RCKS Talk

28-May-2018

Pacton Gold Inc.

Pacton Picks Up More Land in Pilbara

Impact: Positive

Pacton announced the acquisition of the Friendly Creek exploration license (1) and mining leases (5) totalling 31.36km2, adjacent to land held by Novo Resources’ and Kairos Minerals (Figure 1).

  • Initial exploration is planned to be undertaken on the historical property which extends over a 10km strike
  • Large scale bulk sampling can begin quickly with mining licenses already in hand
  • Under the agreement Pacton will pay C$25,000 to the vendors and issue 2.5 million shares
Following the strategic investment from Eric Sprott and recent land consolidation, Pacton is quickly advancing its interest in the Pilbara and becoming a large landholder in the region.

 
25-May-2018

Monarques Gold Corp.

FQ3 Reflects One-Off Issue; Operations Expected to Improve in FQ4

Impact: Neutral

Monarques reported FQ3 2018 financials (ended March 31, 2018) with revenues of C$9.8 million (down 4.6% QoQ) following weaker than expected production during the quarter due to unanticipated equipment challenges and planned maintenance.

  • Equipment challenges resolved, production returned to normal in April which should support stronger FQ4 financials
  • Company ends quarter with strong cash balance of C$18.1 million, despite reporting QoQ decreases in EBITDA, operating cash flow and free cash flow.
  • Continues to work towards restarting the Beacon mill at end of 2018 to increase capacity to 2,350 tpd
Monarques currently trades at a discount to peers (C$14/oz vs. peers at C$33/oz) and we believe the upcoming resource expansion drilling and technical studies including conceptual study should help close the valuation gap to peers.

 

24-May-2018

First Cobalt Corp.

Kerr Strike Extended; US Cobalt Acquisition Approved

Impact: Positive

First Cobalt continues to gain momentum as the company releases another set of drill results from the Kerr area in Cobalt North and the US Cobalt acquisition gains approval.

  • US Cobalt acquisition approved; recent high-grade results confirm reasoning
  • Kerr area mineralized zone expands another 150m, total length now 350m and remains open
  • Mineralization mostly intercepted from 25m to 100m: believed to extend to surface
We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers. The completion of the US Cobalt acquisition is the next key catalyst for the company, which is expected around May 31, 2018.

 

24-May-2018

​Moneta Porcupine Mines Inc

Results Support Higher-Grade Potential of Golden Highway

Impact: Positive

We recently visited Moneta Porcupine Mines Inc.’s (TSXV:ME) Timmins assets and were generally impressed with our visit, we view these recent drill results as a positive development for the company as it targets the Golden Highway property’s high-grade underground potential for an upcoming resource.

  • Step-out drilling at South West continues to extend vein structures.
  • Updated resource later this year is likely to change the story
  • Market is undervaluing the potential for defining a significant maiden underground resource
We believe that the likely high-grade resource at Golden Highway, is going to be an important catalyst for the company and make it attractive to potential bidders.


24-May-2018

Red Pine Exploration Inc.

Minto Mine South Zone Continues to Expand

Impact: Positive

Additional drill results highlight the exploration potential of the Wawa Gold Project, supported by further expansion of the Minto Mine South Zone.

  • Minto Mine South Zone continues to expand along strike and down-dip
  • Possible new high-grade zone intersected in Minto Mine South.
  • 30,000m drill program underway, working towards updating resources at Wawa
Red Pine currently trades at a discount to peers (C$27/oz vs. peers at C$51/oz), valuation does not reflect the potential for exploration upside.

16-May-2018

Maritime Resources Corp.

Maritime Adds Land; Doesn’t Alter Our View

Impact: Neutral

Maritime Resources has announced the acquisition of 3,225 ha of claims surrounding its Hammerdown asset (Figure 1).

  • Strategic land consolidation may provide incremental fundamental value; potential justifying a change to the current offer of 0.390 of a common share of Anaconda in exchange for each Maritime share
  • Share component of the acquisition (500k on signing, plus an additional 1.5 million shares through the life of the deal) could be considered an additionally dilutive tactic, similar to the previous C$1M financing as a takeover defense tactic against Anaconda
While we expect Anaconda to be displeased with the expanding share count, it’s likely a transaction it would have eventually undertaken. Therefore, we do not expect them to pull the offer and we continue to believe that the a hostile takeover proposed by Anaconda in April still has an 60-70% chance of being completed.

 

14-May-2018

Mawson Resources Ltd.

New Cobalt Mineralization at Rajapalot

Impact: Positive

Mawson has identified significant intervals of cobalt mineralization at its Rajapalot project in Finland, which is currently associated with gold mineralization over an area of 3km by 4km and open in all directions.

  • Cobalt has potential to add by-product value to Rajapalot
  • Attractive option for future ethically-sourced cobalt for Europe
  • Over half the drill core remains to be re-assayed for cobalt content
We expect results from re-assaying and drilling to be upcoming catalysts for the company, as it looks to build a maiden resource.

11-May-2018

Ascot Resources Ltd.

New Underground Resource First Step Towards Production

Impact: Mildly Positive

Ascot has shifted its focus to underground resource development at its Premier-Dilworth property with the announcement of a high-grade underground resource in the southern area of the property.

  • Ascot defines 601koz AuEq of high-grade underground resources at Premier/Northern Lights
  • Underground focus puts the project on the path to production
  • Drilling has revealed additional areas that may host high-grade resources
After incorporating Ascot’s resource update, the company trades at a discount (C$37/oz versus peers at C$65/oz). We expect the ongoing news from exploration and infill drilling on higher-grade underground resources to close the gap to peers.

09-May-2018

Brixton Metals Corp.

Brixton Hits Cobalt Mineralization in Basement Rock

Impact: Positive

Brixton has identified a new broad Ni-Co-Ag mineralized zone in the Archean basement rocks at its Langis Project in addition to intersecting high-grade Co-Ag in the conglomerate sequence.

  • Experience working in the Cobalt Camp continues to pay off
  • Broad mineralized zone discovered in Archean basement rock
  • Brixton remains undervalued compared to Cobalt Camp peers
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.014 EV/ha, while Brixton trades at C$0.004 EV/ha.

04-May-2018

Aquila Resources Inc.

Final Permit for Back Forty Moving Towards Resolution

Impact: Neutral

Aquila continues to work towards receiving the company’s final permit, the wetland/stream/floodplain permit, in order to commence construction at Back Forty.

  • Certain EPA objections have been resolved, and have been conveyed to the Michigan Department of Environment Quality (MDEQ)
  • Aquila and the MDEQ have until June 6, 2018 to resolve remaining objections to confirm the proposed permit conditions comply with the EPA
  • Recall, as of the December 2017 the permit was deemed administratively complete, Aquila assures the remaining issues should be resolved, and conditions met
Upcoming permitting news will be an important near-term catalyst for the company, we believe Aquila is well positioned to complete the feasibility study and start construction once the final permit has been granted, with funding in place to support pre-construction activities.

 

03-May-2018

First Cobalt Corp.

High Priority Kerr Area Extends over 200m; Remains Open

Impact: Mildly Positive

Encouraging recent drilling in the Kerr area provides momentum for First Cobalt in advancing exploration efforts across its large land package in the Cobalt Camp.

  • Kerr area mineralized zone expands to 200m, remains open
  • Drilling complements disseminated mineralization thesis
  • Follow-up planned for the high priority Kerr area
We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers. Next key catalyst for the company is the completion of the US Cobalt acquisition, expected on or around May 28, 2018.

01-May-2018

Austral Gold Ltd.

Q1 2018 Production Hindered by Unexpected Issues

Impact: Mildly Negative

Austral reported disappointing Q1 2018 production results, reducing total mine production (Guanaco, Amancaya and Casposo) by ~17% from Q4 2017 to 20,367 oz AuEq, following unexpected issues. 

  • Total production fails to meet expectations, company focused on improvements to meet 2018 guidance of 92,000 oz Au (net to Austral)
  • Better grade control systems have been implemented at Guanaco and production issues at Amancaya have been fixed to support a stronger Q2 2018 production
  • QoQ production at Casposo reduced by lower head grades, more equipment to be added for next quarter to recover
We expect stronger quarters from Austral as the company and works towards meeting its 2018 production guidance. In our view, Austral is poised to re-rate towards similar scale peers, as it improves operations.

30-Apr-2018

Brixton Metals Corp.

Completes Phase 1 Drilling with Impressive Grades

Impact: Positive

Brixton has released the remainder of its phase one drill results from Hudson Bay and is now focusing drilling on its nearby Langis property also in Ontario’s Cobalt Camp.

  • Hudson Bay continues to deliver high-grade cobalt intersections
  • Drilling shifts to Langis, 22km from Hudson Bay
  • Brixton remains undervalued compared to Cobalt Camp peers
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.014 EV/ha, while Brixton trades at C$0.004 EV/ha. 

30-Apr-2018

Adventus Zinc Corp.

Sesmo Target Highlights Regional Upside

Impact: Positive

Initial results from regional exploration are encouraging, supporting the potential for diverse discoveries across the company’s prospective land package. 

  • Drilling supports view that Curipamba has significant regional exploration potential
  • Sesmo target adds a potential precious metals sweetener
  • Exploration advances to unlock Curipamba’s regional value, follow-up results key
Adventus is now trading at a modest premium to peers given its recent share price performance. We believe the premium valuation is warranted given the exploration potential and quality of the underlying asset. Upcoming catalysts includes results from regional exploration work along with the planned monetization of non-core exploration assets.

26-Apr-2018

Aurania Resources Ltd.

New Epithermal System at Lost Cities – Cutucu Project

Impact: Positive

Recent exploration at the company’s Lost Cities – Cutucu Project has revealed an entirely new epithermal system, now called the “Charip” target, which is completely separate from its cluster of targets at Latorre and its Awacha porphyry target.

  • New target bears early signs of an epithermal system
  • Continued exploration at Crunchy Hill remains positive, refined targets for scout drilling
  • Aurania continues to add exploration upside and discovery potential
As the company refines targets and approaches the commencement of scout drilling, we see increased potential for a discovery at one of the targets within its strategic land position in Ecuador. We believe ongoing newsflow will be positive near-term catalysts for Aurania, as the company explores its epithermal and porphyry targets. Aurania will be hosting a call on Monday, April 30, 2018 at 2:00pm Eastern Time to discuss the company’s exploration program and results to date.

25-Apr-2018

Northern Empire Resources Corp.

Regional Work Defines Seven New Targets

Impact: Neutral

Northern Empire has provided a technical update on the regional geology at its Sterling Gold Project in Nevada, which includes the discovery of seven more prospective targets on the Sterling property that add value and upside to the existing deposit.

  • Exploration data has revealed more near-surface exploration targets that appear to be prospective and add discovery potential to the Sterling story (Figure 1)
  • New targets warrant further exploration and are likely to be targeted in the company’s ongoing 18,000m drill program
  • While the focus likely remains SNA, Secret Pass and Daisy areas, increased understanding of geological controls suggests property-wide exploration potential 
Northern Empire trades at a premium to peers on a EV/oz basis (C$113/oz, peers C$82/oz). Based on peer multiples, this implies the addition of ~320k oz Au, which we view as possible, given recent drilling success by Northern Empire and Corvus Gold’s (TSX:KOR) at its Mother Lode project (surrounded by Northern Empire ground). We believe the natural consolidator is Coeur Mining (NYSE:CDE) given its a significant shareholder of both companies (Corvus 5.9%, Northern Empire 11.6%).

 

25-Apr-2018

Tinka Resources Ltd.

West Ayawilca Step-out Expands Project

Impact: Positive

Tinka reported more positive results from Ayawilca, highlighting the project’s potential for resource expansion as the 15,000m drill program continues.

  • Step-out drilling in previously untested area of West Ayawilca successfully expands the project, follow-up underway
  • Zone 3 represents another area of interest outside current resources
  • Newsflow key as 2018 drilling continues, in support of the PEA expected H2 2018
We believe that the ongoing drilling updates and the significant exploration potential of the Ayawilca property should be important catalysts for the company to close the valuation gap to peers.


 

25-Apr-2018

Novo Resources Corp.

Preliminary Results from Larger Bulk Sample Look Good; Grade Expected by End of May

Impact: Positive

Novo Resources announced preliminary results from its larger bulk sample program at Comet Well, and while the market appears to have expected grade, a rough estimation of grade and location of the sample are very encouraging in our view.

  • Based on the limited data provided sample is likely to grade ~15-40 g/t, excluding the fine gold component
  • Good results, off the basal contact important resource development and mining
  • Final grade results expected end of May; results likely to be steady after that
Despite bulk sample grades and widths being towards the top end of our expected range it is only one sample, so we continue to believe that Novo is worth between C$4.70-17.90/sh, suggesting upside from the current share price.

24-Apr-2018

Orford Mining Corp.

Drilling Begins in the Carolinas

Impact: Positive

Orford announced the commencement of drilling at its Carolina Gold Properties, in North and South Carolina, to follow up on targets developed through geophysical and geological surveys announced in March.

  • Drilling is targeting Haile gold deposit style mineralization at both Landrum-Faulkner and Jones-Keystone
  • Assay results are anticipated in June from ~1,400m of drilling
  • We expect upcoming newsflow to be key in highlighting the value of these Carolina assets
We believe at Orford’s current value, the stock does not properly reflect the potential of the company’s projects, both in Quebec and the Carolinas.


24-Apr-2018

NxGold Ltd.

First Steps at Mt. Roe Look Good; Project on the Right Track

Impact: Mildly Positive

NxGold has discovered more gold nuggets and provided an update on its maiden mapping program at its Mt. Roe Gold Project in the Pilbara, which is adjacent to properties held by Novo Resources (TSX:NVO) and Artemis Resources (ASX:ARV).

  • First steps look good, company remains on the right track
  • More nuggets discovered by management along Mt. Roe conglomerate contact zone
  • The second style of nuggets identified at Mt. Roe is interesting
The current market cap, could be ascribed to one of the company’s projects (Mt. Roe, Chicobi, and Kuulu), but not all three, suggesting room for re-rating as each of them progresses. We expect assay results from grab sampling, mapping results and the start of trenching to be important catalysts for the stock.

 

23-Apr-2018

Monarques Gold Corp.

Solid Quarter FQ3; Production Expected to Improve

Impact: Mildly Positive

Monarques FQ3 2018 production was minimally affected by equipment challenges and planned maintenance, operations continue as usual for a stronger FQ4 2018.

  • Solid quarter at 4,932 oz produced, planned maintenance and unexpected equipment failure impacted production
  • Custom milling revenue increases 17% in FQ3 2018, should benefit overall financial performance
  • A solid quarter from Beaufor underpins efforts at other key assets.
Monarques currently trades at a discount to peers (C$14/oz vs. peers at C$32/oz) and we believe the upcoming resource expansion drilling and technical studies including conceptual study should help close the valuation gap to peers.

22-Apr-2018

Metanor Resources Inc.

Metanor Extends Barry Deposit to the East and at Depth

Impact: Mildly Positive

Drill results from its Barry project highlight the project’s potential and continuity, returning 15.8 g/t Au over 1.5m (MB-17-54) and 12.3 g/t Au over 1.3m (MB-18-156).

  • Results extend Barry 100m to east and 75 m at depth
  • Drilling continues at Barry with 3 diamond drill rigs in operation, ramp development for bulk sample continues (40m complete)
  • On an EV basis, MTO is trading roughly in line with small Canadian producing peers, but a steep discount to its development stage peers in the Urban-Barry camp
With the only permitted mill and an expectation for meaningful resource growth, Metanor’s $54M market cap (EV$ 43M) suggests it is undervalued, relative to other Urban-Barry camp peers, which are development stage.

19-Apr-2018

Anaconda Mining Inc.

Thicker High-Grade Intercepts from Goldboro

Impact: Positive

Anaconda intersected thick higher-grade zone near newly identified fault structure, expanding the gold mineralization down-dip of the existing resource.  

  • Gold mineralization extended down dip with high-grade assays
  • Impressive widths and grades as drilling intersects a new fault structure
  • Results point to resource growth – 10% increase in both grade and tonnes at Goldboro increases our NAVPS estimate by 9%
  • Drilling at Maritime’s Hammerdown intersects near-surface high-grade gold 
After recently incorporating Anaconda’s potential acquisition of Maritime Resources (TSXV: MAE), our NAVPS estimate increased to C$1.12/sh results in Anaconda trading at a steep discount to peers (0.33x NAV, peers 0.65x).

19-Apr-2018

Adventus Zinc Corp.

Initial 2018 Drilling at El Domo Encouraging

Impact: Mildly Positive

Adventus Zinc Corp. (TSXV:ADZN) and Salazar Resources Ltd. (TSXV:SRL) reported positive initial results from El Domo.

  • Initial results a good start to 2018 program
  • 2,100m of infill drilling complete, more results pending in support of resource expansion and upcoming metallurgical work.
  • Recent site visit supports our view that exploration upside exists
Adventus continues to trade at C$0.012/lb ZnEq (75%), a slight discount to peers at C$0.014/lb ZnEq. Ongoing exploration results and news regarding the monetization of its non-core assets are key.

17-Apr-2018

SolGold Plc.

Alpala Keeps Getting Bigger

Impact: Positive

SolGold’s exploration drilling is continuing to hit high-grade copper-gold mineralization outside existing 16.2Blb CuEq resource at Alpala, with the company’s Cascabel Project in Northern Ecuador.

  • First drill hole at Aguinaga intersected 373m of porphyry-style mineralization in hole AGD-18-001 with assays pending and a second drill hole planned to test the mineralization at greater depths
  • Infill drilling at Alpala continues to support an increase in resource grade, highlighted by 478m grading 1.28% CuEq in hole 42 open at depth
  • Step-out drilling continues to expand the Cu-Au mineralization beyond the current resource boundaries, highlighted by 504m grading 1.28% CuEq in hole 43
In our view, the SolGold's current valuation (0.030/lb vs. peers at 0.041/lb CuEq) does not properly reflect the exceptional nature of the existing orebody or the meaningful exploration upside at the company’s projects as suggested by this press release.

17-Apr-2018

Lupaka Gold Corp.

Construction Advancing; Production Still Expected in Q3

Impact: Mildly Positive

Lupaka provided an update regarding development activities at its Invicta Gold Project.

  • Remains on track to achieve commercial production in Q3 2018
  • Construction and rehabilitation activities are advancing, 8,000 tonnes of material to be processed and tested in May
  • Josnitoro JV has been terminated: however, we had not included it in our valuation, therefore has no effect
Based on the company’s recently released PEA, our valuation of Lupaka suggests a NAVPS10% of C$0.55 assuming a 350tpd operation. We believe that first production, expected in H2 2018 is going to be the next key re-rating catalyst for Lupaka. 


17-Apr-2018

Bonterra Resources Inc.

Initial Metallurgical Work Very Good at Gladiator

Impact: Positive

Bonterra has announced positive preliminary metallurgical testwork from the Gladiator Gold Deposit, which represents a significant hurdle for the company’s resource development program.

  • Results highlight the potential for very good recoveries – checking a development box
  • High gravity recoveries suggest the potential for lower capex and opex costs
  • Market value of Bonterra does not take into account the potential for resource expansion
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$25/oz vs. peers at C$39/oz).

17-Apr-2018

Northern Empire Resources Corp.

Drilling Success Continues; More Results Pending

Impact: Mildly Positive

Additional drill results were released from the SNA deposit at the company’s Sterling Gold Project, highlighted by SNA18-003, returning 1.72 g/t Au over 16.76m, directly south of Corvus’ Mother Lode (Figure 1).

  • SNA Deposit results continue to suggest resource growth is likely
  • One drill rig is targeting the area between the historic Mother Lode pit and SNA deposit
  • Results are pending, three of the holes are located along Northern Empire’s property boundary, adjacent to Corvus’ Mother Lode project
Northern Empire trades at a premium to peers on a EV/oz basis (C$120/oz, peers C$82/oz). Based on peer multiples, this implies the addition of ~500k oz Au, which we view as possible, given recent drilling success by Northern Empire and Corvus Gold’s (TSX:KOR) at its Mother Lode project (surrounded by Northern Empire ground). We believe the natural consolidator is Coeur Mining (NYSE:CDE) given its a significant shareholder of both companies (Corvus 5.9%, Northern Empire 11.6%).

17-Apr-2018

GoldQuest Mining Corp.

Written Injunction Received; A Return to the Status Quo

Impact: Positive

GoldQuest has received the written ruling from the injunction announced on March 27, 2018 which suggests a return to the status quo. 

  • Written decision informs company injunction has no effect on activities, reiterates legal requirements
  • Exploration activities including drilling can resume at Cachimbo
  • Final signature for exploitation permit at Romero still required for development work to resume
  • Decision should benefit the share price, returning it to ~$0.30 level from ~$0.20 
Given the decrease in risk resulting from the written decision, we expect the share price to return to its pre-injunction level. The next catalyst for the stock is to obtain the final signature for the exploitation license for Romero. In the meantime, drilling at Cachimbo, should continue to help highlight the project’s exploration potential.

16-Apr-2018

First Cobalt Corp.

US Cobalt Drill Results Encouraging; Acquisition Advances

Impact: Mildly Positive

On March 14, 2018, First Cobalt Corp. (TSXV:FCC) announced a move into the U.S. with the acquisition of US Cobalt Inc. (TSXV:USCO), owner of the Iron Creek Cobalt Project in Idaho.

  • Acquisition continues to advance, US Cobalt was granted an interim order last week and securityholders will meet May 17, 2018 to consider the transaction
  • Encouragingly, US Cobalt intersected more high-grade cobalt from 2017 drilling, highlight by 0.31% CoEq over 4.1m and 0.50% CoEq over 2.0m including 0.71% over 0.9m (Hole IC17–39), results are pending from 2018 drilling
  • We view the transaction is accretive as provides diversity outside of the Cobalt Camp and adds resources for First Cobalt 
We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers. Next key catalyst for the company is the completion of the US Cobalt acquisition, expected on or around May 28, 2018.

16-Apr-2018

Anaconda Mining Inc.

Anaconda Launches Takeover Bid for Maritime

Impact: Positive

Anaconda has formalized its offer to acquire Maritime Resources Corp. (TSXV:MAE) causing us to incorporate Maritime’s Hammerdown mine in our estimates.

  • Sweetened Maritime takeover bid increases odds of completion
  • Initial production from Hammerdown expected in late 2019
  • Estimates indicate the transaction is accretive to both Anaconda and Maritime shareholders
Incorporating Hammerdown, increases our NAVPS estimate to C$1.12/sh (was C$0.97/sh) for Anaconda should the transaction be completed as defined, resulting in Anaconda trading at an increased discount to peers (0.35x NAV, peers 0.65x).

16-Apr-2018

Adventus Zinc Corp.

Curipamba Site Visit: Good As Is; Exploration Upside Could Make It Great

Impact: Positive

Last week we visited Adventus Zinc Corp. (TSXV:ADZN) and Salazar Resources Ltd. (TSXV:SRL) Curipamba project in Ecuador and were impressed with what we saw.

  • Based on the work to date, we believe the project as it currently sits is very doable
  • Adventus is benefitting from 10 years of work by Salazar
  • Curipamba looks to have meaningful regional exploration potential; with work just getting underway
Our site visit confirmed our view that Adventus is trading at an unwarranted slight discount to peers, and that the upcoming catalysts from regional exploration work along with the planned monetization of non-core exploration assets should close the valuation gap to peers.

 

13-Apr-2018

Anaconda Mining Inc.

Q1 Production Ahead of Estimates on Better Grades

Impact: Positive

Gold production of 4,293 ounces at Point Rousse ahead of our estimate for 3,439 ounces.

  • Production beats our estimates on better than expected grades
  • Operational execution, should help fund development and exploration activities
  • Strong quarter has Anaconda positioned to beat 2018 guidance

Anaconda continues to trade at discount to peers (0.40x NAV, peers 0.64x); ongoing exploration success should close the gap.

 

12-Apr-2018

Red Pine Exploration Inc.

New Discovery Expands Wawa Gold Project

Impact: Positive

With the discovery of a new zone outside current resources, drilling continues to support our view that resource expansion is likely.

  • New shear zone discovered 950m north of resource at Wawa
  • New zone demonstrates 5km strike of Wawa Corridor
  • Exploration continues to follow-up on results, to support expected resource expansion
Red Pine currently trades at a discount to peers (C$27/oz vs. peers at C$49/oz), valuation does not reflect the potential for exploration upside.

11-Apr-2018

Osisko Metals Inc.

Drilling at Gilmour South Confirms Continuous Zone

Impact: Mildly Positive

 Recent drilling success has lead the company to plan to extend drilling at Gilmour South and focus on further expansion.

  • Mineralization re-interpreted to be continuous, extending over 1.4km.
  • Gilmour South bears similarities to past producing Brunswick No. 6 & 12 mines.
  • Extensive exploration programs planned for both Bathurst Mining Camp and Pine Point. 
Osisko Metals remains well-positioned and funded to advance exploration in both the Pine Point and Bathurst Mining Camps.

11-Apr-2018

Marlin Gold Mining Ltd

Drilling Expands Pearce Hill

Impact: Positive

Results from Pearce Hill have expanded the Footwall Zone, supporting our view that resource expansion is likely.

  • Drilling increases strike length of the Footwall zone to 525m
  • Continued success at Pearce Hill has significant potential to expand resources
  • Exploration continues, metallurgical testing results key  
These drilling results from Pearce Hill reflect the exploration upside at the Commonwealth project, which currently represents 51% of our pre-tax NAV for MLN shares. Based on our estimates, we believe Marlin is trading at a slight discount to peers (0.56x NAV, peers 0.57x) which does not properly account for the optionality of the expected significant near-term cashflow.

 

11-Apr-2018

Mawson Resources Ltd.

Mawson Continues to Demonstrate Potential at Rajapalot

Impact: Positive

Mawson continues to discover high-grade mineralization at Rajapalot through drilling, which has expanded the mineralized footprints of each prospect.

  • Mawson hits 23.1m grading 3.4 g/t Au at Raja prospect
  • Drilling at the other four prospects returned gold intersections
  • Plenty of upside as remaining <75% of assays are released 
With three diamond drill rigs and one base-of-till operating 24/7, we expect results from ongoing drilling to be an upcoming catalyst for the company, as it looks to build a maiden resource.

11-Apr-2018

Brixton Metals Corp.

More High-Grade Ag & Co Results from Hudson Bay

Impact: Mildly Positive

Drill results from Hudson Bay are encouraging, intersecting additional high-grade silver and cobalt mineralization.

  • Drilling continues to intersect high grade silver and cobalt mineralization at Hudson Bay.
  • Past producing Hudson Bay leverages both silver and cobalt markets.
  • More results pending, additional high-grade intercepts expected to be key near-term catalyst. 
 
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.017 EV/ha, while Brixton trades at C$0.004 EV/ha.

 

09-Apr-2018

Metanor Resources Inc.

Metanor Hits 51g/t over 4.8m at Moroy

Impact: Positive

Metanor continues to add value to its operating Bachelor mine with ongoing drilling and development reaching the two known Moroy veins. 

  • Underground development has reached Moroy veins on level 11
  • Drill results demonstrate continuity and extend Moroy mineralized structures
  • Adding ounces at Moroy and Barry likely to lead to a mill expansion
 
With the only permitted mill and an expectation for meaningful resource growth, Metanor’s $53M market cap (EV$ 42M) suggests it is undervalued, relative to other Urban-Barry camp peers.

09-Apr-2018

Bonterra Resources Inc.

6th Gold Zone Discovered at Gladiator

Impact: Positive

Results from additional drilling at Gladiator continue to support our view the deposit is likely to materially grow.

  • Drilling expands Gladiator, intersecting a new gold zone south of Barbeau
  • Continuity of deposit demonstrated through recent infill results
  • Assays are pending, follow-up drilling underway to test south of new zone 
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$26/oz vs. peers at C$36/oz).

09-Apr-2018

Aurania Resources Ltd.

Crunchy Hill Likely to Be First Drill Target

Impact: Positive

Following up on the previously discovered chalcedonic silica at the Latorre target led to the identification of the source of vuggy silica rocks, which is a known indicator of epithermal gold-silver systems thus making the recently renamed Crunchy Hill (was Latorre B), the most likely initial drill target for Aurania.

  • Tracing the source of chalcedonic silica has allowed Aurania to narrow down the search for drill targets
  • Crunchy Hill has similarities to epithermal systems at both Fruta Del Norte and Alto Chicama
  • Aurania doubles the size of the Latorre A target through additional stream sediment sampling
 
The market is currently pricing in the company’s strategic land position in Ecuador, but it does not take into account the company’s potential for a significant porphyry or epithermal discovery. We believe ongoing newsflow should be a positive catalyst for Aurania, as the company advances its Crunchy Hill, Awacha and Latorre targets.

 

05-Apr-2018

Anaconda Mining Inc.

Goldboro Expands to the East

Impact: Mildly Positive

Infill and expansion drilling continues to be encouraging at Goldboro, highlighting the ability to expand resources at the deposit.

  • Drilling expands Goldboro east with similar tenure of mineralization seen across the deposit
  • If Goldboro's mineable resource increases by 10% increase pre-tax NAV for the project by 9% our overall NAVPS by 2%
  • Drill success at both Point Rousse and Goldboro highlight the potential for organic growth, while the company continues to work-on growing via acquisition
 
Anaconda continues to trade at discount to peers (0.39x NAV, peers 0.63x); ongoing exploration success should close the gap.

05-Apr-2018

Aurania Resources Ltd.

Management Backs Aurania with US$2 million Raise

Impact: Positive

Recent exploration success at Lost Cities, pushes management to renew the entire Lost Cities – Cutucu Project. Due to the additional fees, Dr. Keith Barron, Chairman & CEO invests US$2 million through a convertible debenture loan, convertible into common shares at C$3.00/share, a premium to the market (C$2.86 as of close April 5, 2018).

  • Dr. Keith Barron demonstrates management confidence in Lost Cities – Cutucu Project with US$2 million unsecured convertible debenture.
  • Entire 2,080km2 renewed for another year, based on recent exploration success at Lost Cities.
  • Newsflow continues to be important catalyst for Aurania, positive exploration results expected, supported by renewal. 
 
The market is currently pricing in the company’s strategic land position in Ecuador, but it does not take into account the company’s current potential for a porphyry or epithermal discovery. We believe ongoing newsflow will be positive catalysts for Aurania, as the company explores Awacha and its Latorre epithermal target, which bears similar geological and geochemical signatures as the Fruta Del Norte deposit.

05-Apr-2018

Monarques Gold Corp.

Taking Steps to Transform Wasamac

Impact: Mildly Positive

Monarques has initiated the search for a low-cost alternative to transform Wasamac into an economic and profitable asset with announced conceptual study. 

  • Conceptual study to use local rail lines to transport ore to another mill/tailings facility in an effort to improve project economics, results expected May 2018
  • Current EV/oz discount likely relates to concerns regarding Wasamac’s economics as a traditional operation, this study could transform that perception and re-rate the stock
  • Drill results from ongoing operations and operating results from the company’s second full quarter at Beaufor are likely to be near-term catalysts.
Monarques currently trades at a discount to peers (C$18/oz vs. peers at C$31/oz) and we believe a positive result from this study along with other catalysts are likely to close the valuation gap to peers.

04-Apr-2018

First Cobalt Corp.

Woods Extension Drilling Expands Zone

Impact: Neutral

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A total of 7 holes (1,436m) were drilled north of the Frontier Mine, in the Woods Extension Zone to further test cobalt mineralization. Results from the latest two holes returned 0.47% Co and 0.50% Cu over 0.65m (FCC-18-0015) as well as 0.77% Co and 2.67% Ni over 0.30m (FCC-18-0020).

  • Results continue to extend the Woods vein and could represent an initial resource area but more work is needed
  • While there are hints of broader zones of alteration; assay results continue to suggest narrow veins of mineralization
  • First Cobalt continues to actively explore with ongoing drilling and surface exploration, along with downhole geophysical surveys and televiewer imaging planned in an effort to understand the complex structural nature of this area
 
We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers. Next key catalyst for the company is the completion of the US Cobalt acquisition.

03-Apr-2018

Northern Empire Resources Corp.

Crown Getting Shinier; Encouraging Drill Results from SNA

Impact: Positive

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Recent results suggest the SNA Deposit is likely to materially grow and suggest recent success by both Northern Empire and its land-locked neighbor Corvus that a larger Carlin-style system could be discovered.

  • Continued success at the Crown deposits (Secret Pass, Daisy and SNA) suggest that critical mass is building for a second production area
  • Drilling success at SNA and Mother Lode (Corvus) suggests that the discovery of a larger Carlin-style system is probable, with a natural consolidator already in place (Coeur Mining – NYSE:CDE)
  • Market does not appear to fully reflect the likely resource growth delivered by recent drilling. 
 
Considering Northern Empire’s recent exploration success, we consider the modest premium it trades at relative to peers, likely understates the likely resource growth.

03-Apr-2018

Bonterra Resources Inc.

Gladiator Goes West

Impact: Mildly Positive

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Latest 4 drill holes continue to expand and confirm continuity at Gladiator, supporting our view that significant resource growth potential exists.

  • Near-surface strike length extended by 100m to the west at Gladiator.
  • Drilling continues to confirm continuity.
  • Resource development advances with 7 drills in operation.
 
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$29/oz vs. (C$37/oz).

31-Mar-2018

Adventus Zinc Corp.

Adventus Adds an Early-Stage Project in Ecuador

Impact: Positive

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Adventus (80%) and Salazar (20%) have added the Pijili Project to its Ecuador-wide exploration alliance, which the two companies have just finalized.

  • Pijili Project added to the alliance – an early stage epithermal gold-silver target
  • Pijili has large-scale porphyry potential as evidenced by copper sulphide-bearing (chalcopyrite) veins in a valley bottom
  • 18-month (US$1M) initial exploration program planned for Pijili
 
Adventus continues to trade at C$0.010/lb ZnEq, a discount to peers at C$0.014/lb ZnEq, which we believe it’s not reflective of the company’s active exploration program or the addition of this pipeline asset.

28-Mar-2018

GoldQuest Mining Corp.

Injunction Ceases Activity at Romero; Implications Unclear

Impact: Short-term Negative; Long-term Uncertain

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Following a verbal injunction filed by a group of individuals against the company’s subsidiary, GoldQuest Dominicana SRL, all activities at the wider Tireo Project have been are suspended. Specifics regarding the scope of the injunction are unclear, as the written decision is pending.

  • All activities suspended at Romero and the wider Tireo project
  • Complete details of the injunction are expected next week with the written decision
  • Once details are in-hand, the company plans to take the necessary steps to have the injunction lifted 
 
In our view, today’s ~33% decline in the share price reflects the increased risk associated with this injunction and the uncertainty with respect to its scope. We highlight that at last report, the company had $25.8M in cash (~C$0.10/share) and is funded to weather this challenge. We expect the full details of the injunction when released next week and GoldQuest’s next steps are likely to be the next key catalyst.

 

27-Mar-2018

Monarques Gold Corp.

Continued Drilling Success at Beaufor Points to Mine Life Extension

Impact: Mildly Positive

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Final drill results from 2017 drilling are encouraging, 2018 drilling is expected to follow-up on these results.

  • Results suggest resource growth and incremental mine life extension likely
  • Definition drilling confirms continuity
  • 30,000m of exploration and definition drilling is planned for Beaufor in 2018
 
We believe the upcoming drill results from 2018 drilling as well as the planned technical studies should help close the valuation gap to peers, Monarques currently trades at C$18/oz vs. peers at C$33/oz.

26-Mar-2018

First Look Encouraging at Aguinaga; Alpala Expanding

Impact: Mildly Positive

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Initial results from Aguinaga are encouraging, providing a secondary resource target at Cascabel. Alpala continues to show potential for growth.

  • Initial visual results from the first hole at Aguinaga, a regional target at Cascabel, suggest a new discovery is possible; assays pending.
  • Visuals from most recent Alpala expansion drilling suggests the resource may grow.
  • Infill work on Alpala's high-grade core suggests this could expand, which may benefit project economics. 
 
In our view, the SolGold's current valuation (0.036/lb vs. peers at 0.031/lb CuEq) does not properly reflect the exceptional nature of the existing orebody or the meaningful exploration upside at the company’s projects as suggested by this press release.

26-Mar-2018

First Cobalt Corp.

Initial Results Identify Possible +100m Zone near Kerr Mine

Impact: Mildly Positive

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Results have identified a possible +100m zone of cobalt mineralization, with more results pending.

  • Initial results identify possible +100m zone in Cobalt North.
  • Results from 3 more holes are pending.
  • Cobalt camp continues to advance, bulk tonnage sampling targets developing.  
We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers. Next key catalyst for the company is the completion of the US Cobalt acquisition.

25-Mar-2018

Mawson Resources Ltd.

Drilling Plan Adjusted as Key Permit Grant Overturned

Impact: Mildly Negative

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Drilling on the Kairamaat 2-3 permit ended a few weeks earlier than expected, however, drilling continues on other fully granted permits at the project.

  • Finnish administrative court decision overturns Kairamaat 2-3 permit based on appeals
  • Kairamaat 2-3 is a key portion of Rajapalot and winter only drilling area
  • Mawson is working to get the Kairamaat 2-3 permit re-granted, for follow-up drilling next winter 
On the news, Mawson traded down 10.7% versus Finland peers Rupert Resources Inc. (TSXV:RUP) down 1.71% and Aurion Resources Ltd. (TSXV:AU) down 1.23%. In our view, this move is appropriate given the increased risk and is likely to reverse as Mawson advances the process of having the permit re-granted.



23-Mar-2018

Anaconda Mining Inc.

Argyle Continues to Grow at Potential Higher Grades

Impact: Positive

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Infill and expansion drilling at Argyle point towards resource expansion and the potential for increased grade.

  • Drilling expands Argyle, discovers new high-grade zone.
  • Even an incremental 25% increase in Argyle’s resource grade adds value
  • Maritime has responded to Anaconda’s intention to bid; we still consider the likelihood of a merger to be 50%. 
Anaconda continues to trade at discount to peers (0.42x NAV, peers 0.65x); ongoing exploration success should close the gap.

 

21-Mar-2018

Northern Empire Resources Corp.

Continued Success at Secret Pass; More to Come

Impact: Positive

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Drill results from Secret Pass continue to highlight the exploration upside represented by Northern Empire’s Crown project.

  • Drilling at Crown continues to deliver positive results.
  • Recent success, suggest Crown is poised to grow.
  • More results on the way. 
 
Considering Northern Empire’s recent exploration success, we consider the modest premium it trades at relative to peers, likely understates the possible resource growth.

21-Mar-2018

Radisson Mining Resources Inc.

O’Brien Resource Grows; Drilling Continues

Impact: Neutral

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The resource update increased overall contained ounces by 39%, tonnes by 53% and reduced overall grade by 9%.

  • Limited drilling over the past two years has led to a modest resource increase.
  • Resource parameters relatively unchanged, suggesting real tonnage growth.
  • Drilling continues, as the deposit remains open and the Vintage zone continues to show potential.     
At C$39/oz, Radisson trades at a premium to peers at C$29/oz; it appears the market has started to reflect the recent discovery of the Vintage zone and the advancements made at O’Brien.

21-Mar-2018

SolGold Plc.

Extension of Epithermal Gold Mineralization Highlights Regional Exploration Potential

Impact: Positive

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New discovery highlights the company’s large land package and ability for additional growth and discovery beyond Cascabel

  • New discovery connects and expands known mineralization over a 10km trend.
  • Early stage work yields positive results and supports our view that there is significant regional exploration upside
  • Assays pending; detailed follow up work underway
These results continue to highlight that the current valuation, (C$0.035/lb vs. peers at C$0.029/lb) does not properly reflect the exceptional nature of the Alpala deposit, or SolGold’s regional exploration potential.

19-Mar-2018

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