As the global economy continues to deal with inflationary pressures, volatile markets, and a full-blown energy crisis, there continues to be unprecedented amounts of uncertainty around the world.
The recession bells are ringing worldwide as numerous economies contract, interest rates continue to increase, and central banks are still dramatically behind the curve.
China trimmed its key lending rate again last Monday as the country is desperate to try to revive its economy, which is in the middle of a dramatic cooldown in its property market as developers continue to face severe debt and solvency issues.
Interestingly, it was reported last week that China’s gold imports from the major refining hub of Switzerland jumped to the highest in more than five years, which signifies that demand continues to be strong even as the economy faces major headwinds.
In fact, gold has historically been an excellent hedge against economic downturns, as during the last three recessions, its performance has countered that of the S&P 500.
In addition to demand out of China, central banks around the world continue to showcase its appetite as they have purchased 270 tons of gold so far in 2022.
The Governor of the Polish National Bank, Adam Glapiński, recently touched on why central banks are buying the precious metal:
“Gold is the safest reserve asset: it diversifies geopolitical risks and is an anchor of confidence, especially in times of stress and crisis.”
Denarius Metals (TSX-V: DSLV)
A company I have been following for a while is Denarius Metals which continues to focus on advancing its Lomero-Poyatos project located in Spain.
The project is located in the Iberian Pyrite Belt, which hosts the largest concentration of massive sulfides in the world. Mining activity on this belt goes back thousands of years. Currently, over 250 deposits are in the belt.
The project is situated in an area with robust regional infrastructure as numerous high-capacity processing facilities are close to the deposit.
One of the most exciting aspects of this deposit is its grade.
The Lomero-Poyatos deposit has the highest gold grades in the Iberian Pyrite Belt, with values of 2.0 meters @ 14.1 G/T gold and 0.55m @ 16.84 G/T gold being returned from CMR/Newmont drill holes in 2007.
The company recently completed its in-fill drill program.
To date, Denarius has completed approximately 22,543 meters of drilling in 75 drill holes, including the twinning of historical drill holes.
The validation and in-fill phases, totalling 66 holes and representing 81% of the initial program, are now complete. There are three drill rigs on site, continuing with the resource expansion portion of the initial program.
In addition to the diamond drilling, the company has received preliminary results from the recently completed geophysical surveys that confirm the potential to extend the known Lomero-Poyatos deposit down-dip and to find new deposits along strike to the east in two zones.
The deposit is already very large. The deposit hosts billions of dollars of minerals, a resource upgrade is expected in the coming weeks, and the company plans to remain very active for the remainder of the year. The company is incredibly cheap given its scale, location and work planned in the coming months which should deliver numerous catalysts.
I was pleased to be joined by Serafino Iacono, the CEO and Chairman of Denarius to give Gold Telegraph readers an update on the company.
Thank you, Serafino, for providing the Gold Telegraph readers with another update on Denarius.
How is drilling progressing at the Lomero-Poyatos project in Spain alongside the Guia Antigua Project in Columbia? Any updates you can share with our readers?
Hi Alex, Great to be back with you and thank you to your audience for following our story. Despite turbulent metals markets for base and precious metals it has been a very strong start to the year for Denarius with some fantastic results from our drilling campaign at The Lomero Project which has become the company’s flagship asset. The company’s initial 23,500 meters drilling campaign at Lomero commenced in October 2021 and is continuing in 2022 with three drill rigs currently in operation.
Can you touch on the Lomero-Poyatos project’s incredible size? It seems the general marketplace is sleeping on the potential at the project and where it is situated as the Iberian Pyrite Belt hosts the largest concentration of massive sulphides in the world.
Does the company plan to update a new resource estimate in the coming months?
Yes, we are incredibly pleased to be exploring and developing a mining project in this fantastic jurisdiction which has mining operations dating back to the Roman Times. The Lomero project itself is proving to be a very mineral rich asset with fantastic grades consistent with the deposits in the Pyrite belt; however, the differentiator at Lomero is the Gold grade is quite high for a VMS Deposit. Lomero has a historical resource estimate of 20.93 MT of 3.1 g/t gold, 62 g/t silver, 0.9% copper, 0.9% lead and 3.1% zinc. It’s the best of both worlds and its growing. The project remains open at depth and along strike. Some results from the campaign so far include 1.51% CU, 0.40% PB, 2.27% ZN, 43.83 G/T AG AND 4.71 G/T AU OVER 20.60 METERS
The company plans to have an updated 43-101 compliant resource statement once the first phase of drilling is complete in the second half of this year.
The company also expects to have results on metallurgical testing in the second half of this year.
Shifting gears, the company reported in July that it was reviewing the geology and structural data at Guia Antigua better to understand the geology of the historical high-grade shoots.
How is that process going, and what are the plans for this project for 2022?
Yes, we have done a lot of exploration work at Guia Antigua over the past year and have an active drilling campaign at the property with results expected very soon. The Segovia district of Colombia is a fantastic area to be exploring, next door to GCM Mining’s flagship operations in very rich gold and silver territory. This project was the company flagship, until the company acquired Lomero. We are still very excited about the potential high-grade shoots that lay beneath the surface. Results at Guia Antigua have been very encouraging so far and we expect to have a formal update on the campaign very soon.
For new readers, can you provide a brief overview of the Zancudo project?
Yes, The Company also owns the Zancudo Project in Colombia, which is a high-grade silver-gold project within the Titiribi Mining District.
I have been highlighting to many of my readers that commodity stockpiles are nearing record lows, which does not help the surging inflation we see worldwide.
What is your current take on the commodity space, notably metals?
You’re spot on Alex. I have been saying for some time that I believe we are in the early stages of a commodity super cycle. I believe it’s going to be a very prolonged run for both precious and base metals. Base metals, obviously, are going to provide the building and innovation this company requires for a sustainable future. The electrification of everything requires a lot of mining. Gold, as your audience knows best, is the best hedge against poor monetary policy and a decline in global currencies. We are happy to have projects that offer the best of both worlds.
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