Inflation continues to swirl as supply chains worldwide continue to feel pressure due to the effects of COVID-19.
In fact, yesterday it was reported that U.S consumer prices posted their biggest jump in 8 years. The United States Bureau of Labor Statistics reported that its Consumer Price Index for all Urban Consumers rose 0.6 percent last month, after rising 0.4 percent in February.
This comes after more and more central banks step forward to publicly endorse and remind the general public of the importance of gold.
Hungary’s central bank raised its gold reserves to 94.5 metric tons from 31.5 tons, citing “long-term national and economic policy strategy objectives.”
The central bank went on to say in the report:
“The appearance of global spikes in government debts or inflation concerns further increase the importance of gold in national strategy as a safe-haven asset and as a store of value. As a result of this decision,” the press release said.
Many tailwinds persist for gold, especially for companies such as Gold X Mining due to its torque with its mineral wealth in the ground. Recently, the company announced an executed agreement with Gran Colombia which will create a mid-tier Latin American focused gold producer if it is approved.
Gran Colombia is an excellent company that has continuously showcased high margins and reliable guidance. In fact, yesterday, Gran Colombia announced that it is on track to meet its full-year guidance at its four operating mines.
I had the privilege to catch up once again with mining legend Paul Matysek, for a general update on Gold X as it enters into a stage of transformation:
Hi Mr. Matysek, thank you for taking the time to give the Gold Telegraph readers another update on Gold X.
Clearly, lots of things have transpired since the last time we spoke. Let’s start with the executed arrangement for Gran Colombia to acquire Gold X to develop a mid-tier Latin American-focused gold producer.
Can you go over the deal and why it made sense?
Thank you, Alex. Its always great to catch up with you.
Yes, we have been very busy and of course we are very excited about the transaction with Gran Colombia Gold to create a mid-tier LATAM gold producer. The deal made a lot of sense for both companies. I’ll start with Gold X. We saw this as a major benefit to our shareholders for a few reasons. Shareholders receive a 44% premium based on Gold X’s 20 day VWAP as of March 12, 2021. They continue to receive the upside of the Toroparu Project but they do so in a dividend-paying vehicle with increased balance sheet strength, access to capital and free cash flow to fund development. On top of this, the deal provides access to Gran Colombia’s in-house development and operational capabilities and diversified ownership in Gran Colombia’s world-class Segovia Gold Mines.
For Gran Colombia the deal represents an opportunity to become a major player in South America by adding a substantially de-risked growth project to their portfolio in a mining friendly jurisdiction. The project shows great alignment with Gran Colombia’s geographic, development and operational competencies.
If the deal is approved, the Toroparu project will undoubtedly turn into a key asset for Gran Colombia, representing tremendous growth potential due to the size of the deposit.
I know this is forward-looking, but can you touch on the resource growth and exploration potential for Toroparu? Will exploration and growth still be pursued aggressively if the deal closes, given the enhanced balance sheet?
Absolutely, Gran Colombia has the operational and technical know-how to get the most out of
1) the known mineable ounces and 2) the increasing potential resource along the 3km Toroparu trend, which has been showing significant promise with the new structural mapping by HPX and Nordmin of high-grade gold bearing structures. In particular, the reworking of the deposit geologic model provides a strong basis for Gran Colombia to extend resources and develop the underground mining potential of Toroparu. This is addition to relatively under explored 538 km2 surrounding land package.
The project is transitioning to a team with expertise in complex underground mine development who will continue to grow this considerable and consistent resource as they have already done at Segovia.
How is the on-going drill program going? I noticed the company provided an update on the geologic model on March 22nd.
Can you provide a bit of an update on phase 2 progress to date and when the program is expected to be completed?
The proposed drill program has been a resounding success. The results of Phase I drilling were detailed in our February 23, 2021 news release and subsequently a follow-up news release on March 22, 2021 updating the geologic model. This analysis has led us to several preliminary conclusions:
- The NW/SE & E/W high-grade mineralized structures are separate mineralized domains that can be modeled independently from the lower-grade mineralized domains surrounding the structures in the Toroparu Main Pit.
- The High-Grade Mineralized Structures demonstrate continuity for more than 2 km to the NW potentially increasing resources across a 3 km strike length that are potentially amenable to both open pit and underground mining methods.
- Continuity of very-high (5 g/t to > 20 g/t) gold bearing structures have been defined at the intersection of cross-cutting NW/SE and E/W structures over a distinct and repeatable pattern that occurs over the 3 km strike length drilled to date.
- An updated open pit and maiden underground mineral resource estimate will result from the Phase 1 & 2 drill programs and revised geologic modelling. The updated MRE will highlight the extent to which additional resources outside of the historic open pit (along strike and at depth) will potentially improve the overall Toroparu project.
Gold X will complete the 10,000-meter Phase 2 drill program drilling in April.
I was fascinated to see such high-grade mineralized pipes (5g/t to more than 20 g/t of gold over potentially mineable widths)
After the phase 2 program is complete, when does the company plan to publish an updated mineral resource estimate which will combine the higher grade and lower-grade mineralized domains?
Following the completion of this drill program in mid-April, Gold X is targeting the completion of an updated Mineral Resource Estimate possibly in May.
Now, Mr. Matysek, you have been in the mining and gold space for a very long time and have been incredibly successful.
I would love to know your thoughts on the overall market and the importance mining will play in the years to come.
As far as mining is concerned, my thoughts on the overall market remain very positive. It is a cyclical industry but there are always emerging trends creating bull markets to keep a close watch on. When we talk about the EV revolution and the age of battery metals, I believe many people underestimate the amount of resources needed to meet the criteria of this new world. I believe the impact this will have on both base and precious metals will be profound and do believe we are looking at a super cycle scenario for these metals. When it comes to Gold specifically, I view the current market as a fantastic buying opportunity. We are all familiar with the debt creation that has been enacted by government treasuries and monetized by the central banks which I believe will be inflationary over the medium term. It is my belief that gold is the best store of value to combat this inflation..
Thank you for your time Mr. Matysek, I am looking forward to catching up soon.
Thank you, Alex. It was wonderful speaking with you.
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