Chile

Future Upside Provides Excellent Entry Point For Fiore Gold

Pan Mine, Nevada

After a lengthy trading halt since June 12, Fiore Gold (F.V) started trading on October 2, having completed the business combination with GRP Minerals. This took quite a bit of time, as it was a fairly complex venture for both companies, with a lot of paperwork.  I view this deal as an accretive one, as a lot of tangible value through much more advanced assets was added, up to an estimated Net Asset Value of about C$120M in my view, and a lot of realistic growth potential. Apparently, not everybody had the same long term view for Fiore Gold as is needed in this case, the company now morphing into a long term growth production story instead of an exploration story, and a sell-off started immediately after opening of the markets:

The Fiore-GRP Deal: Giustra Builds Another Gold Producer

Pan Mine, Nevada

1. Introduction

In December 2016 I introduced Fiore Exploration, a new company backed by Frank Giustra, and it has been a relatively quiet 6 months. Fiore completed some drilling on the Pampas El Peñon project in Chile and an IP survey on the newly acquired Cerro Tostado.

But behind the scenes, things were in motion. Earlier this year, Fiore began exploring the idea of merging with GRP Minerals, a private company ramping up the PAN heap leach operation  in Nevada. GRP bought Pan and other Midway Gold assets for US$5.5M and spent another US$18 million on upgrading and restarting the operation. Midway had spent more than US$100 million constructing the Pan mine but in the end failed to execute. The demise of Midway Gold is a whole other story, one I will touch on later.

Set Up By Frank Giustra For Exploration Success: Fiore Exploration

Pampas El Penon; drilling

Introduction

With the recovering metals- and commodity sentiment in 2016 (although the Trump election (unexpected by many) and last rate hike were negative for gold and silver so far), a lot of influential groups and individuals in mining are setting up new ventures since the end of 2015 to position themselves the best they can for possibly the next big bull market in mining. One of these individuals is one of the most successful mining titans of our time: Frank Giustra. Having founded 5 (multi) billion dollar resource companies (for example Pacific Stratus Energy, the predecessor of Pacific Rubiales Energy, and Wheaton River, predecessor of Goldcorp and Silver Wheaton) and a multi billion dollar film studio (Lionsgate), he became a billionaire himself because of it. That wasn't it, as Giustra did some remarkable things before he started founding companies himself.

Wealth Minerals: Negotiating Its Way Into The World Class Maricunga Lithium Brine Project

Executive summary

  • Wealth Minerals is in the process of acquiring a part of Salar de Maricunga in Chile, a brine lithium project, by taking over Li3 Energy
  • The Maricunga project has been ranked as the 4th best brine project in the world
  • The local situation is complex, but CEO Henk van Alphen, COO Xiaohuan Tang and newly appointed executive director Marcelo Awad are respected, experienced and successful businessmen in China, Latin America and especially Chile, and are working out a possibly very interesting solution
  • With current developments in electric vehicles and energy storage fueling lithium prices to unprecedented levels, problematic or even absent production expansions, the lithium carbonate supply/demand situation seems constrained for many years to come, creating healthy market fundamentals for Wealth Minerals
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