If you love gold, you'll love Amaroq.
Good Wednesday MINING AIM, and welcome to your thought of the day.
On this site, one of the concepts I continually attempt to hammer home is the concept of 'core portfolio stocks.'
These are companies that have huge upside potential over the longer term, but critically, are already underpinned by an objectively high quality asset and decent financing.
In the gold sphere, there used to be two companies meeting this definition - Greatland Gold and Amaroq Minerals. However, ever since Newmont took over Newcrest and decided to put Telfer and its 70% shareholding of Havieron up for sale, GGP has dropped out of what I would categorise as this premium segment.
Once financing is sorted, and presumably they take over the entire project, they will come roaring back.
But for now, in gold, only Amaroq is top dog.
Other companies I have designated as core portfolio include Sovereign Metals for the Kasiya deposit, and Jubilee Metals for its processing power in key African nations.
What amazes me is that while Sovereign, Greatland and Jubilee all have what can only be categorised as impassioned followings, Amaroq has never quite taken hold of investor hearts in the same way.
We're changing that. Starting today.
Q2 results are out - in Canadian Dollars.
CEO Eldur Olafsson enthuses:
'Progress at Nalunaq is advancing smoothly, and we remain on track to achieve first gold production later this year. The completion of the main building works marks a significant milestone, and we are now focused on installing the key components of the processing plant. A standout achievement this quarter was receiving approval from the Greenlandic Government for our Environmental and Social Impact Assessments.
Upholding the highest standards of environmental and social responsibility is fundamental to our mission as we bring Nalunaq into production.
Our exploration efforts across our gold and strategic minerals targets are also progressing well. At Nalunaq, the Target Block resource expansion program is underway, with drill crews now fully mobilized on-site. At Stendalen, we have successfully completed the camp construction, and drilling operations have begun, informed by promising results from recently completed ground geophysics.
Additionally, we are pleased to announce a significant post-period development: the successful arrangement of a substantial increase and extension of our debt financing package with Landsbankinn. This new arrangement simplifies the structure of the facility while securing more favorable rates.'
AMRQ now has group liquidity of $62.2 million consisting of cash balances, undrawn revolving credit facilities, and undrawn revolving credit overrun facility less trade payables - while the Gardaq Joint Venture that comprises the Strategic Minerals business has available liquidity of $13.5 million as of 30 June 2024.
The July refinancing with Landsbankinn for US$35 million in three Revolving Credit Facilities was important on two fronts; this gives AMRQ the cash it needs to get into production comfortably, but is also a strong signal of confidence from a major creditor.
The Government of Greenland approved the Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) for the Nalunaq project in June 2024 - these are the big ones - with the Impact Benefit Agreement in the pipeline by the end of the year.
There are all sorts of technical updates in the RNS (next week I'll sink my teeth into them), but the bottom line is that gold is getting produced in Q4. And a Mineral Resource update is coming in Q1 2025.
For context, Nalunaq alone already boasts a Total Inferred Mineral Resource of 355.0Kt @ 28.0g/t Au for 320Koz gold (September 2022), reported according to CIM Definition Standards by SRK. This was a 30% increase in contained gold compared to the previous estimate reported in June 2020, and a 50% increase in average grade.
Nalunaq already sits within the top 2% in terms of global reported gold resource grades, and is close to another upgrade.
And they're not stopping.
All additional 75 vein samplings from historical core housed at Nalunaq has been completed and submitted to ALS for assaying.
Drill crews and further equipment for surface exploration drilling, targeting expanded mineralisation at the Target Block, have been mobilised to site.
And as the underground rehabilitation is completed, exploration will now be conducted from underground as well as surface - in the plan to generate additional information and data on the Mountain Block and Target Block extensions to the Main Vein, as well as assessing the continuity and form of the 75 Vein.
Underground drilling locations have been designed and a rig is to be mobilised for operations in Q4 2024.
And away from Nalunaq, Amaroq has mobilised three drill rigs and a semi-permanent 40 person camp in order to expand its drilling programme at Stendalen after its ground geophysics programme - which has already commenced
The open secret is that they're hunting for Voisey's Bay II.
This is just the tip of the exploration iceberg. Again, I will go into serious detail next week.
But the bottom line is that Amaroq shares are down from their March peak and trading around the same level as in December 2023. But it's far more advanced and ready to boom.
When the gold price rockets, the majors respond first. You are starting to see this with the major resurgence of Both Newmont and Agnico Eagle since February, and also in Barrick's jump yesterday. These stocks will keep climbing - and when the majors leap, the juniors follow.
Amaroq will lead the charge.