Prime Mining Corp (TSX.V:PRYM) (OTCQB: PRMNF)(Frankfurt:04V3) Expected to Announce Production Decision by Next Summer
With gold up nearly 13% in 2019, having surpassed its six-year peak of $1,557 in September with more gains expected next year, previously overlooked, high grade projects such as Los Reyes are now firmly back on the radar screens of investors and the smart money is not about to let this opportunity slide.
The Los Reyes gold-silver project is in one of Mexico’s premium mining jurisdictions. Over the course of the last two decades, more than $20million has been devoted to exploration, engineering and furtherment of the project, which Vancouver-based Prime Mining (TSX.V:PRYM) (OTCQB: PRMNF.)(Frankfurt:04V3) managed to acquire for only $6million!
A high-grade resource with the potential to produce between 65,000 and 75,000 oz annually, this project is expected to have a pay-back period of less than a year.
Key to Winning the Gold Game: Quality Deposits
Prime Mining (TSX.V:PRYM) (OTCQB: PRMNF)(Frankfurt:04V3) represents an exciting investment opportunity. Company CEO, Andrew Bowering has revealed that they expect to announce an update to their resource statement in the New Year which should add at least 20-25% to the current estimates.
The Los Reyes Project boasts high-grade oxide ore with a starter target pit of around 500,000 tonnes with a grade of 3.2g/t Au and significant silver credits. Total indicated and inferred gold resources are estimated at 380,000 oz @1.73g/t Au and 155,000 oz@ 1.49g/t respectively.
Even Great Deposits Need Strong Leadership
$4.5m of the $6m purchase price has already been paid with the final payment due in the last quarter of 2021.
Most of this acquisition price has been paid by the company’s management team, who have yet to draw a salary. This indicates that management not only believes in the project, but they have aligned their interests with those of their shareholders.
Minority shareholders have become accustomed to high corporate management and head office fees followed by capital raises and private placements that dilute shareholder value and do little to further the development of the project. It is indeed refreshing to find a company with a management team that are intent on seeing the project come to fruition.
Collectively the technical team has founded, funded and built precious, base and industrial metal projects taking them from exploration to production. A quick overview of managements’ bios indicates tremendous depth of knowledge and experience in execution and returning shareholder value.
- Company CEO, Andrew Bowering bas more than 30 years’ experience as a founder and operator of TSX Venture, TSX and American Stock Exchange Companies including Millennial Lithium Corp, Pinnacle Mines, Caldera Environmental, ATW Gold and American Lithium Corp.
- COO and Director Gregory Liller has played a pivotal role in seven projects that became active mines and managed exploration and development of over 11 million ounces of gold and 600 million ounces of silver reserves and resources. He has held senior positions in public companies including Genco Resources, Oracle Mining and Mexgold Resources.
- Executive Chairman Daniel Kunz is the former CEO of Ivanhoe Mines Ltd and founder of US Geothermal. He has also served as a senior manager at Morrison Knudson Corporation and President of MK Gold Company.
Winning Formula: Create Jobs While Turning a Profit for Shareholders
A strong feature of the Los Reyes Project is the relative abundance of qualified and low cost labour. This is an important factor when evaluating a junior mining project as having the ability to use local labour negates the need to spend on high-cost mechanization, thereby maximizing investor returns.
Furthermore, mining operations can become a source of discontentment if they are not seen to be creating local employment and uplifting the community. Los Reyes, through its ability to create jobs, has managed to foster good community relations. This in turn should earn the project the support of local government and ensure that the construction and production permit is fast tracked. It is expected that Prime Mining will be able to get a permit to build their mine within 12-14 months.
Prime Mining (TSX.V:PRYM) (OTCQB: PRMNF)(Frankfurt:04V3) Well Positioned as a Potential Breakout Stock
There are strong fundamentals supporting a gold market rally. Prices have already reached six-year highs, and the market is already showing signs of further increase in the new year. As such there is certainly room for new, low cost, gold players to make their mark as breakout stocks in the new year.
Prime Mining (TSX.V:PRYM) (OTCQB:PRMNF)(Frankfurt:04V3) is a junior mining company, leveraged to take full advantage of the gold market rally. As a gold asset, the Los Reyes Project checks all the boxes with respect to offering a strong value proposition, including:
- High grade opportunity: Total indicated resources has an average grade of 1.73g/t
- Low cost: Management has purchased the asset for $6million and has already benefited from more than $20million worth of previous exploration work.
- Quick payback period: The Los Reyes project has the potential to produce around 65,000 and 75,000 oz of gold annually and carries significant silver credits, as such the projected payback period is around six months
- Near term producer: The company is expected to make a production decision by next summer
- Depth of management: Prime Mining’s top management has strong experience in execution and returning value to shareholders
- Mining friendly jurisdiction, with a local labour force and a relatively straightforward mining application process which could see a production permit being issued inside of 14 months from application
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