This week the inflation print rattled markets as inflation has now officially hit a 31-year high as consumer prices jumped 6.2% in October. Wage gains have already been completely wiped out as well due to rampant inflation.
Inflation continues to be very sticky and is only facing more tailwinds as the world is currently in the early stages of a global energy crisis.
The cost of electricity has seen its biggest jump since 2009, affecting all American households and energy prices ranging from fuel oil, propane, and firewood have skyrocketed.
This inflation reading has sent gold back to 5-month highs, which signals that investors do not expect the Federal Reserve to do much to tackle inflation right now.
Frankly, they can’t. The Federal Reserve is trapped due to record levels of debt at a federal and household level. America has never been this much in debt. The Federal Reserve is also holding long-dated securities on their balance sheet, which makes this a tough situation in terms of tools to tame inflation, particularly raising interest rates.
Since inflation was reported, the gap between longer-term and shorter-term treasury’s yields is shrinking, which signals that tough economic times are ahead from a historical perspective.
I continue to be very bullish on gold long-term as more and more countries look to gold to protect their sovereignty in a time of unprecedented money printing, inflation and shortages.
Denarius Silver: (TSX-V: DSLV)
I continue to be very excited about the Denarius story as I believe this company is significantly under the radar in the marketplace.
The company’s flagship asset is the Lomero-Poyatos deposit which is situated in the northeast part of the Spanish/Portuguese Iberian Pyrite Belt in the Huelva Province of Southern Spain.
The deposit hosts billions of dollars of minerals in the ground which are:
The project is situated in a famous mining belt that hosts the largest concentration of massive sulphides in the world.
Interestingly, the massive sulphide and semi-massive sulphide zones at Lomero-Poyatos are significantly enriched in gold which is a key distinction of this project considering gold grades at the deposit have proven to be some of the highest in the belt.
The company has commenced its first diamond drill campaign at the project which will consist of 81 drill holes, including 17 extension holes, for a total of approximately 23,500 meters designed to validate some selected historical holes drilled within the existing mine and then conduct a 50×50 meters in-fill drilling program in the lower levels of the same mine.
What makes Denarius so appealing today is its present valuation, especially when you compare it vs its peers:
The story is still very young, and I believe it has significant rerating potential as it plans to publish an updated resource estimate in the early part of 2022 and a PFS in late 2022 after it completes a total of 60,000 metres of drilling.
The project is very close to MATSA, Lundin Mining and First Quantum Minerals, which could be potential partners in terms of fast-tracking the deposit into production in the future.
I will be doing an editorial in the coming weeks as I will do more of a deep dive into the company’s two other exciting assets, but today, I am joined by the company’s CEO once again, Serafino Iacono, to provide Gold Telegraph readers with an update on the company:
Thank you, Serafino, for taking the time once again to provide Gold Telegraph readers with an update on Denarius.
Can you provide a bit of a general update and touch on the recently commenced drill programs at the Lomero-Poyatos deposit and the Guia Antigua Project?
Our confirmation drilling program commenced at Lomero-Poyatos on October 20th, 2021. So far, we are encouraged by the visible sulphides we are seeing in the drill core as it is confirming that the mineralization is like the historic drilling on the property. We expect to have the assays back by the end of 2021.
In August 2021, we commenced our infill and exploration drilling campaign at Guia Antigua and we expect to have some results by the end November 2021.
The Iberian Pyrite Belt has seen over two billion tons of ore extracted. Gold grades at the Lomero-Poyatos Project are some of the highest in the belt… can you touch on when investors can expect to see some news releases of drilling results at the project?
We expect to have some drill results from Lomero in late 2021 into the beginning of January 2022. The mineralization has met expectations, and we hope they will be inline with the historical grades.
Does the company still plan on completing a pre-feasibility study on the project in the next 18 months? Once the prefeasibility is complete, can you touch on the already existing infrastructure in the area that can help fast-track a production decision?
Our plans are to complete a PFS once we have completed the 60,000-meter drill campaign in mid 2022. The Lomero-Poyatos property is 14km from the Atalaya Mine owned by Rio Tinto and 6 km away from the Matsa mine which was recently acquired by Sandfire Resources from Australia for$1.9 billion euros.
Infrastructure in the region is world class, the project has access to high-quality water, power and highway infrastructure, a reliable local workforce and services, as well as proximity to several high-capacity processing facilities and the port at Huelva. In my opinion, it is one of the best mining operations I have seen in many years.
Is the company still planning on publishing an updated resource in the early portion of 2022 at Lomero-Poyatos?
Once we have completed the 23,500 meters of confirmation drilling at Lomero-Poyatos it is our goal to do an updated resource at today’s all mineral prices.
Finally, Serafino, I always like asking my guests about their current thoughts on the market. Do you think we are nearing a commodity super cycle that many industry leaders are calling?
I believe that we are going to be in a super cycle for the next 15 years until we can decide whether to go fully electric worldwide.
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