Amid a rising US dollar, precious and base metals have suffered, owing to investment focusing elsewhere; however, this will not last, says TSX Venture-listed Broadway Gold Mining CEO Thomas Smeenk, whose junior mining company explores for silver, gold and copper in south-western Montana.

He tells Mining Weekly Online that the US government’s increasing deficit spending requires it to print more fiat money, which lowers each dollar’s purchasing power while it increases the debt, with higher inflation an eventual result.

He adds that the strength of the US dollar is not sustainable in the long run, even though its safe harbour status has taken focus away from equities, including the mining sector.

Smeenk explains that an American dollar issued in 2010 is worth $0.88 in 2019, while a dollar issued in 1990 is today worth $0.57, and $1 issued in 1950 has the purchasing power of $0.01 today.

“With this downward trend in mind, investors should take notice of the low commodity prices and get back to fundamentals like silver, and the companies finding it,” he says.

Smeenk expects investment in commodities to pick up and suggests that silver, followed by gold and then copper are the top choices.

“Silver has more investment upside today than we have seen since the beginning of the decade. Silver is currently trading at 82 oz to 85 oz to 1 oz of gold, meaning you get 2.5 times more silver today than in 2011.

“You can now buy gold as silver at an 83% discount to what Sir Issac Newton paid for the yellow metal in 1717 when he set the silver standard at 15:1.”

Contrasting the price upswing of gold bullion in recent months with the lack of uptick in stocks of gold miners and explorers, Smeenk said that the latter option provides good entry points for investors to add the metal to their portfolio.

“There is $79-trillion in managed investment accounts globally, which have no exposure to gold as a hedge; if there was a 1% move of that money into gold as a precious metal hedge, it would eclipse the annual trading volume of physical gold on the London Bullion Market Association,” notes Smeenk.

For copper, a recovery in pricing is predicted to be around $3.30/lb by the end of this year, owing to a drop in supply inventories, especially in Chile where production has wound down as a result of the lower prices. However, new copper mines being developed in the Democratic Republic of Congo and Mongolia may replace the reduced production.

Adding to the conversation, Broadway geologist and qualified person Bob Middleton says a driving force in the copper price and demand will be the rise of electric vehicles. “Copper is the key element of electric vehicle motors, how it connects to the battery, and between the battery and the vehicle charging stations. Copper is a key element in making these vehicles happen.”

Meanwhile, Broadway is taking its next steps forward following its completion in 2018 of a 2 323 m Phase 3 surface drill programme at its flagship Madison project in the Butte-Anaconda mining region of Montana, US. The programme targeted copper/gold porphyry-based mineralisation, resulting in a latite porphyry discovery.

Broadway is drilling to define and extend an underground massive sulphide zone, which is said to contain 24 g/t gold.

In January the company announced the planning stages of a new multi-phased underground Madison programme.  Based on positive results generated from a Vulcan three-dimensional computer model of the underground portion of the project, Broadway is currently budgeting a 2 200 ft (or 670 m) programme consisting of 12 diamond drill holes from two underground stations.

The focus of the underground drilling programmes will be to infill drill and extend a massive sulphide gold zone called the “MS 4890,” confirm and define the “East Drift,” a new zone which consists of a mixed massive sulphide and skarn, as well as confirm a high-grade copper zone where 25% to 35% copper mineralization was previously bulk sampled.

“We will drill the project’s [MS 4890] massive sulphide zone, which we believe will extend it 100 vertical feet ‘down dip', and connect mineralization of the Madison mine to the adjacent Broadway mine’s 900 level,” Smeenk says, referring to the historic Broadway gold mine located on the same property

From the 1880s to the 1950s, the Broadway mine produced 144 000 oz of gold at an average grade of 0.32 oz/t (11 g/t).

News of the underground programme follows recent work that delineated a possible porphyry source of the mineralsation at Madison.  Last November, Broadway reported the discovery of statistically significant strontium/yttrium ratios over a 2.4 km contact zone, based on a 571 rock chip and 1 468 soil samples taken across prospective areas of the property.

“These anomalies indicate through-going structures and leakage of favorable geochemistry; we are in the right place to vector into a significant Au-Cu porphyry discovery,” chief geologist Philip Mulholland notes.

To date, a total of 150 holes, constituting 62 329 feet (about 18 998 m), have been drilled at Madison, defining infill drill targets that follow known and previously mined massive sulphide ore bodies that contain high grade copper and gold values.

Historical studies on the property had identified multiple priority target areas that are associated with a copper/gold porphyry system at depth, which is located within a well-mineralised, 3.2-km-long geological trend.

Earlier underground drilling results by Broadway have found 24.5 g/t gold and 0.39% copper over 30.28 m, and 41.65 g/t gold and 0.38% copper over 11 m.

“There must be a porphyry source to the property based on what we’ve encountered to date.

“If we hit a porphyry, one can expect a lot more drilling to ensue, because of the usual sheer size of porphyry deposits,” chairperson Duane Parnham previously told Mining Weekly Online.

The company’s data demonstrates that a porphyry system produced a generation of fluids that formed the skarn zones discovered along the faulted intrusive contacts currently exposed in accessible mine workings and at surface.

Once the company has completed drilling to define the porphyry system, it will work on finalising a mine plan and make a decision to either develop standalone operations on the site or to work from the existing historical infrastructure.

“Our job is to attract a mining major who likes our geophysical targets and porphyry confirmations, and who is willing to drill the deep holes to earn into the project,” Smeenk concludes.