all the resource estimates updated over the course of this year, and that is substantially bigger than most of the exploration of development projects on the market (except for NovaGold, International Tower Hill Mines, and Seabridge). So all things considered, the current market for i-80 is a bit silly on the low side.
Also, providing the deal goes through for acquiring Paycore Minerals, then they’ll also have more ounces in the ground on the FAD property as well.
I’m not sure most people are awake to the fact that once they get Granite Creek + Cove + Ruby Deeps all moving towards gold production in tandem, and can fully utilize their autoclave and mills and even heap leach pads…. that they could be production upwards of 400,000 – 500,000 ounces of gold per year and be the 2nd or 3rd largest US Gold producer. Obviously there is a lot they need to show the market between then and now, and need to crawl before they walk on the production front, but they certainly are not being viewed by most in light of their solid 5 year growth profile.
In the nearer-term, it sounds like they have a lot of holes to still release to the market from multiple targets, but the ones from Ruby Hill are likely the ones that are going to be more widely followed by the CRD drill junkies.
UEC, the target of a short seller, -15%.
Yeah, I saw that Kerrisdale hit piece was out on UEC, but have been busy all day and haven’t had a chance to digest it yet. Keep in mind that same organization (Kerrisdale) has done a couple of slimy hit pieces on mining stocks in the past, and often get a number of things wrong, and make a number of assumptions based on conjecture and hyperbole (at least that is what they’ve done in the past).
However, within each short report that attacks a company’s credibility, there are usually a few legit red flags raised or warts highlighted, so they can offer perspective and balance to a bullish thesis, and are useful in that sense.
I’ve got a position in UEC and didn’t like see the nearly 15% selloff today in the stock, but that is the way these volatile juniors can respond to fickle emotional retail hordes, that sell first and don’t ask questions until later…
I’m was looking forward to listening to this. I’ve keep buying IAUX on technical selling exhaustion signals (which just happened– though obviously not valid on a new close below 1.99). I figured I should actually find out more about what they’re actually up to as I’ve been keeping some shares after each profit taking as part of my portfolio gold exposure. I have no edge in fundamental analysis of gold miners, but new mines coming into production on resources which keep getting explored further sounds great.
If we do get a true break out and gold and then I-80 executes on a solid majority of their 6+ plans, then maybe an IAUX breakout to new highs. Each time it runs up I hope I won’t see the exhaustion signals and have to take profits.
It feels really strange to be so positive on such a deep pullback, but it went where I thought it might bottom at old resistance, had a swift flush into the danger zone and then reversed remarkably. And that volume, some serious buyers came in.
The only question not asked in this interview that I would have liked is more about the funding for all this work. Dilution to raise capital is an ever present threat. I’ll stop being lazy and go find my own answer to that one by looking at some of their recent filings.
It’s borderline. Interest paid in shares and convert at will means we could see a dumping of shares after June 23, 2023. I will definitely be watching the price action and volume closely. 15%+ new supply can really dampen any rally over the conversion price of the debentures.
Hi DL. Thanks for those comments on I-80, the feedback, and yes, good question about the eventual funding needed for upgrading the Ruby Hill processing center, and then in about 2-3 years the Lone Tree Processing center. I didn’t get the impression either of those were imminent needs, as currently the plan is to keep increasing the output from Granite Creek over the course of 2023 and into 2024 which they are hauling to Nevada Gold Mines Lost Creek processing center. That should start generating revenues later this year and into next that would assist with the capital costs for Ruby Hill first. Also taking on a modest amount of debt to get Ruby Hill up and running could still be an option, or a streaming deal, so it doesn’t have to be share dilution. I plan on having Ewan on the show again in the not to distant future and I can ask him about that and see if he wants to discuss it, but it’s a bit early since the budget for drilling the 3 properties and ramping up into commercial production from Granite Creek are the main objectives for this year.
I did some back of the envelope math on the conversion of their recent debenture issue and it’ll definitely produce some new shares, but only a lot of them if the share price truly breaks out to new highs up to over US$3.38. The agents could have taken some of their commission in shares as well and I-80 can pay the 8% interest in shares on the debentures.
I’m going to watch the credit markets to see if any of the debentures end up being traded after June 23, 2023. I wouldn’t mind grabbing some corporate credit that pays me in I-80 shares and has an upside option/warrant-like convertibility. Especially if we hit a point of expanded high yield spreads from banking/refinancing fears. Might be able to grab those debentures for a discount compared to the offering. Though they might be very tightly held. Though in a rapidly expanding spread environment, someone will want out and set the market price in a very sales-encouraging manner to those with mandates about what credit they can hold.
If I-80 executes their plan and an artificial high yield credit seizure offers up the opportunity, I’ll jump on it. It might even be possible to get the debentures at a discount while the price of gold is making new highs just from what happens in a period of yield expansion as fear grips the high yield market.
Good thoughts DL on looking to pick up some of the debenture issues on the credit markets.
Were some of those on offer from Equinox cashing in portion of their’s from I-80 recently?
I don’t think they can be sold until June 23 by anyone. They are a security from the offering.
Also, Equinox’s sale of the shares isn’t even closed yet, the private placement is still ongoing:
I actually have no idea if Equinox even participated in the debenture offering in February. Seems like it would be strange to lend Equinox money if you were thinking of selling your stake.
I hope that 25% of i-80 shares ends up strong hands. If they end up getting dumped on the market after the waiting period is over.
I’m going to be watching the price and volume like a hawk going into late June. Doesn’t matter how well they execute on all their plans if 25-35% of the total float gets sold into the market after June 23-29.
Very thorough interview again. I need to add more when I can trade again. Almost done with partial account transfer.