Oil and Gold, Alamos AGI, Kinross K and AMX, TCF and BFG
Buy Alamos Call Options
Oil is screaming recession and I am watching closely for sign of a bottom under $70. I will have more of an update on oil soon, but for now a look at gold and a few of our gold stocks. So far support is holding and I have been waiting for more of a pull back to add 1 or 2 new gold stocks. I do expect an upside break out and when that happens I will add 1 or 2 new picks. It is September and can be volatile, so is why I am being a bit cagey and cautious for now.
Alamos Gold - - TSX/NYSE:AGI - - - Recent Price - $24.85
Entry Price - $12.43 - - - - Opinion – Buy Call Options
Alamos has been one of the top performing gold producers and was just recognized as a TSX30™ 2024 winner by the Toronto Stock Exchange ("TSX"). The annual ranking recognizes the 30 top performing stocks based on their dividend-adjusted share price performance over a three-year period. Alamos’ share price increased 134% over the trailing three-year period.
The stock has come down to support and is a decent buy here. I like the Call options because there is little premium and gives you more leverage for your $$. There is not much open interest on the Canadian side but lots on the U.S. side.
Currently the stocks is US$$18.30 and I would buy the January US$16 Call for about $3.05. This call is $2.30 in the money so the premium is only $0.75 to go out to January 2025. You could also go out to March and just pay $1.00 premium for the $16 call.
I will add the January US$16 Call at $3.05 on the Selection List. Below is the C$ price chart.
Kinross Gold - - - TSX: K, NYSE: KGC - - - Recent Price - $12.05
Entry Price - $6.35 - - - - - - Opinion - hold
and Amex Exploration TSXV:AMX - - - Recent Price $1.10 - - - - Opinion - buy
Today Kinross provided a Preliminary Economic Assessment (PEA) on the Great Bear project, located in Red Lake, Ontario, Canada. Remember, we made a killing on Great Bear when Kinross bought them out. I am highlighting this also because it gives you an idea what Amex's Perron Project would look like in a couple years. Amex Exploration is going to be another Great Bear. Both projects are similar vein type high grade targets. In fact Amex's overall average grade is 4.28 g/t and Kinross's Great Bear M&I 2.74 million ounces is 2.81 g/t.
I expect Amex's Perron grade will come down some when they add lower grades from other zones into the total. Great Bear has had 825,176 metres of drilling. Amex's Perron has seen less than 600,000 metres. By the time Perron sees another 250,000 metres of drilling, it's numbers will get close to Great Bear.
Based on mineral resources drilled to date, the Kinross PEA outlines a high-grade combined open pit and underground mine with an initial planned mine life of approximately 12 years and production cost of sales of $594 per ounce. The Project is expected to produce over 500,000 ounces per year at an all-in sustaining cost (AISC) of approximately $800 per ounce during the first 8 years through a conventional, modest capital 10,000 tonne per day (tpd) mill.
Kinross has also released an updated mineral resource estimate increasing the inferred resource estimate by 568koz. to 3.884 Moz. which is in addition to the existing M&I resource estimate of 2.738 Moz4. The mineral resource estimate and PEA for the Great Bear project are available here.
Key PEA Highlights:
The Great Bear PEA demonstrates a top-tier high margin operation in a stable jurisdiction in Ontario, Canada. The Project is located within the prolific Red Lake Greenstone Belt 24 kms from Red Lake, a town with a long history of mining, significant infrastructure including a paved highway and provincial power lines, and access to experienced, skilled labour.
The results from the PEA affirm that Great Bear has the potential to be a cornerstone asset with a top tier production profile, low costs, and significant value.
The PEA mine plan demonstrates an excellent estimated internal rate of return (IRR) and after-tax net present value (NPV) at a range of gold prices.
PEA study physical highlights5
Annual production (koz. / first 8 years) 518
Annual production (koz. / life of mine average) 431
Life of mine production (Moz. Au) 5.3
Mill Processing rate (tpd) 10,000
Underground peak mining rate (tpd) 6,000
Life of mine tonnes processed (million tonnes) 44.6
Average grade processed (g/t Au) 3.87
Average recovery rate (% Au) 95.7
This is a very strong PEA with very low AISC (costs) of only $800 and with gold at $2,500 this will be a huge cash cow and Amex Exploration will end up very similar. We are up about 100% on Kinross, but I am in no hurry to sell with this Great Bear project on the horizon.
Trillion Energy - - CSE: TCF, OTCQB: TRLEF - - - Recent Price - $0.13
Entry Price - $0.19 - - - - - Opinion - buy
TCF provided an update on the Akcakoca-3 well, SASB Field that has now been put into production.
On July 17 eleven meters of gas pay was perforated in the Akcakoca-3 well, however, due to delayed pressure build up, was not initially produced. By Friday September 6th, 2024 the well head pressure for Akcakoca-3 had increased to 616 psi and the well was put into production. Initial production flow rates were 4.28 MMcf/d which increased to 4.66 MMcf/d with pressure increasing to 645 psi.
At the same time, Alapli-2 was opened to test pressure resulting in gas flow to surface, however, is not producing gas in significant quantities at this time -production is pending installation of velocity strings.
Things are going very well in the rework of this gas field and the high European gas prices will produce big cash flow. The big news/event on the horizon will be exploration drilling on their Cendere oil field in Turkey.
Giant Mining - - - CSE BFG, OTC:BFGFF - - - Recent Price - $0.19
Entry Price - $0.45 - - - - - Opinion – strong buy
My last update on BFG was that 15 million shares were coming free trading from a $0.20 financing. I suggested a strong buy under $0.30, but the stock has dropped much further. It seems there are panic investors now selling below the $0.20 they bought the stock for in the placement. They are not waiting to see what drill results will be.
Of course not all investors in the placement fall into this panic category, but so far almost 6 million shares have traded since August 30th when the placement stock became free trading.
Volume has dropped right off today so this panic selling is ending, but we may see some more sellers when we get back to the low and mid $0.20s. The stock has now put in a double bottom.
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