RVR dropped -20.7% on the day of that report (last Friday, from 14.5c to 11.5c), but have risen +8.7% (or 1 cent) today on the back of this announcement: 20-Jan-2020: Red River hits 67% zinc equivalent at Liontown. And they've had other positive announcements recently, including:
06-Dec-2019: High Grade Gold at Curry's Block
I have a smallish position in RVR. It's larger than my NCZ position, but smaller than my position in S32 or SOL (who also both also own Australian zinc mines). Keep the position sizes appropriate to the risks. NCZ is the the highest risk (of going to zero). RVR, while producing less zinc than the others at this point in time, are debt free with a cash balance of $11.9 million plus financial assets of $12.9 million (cash backed security bond deposits) as at 30 December 2019. They also have a US$10m working capital facility that remains undrawn. They also have lower costs than NCZ and high zinc grades at Thalanga. RVR also have some promising gold, silver and antimony projects that they own, which may well result in them becoming a multi-commodity-producer in the future similar to what IGO did. IGO went from being a zinc miner (predominantly) to now being a significant nickel miner with a 30% interest in the high-grade Tropicana gold mine. Zinc prices were down 9% over 2019 and treatment (smelting) charges rose a LOT, making zinc barely profitable for a number of smaller players (and still unprofitable for some - like NCZ because of their higher costs), however RVR are doing OK. Small, but doing well considering the headwinds they have faced. Even if zinc falls further, they have that cash buffer and the undrawn working capital facility which provides a significant safety net for them. And they're busy. They are finding more high-grade zinc (as today's announcement highlights) and they have other projects that they are progressing. I think RVR presents as a good risk/reward trade-off for me, and I've made a small investment in RVR shares (at 12.5c).
01-July-2020: Red River builds gold portfolio at Thalanga
Red River Managing Director Mel Palancian said: “In parallel with plans to restart gold production at our Hillgrove project in NSW this year, we are working to maximise our exposure to gold at Thalanga, where we can produce gold in addition to our ongoing base metals operations. As part of that strategy, we have targeted areas of known gold mineralisation in the Thalanga region, and both the Toomba and Don projects fit that criteria with historical gold production and exciting prospects for follow-up. Our exploration team has commenced exploration activities at Toomba and is now planning a work program for the remainder of CY2020.”
Red River Resources Limited (ASX: RVR) is pleased to announce it has been granted the Toomba Project (EPM 27357) and applied for the Don Project (EPMA 27520) near its Thalanga Operations in northern Queensland as part of its strategy to maximise exposure to gold. Small-scale historical gold mining activities have occurred in both project areas, which are 20-30km northwest of Thalanga, with high-grade gold mineralisation (hosted in mesothermal quartz veins) at multiple locations in the project areas.
Exploration by previous tenement holders confirmed the presence of high-grade gold mineralisation in multiple identified vein systems at the Toomba Project (Toomba Old Workings, Toomba East, Central and Lady Barrington) and the Don Project (Don and Don SW).
China Yunnan Copper completed nine reverse circulation drill holes at the Toomba Project in 2008/2009, which confirmed the presence of a laterally extensive mesothermal vein system, with PC005 returning an excellent intersection of 2m @ 26.5 g/t Au and 43 g/t Ag from 43m down-hole at the Toomba Old Workings. This result was not followed up and represents a high priority exploration target for Red River.
Toomba Exploration and Mining History
Operations at the Toomba Mine (Toomba Old Workings) commenced in 1889, and several shafts were sunk, one to a depth of 130 feet. The workings were located on a fissure vein in granite, which was traced for about 450m on the surface. The fissure ranged from 30cm to 1.2 metres in thickness, consisting of quartz with pyrite, galena and sphalerite. Gold assays ranged from 15 dwt (pennyweights) to one ounce per ton. Total output is recorded as 335 ounces from the Toomba Mine (QLD Mines Dept 1936).
Toomba Project Area Geology and Mineralisation
Previous rock chip sampling by Mt Stewart Gold/China Yunan Copper between 2005 and 2010 produced highgrade gold (average gold value of 9 g/t Au) values with samples also returning results of up to 128 g/t Ag, 0.7% Cu, 3.4% Pb and 4.8% Zn.
The Central Vein is a zone of veining and veinlets seen in outcrop, float and historic exploration trenches for more than 400m with a further occurrence 800m to the north. Rock and chip sampling returned assay values of up to 9.65g/t Au.
The Toomba East Vein Zone strikes for more than 300m and has been mapped as a trend of small pits and exploration trenches with coincident area of sulphidic quartz veinlets as float on the surface. Samples returned maximum results of up to 6.25 g/t Au, 68 g/t Ag, 1.25% Pb and 0.15% Zn.
The Lady Barrington Vein has been exploited by a deep shaft and strikes for approximately 200m. Rock chip samples returned values to 8.81 g/t Au, 6 g/t Ag, 0.57% Pb and 0.18% Zn.
China Yunnan Copper (CYC) completed nine reverse circulation (RC) holes in 2008/2009 testing vein systems at the Toomba Project. Six RC holes (643m drilled) tested the Toomba Old Workings, two RC holes (215m drilled) tested the southern portion of the Central Vein structure and three RC holes (340m drilled) tested the Toomba East Vein.
Three RC holes (PC005, PC006 and PC007) tested the northern portion of the Toomba Old Workings. PC005 was designed to test the structure beneath the northern workings. PC005 intersected a quartz vein at 43 metres down hole, with a down hole width of approximately 1.3m. The intersection returned an excellent assay result of 2m @ 26.5 g/t Au, 43 g/t Ag, 0.4% Cu, 0.9% Pb and 1.8% Zn.
PC0006 was drilled 50 metres to the south (from PC005) along strike and under more old workings and an outcropping zone of veinlets hosted in sericite altered granite. PC006 intersected a 5m wide zone of quartz veining from 47m to 52m downhole. The maximum gold assay was 1m @ 0.27 g/t Au and the main vein zone assay up to 0.19 g/t Au.
PC007 was drilled a further 116 metres south along strike under old workings. PC007 intersected a solid zone of vein quartz from 37m to 42m downhole. The main vein assayed to only 0.4 g/t Au and the best result came from the hanging wall veining (0.55 g/t Au).
The CYC drilling confirmed the presence of high-grade gold mineralisation at in the northern section of the Toomba Old Workings in a laterally extensive mesothermal vein system. This drilling has not been followed up and the intersection in PC005 is still open down dip and to the north.
Don Project Exploration and Mining History
Historical mining activity in the Don Project area was limited to the Don and Don SW mines. At the former, historical records indicate a shaft was sunk on the Don reef to a depth of 53m and about 0.75m wide. Some stoping was undertaken at the 46m level and back to the 18m level. The ore crushed assayed about 1 oz Au. In 1935, ore from the surface was crushed and assayed at around 15 dwt (pennyweight, where 1 penny weight = 1.56 g/t) Au.
Don Project Area Geology and Mineralisation
Gold mineralisation at the Don deposit is hosted by a 0.4m to 2.0m thick quartz vein that extends over 250m, striking NNW with an average dip of 75° to the WSW. Several small pits expose an en échelon array of smaller quartz veins on the eastern side of the main vein, in an overall N-S zone. Historical samples of mineralised quartz vein material taken from mullock heaps contained between 1 to 3% galena-chalcopyrite-pyrite-bornite and returned assays up to 54.7 g/t Au.
The Don SW workings, about 600m SW of the Don Workings, extend over a N-S trend of approximately 400m. The main mineralised quartz vein observed at surface, extends over 270m, is 0.4-1.0m wide, strikes 345° and dips WSW at 70° to 80°. At the northern end of the reef, a set of shallow pits trace another quartz vein with a strike of 350° over a length of 180 metres. Historical sampling of mineralised quartz taken from mullock heaps contained 3-6% galena-chalcopyrite-pyrite-bornite, returning assays of up to 9.6 g/t Au.
At least five percussion holes were drilled by Rowe Drilling in 1992-3, from the west, but no company records of the drilling are available. It is understood that drilling was undertaken by prospectors on a speculative basis.
Red River has commenced exploration activities at Toomba (mapping, sampling) to be followed up by trenching to better define the extent of the vein systems prior to drilling. Upon grant of the Don tenement (expected shortly), Red River will commence similar activities.
--- click on link at the top of this straw for the full report which includes a number of useful diagrams, charts and photos of the area and the old workings ---
Disclosure: I hold RVR shares, and while I hold them primarily as a good zinc exposure, I very much like that they are taking advantage of a high gold price to diversify into gold production as well as zinc and other base metals production.
30-June-2020: RVR Produces Gold Concentrate from Thalanga
RVR produces gold concentrate from Thalanga
Base and precious metals producer Red River Resources Limited (ASX: RVR) is pleased to announce that the gold-rich historical tailings at Red River’s Liontown Project have been processed through the Thalanga Mill to produce a saleable gold concentrate.
Approximately 600 tonnes of concentrate containing approximately 1,300ozs gold have been produced with final reconciled assays are pending.
The Liontown Tailings were reclaimed and transported to Thalanga during April and May and campaign processed through Thalanga during June. Whilst Thalanga was treating the Liontown Tailings, the mill temporarily ceased processing the polymetallic ore from Far West. Underground mining operations continued at Far West.
Once the Liontown Tailings processing was completed, the Thalanga Mill reverted back to producing copper, lead and zinc concentrate from the Far West ore.
Red River Managing Director Mel Palancian said, “Processing the Liontown Tailings to produce a saleable gold concentrate is an excellent result for Red River. The Liontown Tailings would have been moved during development and mining activities at the Liontown Project, and by doing it now, it allowed us to take advantage of the current high gold prices”.
--- click on link above for the full announcement including quite a few photos ---
Disclosure: I hold RVR shares.
Zinc project was previously valued by market at ~$100m market cap.
They then purchased gold asset @ $4m valuation for consideration in scrip. Deemed issue price at 17c per share.
Price of gold at time of purchase was close to AUD$2000 /oz
It is now trading at almost AUD$2500 /oz and trending higher.
Valuation on sum of parts is basically, Zinc project and assets at 30% of recent market valuation, with free gold project in rising POG environment.
With team who have demonstrated getting projects quickly into production in past.
edit: thanks for the feedback and comments on my incorrect pricing Bear77. Have updated to correct.
A late night comment on Strawman to have it match my portfolio. Alas my buy orders keep failing as price races off!
18-June-2020: I hold Red River Resources (RVR) shares and I like them a lot. Good management. Low cost Zinc mining at Thalanga and now diversifying into Gold and Antimony. There's a lot to like. They just need to get through this period of low zinc prices where they could be struggling to maintain profitability. They would be skirting around breakeven I would expect right now. They are in good shape and I think they WILL survive, and then thrive when the zinc price rises again, which is why I hold them (and I like the new gold exposure too).
03-March-2020: From MiningNews.net: https://www.miningnews.net/events/news/1382091/zinc-to-not-stink-too-much-longer-…-maybe
Zinc to not stink too much longer … maybe
WHILE there looks more pain to come, there are hints of some light at the end of a long tunnel for terribly battered zinc producers.
Analyst Ryan Cochrane told the PDAC Convention in Canada that he's now "quite positive" on zinc having been bearish on the galvaniser when he presented two years ago.
That bearishness proved accurate given the zinc price fell about 40% from February 2018 to December 2019 as demand fell for various reasons including, most particularly, China's general economic transition from a heavy infrastructure spend.
And since the coronavirus crisis hit, the metal has dropped a further 11%.
Cochrane, who was at CRU two years ago but is now at Open Mineral - a firm started a couple of years ago by a two ex-Glencore traders and described in some quarters as an eBay-style market place for metals - believes the battered metal could see some positive action in the second half of 2020 aided by potential macro tailwinds such as a weaker US dollar.
Cochrane noted a current "interesting" anomaly in the market - treatment charges for zinc concentrate falling as demand for the commodity fell.
"The consensus view would be such a reduction in demand would drive up a huge glut in concentrates, and this would push up TCs," Cochrane said.
"But with the fall in zinc price you started to see spot TCs starting to turn around."
Still, Megan Degelman-Smith from the world's third biggest zinc producer, Teck, believes further mine closures can be expected this year given about a quarter of global production is currently underwater.
Not a positive forecast for some stressed-out producers, but for those that can ride out 2020 …
11-Feb-2020: January 2020 Production Update
RVR is a profitable zinc miner who are expanding into gold production as well now. I hold RVR shares.
28-Jan-2020: Gold Potential Revealed at Thalanga
June 2020 Quarterly Production Update – Record Copper Production
Red River Resources Limited (ASX: RVR) is pleased to report the operating performance from its Thalanga Operation in Northern Queensland for the quarter ended 30 June 2020 (Q4 FY20).
Mine production and mill throughput were stable during the quarter and the Company produced 4,310 tonnes of high-quality zinc concentrate and 1,133 tonnes of high-quality lead concentrate. An increase in copper grade of ore milled (to 1.0% Cu) and a record copper recovery to copper concentrate of 84.7% resulted in a record quarterly production of 2,697 tonnes of high-quality copper concentrate.
Red River also processed a parcel of historical gold-rich tailings from RVR’s Liontown Project during the quarter and produced approximately 600 tonnes of gold concentrate containing 1,300oz of gold on an unreconciled basis.
--- click on the link above for the entire report ---
I hold RVR shares.
Also: Yesterday (9-July-2020): RVR set to commence drilling at Hillgrove Gold Project
09-Apr-2020: Quarterly Production Update
Red River Resources Limited (RVR) is pleased to report the operating performance from its Thalanga Operation in Northern Queensland for the quarter ended 31 March 2020 (Q3 FY20). Mine production and mill throughput improved significantly in the quarter resulting in increased quarterly production of zinc and lead concentrates and record production of copper concentrate. Mining activities ceased at the West 45 underground mine in March.
...click on link above for more...
11-Mar-2020: Red River increases Liontown contained gold by 125%
28-Feb-2020: Maiden gold resource for Hillgrove Stockpile
--- click on link above for further details ---
RVR is currently a high-grade zinc producer at Thalanga and is now also diversifying into gold production. I hold RVR shares.
19-Feb-2020: Sampling at Sunlight adds potential Hillgrove Gold
Another day, and another positive announcement from RVR, who, as I said yesterday, are successful zinc producers now expanding into gold production as well. (I hold RVR).
24-Jan-2020: MiningNews.Net: Red River ramps up Hillgrove Revival
Red River ramps up Hillgrove revival
Little more than a week after Red River Resources’ promised the market a decision on restarting production at the company’s Hillgrove project in New South Wales, managing director Mel Palancian outlined how the base metals miner would expand its output into the gold sector this year.
Based on metallurgical test work from the Bakers Creek waste dump, where the material grades around 2.5 grams per tonne, Red River said recovery through the existing plant could be up to 90%, with gravity expected to be 60-65%.
Flotation could recover an additional 20-25%.
The dump was created during the mining of the Bakers Creek mine that produced 303,900 ounces from 175,980t of ore at 49gpt between 1877 and 1921.
The company has calculated an exploration target of 200,000-300,000 tonnes at 2-3gpt for the dump.
Palancian said Bakers Creek was a "fast restart opportunity" that would allow the company to leverage high gold prices by produce saleable 75-80% gold doré.
Work has commenced on a conceptual flowsheet.
The revival is expected to be low-cost, with a new gravity gold concentrator expected to be installed in the grinding circuit, and changes to the cyanide circuits are being considered as upgrades to the "near new" 250,000t mill.
Red River secured Hillgrove last August for just $4 million in scrip for Hillgrove, a fraction of the $180 million spent on the asset over 15 years by past owners such as vendor Bracken Resources and former operator Straits Resources.
Bakers Creek could lead into exploration of Curry's Block, a 700m-long prospect with an average sampled grade of 17gpt gold, with good grades of antimony and tungsten that has never been drilled.
Hillgrove has resources at 2.8Mt grading 5.1gpt gold and 1.7% antimony for 459,000oz gold and 48,000t antimony.
Red River shares were up 2% to 11.5c, valuing the company at $60 million.
Disclosure: I have a smallish holding in RVR. I like zinc from here, and I'm happy to see them also moving into gold.
24-Jan-2020: RVR to restart Hillgrove Gold production in 2020
As I recently noted, RVR are on their way to becoming a small diversified mining company. They already mine high-grade zinc, and soon gold as well. They're still a very small company (market cap ~$60m currently) but they have reasonable liquidity for their small size, great management, no net debt, and they're making some very smart moves. I do hold RVR shares.
--- Click on link above for more ---
Disclosure: I hold RVR shares.
15th April 2019:
Red River's rivers of cash
NORTHERN Queensland miner River Resources had already announced a record March quarter in terms of production, but this morning it revealed it also revealed record low cash costs and that its bank balance has swelled by A$8.5 million to $21.2 million, even after spending around $5 million.
C1 cash costs were down almost 70% due to the higher production levels, and C3 costs were down 37% to around US58c per pound of zinc.
The Thalanga operations produced a record 106,000t at 0.6% copper, 3.1% lead, 5.8% zinc, 0.3 grams per tonne gold and 53gpt silver, with 97,000t of ore mined from West 45.
Underground development at Far West exceeded 1700m, and 9000t of development ore was processed, with the ore said to be exceeding the recoveries and grades expected in the restart study.
The company spent around A$4.5 million in development, mainly at Far West.
The mill also set a new record, processing 109,000t at 11.4% zinc equivalent.
Both mine and mill records were set despite the fact Thalanga was subjected to some 445 millimetres of rain during the quarter, of which 340mm was during a flood event in late January and early February.
Zinc production was up 16% to 8952t, lead was up 25% to 3763t and copper was up 134% to 1694t. Recoveries for all metals were also improving, particularly copper, which had suffered some metallurgical issues last year.
Red River sold 9052t zinc concentrate, 3758t lead concentrate and 2008t copper concentrate during the quarter to generate revenue of $32.6 million, of which more than half was from zinc sales.
Revenue was up $14.4 million from the prior quarter.
Just $400,000 was spent on exploration, with only minimal field work undertaken due to the drenching the region suffered.
The company's exploration team worked to develop targets for a planned resumption of drilling this quarter, initially at the Liontown project, to support the ongoing scoping study, and in Far West to define additional resources in the upper levels of the mine.
Ultimately it hopes to develop several concurrent mining operations utilise spare capacity at the 600,000tpa plant.
Red River secured the mothballed Thalanga project in 2014 and started operations in late 2017.
Shares in the junior were last traded at 18c, valuing the miner at $88 million, although its shares have fallen from around 29c one year ago.
--- ends ---
Disclosure: I hold RVR shares. It is one of the better ways to play zinc in my opinion.