Tag Archives: base metals

The Cost of Insuring Against a Commodities Crash Is Rocketing

Bloomberg, Jul 9, 2015

Cattle Surge to RecordInsuring the price of these cows just got more expensive.

More fallout from Chinese stocks.

China’s stock slump has played havoc with the commodities market as traders fret that the economy driving global raw materials demand is about to tank.

The Bloomberg Commodity Index, which includes 22 commodities that cover everything from live cattle to natural gas, traded near a 13-year low this week as industrial metals and oil tumbled. Nickel plunged 9 percent in a single day.

The increase in volatility has sent the cost of buying options to insure against bigger drops in the price of some commodities soaring.

The table below shows the implied volatility for 90 percent puts on commodities, or options that bring protection against a 10 percent drop in prices. The higher the implied volatility, the more expensive the option.

Copper, zinc and corn are all trading near the top of their one-month ranges:

The implied volatility of 90 percent put options on a range of commodities.

The volatility hasn’t stopped.

Prices bounced back sharply today after the Chinese government finally succeeded in arresting the plunge in stock prices — New York crude is up more than 3 percent, copper 2 percent.


NEWS: Kaizen Discovery Announces Retirement of Chief Financial Officer and Appointment of Interim Chief Financial Officer

Jun 1, 2015

Kaizen Discovery Inc. (TSX VENTURE:KZD) announced today the retirement of Pierre Massé, the company’s Chief Financial Officer (CFO).

Mr. Massé has been the CFO for Kaizen since the company was formed in late 2013. He also has served as the CFO of GoviEx Uranium Inc. since early 2011, and previously served as Vice President, Finance of Ivanhoe Mines Ltd. (now Turquoise Hill Resources Ltd.) for more than ten years.

Kaizen is actively engaged in an external search for a new Chief Financial Officer. Steve Vanry, Kaizen’s Executive Vice President, Corporate Development, will serve as Interim CFO until Mr. Massé’s replacement is appointed. Mr. Vanry is a Chartered Financial Analyst (CFA) and Chartered Investment Manager (CIM) with more than 20 years’ experience working with various public and private Canadian corporations in the areas of financial reporting, corporate finance, mergers and acquisitions and regulatory compliance.

“On behalf of everyone at Kaizen, I want to thank Pierre for his dedication and significant contributions to the company,” said Kaizen’s President and CEO B. Matthew Hornor. “He has played an integral role in guiding the company’s strategic financial and operational activities. We wish Pierre well in his retirement.”

Full Release

NEWS: First Majestic Announces New La Guitarra NI 43-101 Technical Report

Mar 31, 2015

FIRST MAJESTIC SILVER CORP. (the “Company” or “First Majestic”) is pleased to provide a new NI 43-101 Technical Report and the initial Mineral Reserve and Resource estimate for the La Guitarra Silver Mine located in the State of Mexico. All amounts are in U.S. dollars unless stated otherwise.


  • Proven and Probable Reserves totalling 11.8 million ounces of silver equivalent ounces, including 9.4 million ounces of pure silver
  • Measured and Indicated Resources of 15.2 million ounces of silver equivalent ounces, including 11.7 million ounces of pure silver
  • Inferred Resources totalling 6.3 million silver equivalent ounces, including 4.7 million ounces of pure silver
  • Average Reserve silver grade of 223 g/t; and an average gold grade of 1.06 g/t
  • Life of Mine (LOM) of 7.0 years producing an estimated total of 9.3 million ounce of silver and 45 thousand ounces of gold
  • LOM operating cost per tonne estimated at $48.31 per tonne, excluding G&A, sustaining costs and exploration

Keith Neumeyer, CEO and President, states: “since purchasing the La Guitarra mine over two years ago, our geological and technical teams have been working diligently examining over 900 historical drill holes and drilling several additional holes in order to create what is now our new base line Reserve and Resource estimate which now gives us a very good starting point to build on in the coming years. This large property has extremely exciting geological potential and this first Technical Report prepared by our team points to the reason why we first decided to buy this mine in 2012.”

The La Guitarra Silver Mine, located in historical Temascaltepec mining district in the State of Mexico, consisting of 43 mining concessions covering 39,714 hectares (98,135 acres). La Guitarra is comprised of two operating mines, La Guitarra and Coloso, and three past producing areas, the Nazareno, Mina de Agua and El Rincón, which are now considered as exploration areas.

The new Mineral Resource and Mineral Reserve estimates for La Guitarra are shown below and are classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014). Please note, First Majestic is reporting Mineral Resources inclusive of Mineral Reserves.

(1) Mineral Reserves have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
(2) Cut-off grade considered for sulphides was 200 g/t Ag-Eq and is based on actual and budgeted operating and sustaining costs.
(3) Metallurgical recovery used was 85% for silver and 79% for gold.
(4) Metal payable used was 95% for silver and 95% for gold.
(5) Metal prices considered were $20 USD/oz Ag, $1,200 USD/oz Au.
(6) Silver equivalent grade is estimated as: Ag-Eq = Ag Grade + (Au Grade x Au Recovery x Au Payable x Au Price) / (Ag Recovery x Ag Payable x Ag Price).
(7) Tonnage is expressed in thousands of tonnes, metal content is expressed in thousands of ounces.
(8) Totals may not add up due to rounding.

(1) Mineral Resources have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
(2) Cut-off grade considered for sulphides was 180 g/t Ag-Eq and is based on actual and budgeted operating and sustaining costs.
(3) Metallurgical recovery used was 85% for silver and 79% for gold.
(4) Metal payable used was 95% for silver and 95% for gold.
(5) Metal prices considered were $22 USD/oz Ag, $1,350 USD/oz Au.
(6) Silver equivalent grade is estimated as: Ag-Eq = Ag Grade + (Au Grade x Au Recovery x Au Payable x Au Price) / (Ag Recovery x Ag Payable x Ag Price).
(7) Tonnage is expressed in thousands of tonnes, metal content is expressed in thousands of ounces.
(8) Totals may not add up due to rounding.
(9) Measured an Indicated Mineral Resources are reported inclusive or Mineral Reserves.

Since taking control of the property in July 2012, to the effective date of December 31, 2014 used for the Mineral Resources and Mineral Reserve estimates, First Majestic has led an aggressive exploration program at La Guitarra which has included an extensive 35,575 metres of diamond drilling over 262 holes. The Company also commenced a plan to expand the operation from 200 tonnes per day (tpd) to 520 tpd in late 2012. This expansion was completed in May 2013 following the installation of a spare ball mill from the La Parrilla Silver Mine and some spare flotation tanks from the La Encantada Silver Mine.

The LOM plan is based on an annual processing rate of 190,000 tonnes of plant feed, corresponding to approximately 520 tpd. Considering the Mineral Reserves presented above it represents a mine life of 7 years producing an estimated 9.3 million ounces of silver plus 45 thousand ounces of gold.


In late 2013, the Company started the development of the Coloso mine incurring in expansionary capital expenditures in the areas of mine development, mine infrastructure and a 5 km power line. Sustaining capital expenditures throughout the projected life of mine are assumed to average $4.26 million per year, including maintenance of the processing plant, equipment replacement in the mine, mine development, for tailings facility expansions and infill exploration.

The sustaining capital budget includes an allocation of an estimate of $1.0 million for the development of an 800 metre tunnel to connect the Coloso mine with the Nazareno area, in addition, an estimate of $1.5 million for mine developing and preparation in Nazareno to bring this mine into production as a replacement of the La Guitarra mine production after the depletion of current reserves in this area.

The Company’s Qualified Persons recommend going forward with infill exploration works required for Nazareno and the permitting and exploration works required for Mina de Agua in order to upgrade current resources and generate additional resources. The Company’s Qualified Persons are of the opinion that La Guitarra property has the potential for hosting additional resources laterally at the Guitarra vein, at depth at Coloso and laterally and at depth at, Nazareno, Mina de Agua and El Rincón. Further exploration at Nazareno and Coloso areas may result in a near term increase in the recognized resources from this area.

Furthermore, the Mina de Agua and El Rincón areas are highly prospective given the history of production from these areas. In the 18th century, the Mina de Agua mine and surrounding areas were one of México’s largest silver producers, generating approximately 10% of the country’s total mineral wealth. The Company’s Qualified Persons recommend the development of a 2 km tunnel from Mina de Agua to El Rincón plus a comprehensive exploration program to develop the resources and potentially increase the delineation of resources and reserves in these areas.

In addition, a series of conceptual studies have been conducted to investigate the potential of increasing the throughput capacity of the current La Guitarra processing plant to 1,000 tpd. Preliminary estimates indicate a potential reduction of the operating costs driven by the economy of scale, mainly in the processing and general and administration areas; however, the economics of the mine capacity expansion and the plant expansion have not been completed. An increase in the annual throughput could reasonably be expected to increase the total costs but to reduce unit operating costs. The Company’s Qualified Persons recommend continuing the conceptual studies and progressing to an internal pre-feasibility level study to assess the economic viability of this expansion.

Mineral Resources for the Coloso area have been estimated by Amec Foster Wheeler Americas Ltd. under the supervision of Greg Kulla, P.Geo. Mineral Resources for La Guitarra, Nazareno and Mina de Agua areas have been estimated by First Majestic. Mineral Reserves for La Guitarra, Coloso and Nazareno areas have been estimated by First Majestic under the supervision of Jesus M. Velador Beltran, PhD Geology. Mineral Reserves for La Guitarra, Coloso and Nazareno areas have been estimated by First Majestic under the supervision of Ramon Mendoza Reyes, P.Eng. Mr. Ramon Mendoza Reyes, Vice President Technical Services for First Majestic, is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in this news release.

First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.

FOR FURTHER INFORMATION contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll free number 1.866.529.2807  FREE.

Full release

Kaizen Discovery (TSXV: KZD) Offers Investment Dollars, with the Help of a Japanese Business Partnership, for Undervalued Mining Properties

MetalNews.com, Mar 2, 2015


Matthew Hornor, President and CEO of Kaizen Discovery (TSX: KZD), spent some time with Metals News to discuss his company’s business model and the innovative way they have chosen to enter the mining industry.

Mr. Hornor said, “Our stated business purpose is to seek out high quality, undervalued opportunities in a troubled mining sector and partner with one or more Japanese trading houses. We came into this about a year and a half ago.” Matthew Hornor brings to the company a long background in business and law. He said, “My background is as a corporate finance lawyer. I spent a lot of time in Japan, speak the language and lived there. It has always been a passion of mine to be attached to that country in some way. I like their ethics and their approach.”


During his time in Japan, Mr. Hornor built relationships with a group of business owners that were looking for opportunities. He said, “I have been a part of a collective group of companies for about a decade. I have helped many of these companies obtain financing. In one financing I led, we raised approximately $300 million from a consortium of Japanese investors for Ivanhoe’s Plantreef project in South Africa.” This experience led him to his current business model. Mr. Hornor said, “The idea is to take advantage of the buyer’s market and be able to advance projects in a tough cycle when there aren’t a lot of investors. We can put up investment dollars – that’s the difference.”

Matthew Hornor has used his experience in Japan to build Kaizen Discovery. He said, “The Japanese companies that we work with are primarily trading houses. They are looking for offtake to provide to their dealers, like Nissan and Toyota. In 2014, we entered into a strategic partnership with one of the trading houses, ITOCHU Corporation. ITOCHU invested $5 million for a 6% interest in the company. We also found Tundra Copper, an exploration company with a high-quality copper project and acquired it last year. We expect that our Japanese partners will provide funding to explore the Tundra ground. We also are taking a hard look at Tower Resources in BC. We are in an exclusive negotiation period with them right now.”

Using the leverage of the trading houses allows Kaizen Discovery to take on more projects in the mining sector. Mr. Hornor said, “You can look at us as a P/E fund. We have a decent treasury with access to additional funding from our Japanese partners. We think it is a winning model. No one has ever done it this way before. It requires a few key ingredients. You have to have a track record where you can raise money in Japan and a reputation that will allow you to get in front of them. You need M&A and mining experience, but most importantly, you need to have developed trust.”

This level of trust has allowed Mr. Hornor to work quickly to build up Kaizen Discovery’s assets. He said, “We are finalizing a drilling program in New South Wales in Australia. We anticipate finalizing the Tower Resources deal and obtaining the support of our Japanese partners during the second quarter of this year. We are also looking at interesting projects in South America that are shovel-ready with defined resources. We have been looking at South America for a while. After Tower Resources, we will look closely at prospects in Chile and Brazil.”


*Projected work programs may change following meetings with financing partner

Geographically, Kaizen Discovery works as close to Japan as possible. Mr. Hornor said, “We are focused on the Pacific Rim because it is easier for the Japanese to be comfortable with in regions with less political risk. David Broughton is our Executive VP of Exploration. David will be receiving an award at PDAC for his work with Ivanhoe Mines in the discovery of the incredible Kamoa copper deposit in the Democratic Republic of Congo. We believe we have a project that looks a lot like Kamoa with similar geology and rock age. Because of David’s expertise, he was the ideal choice for running the exploration program on our Coppermine project.” In addition to Mr. Hornor, who travels to Japan about ten times per year, Kaizen Discovery also has managers in country. Mr. Hornor said, “We have a team in Tokyo that runs the Tokyo office. They stay in contact with our trading and industry partners.”

Investors who are looking for an innovative investment model may want to do some further research on Kaizen Discovery. Mr. Hornor said, “We acquired Concordia – 85% of that – and now we are sitting at about 160 million shares. Most of that is held by HPX Techco, which is a privately-held, Robert Friedland-backed investment company. Our share structure is not bad at all. About 50 million shares are publicly traded.” Who is an ideal candidate to invest in Kaizen Discovery in Mr. Hornor’s mind? He said, “If somebody wants to play the buy low, sell high market here and they want to back a group that has a proven track record of finding and building mines, that is exactly what we offer. We have a very strong team that has done this before. We have unique access to funding from Japan and we have large investors that protect the stock and prevent dilution. We have embedded strategic partners from day one. We also have geophysics tools that enable deeper prospecting than most. That gives us a decided advantage in areas such as Chile where it is hard to complete drilling or where you are drilling blind. In a tough market, we can find resources with our advanced technology. In my opinion, such a combination provides very little downside and an unlimited upside potential”.




Kaizen Discovery

World Trade Centre

654-999 Canada Place

Vancouver, BC V6C 3E1


Phone: +1 604 669-6446

Email: info@kaizendiscovery.com


NEWS: Kaizen Discovery and Tower Resources Extend Period of Exclusive Negotiations

Feb 27, 2015

Kaizen Discovery (TSX VENTURE:KZD) and Tower Resources Ltd. (TSX VENTURE:TWR) announced on February 2, 2015 that they entered into an Exclusivity Agreement as an initial step towards a proposed transaction which would see Kaizen acquire 100% of the outstanding common shares of Tower in an all-share transaction. The parties have agreed to extend the exclusivity period from March 15, 2015 to March 30, 2015 in order for both companies to complete their due diligence.

For more information on the proposed transaction, please refer to Kaizen’s February 2, 2015 news release available at www.kaizendiscovery.com.

About Kaizen Discovery

Kaizen is a Canadian technology-focused, mineral exploration and development company. Kaizen entered into a collaboration agreement with ITOCHU Corporation of Japan in January 2014 and has access to HPX TechCo’s proprietary geophysical Typhoon technology under a dedicated services agreement. Kaizen’s long-term growth strategy is to work with Japanese entities to identify, explore and develop high-quality mineral projects that have the potential to produce and deliver minerals to Japan’s industrial sector.

Full release