RCKS Talk

31-Jul-2018

Austral Gold Ltd.

Production Increases QoQ; Guidance Revised Slightly Lower

Impact: Neutral

Austral Gold reported Q2 2018 production results, improving total mine production (Guanaco, Amancaya and Casposo) by ~12% from Q1 2018 to 20,255 oz AuEq.
  • Guanaco and Amancaya production increased due to stabilization of leaching plant
  • Casposo production behind schedule due to underground setbacks
  • Year to date production 16% below first half 2018 guidance
We expect stronger quarters from Austral as the company works towards meeting its 2018 production guidance. In our view, Austral is poised to re-rate towards similar scale peers, as it improves operations.

27-Jul-2018

Global UAV Technologies Ltd.

Global UAV Accelerates Technology Development

Impact: Mildly Positive

Global UAV Technologies, a vertically integrated drone technology company, announced today that it has successfully test flown a UAV (an “Unmanned Aviation Vehicle”) using the 4G cellular network for command and control as well as flight data telemetry feedback.
  • The technology allows for a pilot at an operations center to launch, fly, and land a UAV anywhere in the world with cellular network coverage, or in an urban setting where structures may obstruct radio communications, which represents a major step forward for the company in targeting UAV mapping
  • Currently, UAV's fly utilising a direct radio link with the pilot ground station, but now that flying and landing a drone using existing cellular is possible it opens up a range of new consumer and commercial drone applications for the company
  • Using the cellular network as a high bandwidth datalink will provide increased operational range for many applications such as drone surveillance, delivery, search and rescue and emergency response flights in both urban and rural areas
We see this update from Global UAV as positive for the company as it represents the success of one of the company’s many ongoing R&D projects. This ability to fly drones in an urban setting using a cellular network follows the company’s announcement of its first UAV mapping mission over a major Canadian metropolitan city, which we expect is likely to open the door to a range of new business opportunities going forward.

26-Jul-2018

Honey Badger Exploration Inc.

Near Surface Cobalt Neighbouring Beaver Silver Mine

Impact: Positive

Honey Badger Exploration has released partial results from 2 of the 8 drill holes completed during the Spring 2018 program, showing wide, near-surface cobalt mineralization at the Thunder Bay Silver Camp.
  • BM-18-002 returned 0.085% Co over 24.1m, including 0.83% Co over 1.7m, and also intersected 56.1g/t Ag over 2.2m within the cobalt discovery as well as 0.85% Cu over 1.5m; BM-18-003 intersected 0.20% Co over 4.6m
  • Located near the historic Beaver Silver Mine (average historic grade 2,565g/t Ag) and contained within the Rove Shale, a thick metasedimentary unit of host rock which was previously thought to be unmineralized
  • This discovery confirms the company’s original hypothesis that, similar to the Cobalt Camp, zones of cobalt mineralization exists in proximity to historic silver mines; the company believes these zones were missed historically
With an experienced management team and an extensive land package in an under-explored and highly prospective Ag-Co district, we expect pending assay results from 2018 drilling to reflect this potential and be important catalysts for the stock.

26-Jul-2018

Anaconda Mining Inc.

Continued Drilling Success at Goldboro Points to Resource Growth

Impact: Mildly Positive

Anaconda Mining has announced the final assay results from the company’s 11,588m diamond drilling program that began in October of last year at its Goldboro Gold Project in Nova Scotia. The release includes the results of two holes covering 1,139m, which successfully targeted extensions of the East Goldbrook (EG) and Boston Richardson (BR) Gold Systems within section 9000E.
  • Highlight intersections from the two holes include: 63.88g/t Au over 1.0m (BR-18-41), 77.69g/t Au over 0.5m and 6.05g/t Au over 3.7m
  • This round of drilling in the EG system has discovered previously unmodeled mineralized zones up-plunge in the section and at BR the system was extended 250m at depth to a total of 525m and remains open
  • Between the two gold systems 10 sections have been drilled to date, with the gold hosting structure was present in all areas tested for a total strike length of 700m; all these results are planned to be included in a future mineral resource update
  • Results continue to demonstrate the continuity of the deposit and suggest resource growth is likely with the next update – 10% increase in both grade and tonnes at Goldboro would increase our overall NAVPS estimate by 9%
Anaconda continues to trade at a discount to peers (0.29x NAV, peers 0.59x). We continue to believe that upcoming catalysts, including ongoing operating execution, ongoing exploration results from both Goldboro and Point Rouse and advancing Goldboro as important catalysts to close the valuation gap to peers.

25-Jul-2018

IDM Mining Ltd.

Money Rock Panel Samples Return High Grade Silver & Gold

Impact: Neutral

IDM Mining has released the results of additional surface samples from trenching at the Money Rock zone of the Lost Valley target at its Red Mountain Gold Project in the Golden Triangle of northwestern BC.
  • The 51 samples reported today, collected on one-metre intervals, returned an average of 9.81g/t Au and 101.40g/t Ag over 51m of strike; the total samples to date, collected over 85m of strike, average 11.15g/t Au and 82.56g/t Ag
  • Trenching at Money Rock has exposed the structure for 100m of strike length with a width of veining and faulting that varies from ~0.8 - 2.5m; panel samples were taken with the objective of representing the entire length and width of the interval
  • Money Rock potentially connects with the Randell vein which is currently being explored, with assays pending; 2016 exploration efforts are being supplemented with current and future exploration at Money Rock and Randell
We expect permitting updates and development activities to be important catalysts for the stock as the company remains focused on advancing the project towards construction (2018). IDM continues to trade at a discount to peers on a per ounce basis (C$40/oz vs. peers at C$46/oz).

23-Jul-2018

De Grey Mining Ltd.

De Grey Finds Fresh Conglomerate at Jarret Well

Impact: Positive

De Grey Mining has reported the first diamond drill hole results from the Jarret Well Prospect as well as planned conglomerate gold exploration activities at the Pilbara Gold Project in Western Australia.
  • The Jarret Well drill hole intersected fresh conglomerate sequence from 57.5m - 97m depth, including 11.6m of pyrite rich pebble conglomerate towards the base of the conglomerate package
  • The intercepted conglomerate appears to be very similar to what was reported by Novo Resources at the Comet Well and Purdy’s Reward prospects, 120km to the west
  • Due to the nuggety nature of the mineralization, assays are not expected to be representative of gold grade, however, downhole sampling will be used for geochemical characterization of rock types and potentially as a pathfinder for bulk sampling
Our preliminary valuation of De Grey’s hard rock assets of A$0.15-0.23/share does not account for the potential of its conglomerates or the recent hard rock exploration success that the company has had. We continue to believe that De Grey’s current valuation provides investors a low-cost option on the conglomerates which is underpinned by traditional hard rock assets with resource growth potential. Next catalyst includes a PFS for the company’s Pilbara Gold Project (Q4 2018), preceded by ongoing exploration results.

23-Jul-2018

Adventus Zinc Corp.

Strong Infill Holes Drilled at Curipamba

Impact: Mildly Positive

Adventus Zinc has provided an update for the 7,500 m (~6,060m now complete) 2018 infill drilling program at its El Domo deposit at the Curipamba project in Ecuador.
  • Highlights of the drilling includes:
    • 4.12m of 2.27% Cu, 14.31g/t Au, 33.36% Zn, 526.8g/t Ag, and 3.78% Pb for 31.96% CuEq (CURI-270)
    • 9.98m of 2.58% Cu, 11.48g/t Au, 22.72% Zn, 265.8g/t Ag, and 2.73% Pb for 23.06% CuEq (CURI-272)
    • 4.00m of 4.36% Cu, 22.82g/t Au, 16.56% Zn, 250.5g/t Ag, and 3.53% Pb for 31.03% CuEq (CURI-275)
  • Infill results to date, have returned a weighted average grade of 14.3% ZnEq (5.95% CuEq), over an average width of 6.5m. This compares favourably to the current resource grade of 10.7% ZnEq (4.45% CuEq) and suggests to us that the next resource update should result in a larger resource and increased grades
  • As well, the company intersected stockwork mineralization below the main orebody. And while the grades are lower, we highlight that this type of mineralization has the potential to materially extend the mine life beyond what is implied by the current resource
The company is currently trading at a slight discount to peers, which we expect to close given the exploration potential and quality of the company’s exploration assets. Upcoming catalysts includes results from ongoing exploration activities along with the planned monetization of non-core earlier stage exploration assets.

19-Jul-2018

Honey Badger Exploration Inc.

Strategic Property in Historic Camp

Impact: Mildly Positive

Honey Badger Exploration has entered into an option agreement with Cairngorm Mines Limited to acquire 100% interest in the Beaver Silver Property, located in the historic Thunder Bay silver district.
  • In order to exercise its option, Honey Badger must complete the following requirements within the 3-year option period following the execution of the agreement: cash payments totaling $125,000, the issuance of securities with a market value of $410,000, and the incurrence of exploration expenditures totaling $750,000
  • If the option were to be exercised, a 2% net smelter return will be granted to Caringorm, of which 1% is available to be repurchased for $1,000,000
  • The acquisition of the Beaver Silver property and Beaver Silver mine supports Honey Badger’s strategy of combining historical data and advanced technological data to exploit the underexplored nature of the district; data from 1960s sampling has been compiled and airborne magnetics surveys have already been completed
With an experienced management team and an extensive land package in an under-explored and highly prospective Ag-Co district, we expect pending assay results from 2018 drilling to reflect this potential and be important catalysts for the stock.

19-Jul-2018

First Cobalt Corp.

Drilling High-Grade Cobalt at Iron Creek

Impact: Mildly Positive

First Cobalt has tested the western extension of mineralization at the Waite Zone of the Iron Creek Cobalt Project in Idaho with 6 underground drill holes, validating previous results which had extended the total strike length of the zone to 520m and along a dip length of over 250m.
  • At the Waite Zone, a broad intercept, to the west of the previously drilled initial resource area, contained 24.6m grading 0.28% Co and 0.22% Cu (0.30% CoEq or 3.02% CuEq, based on US$30/lb Co and US$3/lb Cu)
  • The high-grade intercepts are contained within broader zones of lower grade cobalt-copper mineralization that has the potential to be suitable for bulk mining methods, pending further drilling
  • Drilling at Iron Creek has extended the strike and dip beyond the boundaries of the maiden resource estimate expected in October (primarily based on 2017 drilling by US Cobalt), and an encouraging consistency of cobalt grades over wider widths and higher than expected copper grades, support further testing of the western strike extension of Iron Creek for a second resource estimate in early 2019
On an EV/hectare basis, First Cobalt is trading at a discount to other cobalt explorers in the Cobalt Camp of Ontario (C$0.011/ha vs peers at C$0.018/ha). We continue to believe the company’s unique attributes, including its land position, infrastructure and recent acquisition of US Cobalt are likely to close the gap to other cobalt exploration peers.

18-Jul-2018

Ascot Resources Ltd.

Additional High-Grade Drill Results from Big Missouri and Premier/Northern Lights

Impact: Mildly Positive

Ascot Resources has released results from 9 drill holes at Big Missouri and 21 holes at Premier/Northern Lights, within the Premier-Dilworth property near Stewart, British Columbia.
  • Drilling at Big Missouri continues to identify new gold mineralization with intersections of 8.07g/t AuEq over 4.29m and 7.74g/t AuEq over 5.5m
  • Drilling at Premier/Northern Lights has demonstrated that the current resource has growth potential in this area, with notable intercepts of 9.91g/t AuEq over 2m and 10.34g/t AuEq over 2m
  • The current drill program is designed to delineate a large enough high-grade underground resource to justify the restart of the Premier mine using the existing the infrastructure. These results continue to suggest this is a likely outcome, and the company plans to start on initial engineering studies in June
Based on the company’s recent resource update (open pit & underground), Ascot trades at a discount (C$30/oz versus peers at C$95/oz). We expect the ongoing news from exploration and infill drilling on higher-grade underground resources to close the gap to peers.

17-Jul-2018

Monarques Gold Corp.

Initial 2018 Results Point to Beaufor Mine-Life Extension

Impact: Mildly Positive

Monarques Gold reported its first set of results in 2018 from the planned 30,000m drill program at the Beaufor Mine. In our view, the results from these first 9 holes (2,047m) suggest mine life extension for Beaufor is possible; however, more work is needed.
  • 20.62g/t Au over 3.95m was intersected at QF1, which lies ~70m from the lower contact of Zone Q, the main zone currently in production at Beaufor
  • All five holes drilled at the 1700 project intersected mineralization, confirming the vertical and lateral extension of a mineralized lens containing several veins; more work to be done on the western extension
  • Results show strong gold potential in Zone Q footwall suggesting potential to increase the mineral resource in this area; the next round drilling, which is already underway, will test the West, Central and East sectors of QF1
Monarques continues to trade at a discount to peers (C$13/oz vs. peers at C$33/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

17-Jul-2018

Bonterra Resources Inc.

Gladiator Continues to Bulk Up

Impact: Mildly Positive

Bonterra Resources has released new infill and extension drilling results from the ongoing resource development program at the Gladiator Gold Deposit, including an intersection of 15.3g/t Au over 2.7m at ~500m depth, extending the Footwall Zone down-plunge to the east (Figure 1).
  • The Footwall Zone was extended westwards with an intersection of 9.1g/t Au over 2.0m, while the North Zone was extended down plunge to 300m depth with an intersection of 12.2g/t Au over 1.5m and expanded up plunge in the east side of the deposit with 12.6g/t over 1.3m
  • The resource development program continues to demonstrate continuity down dip and along strike and supports our view that the Gladiator Deposit has the potential to reach upwards of 2Moz at high-grades with the next resource update
  • Continuity of mineralization is now confirmed over a total drilled strike length of 1,200m, as well as to a drilled depth of over 1,000m; the resource development program continues with five drills in preparation for the updated mineral resource estimate in Q4 2018
Given our expectation for meaningful resource growth at its flagship Gladiator deposit, assuming a 2M oz Au resource at Gladiator, Bonterra trades at a discount to peers (C$19/oz vs. peers at C$41/oz).

16-Jul-2018

Novo Resources Corp.

Novo Exercises ROFR on Half of Comet Well Royalty

Impact: Mildly Positive

 

Novo Resources has exercised its right of first refusal (ROFR) to purchase half of a 1% NSR royalty on its Comet Well property in the Pilbara, matching the terms of an offer made by International Prospect Ventures Ltd. (TSXV:IZZ).
  • Payment to the holder of the NSR includes $1,750,000 cash payable in three increments ending 1 year from the approval date, as well as Novo common shares equivalent to 9% of IZZ’s issued share capital at the date of execution
  • Additionally, Novo has agreed to pay a sub-royalty to the holder based on announced resources or mined resources of gold, of $0.50/oz up to 5,000,000oz and $1.00/oz for over 5,000,000oz
  • Novo stated that the use of the company’s ROFR was to minimize potential profit dilution from future operations
Now that the company has overcome the processing challenges encountered for the first samples, we expect steady newsflow going forward (24 samples currently in the queue). We continue to believe that Novo is worth between C$4.70-17.90/sh, suggesting upside from the current share price.

 

16-Jul-2018

Metanor Resources Inc.

Barry Extended West With 7.4g/t Over 4.4m

Impact: Mildly Positive

Metanor Resources has released new results from the ongoing drill campaign at the Barry project, located in the Urban-Barry camp in Quebec.

  • Highlights from this round of results include: 7.4g/t Au over 4.4m, 7.1g/t over 4.2m, 9.4g/t over 2.9m and 8.2g/t over 2.6m
  • Drilling succeeded in purpose of expanding the deposit to the west and at depth, demonstrating strong continuity of the mineralized system
  • The Barry ramp, which will provide access to both underground drill bays and extraction of the bulk sample program in Q4 2018, is progressing on schedule with approximately 300m of advancement to date
Bonterra Resources has recently announced that its has entered into a binding letter of intent to acquire Metanor for ~C$0.65/share in an all share transaction (1.6039 Bonterra shares for each Metanor share), representing a 8% premium to last close of C$0.60/share, which reflects further upside to the current share price should the transaction be completed.

15-Jul-2018

SolGold Plc.

Strong Mineralisation 30m below Surface at Cascabel

Impact: Mildly Positive

SolGold has provided an update on the drilling programs at the Alpala and Aguinaga deposits at the Cascabel Cu-Au project in Ecuador.

  • Extension drilling at the high-grade core is expected to extend the mineralization along the lower and northeast margins of the deposit. Results included 0.71% CuEq over 458m (incl. 1.17% CuEq over 66m) 
  • Shallow mineralization continues to be intersected by extension drilling at Alpala Central within 450m of the surface, above the existing resource limits along the southwest margin of the deposit and 250m shallower than previously modeled
  • Drilling at Aguinaga has confirmed near surface potential, with Hole 6 intersecting strong mineralization at 30m depth and Hole 7 intersecting 67m of visual copper sulphide mineralization from 55m below surface
In our view, the SolGold's current valuation (C$0.034/lb vs. peers at C$0.026/lb CuEq) does not properly reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

12-Jul-2018

eCobalt Solutions Inc.

eCobalt Provides Construction Update

Impact: Mildly Positive

eCobalt Solutions has provided an update on the construction progress at its 100% owned Idaho Cobalt Project.
  • Crucial equipment has been delivered to site for the construction of environmental systems; the main transformer has been energized with the installed grid power now operational
  • The concrete plant is on site and the company has begun constructing foundations for the Water Treatment Plant (WTP); also in progress is the installation of liners for the Tailings Waste Storage Facility (TWSF) and water management ponds
  • eCobalt’s objective is to ensure all environmental systems are in place to manage mine water and waste rock prior to commencing underground operations; activities are being funded by proceeds of the February 2018 public offering and, due to weather delays earlier this spring, are now anticipated to be completed in early Q4 2018
We view eCobalt as one of the few companies positioned to meet the near-term increase in cobalt demand, taking advantage of the current upswing in metal prices. The project’s location, in the U.S., places it in a mining friendly jurisdiction with low political risks versus other cobalt developers.

12-Jul-2018

Red Pine Exploration Inc.

New Zone Discovered at Wawa Gold Project

Impact: Mildly Positive

Red Pine Exploration has announced results from 22 new holes drilled at its Wawa Gold Project as a part of its 30,000m 2017-2018 drill program and has discovered a new mineralized zone (Minto Lower Zone) parallel to the Minto Mine South Zone.
  • Highlights include: 4g/t Au over 2.2m (SD-18-213) and 76g/t Au over 1.6m (SD-18-212); another new gold zone was discovered in the footwall of the Surluga Deposit, including 2.54g/t Au over 5.4m (SD-17-153)
  • The new Minto Lower Zone extends for over 1.5km and 3D modeling suggests it may be associated with the historic Parkhill Mine, which had an average recovery grade of 8.57-10.28g/t Au
  • The Minto Lower Zone correlates with the company’s understanding of the mineralization of the project and reflects the exploration potential of the property
Red Pine currently trades at a discount to peers (C$26/oz vs. peers at C$49/oz), valuation does not reflect the exploration upside we believe the property has.

12-Jul-2018

Anaconda Mining Inc.

Q2 Production Beats Estimates; Withdraws Bid

Impact: Positive

Anaconda Mining Inc. (TSX:ANX) has announced Q2 2018 production results which were ahead of our expectations. In addition, Anaconda announced the withdrawal of its bid for Maritime Resources, which should remove the arbitration overhang.
  • Anaconda produced 4,632oz and sold 4,330oz in Q2, exceeding our estimate of 3,439oz of Au by 26% (Figure 1). The beat was as a result of better than expected grades, however this includes processing low-grade stockpiled ore from the Pine Cove pit and the company is expecting even higher grades in H2 2018 as ore feed becomes predominately sourced from Stog’er Tight
  • The Pine Cove Mill achieved record throughput of 121,299t (1,350tpd) exceeding our estimate of 1,300 tpd. The average head grade of 1.38g/t was ahead of our our estimate for 1.10g/t Au
  • With 8,856oz produced in H1 2018, the company is on track to beat 2018 guidance of 18,000oz Au, particular since we expect better grades in H2 2018 as the transition to Stog’er Tight is completed. We now model 20,230oz in 2018 (was 19,220oz)
  • As a result of this operational beat we now model revenue of C$33.5M (was C$31.5M), CFPS of C$0.013 (was C$0.0042) for Q2 2018 and a quarter end cash balance of C$9.4 M (was C$8.8M). Our estimate includes the recent ~C$4.5M equity financing, which is expected to fund an aggressive exploration program at Point Rouse and Goldboro
As a result of Anaconda withdrawing its bid for Maritime Resources and beating our Q2 production estimate, we have revised our NAVPS for Anaconda to C$1.00/sh (was C$1.11/sh). The exclusion of Maritime’s Green Bay property from our NAV was partially offset by stronger operating results from Point Rousse in Q2. The company remains attractively valued trading at 0.36x NAV (peers 0.70x).

11-Jul-2018

Bonterra Resources Inc.

Gladiator Continues to Grow

Impact: Mildly Positive

Bonterra Resources has released new infill and extension drilling results from the ongoing resource development program at the Gladiator Gold Deposit, including an intersection of 30.5 g/t Au over 2m, which expanded the high-grade area of the South Zone (Figure 1).

  • The North Zone was extended 150m east at ~500m depth, while the Footwall Zone was extended down plunge with an intersection of 10.3g/t Au over 2.1m and expanded eastward with 18.7g/t over 2.0m
  • The resource development program continues to demonstrate continuity down dip and along strike and supports our view that 2Moz could be delivered with the next resource update
  • Continuity of mineralization is now confirmed over a total drilled strike length of 1,200m, as well as to a drilled depth of over 1,000m; the resource development program continues in preparation for the updated mineral resource estimate in Q4 2018 
Given our expectation for meaningful resource growth at its flagship Gladiator deposit, assuming a 2M oz Au resource at Gladiator, Bonterra trades at a discount to peers (C$19/oz vs. peers at C$40/oz).

10-Jul-2018

Novo Resources Corp.

Heritage Agreement Paves the Way for Regional Exploration

Impact: Mildly Positive

Novo Resources has announced that the Ngarluma Aboriginal Corporation (NAC) has signed a heritage agreement including 37 exploration licenses covering 6,645sq km in the West Pilbara region (Figure 1), which represents over half of the company’s total land package in the Pilbara of Western Australia.
  • With the execution of the agreement, Novo’s exploration license applications should be granted without undue delay, which clears the way for exploration on the company’s wider land package in the Pilbara
  • A strengthening relationship with the NAC allows for a smooth transition to commence negotiations to enter into a Native Title agreement with respect to mining, which we highlight is essential in obtaining an exploitation license
  • Novo has previously highlighted that there are 24 samples (120-168 tonnes) at SGS waiting to be processed and additional samples at a secure yard in Karratha. The company expects to be able to process 50 tonnes per month now that the processing challenges have been ironed out. We expect the next set of results to be released within the next few weeks
Now that the company has overcome the processing challenges encountered for the first samples, we expect steady newsflow going forward (24 samples currently in the queue). We continue to believe that Novo is worth between C$4.70-17.90/sh, suggesting upside from the current share price.

10-Jul-2018

First Cobalt Corp.

Second Cobalt Trend Identified in Kerr Area of Cobalt Camp

Impact: Mildly Positive

First Cobalt has identified a second cobalt mineralized trend in the Kerr area at the Cobalt North project in the Canadian Cobalt Camp. The near surface cobalt mineralization extends over a 500m strike length and is parallel to the previously identified Kerr #2 Zone located 400m south, which has been traced over 350m to date.
  • Several closely spaced Co-Ag veins were intersected near the historic Drummond and Kerr Lake Mines, including: 6.5m grading 0.33% Co and 133 g/t Ag in addition to 10.7m grading 0.14% Co and 13.9 g/t Ag
  • Recent results support the company’s vision of large scale open pit mining in the Cobalt Camp, with new mineralization located just 400m north of Kerr #2 Zone; further testing is required to determine the continuity within the vein network system
  • First Cobalt is now reallocating a larger portion of this year’s exploration budget into the Kerr area despite having a multitude of other prospective targets across its land package; results from 9 holes are pending and additional drilling is planned
On an EV/hectare basis, First Cobalt is trading at a discount to other cobalt explorers in the Cobalt Camp of Ontario (C$0.011/ha vs peers at C$0.016/ha). We continue to believe the company’s unique attributes, including its land position, infrastructure and recent acquisition of US Cobalt are likely to close the gap to other cobalt exploration peers.

10-Jul-2018

Monarques Gold Corp.

Mineralization Expanded at Croinor

Impact: Mildly Positive

Monarques Gold has released new assays from its ongoing drill program at its Croinor Gold project, located near Val-d’Or in Quebec. Results demonstrated an extension of mineralization both along strike and at depth.
  • Highlights include: 9.4m of 3.08g/t Au intersected at 560m depth including 3.1m of 6.61g/t and 16.05g/t over 3.1m
  • Drilling has extended the deposit 180m horizontally to the northwest and 256m below the current resource envelop to 560m of depth
  • These Phase 1 results are from 16 drill holes reaching 4,584m of the total 20,000m 2018 program that began in March
Monarques continues to trade at a discount to peers (C$14/oz vs. peers at C$35/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

10-Jul-2018

Anaconda Mining Inc.

Anaconda Rescinds Increased Offer; Original Offer Still Valid

Impact: Negative

Anaconda Mining has announced that it has rescinded its proposal to increase, by ~28%, the take-over bid for Maritime Resources Corp. (TSXV:MAE). The announcement follows the closing of Maritime’s private placement of C$1.4M, which results in dilution to current Maritime shareholders by over 23%.
  • Anaconda will proceed with its initial take-over bid of 0.39 Anaconda shares per Maritime share, a 28% premium to Maritime’s previous close of C$0.11/share, which has been approved by Anaconda shareholders
  • Anaconda has entered into Lock-Up Agreements with Maritime shareholders holding ~10.6% of the issued and outstanding Maritime Shares, pursuant to which such Maritime Shareholders have agreed to tender their Maritime Shares in support of the Offer
  • We expect that investors in the C$1.4M private placement at C0.10/share are likely to tender their shares in order to capture the value gap between the offering price and Anaconda’s original bid
We view these new developments as negative for Anaconda and have revised our estimate of the probability of the deal being completed to 50-60% (was 60-70%). By factoring in the closed private placement into our estimates, we have decreased our NAVPS estimate to C$1.01/sh. (was C$1.11/sh.) Regardless of the completion of the takeover, the company remains attractively valued. Assuming the transaction is completed, Anaconda is trading at 0.36x NAV or if it is not completed Anaconda is trading at 0.37x NAV (peers 0.72x). We believe that a resolution of the hostile bid (either positively or negatively) is likely to lift current overhang on the share price.

05-Jul-2018

Lupaka Gold Corp.

Lupaka Continues to Demonstrate Grade Continuity

Impact: Mildly Positive

Lupaka Gold has released results from channel sampling within the vertical relief raise development between the 3400 Level and 3430 sublevel at its 100% owned Invicta Gold Development Project, located in Peru.
  • Assays from the channel sample, which was conducted vertically across the strike of the Atenea vein, returned an average of 23.45g/t AuEq over a vertical height of ~30m
  • The results, when combined with the previous horizontal channel sampling from the 3430 sublevel, continue to support the continuity and high-grade nature of the Atenea vein in addition to providing further evidence that grade reconciliation has the potential to be positive as the company ramps up production
  • With the relief raise development now completed, one less step sits in the way of production, which the company indicated is still on track to commence in Q3 of this year
Based on the company’s recently released PEA, our valuation of Lupaka suggests a NAVPS10% of C$0.55 assuming a 350tpd operation. Based on our site visit and the company’s continued exploration success, we see potential for a 500tpd operation at Invicta. We believe that first production, expected in Q3 2018 is going to be the next key re-rating catalyst for Lupaka.

05-Jul-2018

Anaconda Mining Inc.

Anaconda Extends Mineralization at Goldboro

Impact: Positive

Anaconda Mining has released new assay results from 1,725m across 5 holes drilled at the Goldboro Gold Project in Nova Scotia, as a part of the 11,588m drilled since October 2017. Holes targeted 8 mineralized zones of the East Goldbrook (EG) system and 8 zones of the Boston Richardson (BR) system along section 9050E (Figure 2).
  • Current drilling intersected all 8 zones of the BR system, extending it vertically by 250m (Figure 2) and was extended, along with the EG system, westward by 50m up plunge, including: 12.39g/t Au over 3.2m and 24.49g/t Au over 1.0m (Figure 1)
  • Drilling has also demonstrated the continuity of wide mineralized zones along the dominant plunge of the BR system outlining two zones (7.5m and 9.9m wide) within the same corridor as previous sections with at least 100m of mineralization (Figure 3)
  • Results continue to demonstrate the continuity of the deposit and suggest resource growth is likely with the next update – 10% increase in both grade and tonnes at Goldboro would increase our overall NAVPS estimate by 9%
Anaconda has recently announced that it will increase the takeover bid for Maritime Resources from an exchange ratio of 0.39 Anaconda shares to 0.50 Anaconda shares per Maritime share, a 28% increase. Assuming the transaction is completed, Anaconda is trading at 0.34x NAV or if it is not completed Anaconda is trading at 0.36x NAV (peers 0.69x). We believe that a resolution of the hostile bid (either positively or negatively) is likely to lift current overhang on the share price.

05-Jul-2018

Metanor Resources Inc.

Metanor Intersects High-Grades in Moroy Zone

Impact: Mildly Positive

Metanor Resources has announced new drill results from the ongoing underground drill program at the Moroy zone of the Bachelor Mine, located in Quebec.
  • Results demonstrate high-grade continuity to the east, including: 8.4g/t Au over 5.5m, 11.0g/t over 4.0m, and 10.7g/t over 4.4m
  • The Moroy zone will continue to be explored with one underground diamond drill rig completing 15m (50ft) step outs; development into Moroy will provide additional ore for daily gold production
Bonterra Resources has recently announced that its has entered into a binding letter of intent to acquire Metanor for ~C$0.65/share in an all share transaction (1.6039 Bonterra shares for each Metanor share), representing a 12% premium to last close of C$0.58/share, which reflects further upside to the current share price should the transaction be completed.

04-Jul-2018

Anaconda Mining Inc.

Anaconda Bumps Up Maritime Bid

Impact: Mildly Positive

Anaconda Mining has announced that it will increase the takeover bid for Maritime Resources from an exchange ratio of 0.39 Anaconda shares to 0.50 Anaconda shares per Maritime share, a 28% increase.
  • The offer represents $0.21 per Maritime share, which equates to a premium of ~110% based on the prior day close’s share price. This sweetened offer is likely to entice additional shareholders to tender their shares
  • The increased offer is conditional on Maritime’s recently approved private placement being withdrawn. This could eliminate potential investors in that financing who were looking to capture the value gap between the offering price and Anaconda’s original bid
  • In our opinion, the increased bid has approximately the same dilutive impact as the proposed private placement; however, in this scenario the added premium would only benefit Maritime’s current shareholders
We view this new development as positive for both Anaconda and Maritime shareholders with our revised estimate of the probability of the deal being completed to 60-70% (was 40-50%). If we were to factor the revised offer into our estimates, our NAVPS estimate would decrease from the current C$1.11 to C$1.05. We are leaving our estimates unchanged at this time but are likely to update when once the increased offer is formalized. Regardless of the completion of the takeover, the company remains attractively valued. Assuming the transaction is completed, Anaconda is trading at 0.34x NAV or if it is not completed Anaconda is trading at 0.36x NAV (peers 0.69x). We believe that a resolution of the hostile bid (either positively or negatively) is likely to lift current overhang on the share price.

03-Jul-2018

De Grey Mining Ltd.

Continued Hard Rock Success; Toweranna Results Impress

Impact: Positive

De Grey Mining has released drill results from the Toweranna Gold Deposit in the Pilbara, confirming further infill mineralization within existing resource limits at the Western Zone and intersecting new shallow high-grade gold lodes at the Southern, Northern and Eastern Zones.

  • Mineralization remains open along strike and at depth, drill intersections included 4.82g/t Au over 22m and 17.29g/t over 7m; diamond drilling assays for 9 holes are pending, though visible gold was noted in quartz veining at a 173m depth
  • Toweranna only represents a small area of the current overall resource (1.21Moz at 1.6 g/t) and is expected to be a key area to expand the existing resource
  • These results continue to highlight the prospectivity of De Grey’s Pilbara project and ongoing drill results from the companies, active program are expected to demonstrate the potential of its traditional hard rock assets
Our preliminary valuation of De Grey’s hard rock assets of A$0.15-0.23/share does not account for the likely resource growth demonstrated by these results. We continue to believe that De Grey’s current valuation provides investors a low-cost option on the conglomerates which is underpinned by traditional hard rock assets with resource growth potential. Next catalyst includes a PFS for the company’s Pilbara Gold Project (Q4 2018), preceded by ongoing exploration results.


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