China’s latest sanctions against the US are the latest factors keeping the gold price at near record highs – above $2,000/ounce.

The strength in gold is widely expected to continue given the ongoing uncertainty around the longer-term economic impacts of the COVID-19 pandemic, the large government stimulus packages, uncertainty in equity markets, and negative real yields in much of the developed world.

Given that backdrop, some forecasters are now anticipating a rise to $3,000/ounce or more.

While gold’s rise has been well publicised, the recent strength in silver prices has been largely overshadowed. Silver gained 35% in July and has continued its strength into August. Relative to historical levels, silver remains cheap compared to gold and looks due to catch up.

Recognising the opportunity at hand, Pursuit Minerals (ASX: PUR) signed an exclusive option to acquire the Buck Mountain Gold Project, a gold-silver-platinum group metals (PGMs) project in Arizona, USA.

A high-grade alluvial gold project, the Buck Mountain Project’s precious metals are contained within gravels that have been washed down onto the plains from the surrounding Buck Mountain within Arizona’s Mohave Mountain Range.

Mineralisation is widespread, although mostly in small deposits of gold, silver and tungsten.

Pursuit is conducting due diligence on the Buck Mountain Project ahead of its decision to exercise its option over the project by 30 September.

A significant amount of work has already been undertaken at the project by the vendors, such as drill programs and a number of sampling exercises, including the collection and processing of a 16.2 tonne bulk sample.

The bulk sample was processed in a similar way to how a mine would process the alluvial gravels and recovered grades of 4.8g/t gold, 119.66g/t silver and 0.55g/t platinum.

A 2014 auger sampling program was also completed but the samples never assayed. Along with samples from its own soil sampling program that’s currently underway, Pursuit will also be independently verifying these auger samples for grade and distribution. Results are due in early September.

The company is re-drilling 21 of the auger samples sites from 2014, involving shallow drill holes of three to four feet. The company says results of greater than 2g/t gold would be extremely economic. An earlier average grade of 6.1g/t gold was recorded from up to 15 feet deep.

Having recently undertaken a $600,000 capital raise — of which the second tranche of 60.5m shares and $300k is due within the next five weeks — Pursuit is sufficiently funded to complete the due diligence process, exercise the option over the project, and conduce a small initial drilling program.

The project’s low costs in alluvial gold processing and the strength in gold and silver prices also support the project economics.

Resource conversion and expansion

The project has an existing high-grade gold resource — a foreign mineral resource, complying with Canada’s NI-43-101 standard, of 1.248Mt, grading 6.1g/t gold for 244,000 ounces.

Pursuit anticipate than upon exercise of the option, it could expand the resource very quickly and convert it to a JORC (2012) resource.

The foreign resource estimate was based on analysis of alluvial gravels down to 15 feet, yet previous drilling by the project vendor determined that gold, silver and PGM bearing alluvials extend down to at least 30 ft in the project area.

It goes to reason that gold would also be present at greater depths, as it is the heavier material.

Further, the existing resource was calculated over an area of just 45 acres, just 14% of the total 320 acre (1.3km²) landholding.

Well targeted expansion drilling both vertically and horizontally across the wider project area, could see Pursuit quickly grow the resource base to more than 1 million ounces.

If due diligence is successfully completed and the option over the project is exercised, the $9 million capped company could quickly attract market attention. Having only entered he option agreement on 17 July, Pursuit is one of the few gold juniors that are yet to be swept up in the current booming market.

Upon exercise of its option to acquire the project, Pursuit will look to complete a follow up drilling program prior to the end of 2020.

The size and grade of the foreign resource estimate was a key factor for in Pursuit considering the acquisition of the Buck Mountain Project. Consequently, its ability to verify the resource and reclassify under JORC (2012) is an important step forward.

The results from the due diligence program will also allow Pursuit to assess reliability of the foreign resource estimate with much greater confidence.

This presents significant potential to quickly and cheaply prove up and expand the existing resource, which could soon be a million ounce gold resource with additional silver and PGM credits.

Investors are rushing into gold stocks as the precious metal continues to hit new highs. The gold price is now above AU$2,000/oz, for the first time ever, and it seems to have plenty more in the tank with forecasters tipping a rise to US$3,000/oz within a year.

Just like the gold price, Western Australia’s Paterson Province is taking centre stage.

Heavyweights Rio Tinto (ASX: RIO), Newcrest Mining (ASX: NCM), and IGO Ltd (ASX: IGO) each have a slice of prospective ground in this booming WA gold province and cash is pouring into the region.

Outside of the ASX, one of the biggest gold stories out of the Paterson Province is that of London-listed Greatland Gold’s (AIM: GGP) Havieron discovery, which is now being drilled as part of a JV with Newcrest.

With a newly acquired project sitting right between the Havieron discovery and Newcrest’s 32 million ounce Telfer mine, ScandiVanadium (ASX: SVD) is gearing up for its maiden drilling program in the Paterson Province.

The company recently completed the acquisition of Vanatech Pty Ltd along with its two Western Australian exploration targets: the Pascalle Gold Project in the Paterson Province and the Gnama Project in the Fraser Range Nickel Belt. SVD also gained Vanatech founder and geologist Tom Langley in the deal.

While the company name is slightly off target, SVD’s new acquired assets are right in the middle of the action.

Pascalle Gold Project – WA’s Paterson Province

The company’s Pascalle Gold Project is an underexplored gold project in the Paterson Province, wedged neatly between the Havieron discovery and the Telfer Mine.

The Havieron discovery is perhaps the biggest WA gold exploration success story of the last 12 months. The gold deposit is centred on a magnetic anomaly where significant gold and copper mineralisation was revealed under 400 metres of cover.

The discovery was made by London-listed Greatland Gold (AIM: GGP), which has delivered shareholders a >800% gain in the last nine months, for a £530 million (almost A$1 billion) market capitalisation. Given that Newcrest has farmed into the project in a $65 million deal, that valuation is based on Greatland having just a 30% interest in the project.

It’s yet to be seen how big Havieron could ultimately be, but its tipped to be the next feed source for Newcrest’s nearby Telfer plant.

Another regional project approaching production is Rio Tinto’s (ASX: RIO) Winu copper-gold project. Located further to the north of SVD’s Pascalle Project, Rio recently disclosed a resource at Winu.

Providing further encouragement about the potential for the development of multiple ore bodies within the system, Rio has also revealed a new gold discovery, Ngapakarra, located approximately two kilometres from Winu. Here, early stage drilling identified shallow, thick high-grade gold which remains open in all directions and at depth.

But SVD’s Pascalle Project is not simply a nearology play.

Pascalle drilling imminent

The Pascalle project area has a number of key geological similarities with other major discoveries in the region and the processing of geophysical data has identified eight prospective targets for follow up investigation.

The recent discoveries by Rio Tinto at Winu and by Greatland Gold at Havieron have demonstrated the importance of geophysical surveys in aiding discovery of tier one gold copper prospects in the region — SVD is now following the same process.

The company will commence a high-resolution helicopter electro-magnetic and magnetic survey over the Pascalle Gold Project later this month.

The surveying system to be used is the same as was involved in Rio Tinto’s discovery of the Winu copper-gold project, also located in the Paterson province of Western Australia.

This system will be vital in planning the group’s upcoming maiden drilling campaign, which is set to commence by the year’s end.

Based on the early work to date, the project looks highly prospective for Telfer, Havieron and Winu style gold-copper deposits. It has eight untested drill targets and all the right geological conditions to host the region’s next major gold discovery.

Significant exploration expenditure in the region has resulted in enhanced understanding of geological controls on mineralisation over the last four years and encouraged new concepts in exploration.

In the past, exploration was less advanced. Newcrest’s 32Moz Telfer mine was just outcropping followed at depth, while at Pascalle, which was also first identified by Newcrest, next to no drill holes were completed down more than a couple of metres into fresh rock.

Here you can see SVD’s Pascalle target (below, left) and Havieron (below, right) showing ‘Bullseye’ magnetic target with coincident gravity-high highlighted.

The difference in resolution is due to the difference in depth, with Havieron occurring at greater than 450 metres, whereas, at Pascalle, cover is only between 20m and 50m across the vast majority of the licence area (up to 120m maximum).

The Bullseye target at Havieron proved to be a fantastic hit — including 75m @ 4.8g/t gold and 0.6% copper — however, drilling had to extend through 400 metres of cover to get to it.

Not only does Pascalle have only limited cover, it is in the right area geologically, and there are multiple targets to test.

This all comes against a backdrop of gold hitting $2,000/oz, as forecast point to continue run to US$3,000/oz within a year.

Gnama Project – Fraser Range Nickel Belt

Further south in WA’s Fraser Range Nickel Belt is SVD’s Gnama Nickel Project.

Gnama sits ~20km along strike from the Nova-Bollinger Mine, which was discovered by Sirius before being acquired for $1.8 billion by IGO Ltd (ASX: IGO) in May 2015.

Gnama is also not far from Legend Mining’s (ASX: LEG) recent Mawson discovery. The discovery in December 2019, propelled LEG’s share price from 4 cents to 14¢ today, for a $350 million market cap — an impressive valuation for an explorer without a resource.

The 61km² Gnama project was identified by Sirius Exploration in 2010 when RC holes drilled to test a soil geochemical anomaly intersected a zone of nickel, copper and cobalt enrichment in the oxide zone above mixed mafic and ultramafic rocks.

As Sirius moved on to drilling at the Nova target, the potential at Gnama was never followed up and the tenement was allowed to lapse.

However, the project has huge potential — the oxide cap indicator is similar to exploration indicators at LEG’s Mawson discovery, Creasy Group’s Sliver Knight, and at Nova-Bollinger.

In light of the revised company direction, SVD appointed Mr David Frances as Executive Chairman. Mr Frances led Mawson West (TSX: MWE) from 2006-2012 where he completed the world’s largest base metals capital raise and IPO in 2010.

He also has previous exposure to the Fraser Range as Managing Director of Winward Resources which was acquired by IGO in 2016.

With exposure to two premier Western Australia gold provinces and work set to commence shortly, in combination with the strong gold price, SVD will continue to continue attract investor attention.

Centrally located in the Germany’s Upper Rhine Valley, Vulcan Energy Resources’ (ASX:VUL | FWB: 6KO) geothermal project has just reached a major milestone in delivering net Zero Carbon Lithium™ to Europe.

The company has reported lithium recoveries from its geothermal brines of greater than 90%, demonstrating that the technology works in the Upper Rhine Valley.

Vulcan has Europe’s largest lithium resource, a central position close to the growing lithium-ion batteries (LIB) and electric vehicles (EV) markets in Germany, the lowest CO₂ intensity and water usage of all lithium projects globally, and now, a lithium extraction process that’s been proven to work on its geothermal brine.

A huge market for LIBs, and battery-quality lithium is emerging in Europe as EVs are deployed on a massive scale in the 2020s and Germany is at its heart.

However, EVs and LIBs have a dirty little secret — their supply chains are notoriously carbon intensive.

Lithium is currently transported to Europe’s battery manufacturers and automakers from environmentally damaging hard-rock mining or salar type brines operations in Australia, China and the Americas. This generates significantly more CO₂ emissions than the manufacture of traditional internal combustion engine vehicles.

Bench-scale test work at Vulcan’s project has demonstrated >90% lithium recoveries via Direct Lithium Extraction (DLE) from its geothermal brines. Using real brine at ambient pressure from the Upper Rhine Valley, Vulcan produced lithium chloride (LiCl) concentrates using techniques similar to other commercial and near-commercial lithium brine projects.

Thus, proving up the commercially mature extraction technology’s effectiveness for Upper Rhine Valley geothermal brines, and significantly de-risking the project.

While Vulcan is the first to bring this technology to Europe, and Upper Rhine Valley brines specifically, lithium has been extracted using Direct Lithium Extraction (DLE) at commercial scale for decades in Argentina.

DLE has been proven to operate economically by Livent at its Fénix Project in Argentina, but this is not widely known. Neither is the fact that DLE is a more preferred, even ethical, way to produce lithium from brines than from evaporation ponds which have negative impacts on water resources.

Furthermore, as environmental, social and governance (ESG) factors become increasingly important considerations for investors, multinational corporations are coming under pressure to improve their ESG credentials. This extends to automakers in Europe, including Volkswagen, Tesla, and BMW who will be feeling this pressure, not only from investors, but in meeting more stringent government legislation too. The result will be pressure on EV and LIB supply chains to clean up their act.

Zero Carbon Lithium

Vulcan’s world-first first Zero Carbon Lithium™ process extracts battery-grade lithium from geothermal brines, a process which also provides a renewable energy source to power the extraction process.

Via an advanced DLE process, paired with low-carbon power/heat from geothermal energy production, Vulcan will extract lithium from geothermal brines to produce premium, battery quality Zero Carbon Lithium™ hydroxide using readily available heat and power. This is a closed system where brine is reinjected into the reservoir with no evaporation losses:

Schematic of Zero Carbon Lithium Process – producing lithium and power from geothermal heat

This zero carbon, or CO₂-neutral, development of Europe’s lithium deposits is crucial for a sustainable and strong European battery industry and will bring the EU significantly closer to meeting its 2030 climate goals.

The CO₂ intensity of Vulcan’s project is in fact the lowest compared to any lithium project worldwide:

Li-ion battery supply chain

Zero carbon or not, Germany is missing an important piece of the LIB supply chain. While well advanced in the latter stages from cathode manufacture through to the EV market, the country lacks the ‘lithium deposit to concentrate’ and ‘lithium processing to battery chemical’ stages of the supply chain:

The Payne Institute for Public Policy

The European Union is working on building an environmentally sustainable European LIB supply chain ahead of the anticipated surge in demand for electric vehicles (EV).

Vulcan has partnered with EIT InnoEnergy, the innovation engine for sustainable energy across the European Union, which includes accelerating innovation and commercialisation along the entire battery value chain.

EIT InnoEnergy will assist Vulcan in obtaining and fast-tracking licences, developing relationships with lithium off-takers in Europe’s auto and battery industries, and securing project funding.

Europe has enough lithium — the Vulcan Project alone hosts a globally significant 13.95 Mt contained lithium carbonate equivalent (LCE), Europe’s largest JORC lithium resource. Of this, 13.2 Mt LCE is in the JORC Inferred category on its 100%-owned Ortenau license.

The now demonstrated >90% lithium recovery rate is a major step in proving that VUL’s geothermal brines can be a major source of lithium hydroxide for Europe’s LIB production sector — all while emitting net zero carbon.

London-based Natural Resources Global Capital Partners Limited (NRG) has been appointed to provide strategic and financial advice in connection with the Vulcan Zero Carbon Lithium Project.

NRG is an independent advisory firm and merchant bank focused on the global metals and energy industries and is led by Julian Vickers, ex-Global Co-Head of Natural Resources Investment Banking for Barclays.

Vulcan is now working on further optimising the lithium extraction process, completing its pre-feasibility study (PFS) by year end with the DFS to follow, ahead of first commercial scale production targeted for 2023.

Finfeed.com: Meagan Evans