Donner Metals Ltd. (TSX-V: DON) is a Canadian development and exploration company focused on base and precious metal projects in Québec. Donner’s flagship project is a partnership with Xstrata Canada Corporation in the Matagami Mining Camp covering both the current development of a new mine and on-going exploration activities. The project is located in the Abitibi region of central Québec and it is supported by Xstrata’s existing mine infrastructure, a highly experienced workforce and an operating 2,950 tonne per day mill. As well, the area is serviced by highway, power, airport, railway and town site infrastructure.
WARNING: Information contained in Donner Metals Ltd. (the “Company”) press releases, web site information and corporate displays, among others, may contain forward looking information and future oriented financial information as noted and described in specific detail below. The use of forward-looking information and forward-oriented financial information related to future performance of the Company carries risks typically associated with mining ventures as well as risks related to the Company’s ability to fund its share of financial obligations related to such activities. Such risks are discussed below.
The Company’s core project is the Matagami Project located in central Québec. Donner shares a participating interest with Xstrata Canada Corporation (“Xstrata”) in five separate joint ventures in this location.
By accessing this website and other Company information, you agree to be bound by the following terms and conditions:
Under no circumstances should any material in the Company’s press releases, web site information and corporate displays, among others, be construed as an offering of securities or of investment advice. The materials contained in the Company’s press releases, web site information and corporate displays, among others, constitute information only regarding Donner Metals Ltd. The reader should consult with his/her professional investment advisor regarding investments in securities. Junior public mining and exploration companies should be viewed as speculative investments. Such companies by nature carry a high level of risk. Anyone who cannot accept a risk of total and sudden loss of their capital should not own such securities. Speculators should also be aware that these stocks are subject to swings in price (both positive and negative) and liquidity that are not always related to the fundamentals of the underlying business.
Certain statements and/or graphics in the Company’s press releases, web site information and corporate displays, among others, constitute “forward-looking information” Forward-looking information is information that includes implied future performance and/or forecast information including information relating to, or associated with, exploration and or development of mineral properties. These statements or graphical information involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different (either positively or negatively) from any future results, performance or achievements expressed or implied by such forward-looking statements.
Forward-looking statements are identified by wording such as “scheduled (future sense)” “intend(s)”, “plan(s)” “expect(s)”, “believe(s)” “will” “estimate(s)”, “forecast”, “anticipate(s)”, “expect(s)”, , “may”, “should”, “goal”, “target”, “aim”, “may”, “would”, “could” or “should” or, in each case, the negative thereof, other variations thereon, comparable terminology or wording/graphical information that implies anticipated future results or deliverables.
You are cautioned not to place any undue reliance on any forward-looking statement.
Forward-looking statements or information related to Exploration.
Relating to exploration, the identification of exploration targets and any implied future investigation of such targets on the basis of specific geological, geochemical and geophysical evidence or trends are future-looking and subject to a variety of possible outcomes which may or may not include the discovery, or extension, or termination of mineralization. Further, areas around known mineralized intersections or surface showings may be marked by wording such as “open”, “untested”, “possible extension” or “exploration potential” or by symbols such as “?”. Such wording or symbols should not be construed as a certainty that mineralization continues or that the character of mineralization (e.g. grade or thickness) will remain consistent from a known and measured data point. The key risks related to exploration in general are that chances of identifying economical reserves are extremely small.
Forward-looking statements or information related to Matagami Infrastructure
The geological prospectivity of areas which surround, or are adjacent to, deposits from which current production is occurring does not imply that future discoveries will be made, nor does it imply that, should a discovery be may, it will be economically produced. Current production from Xstrata Canada Corporation’s wholly-owned Perseverance mine and future statements relating to use of existing infrastructure and future benefits of existing infrastructure are forward-looking with respect to the impact on new discoveries. The record of past production in terms of metal and/or produced resources does not provide any increased likelihood that new discoveries will be made or that new discoveries can be economically developed. Historical estimates (non NI 43-101 compliant), related to undeveloped deposits, do not provide any increased probability that new discoveries will be made or that new discoveries can be economically developed. Therefore, there is no certainty that new discoveries will be commercially viable based on existing infrastructure and comparison with current operations, past production or historical resources.
Forward-looking statements or information related to mineral resources
The Company has published measured, indicated and inferred mineral resources and proven and probable mining reserves for the Bracemac-McLeod Deposit that conform to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Under the definition of “Mineral Resource” (CIM Definition Standards on Mineral Resources and Mineral Reserves), a resources is “a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.” The later part of this definition implies a forward-looking statement.
Statements relating to “mineral resources” (measured, indicated and inferred) for Bracemac-McLeod involve estimates and assumptions that the mineral resources described exists in the quantities, continuity, grade and thickness predicted between known data points. The designation of mineral resources as “inferred mineral resource”, “indicated mineral resource” and “measured mineral resource” follow the definitions under the Canadian Institute of Mining, Metallurgy and Petroleum – Definition Standards on Mineral Resources and Mineral Reserves as referenced under NI 43-101 Historical resources, where noted, are qualified following guidelines under NI 43-101.
The likelihood of exploring for, discovering or developing a deposit on the Matagami Project is subject to many risks. External risks associated with mineral projects are fluctuations in metal prices, adverse government policy changes, and adverse developments in the financial markets generally. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are interdependent.
The Matagami Joint Ventures
Donner is a partner with Xstrata Canada Corporation in five joint ventures on the Matagami Project where mine development and exploration activities are conducted.
Bracemac-McLeod Feasibility Study: The feasibility study on the Bracemac-McLeod deposit, authored by Genivar Limited Partnership (“Genivar”) and Xstrata Canada Corporation – Xstrata Zinc Canada Division (‘Xstrata Zinc’), contains forward-oriented financial information and project timing assumptions. Details and risks related to the use of such information are discussed below.
Information contained in the Company’s press releases, web site information, corporate displays, and postings on “SEDAR”, among others contain forward-looking information and future-oriented financial information regarding results and financial projections contained in the feasibility study on the Bracemac-McLeod deposit. This study was produced by Genivar and Xstrata Zinc. The Perseverance Mine (wholly-owned by Xstrata) The Matagami mill complex is operated by Xstrata Zinc. Xstrata Zinc and its predecessors (Falconbridge Limited, Noranda Inc, among others) have been operating at Matagami since 1963.
The forward-looking information and forward-orientated financial information are:
Forecast mining resources and reserves are determined by standards governed under NI 43-101 and the experience of Xstrata Zinc as operators of the project. Measured and indicated resources and proven and probable mining reserves were prepared by Xstrata Zinc mining group. The proven and probable reserves calculated in the feasibility study includes two levels of confidence (measured and indicated based on density of drill hole intercepts). For the Upper Bracemac, Bracemac and Bracemac Key Tuffite zones, as well as the upper half of the McLeod zone, spacing of drill intercepts is approximately 25 metres, whereas the spacing of drill hole intercepts in the lower portion of the McLeod zone is at approximately 50 metres. The reader is cautioned that geometry of the mineralized zone and the distribution of grade within the zone may cause both the volume and grade of the mining reserve to vary (either positively or negatively) from the calculation under the feasibility study.Cut-off grade for mining reserves was established by natural cut-off (mineralized versus unmineralized rock) and on a net smelter return (NSR) basis. The use of an NSR cut-off is forward looking as it relies on future looking metal prices, mill recoveries and smelting and treatment charges. These are discussed below.Inferred resources for the McLeod Deep Zone and the West McLeod zone are reported in the feasibility study but are not a component of the financial analysis. The reader is cautioned that inferred resources have the lowest level of confidence under NI 43-101 and future upgrading of the resource or incorporation of these resources in future mine planning have not been considered under the feasibility study. There is no certainty that these resources will be mined due to proximity to underground infrastructure planned under the Bracemac-McLeod feasibility study.
Resources and reserves can be affected by obtaining grades different from expected grades, obtaining lower quantities of mineralization, encountering deposit geometries that vary from expectations and encountering higher than expected mine dilution rates.
Forecast capital costs under the feasibility study have been estimated by Genivar with the assistance of Xstrata Zinc. Cost estimates are based on expected capital charges and pricing with support from Xstrata’s recent experience with the development of their wholly owned Perseverance deposit which was developed between 2006 and 2008. Realized capital costs for the Bracemac-McLeod project can vary (either positively or negatively) on the actual realized costs of equipment and materials purchased, development advancement rate, and overall efficiency of the development process. Ground conditions in particular can profoundly impact capital costs.
Forecast operating costs are provided by Genivar and estimated on the basis of Xstrata Zinc’s experience with current mine and mill operations at Matagami. Variables which may affect operating costs (either positively or negatively) are mine and mill efficiencies, metallurgical variations as well as mine production rates, rates of mill throughput and transportation charges.
Forecast metal prices over the current 4 year life of mine for Bracemac-McLeod are based on industry consensus price based on published forecasts (Brook Hunt, Bloomberg and CRU); these forecasts do not necessarily reflect Xstrata Zinc’s vision of long-term commodity prices. Metal prices can have a profound effect (either positively or negatively) on the financial characteristics of the Bracemac-McLeod deposit as described under the base case analysis in the feasibility study. Constant metal prices are forecast over the life of mine, however these are expected to vary over the planned production period. Metal prices are not in the control of mine operations and are subject to changes in worldwide supply and demand.
Forecast mill recoveries are based on results of tests conducted at Xstrata’s Process Control Group in Sudbury, Canada. Parameters that may affect mill recoveries (either positively or negatively) are changes to expected mineralogical characterizes of ore from Bracemac-McLeod and mill efficiencies.
Forecast treatment charges are based on industry consensus of anticipated treatment and refining charges (“TC/RC’s”) over the life of mine (Brook Hunt, Bloomberg and CRU); theses forecasts do not necessarily reflect Xstrata Zinc’s vision of long-term treatment and refining charges. TC/RC’s can vary on the basis of realized TC/TR contract charges over the life of mine which are negotiated on an annual basis.
Forecast exchange rates are forecast over the current 4 year life of mine for Bracemac-McLeod on industry consensus rates and on published forecasts (Brook Hunt, Bloomberg and CRU). Exchange rates are not in the control of the mine and will fluctuate on the basis of forces external to those controlled under the mine operation; theses forecasts do not necessarily reflect Xstrata Zinc’s vision of long-term foreign exchange rates.
Forecast mine production rates are determined by Genivar based on the resource estimate and block model provided by Xstrata. Ground conditions, geometry of sulphide mineralization and changes in development patterns can impact mine production rates.
Forecast impacts of permitting on the development and mining of Bracemac-McLeod are determined by Genivar with input by Xstrata Zinc. Permitting requirements are not expected to change over the life of mine based on current regulations. However, changes in environmental and other laws and regulations, may impact construction and mining which could affect capital and operating costs. Adverse government policy changes with respect to mineral exploration and exploitation, including changes to taxes or royalties will negatively impact the project.
Note: Fluctuations in prices and unfavorable currency exchange rates constitute uncontrollable parameters.
The feasibility study on Bracemac-McLeod contains forecasts that can impact (either positively or negatively) the financial characteristics of the Bracemac-McLeod deposit as assessed under the feasibility study in terms of expected mine life, projected cash flows , projected internal rate of return, and realized value in relation to calculated Net Present Value.
Forward-looking statements or information related to Donner’s ability to finance its share of costs under the Matagami Joint Ventures pursuant to the Matagami Lake Joint Venture Agreement with Xstrata Canada Corporation (Xstrata)
The Company is currently operating under the Matagami Lake Option and Joint Venture Agreement (MLOJVA) relating to its participating interest in five joint ventures with Xstrata. Donner is required to fund its share of the joint venture expenditures. The funding requirements are subject to many risks such as:
Substantial expenditures are required to explore for mineral reserves;
The junior resource market, where the Company raises funds, is extremely volatile and there is no guarantee that the Company will be able to raise funds as it requires them;
Although the Company has taken steps to verify title to the mineral properties it has an interest in, there is no guarantee that the property will not be subject to title disputes or undetected defects; and
The Company is subject to the laws and regulations relating to environmental matters, including provisions relating to reclamation, discharge of hazardous material and other matters. The Company conducts its exploration activities in compliance with applicable environmental protection legislation and is not aware of any existing environmental problems related to its properties that may cause material liability to the Company.
In specific relation to participation by Donner Metals in the construction of the Bracemac-McLeod mine or other capital intensive programs, Donner’s ability to finance its share of the project can be impacted by negative changes to forecast assumptions under the feasibility study and by adverse developments in the financial markets generally that may result in Donner’s inability to fund/finance exploration, mine construction, development and operations.
Although the Company believes that the expectations expressed in such forward-looking information and future-oriented financial information are based on reasonable assumptions available to management at the time the assumptions were made, such statements or information do not guarantee future performance success and no assurances can be given as to future results, levels of activity and achievements. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may impact realized results. Actual results or developments may differ materially from those in the forward-looking statements/information and may require achievement of a number of operational, technical, economic, financial and legal objectives. The forward-looking information and future-oriented financial information published by the Company are expressly qualified by this cautionary statement. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Cautionary note to U.S. investors – This web site contains information about adjacent properties, specifically in relation to the Perseverance Deposit (owned 100% by Xstrata Zinc), on which we have no right to explore or mine. We advise U.S. investors that the SEC’s mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on other properties are not necessarily indicative of mineral deposits on our properties. In addition, we advise that the Company is not an SEC registrant.
We disclose additional information regarding resource estimates and feasibility studies in accordance with NI 43-101. These disclosures can be found on our website and on SEDAR.
– See more at: https://www.visualcapitalist.com/portfolio/donner-metals-company-snapshot#sthash.EJptEXr2.dpuf
The World’s Gold and Silver Coin Production vs. Money Creation
In 2019, the value of global money creation was over 500 times higher than the world’s gold and silver coin production combined.
Global Gold & Silver Coin Production vs. Money Creation
Note: Data has been updated to correct a previous calculation error pertaining to Japanese Yen money supply.
Both precious metals and cash serve as safe haven assets, intended to limit losses during market turmoil. However, while modern currencies can be printed by central governments, precious metals derive value from their scarcity.
In this infographic from Texas Precious Metals, we compare the value of the world’s gold and silver coin production to global money creation.
Total Production Per Person, 2019
We calculated the value of global currency issuance in 2019 as well as precious metal coins minted, and divided by the global population to get total production per person.
Throughout, global money supply is a proxy based on the 5 largest reserve currencies: the U.S. dollar, Euro, Japanese Yen, Sterling Pound, and Chinese Renminbi.
|2019 Production||Ounces||Dollar Value||Dollar Value Per Person|
|Global Gold Coins||7,204,982||$10.9B||$1.42|
|Global Silver Coins||97,900,000||$1.8B||$0.23|
|Global Money Supply||$4.3T||$556.33|
All numbers are in USD according to exchange rates as of December 31 2019. Gold and silver values are based on the 2019 year close price of $1,510.60 and $17.90 respectively.
The value of new global money supply was 390 times higher than the value of gold coins minted, and 2,400 times higher than silver coins minted.
Put another way, for each ounce of minted gold coin, the global money supply increased by more than $593,000.
Change in Annual Production, 2019 vs. 2010
Compared to the start of the decade, here’s how annual production levels have changed:
|Global Silver Coins (oz)||95,900,000||97,900,000||2.1%|
|Global Gold Coins (oz)||6,298,331||7,204,982||14.4%|
|Global Money Supply (USD)||$2,936,296,692,440||$4,268,993,639,926||45.4%|
Annual increases to global money supply have increased by half, far outpacing the change in the world’s gold and silver coin production.
Even more recently, how has production changed during the COVID-19 pandemic?
The COVID-19 Effect
In response to the global pandemic, central banks have enacted numerous measures to help support economies—including issuing new currency.
The global money supply increased by more than $6.8 trillion in the first half of 2020. In fact, the value of printed currency was 930 times higher than the value of minted gold coins over the same timeframe.
Investors may want to consider which asset is more vulnerable to inflation as they look to protect their portfolios.
Want to learn more? See the U.S. version of this graphic.
Visualizing U.S. Money Supply vs. Precious Metal Production in the COVID-19 Era
Amid trillions in COVID-19 stimulus, this graphic compares new U.S. dollars printed to U.S. precious metal coin production.
U.S. Precious Metal Coin Production in the COVID-19 Era
Gold and silver have played an important role in money throughout history. Unlike modern currencies, they can’t be created out of thin air and derive value from their scarcity.
In the COVID-19 era, this difference has become more prominent as countries print vast amounts of currency to support their suffering economies. This graphic from Texas Precious Metals highlights how the value of U.S. precious metal coin production compares to U.S. money creation.
Year to Date Production
In this infographic, we have calculated the value of money supply added as well as bullion minted, and divided it by the U.S. population to get total production per person. Here’s how the January-September 2020 data breaks down:
|Total (Ounces)||Dollar Value||Dollar Value Per Person|
|U.S. Gold Ounces||826,000||$1.6B||$4.79|
|U.S. Silver Ounces||22,261,500||$544M||$1.65|
|U.S. Money Supply||$3.4T||$10,250.16|
Gold and silver dollar values based on Oct 5, 2020 spot prices of $1,915.93 and $24.47 respectively.
The value of new U.S. money supply was more than 2,100 times higher than the value of new gold minted. Compared to minted silver, the value of new U.S. money supply was over 6,000 times higher.
Production Per Day, Per State Over Time
Here’s how production has changed on a per day, per state basis since 2010:
|2010||2020 YTD (Jan-Sep)||Min-Max Production, 2010-2019|
|Minted Gold Coins||78oz||61oz||12oz-78oz|
|Minted Silver Coins||1,945oz||1,631oz||899oz-2,633oz|
Year to date, U.S. precious metal coin production is within a normal historical range. If production were to continue at the current rate through December, gold would be above historical norms at 81 ounces and silver would be within the normal range at 2,175 ounces.
The issuance of U.S. dollars tells a different story. Over the last nine months, the U.S. has already added 400% more dollars to its money supply than it did in the entirety of 2019—and there’s still three months left to go in the year.
A Macroeconomic View
Of course, current economic conditions have been a catalyst for the ballooning money supply. In response to the COVID-19 pandemic, the U.S. government has issued over $3 trillion in fiscal stimulus. In turn, the U.S. Federal Reserve has increased the money supply by $3.4 trillion from January to September 2020.
Put another way, for every ounce of gold created in 2020 there has been $4 million U.S. dollars added to the money supply.
The question for those looking for safe haven investments is: which of these will ultimately hold their value better?
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