Irving is About to Become a Gold Producer
One of the great pleasures of my job is to revisit companies making solid progress after having done everything they said they would do. I got back a week or so ago from a quick dash to Japan where I got to visit the wonderful team of Irving Resources. (IRV-C)
Irving is seven holes into a scout-drilling program. Their brilliant technical team has already hit a discovery hole similar in grade and thickness to the discovery hole of Hishikari, which was on only the 2nd hole. I was talking about Irving over two years ago; after all they had been reporting $26,456.39 a ton gold over 2.5 years back.
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Their shares were $.85 back then even after reporting the highest-grade samples I have ever seen. That gave them about a $26 million market cap. Guys: This isn’t rocket science. If you can find one $26,456.39 a ton rock sitting on the ground there are certainly going to be more.
Slow forward to 2019. Irving has done something that no Japanese company could have done. While the Japanese are brilliant, there are no junior gold exploration companies in the country. And Irving has done something that no other Canadian could have done. They have brought in the world’s largest gold mining company as a partner, they have appointed the former Canadian ambassador to Japan as an advisor and made the Omu Sinter project the go-to gold project in Japan. While I was visiting early in July the wonderful Akiko Levinson, President and CEO was hosting a group of about 25 members of JOGMEC, the Japan Oil, Gas and Metals National Corporation.
JOGMEC is a government organization responsible for ensuring a stable supply of various resources to Japan through the discovery of economic deposits of base metals as well as precious metals and other rare metals.
I would love to say that the last three years have been a cakewalk for Irving where Akiko just sauntered in and sunk a few holes and discovered one of the highest-grade gold mines in the world. She and Quinton Hennigh may have done that but it’s been a long hard slog. They have literally had to reinvent the wheel and fire at the same time. There was no junior exploration going on, no experienced government agencies. Even finding drillers and assistants and core saws has been an adventure in frustration.
I love companies with problems. The bigger the problems, the more I love them. I used to go to all the gold shows to catch up with the new and upcoming metals stories but it was always the same story.
“We have the most brilliant management team in history. Our technical team has 500 years experience and have discovered and put into production 150% of all the mines in the last 50 years. Our worst project is the best discovery in the universe. And, oh, by the way, we don’t have any problems at all. Everything is running as smoothly as a Singer Sewing Machine.”
Well, I know that’s bullshit. I have owned and run half a dozen projects and life is pure hell with everyone involved doing their level best to crater the operation. You have nothing but problems. That’s what people get the big money for.
Everyone except Akiko Levinson, by the way. For the year ended February 28, 2019 management fees totaled $171,390 CAD. While I was in Hokkaido on the site visit we were in and out of the office with mud on our boots. I looked around and caught Akiko sweeping the floor. If I was ever to recommend a company it would be one in which the CEO is paid peanuts and has to rely on share appreciation to make money and picks up a broom and sweeps when the floor is dirty. I love this company.
One of the fun parts of the exploration program is getting the core sawed. You can be in the most remote region of Northern Canada during the dog days of dead winter and get a core saw delivered via FedEx or UPS in two days. Faster if you are willing to pay the overnight premium.
Remember when I said the company had to invent both fire and the wheel at the same time. In Japan people who cut core have to be certified and there are only a handful. And the sinter rock is well; it’s rock, really hard rock. It chews through saw blades faster than a drunken Squid (Navy puke) on Saturday night spends money. They had to order a special high performance saw from Aussieland. And that takes time.
Quinton keeps getting short hits of high grade, expect some results out in a couple of weeks. But he hasn’t yet hit the mother lode. I thought I would contribute what I could so I brought in the fellow I used to work with to spot holes for me.
As a backup, Newmont sent in their crack CSAMT team from Perth to run a survey for Irving. While I am not a giant fan of giant mining companies, they do have access to the best and brightest people in mining. Such was the team from Aussieland.
With CSAMT you lay out a line of electrical wire over the ground and whisper some secret incantation and your computer will tell you where the rocks are. I don’t know why that would be valuable; my monkey can find rocks if that is all you are looking for. In any case Quinton and the CSAMT team agree it’s a highly valuable resource for locating the vein structure.
As far as the practical side of drilling and exploration Quinton, his technical people and the Newmont folks have things under control. One day soon they will tap into the main feeder at the Omu Sinter and the fireworks will begin.
Meanwhile, back at the Omui Mine, there is real news. Back in October of 2018 Irving quietly released a press release that is only taking effect now. They said they had received approval to take bulk samples and ship the material offsite to a smelter. Irving is about to become a producer.
The plan all along has been to skip the milling and processing part and ship the silica rich rock to some of the numerous smelters in Japan. They would be paid $100 a ton for the rock and 95% of the value of the contained metals. The payment for the flux would offset the price of shipping and 95% recovery is always wonderful.
Irving is in the process of stripping the overburden from the already identified silica veins near the Omui Mine and picking 1500 tons of rock for the initial test shipment. The ore should be on the ship in August and payment received shortly thereafter. Depending on how easy it will be to identify ore chutes near surface the test bulk mining could soon become a source of funds to continue mining drilling and exploration.
I have always been a fan of both Quinton Hennigh and Akiko Levinson. They make a great team. I am convinced that Irving will remain the leader in exploration and production of gold and silver in Japan. At least until someone takes them out.
The company is well financed and has a major partner. Over 90% of the shares are in strong hands. A big hit would send the shares skyrocketing.
I was an early adopter of Irving and have participated in all of the placements and bought shares in the open market. Due to the current market price, it is my largest holding. Irving is an advertiser and naturally I am biased. Do your own due diligence.