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This Bottom-Floor Idea Is In A Booming Sector, Requires Your Immediate Attention For Friday
Based On Recent, Major News, Lida Resources Inc. (LDDAF) Displays Stunning Upside Potential
(OTC: LDDAF) (CSE: LIDA)
August 20th
SCF Members,
Now may be one of the best times to be paying attention to mining companies and Lida Resources Inc. (OTC: LDDAF).
The Company Could Skyrocket as CEO is a Mining Pioneer who was Once Chairman of a Company that Sold for $500M!
This Canadian mining player has assets exploring gold, silver, lead, and zinc in one of the most prolific countries to mine in: Peru.
Within Latin America, Peru has, perhaps, the greatest untapped potential for new discoveries and production!
Gold and gold related stocks may be the best opportunities around right now...
Lida Acquires Strategic Land Position Between the Past Producing San Vicente and Quiruvilca Mines in Peru
Many are turning to gold as a safe haven in 2020, due to the global uncertainty surrounding the economy amid the c-virus pandemic.
This year gold has been on fire!
On Tuesday of this week, the price of gold was over $2,000 an ounce.
In July the metal saw its best monthly gain in YEARS! The 10.3% gain in July marked the best monthly rise since February of 2016, according to FactSet data.
In fact, Gold is — and always has been — the world’s favorite safe-haven. This goes back thousands of years...
Whether there is economic or political upset, war, times of uncertainty, it is usually the precious yellow metal that comes out ahead as #1. The metal's long-term track record has been nothing short of incredible.
As gold prices breached $2,000 an ounce and may continue to march higher, one analyst sees momentum continuing all the way to $2,500 by the time 2020 ends.
E.B. Tucker, director of Metalla Royalty and Streaming and author of “Why Gold, Why Now? The War Against Your Wealth and How to Win It?” said that this current bull rally still has more momentum.
“Normally I would say [the bull run is overheated] but what I’m seeing in the daily action is that gold is rising in a very measured way and is not meeting much resistance, so when that’s happening you just step out of the way and let it go, that’s what you do,” Tucker said.
This is the same analyst who correctly called that gold would go to $2,000!
Gold has so far outperformed ALL major assets in 2020... and the current environment could support gold rising even further...
There may be no better time to pay attention to gold and the companies in the arena than right now when you consider the raging global health crisis, heightened political tension, and economic collapse all bubbling together.
Bank of America forecasted in April that prices could almost double to $3,000 by the end of 2020!
Lida Resources Inc. Acquires 2,500 Additional Hectares Near the Quiruvilca Mine, Peru
Paul Singer's New-York based Elliott Management, which manages about $40Bn in assets, regarded gold as "one of the most undervalued" assets available earlier this year.
Let’s not forget silver...
Silver is another hot metal expected to head higher. The outlook for silver remains positive, with the annual average price projected to rise by 13% to a six-year high of $18.40 in 2020.
The Silver Institute believes that macroeconomic and geopolitical conditions will remain broadly supportive for precious metals, encouraging investors to stay net buyers of silver overall, a development that should lift silver prices higher this year.
Lead and zinc are also expected to see impressive growth.
The lead market worldwide is projected to grow by 6.9Mn Metric Tons, driven by a compounded growth of 6.7%. Poised to reach over 11.5Mn Metric Tons by the year 2025, batteries will bring in healthy gains for lead adding significant momentum to global growth.
According to Statista, the price of zinc is forecast to increase to $1.82 USD per pound by 2028, from an estimated price of $1.49 USD per pound in 2020. Zinc is a base metal with many uses, including used to galvanise other metals. Zinc oxide is used in the manufacturing of products such as batteries, paint, inks, soaps, pharmaceuticals, and more.
Lida Resources Inc. may soon gain major recognition being led by a mining genius who was involved with the sale of Norsemont's Constancia Mine to Hudbay for roughly $500Mn!
CEO Mr. Leonardo De Melt stated, "[...] this is an exciting and critical phase in the development of our business. The management team and I will now focus on progressing stage one of our two phase exploration program of the San Vincente property."
Peruvian miners are set to restart operations in coming days and ramp up to around 80% of normal production levels within a month according to a senior official at the country’s mining industry group who spoke to Reuters back in May.
Miners in the country were currently operating at between 35% and 40% of capacity due to the impact of the c-virus pandemic.
Lida Resources Inc. Acquires 100% Ownership of the Quiruvilca Mine, Peru
“We are talking about 39 operations by 22 large mining companies,” De la Flor told Reuters. "These represent approximately 95% of (local) copper production, 65% of silver production, 62% of zinc production and 26% of gold production."
Major global miners including Aluminum Corp of China (601600.SS), MMG Ltd (1208.HK), Freeport-McMoRan (FCX.N), Newmont Corp (NEM.N), Barrick Gold (ABX.TO) and Southern Copper (SCCO.N) operate in Peru among others.
Lida Resources Inc. looks poised to become a notable player with its Peruvian assets and at these current share prices, looks heavily under-the-radar!
There could be significant upside ahead for Lida Resources Inc. as the stock looks to be a golden ground-floor situation right now!
The Company also owns the Fruta del Sur deposit, with the potential to be one of Peru’s most prolific mines!
Lida Resources Inc. acquires properties by staking initial mineral claims, negotiating for permits from government authorities, acquiring mineral claims or permits from existing holders, entering into option agreements to acquire interests in mineral claims or purchasing companies with mineral claims or permits.
On these properties, the corporation explores for minerals on its own or in joint ventures with others. Exploration for metals usually includes surface sampling, airborne and/or ground geophysical surveys and drilling.
Peru covers an area of 1,285,216 square kilometres with a population of 29.5Mn. Its economy reflects its varied geography, with an arid coastal region, the Andes further inland and tropical lands bordering Colombia and Brazil to the east.
Abundant mineral resources occur in the Andes (copper, zinc, lead, gold and silver) and in the coastal regions there are petroleum and natural gas resources.
Other natural resources include iron ore, coal, phosphate and potash.
Mining in Peru kicked off in the late 1800's. The first boom, or “gold rush”, occurred between 1930 and 1960.
The country is a global leader in the mining industry and is one of the world’s biggest producers of base and precious metals. Currently, it is the third largest producer of copper and zinc in the world. Peru is also a major producer of gold, silver, among other minerals.
The success of Peru’s mining sector stems not only from an abundance of rich natural resources, but also from an attractive legal and tax regime designed to support the industry.
Most of the world’s major mining companies, including Xstrata, Newmont, Glencore, Gold Fields, Freeport-McMoRan, Rio Tinto, Anglo American and Barrick have operations in the country.
A PROVEN LEADER ON BOARD
Lida Resources Inc. is a De Melt Group Company. Leonard De Melt is the third generation of De Melt miners and is the CEO and president of the company.
Why is his role with the company significant?
He is one of the most respected and youngest mine managers in Canada!
He was the youngest mine manager of Canadian mine: McIntyre's Smokey River Coal.
The Yellowknife Con Mine was staked by Mr. De Melt's grandfather in 1935. He was born at the Con Mine in the first aid shack. DeMelt Cresent in Yellowknife Northwest Territories Canada is named in his Family’s honor.
Living in Lima, Peru, Mr. De Melt is an engineering technologist and a graduate of the Haileybury School of Mines. He also holds a bachelor of arts degree in business and economics and a diploma of mechanical studies from the British Columbia Institute of Technology.
He has held management positions with 12 mining companies internationally and was instrumental in starting and building six mines, including:
- Gulf Oil's Rabbit Lake mine (uranium)
- Syncrude mine (oil sands)
- Denison Mines' Quintette (coal)
- Homestake's Golden Bear mine (gold)
- BHP's Ekati mine (diamonds)
- Goldust's Croiner mine (gold)
He has also served as a director of the mining companies Norsemont Resources Inc. and Vena Resources Inc.
Norsemont's Constancia Mine, sold to Hudbay for about $500Mn!
ENTRY STRATEGY
- Advancing the company's flagship property San Vincent in Peru with bulk sampling currently underway.
- Acquiring high-quality assets at a low-cost relative to ultimate value.
- Apply management’s extensive operational and exploration expertise to turn around, grow and/or develop the assets.
- Focus on cash returns to shareholders and prudent use of leverage.
OPERATIONAL STRATEGY
- High-margin projects where the company can achieve rapid production ramp-ups from restarts, turnaround situations or late-stage development.
- Early cash flow to fund exploration, growth, and operational improvements.
- Building critical mass through acquisitions.
- Lida Resources: will be an " Incubator." There is a pipeline of properties available to Lida Resources.
- Companies will spin off from Lida Resources, creating additional shares for Lida shareholders. The first company spin off was Fidelity Minerals FMN on January 20, 2019.
San Vicente Property
Lida Resources Inc. has a 100% stake in the San Vicente property in the Alto Chicama Mining District of Trujillo, Peru.
The development metals and minerals are: Lead, Silver, and Zinc.
The San Vicente Property is located approximately 120 kilometres east of the coastal city of Trujillo, Peru in the district of Agallpampa, Province of Otuzco in the department of La Libertad.
Access to the Property is 70 kilometres by paved road to the community of Otuzco and then a combination of gravel and clay roads to Chota where the Property is located.
Otuzco and the community of San Vicente Bajo La Union, which is in close proximity to the property, are capable of providing basic services and amenities in the support of mineral exploration activities.
The Property is located in the occidental part of the Tertiary Volcanic Belt of the Western Cordillera and is underlain by rocks of the Calipuy Formation, a precious and base metals metallotects formation found in Peru. The Calipuy Formationis the product of post tectonic volcanism in the Cordillera region.
It represents the effusive magmatism that followed the final emplacement of the Coastal Batholith. At the San Vicente Property, the Calipuy Formation consists of andesite as a massive greenish grey fine to intermediate grained rock with local millimetric sized feldspathic phenocrystals and Andesite tuff which is greenish grey to purple in color with a fine grained matrix.
Lida Resources Inc. has an agreement in place with the local community (San Vicente Bajo La Union) for surface rights of 2,500 metres surrounding the mine opening.
The agreement gives Lida a permit for surface use for a period of 20 years. The rest of the surface rights are held by the communities of San Vicente Bajo La Union and San Vicente Alto La Union.
The majority of the ground in the Concession is controlled by San Vicente Bajo La Union. The company is in discussions to obtain further surface rights from the community of San Vicente Bajo La Union so that a new mine access can be forged approximately 80 metres below the current level.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
The San Vicente Property is situated in the upper part of the Moche river basin at altitudes that vary between 3,100 metres to 3,400 metres above sea level. The topography consists of moderate relief, ranging from hilly to flat. The slopes are typically covered with small brush and grasses which constitute natural pasture. Trees (predominantly eucalyptus) can be found growing in all areas and vegetables are grown through subsistence farming.
From Trujillo, the Property is accessed via the districts of Laredo, Samne and Agallpampa to the town of Chota. From Chota, an unpaved two kilometre long road leads to the Property. It takes approximately two hours to travel from Trujillo to the Property.
Access to the San Vicente Property is considered good along the paved road that leads to Otuzco; however, after Otuzco the road is of poor quality.
The Property is located in a moderately populated area where small villages are scattered within the landscape.
As the San Vicente Property is situated approximately 10,000 feet above sea level, crops are restricted to potatoes, vegetables and some cereals. Climatically, the region is characterized by dry and cold temperatures between May to October while from November to April, the climate is warmer with frequent rain. Exploration and surface activities can get disrupted during the rainy season.
There is 220 volts of electricity installed at the Property. Larger voltage installations power other projects in the area and could be extended to the San Vicente Property mine when and if necessary. Water is readily available all year around from streams that run through the Property. However, to date this water has not been used in the extraction process.
The closest big players and mines to the project area are:
Quiruvilca - a very large mine with narrow veins that tend to have extensive lateral and vertical continuity within various structure types.
Barricks' Luganas Norte - a world class high sulfide mine. In 2010, the mine produced 808k ounces of gold at total cash costs of $182 per ounce. The proven and probably gold reserves were then 6.6Mn ounces!
Trinity Mining Holding AG - another interesting area close to the property is the Caupar project. Recoveries of gold and silver, as demonstrated by bottle roll tests conducted by Kappes, Cassiday & Associates, are high: more than than 80% for gold and in the range of 65% for silver (when above 10 g/t in content). The Caupar property covers an area of 3,000 hectares and tying on to it are properties owned by Barrick and Goldfield.
Mineralization
Various areas of mineralization exist within the Concession. The main mineralized areas identified to date are comprised of a series of closely spaced narrow veins that strike Northeast-Southwest.
These veins have been mined along the strike for approximately 75 metres on the 100 level of the mine and the veins can be traced intermittently on the surface over a total distance of 825 metres.
Of all the mineralized structures identified at the San Vicente Property to date, only three are described in detail within the Technical Report, these are the mineralized structures that have been cut with exploration drives in the mine.
The three structures are: (i) MZ1; (ii) MZ2; and MZ3. The three mineralized structures are located within a plagioclase porphyritic sub-volcanic andesite member of the Tertiary Lower Calipuy Group of volcanic rocks. MZ4 was encountered in January of 2011 and is also described in this section as it appears to be gold bearing, unlike the other base metal veins.
The Property is located within a well known Miocene Oligocene epithermal silver and gold metallogenic belt in Northern Peru. The Yanacocha, Lagunas Norte and Quiruyilca mines are world class deposits located within this belt. Based on the current geological knowledge of the San Vicente Property, the mineralization fits the igneous hosted poly metallic veins of silver, lead, zinc and gold deposit types.
RECENT DEVELOPMENTS
In June, Lida Resources Inc. (OTC: LDDAF) announced that it had entered into two agreements to acquire 400 hectares which encompass the Quiruvilca mine. While several million has been spent on this property, the total acquisition cost to the Company was $200K with no further obligations.
The mine is located at an elevation of 3,800 meters in the Andes Mountains of Northern Peru, approximately 80 miles inland from the coastal city of Trujillo, Peru in the district of Agallpampa, Province of Otuzco.
The Property is located in the occidental part of the Tertiary Volcanic Belt of the Western Cordillera and is underlain by rocks of the Calipuy Formation, a precious and base metals metallotects formation found in Peru. The Calipuy Formation is the product of post tectonic volcanism in the Cordillera region.
Quiruvilca Mine
Quiruvilca is one of Peru's oldest mines with mineralization first reported in the area in 1789.
Mining at a corporate level started in 1907 and more or less until 1930 or so. The Quiruvilca Mine has been in continuous operation since about 1940 until 2018 and was initially focused on the silver bearing veins on the property. In 1967, the mill started to treat complex ores producing silver, lead and zinc concentrate. In 1995, Pan American acquired an 80% interest in the Quiruvilca Mine and increased their interest to 99.7% by 1996.
The workings are extensive, spread out over a wide area, in many veins. Currently, grades run at about 150 g/t silver, 4% zinc, 1.5% lead and 0.5% copper. Stoping has taken place in, reportedly, 60 places. Considering the 1,725 tons/per/day that the mine can process, that is a lot of small stopes! The underground working places are accessed by several adits/ramps and one shaft. Ore is moved to surface, primarily, by one long conveyor belt system but also supplemented by rail movement from ore passes plus skip-hoisted ore.
The Quiruvilca deposits are in layered volcanic rocks of the Miocene Calipuy Formation which includes andesite and minor basalt flows. The Calipuy formations have an estimated thickness in excess of 2,000m. Intrusive rocks include andesite stocks and dykes. The ore zones have four distinct zones. Ores in the central part of the district are mesothermal and are dominated by enargite.
The mesothermal deposits grade outward to the epithermal deposits. Lewis (1956) described the various zones in some detail. The inner zone is called the Enargite Zone and, in the past, encompassed the major part of the Quiruvilca Mine.
Little mining is done in that zone today. Minerals associated with the enargite in this zone are pyrite tennantite, wurtzite, sphalerite, chalcopyrite, orpiment, galena and rare hutcinsonite. The second zone outwards is the Transition Zone which is up to 1,400m wide.
Its dominant ore mineral is sphalerite with pyrite and tennatite-tetrahedrite. Other sulphides include chalcopyrite, galena, marcasite, arsenopyrite, covellite and wurtzite. Gangue minerals are mostly massive quartz and occasional rhodochrosite and calcite. The third zone outward is the epithermal Lead-Zinc Zone characterized by sphalerite and galena accompanied by pyrite, chalcopyrite, tetrahedrite-tennantite, marcasite, arsenopyrite and gratonite. Gangue minerals in the lead zinc zone are quartz, dolomite, rhodochrosite and calcite.
The outermost zone is the Stibnite zone. In addition to stibnite, the other minerals there are arsenopyrite, pyrite, sphalerite, galena, chalcopyrite and arsenic.
Leonard De Melt, CEO of Lida stated:
"This transaction is an important consolidation of land in an important part of Peru. The San Vicente mine was in production of gold and silver concentrate until 2011. The Quiruvilca Mine is only 6 miles away from the Company's San Vincente Property and we feel that mineralized zones connect the two properties. I feel that the large near massive sulphide copper rich zone near the bottom of the Quiruvilca mine has excellent potential and I believe this structure had a 2.5km potential that had only a few drill holes into it. I believe this combined project would potentially make an excellent exploration/resource build project that could return to mining with some key investment and management. Our goal is the completely change the mining methodology. The 2.5km gold/copper sulfides zone requires infill drilling to prove out tonnage. Our objective is to change from a vein type silver mine profile to a high tonnage gold/copper mine profile."
Lida Resources Inc. also announced in July that it has staked 2,500 hectares in the vicinity of its San Vincente Property and the recently acquired Quiruvilca Mine Property.
The Company's San Vincente Property, Quiruvilca Mine Property and additional ground (the "Property") are all located in the Quiruvilca District, Santiago de Chuco Province, La Libertad, Peru.
"We are very pleased to pick up additional ground in this area. This is a very prolific gold/silver/copper property. We are adjacent to the Barrick Gold Lagunas Norte mine. We want to consolidate our land position in the vicinity of Quiravila Mine. Our objective is to change from a vein type silver mine profile to a high tonnage gold/copper mine profile," stated Len De Melt, CEO.
At the peak during its initial 80-year mine life the Quiruvilca Mine was mining the narrow veins at 3,000 tons per day. The mine was mining at 1,000 tons per day when it closed down!
Management Team
Leonard (Len) De Melt, age: 73, Director, President and Chief Executive Officer (full time; employee)
Mr. De Melt is an engineering graduate of the Haileybury School of Mines and also holds a Bachelor of Arts degree in business and economics. He has held management positions with 12 mining companies internationally. Mr. De Melt has nearly 30 years of project management and mine development experience to the Corporation.
Geoffrey Balderson, age: 42, Director and Chief Financial Officer
Mr. Balderson is the President of Harmony Corporate Services Ltd., a company that provides corporate, secretarial, bookkeeping, accounting and filing services to public companies or companies that are working on going public. In addition, Mr. Balderson has been an officer and director of several TSX Venture Exchange listed companies over the past 12 years. Prior to that he was an investment advisor at Union Securities and Georgia Pacific Securities Corp. Mr. Balderson holds a Sales and Marketing Diploma from the Sauder School of Business at the University of British Columbia. Mr. Balderson completed the Canadian Securities Course in 2000 and the Professional Financial Planners Course in 2003 both through the Canadian Securities Institute.
Andrew von Kursell, age: 83, Director
Mr. von Kursell has been involved in mining operations in Chile, Peru, Bolivia, Ecuador, Uganda and China. Mr. von Kursell is a Professional Engineer, registered in BC, Ontario, Life Member in Nova Scotia and retired in Yukon. He earned a Bachelor of Mining Engineering degree from McGill University in 1963.
Patrick Morris, age: 51, Director
Mr. Morris is an entrepreneur and capital markets executive with over 15 years of experience. In addition, Mr. Morris co-created and co-produced Canada's first nationally syndicated radio show about growth stock opportunities, which was broadcast on 14 of the top-rated news talk stations across Canada. Prior to entering the capital markets, Mr. Morris had five years of experience in wine and spirits importing, sales, and portfolio management.
Erick Underwood, age: 51, Director
Mr. Underwood has over 25 years of experience in corporate development, business planning and analysis, treasury and accounting for the mining industry including 14 years while being based in Chile and Peru. Mr. Underwood holds a CPA, CMA professional designation from CPA Ontario. Mr. Underwood holds an MBA from the Rotman School of Management of University of Toronto, a Graduate Diploma in Management from McGill University and a B. Comm. (Finance & International Business) from McGill University. He has successfully completed all the requirements for the CPA-CMA designation and will become a Certified Management Accountant in Ontario, Canada in 2014.
THE BOTTOM LINE
Lida Resources Inc. (OTC: LDDAF) is fresh to the scene and may soon be catching major attention with its mining endeavors in Peru!
With a CEO leading the way who has been a part of a mine sale at $500Mn, anything could be possible here…
Gold, silver, zinc, and lead are all expected to head higher as the level of uncertainty related to the c-virus is unprecedented.
With gold exploding, looking at junior gold explorers may be the next best thing to owning physical gold.
Last year gold's price soared nearly 20%, making it the best year for the precious metal in a decade. This year, the metal is up way past that, and the year isn't even over!
The price of gold has traded to fresh yearly highs during every single month so far this year!
The CV-19 pandemic is having a devastating effect on the global economy and with so much uncertainty, investors are embracing the precious metal as a key portfolio hedging strategy.
"The upward momentum in gold and silver is still fairly solid at this stage because there's a lack of interest in other asset classes; many factors of the economy are still struggling," Bank of China International analyst Xiao Fu recently said.
Gold is often looked at as a safe haven many think the metal will head a lot higher. The metal thrives in an uncertain atmosphere and with this year also being an election year, the sky could be the limit.
One grand prediction comes from Frank Holmes, the CEO of US Global Investors, who believes gold's true value is as high as $10K!
The biggest gold enthusiast in Canada is the legendary mining billionaire Eric Sprott who is known for his interest in junior gold miners. Sprott believes these companies could be on the verge of striking the motherlode!
He has said that gold equities are "the investment opportunity of [his] lifetime,” adding that he fully expects gold to almost double in value in the next year.
With an economic recession, metals may be a safe haven for months to come and mining companies such as Lida Resources Inc. could be hitting the spotlight!
Lida Resources Inc. (OTC: LDDAF) could become one of the next big mining players and may be a major ground-floor idea right now!
