RCKS Talk

13-May-2019

Mawson Resources Ltd

Mawson Drills New Gold Cobalt Target

Impact: Mildly Positive

Mawson has announced that it has successfully drilled a new zone, Rumajärvi, that is coincident with a boulder train and geophysical target. This new discovery is outside the current resource area. We are maintaining our fair value of C$0.79/sh (unchanged) however, today’s results could define upside beyond our current estimate that the existing resource is likely to double with 2019 drilling.
Highlights:

  • Drilling uncovers a new discovery (Figure 1 & 2). Banner intercepts from the Rumajärvi target returned 7.4m at 3.4 g/t Au and 597 g/t Co from 86.3 metres located 700m west of Raja and 1.1 km south of Palokas (current resource area). These results suggest there is room for resource growth beyond our current view. We believe the resources at Raja and Palokas have the potential to double with this year’s drill program, and that the geophysical targets in these areas suggest the resource could double again.
  • Results validate geophysical model. While still early days, Rumajärvi is located within large boulder field where highly anomalous grab samples have been collected (average 184 g/t Au). Additionally, this set of results offers promising evidence that geophysics are an effective method for target identification. This bodes well for near-resource drilling where the company is testing large conductive plates beneath existing resource shells. Assays are pending from three further holes at Rumajärvi.
  • Remaining drill holes expected to highlight growth potential. Mawson still has to report 23 drill holes from this winter’s program and we expect them to validate our thesis on resource growth. The company reports promising visual results from unreported intercepts drilled at Raja, Palokas and South Palokas. 
Valuation:
Ongoing drilling success should provide the near-term re-rating catalysts.
We are maintaining our fair value estimate of C$0.79/sh (unchanged), derived using our probability-based valuation methodology (Figure 3). Based solely on its maiden resource Mawson is trading at US$35/oz AuEq relative to peers at US$43/oz AuEq. We believe that ongoing drill results are likely to demonstrate the upside that we see and should re-rate the stock towards our estimated value. Upcoming catalysts include 1) Results from 23 holes from winter 2019 drill program and 2) Resource update (H2/19).

 

26-Mar-2019

Mawson Resources Ltd

Mawson Gets Government Support

Impact: Positive

Mawson has announced an important endorsement from Finland’s BATCircle consortium which will aim focus on the development of Mawson’s strategic gold-cobalt resource via funding and technical support. We estimate a fair value of C$0.79/sh for Mawson’s shares and we believe the company is on track to deliver a sizeable gold-cobalt resource in a secure jurisdiction.
Highlights:
  • Mawson gains financial support at Rompas-Rajapalot. The announcement of the Finland-based Battery Metals (BATCircle) 50:50 funded consortium will focus on the research and development of Mawson’s gold-cobalt resource. The partnership will generate total funds of C$756k for the advancement of exploration and metallurgical testing of the company’s flagship Rompas-Rajapalot project. The news is highly encouraging as it demonstrates government support for the development of the project and will offer technical and financial resources needed to move the project ahead.
  • Cobalt in resource offers strategic sweetener. Currently, 28% of Mawson’s maiden resource is made up of cobalt which can be mined as a by-product and processed at the nearby Freeport cobalt refinery. The project stands as one of the top cobalt resources in the country making it an instrumental source for the battery metal as it undergoes a surge in demand for ethical sourced metal.
  • Mawson trades at discount to peers ahead of a resource update later this year. Mawson is trading at US$38/oz AuEq, a discount relative to peers at US$49/oz AuEq. Recent geophysics suggest that Raja, Palokas and South Palokas could as much as double given large conductive plates identified down dip from their current resource outlines. The company is actively drilling these targets with ~9,000m of drill results pending and we expect coming updates to shed more light on this growth potential.
Valuation:
Funding and exploration results on track to grow resource and reinforce our fair value estimate of C$0.79/sh. We believe that ongoing drill results and the coming resource update should provide momentum to re-rate the stock closer to our estimated value. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19) 2) Ongoing results from 15km drill program

05-Mar-2019

Mawson Resources Ltd

Drilling and Geophysics Work; More to Come

Impact: Mildly Positive

Results released from the first portion of drill results from Mawson’s Rajapalot project suggest that the large conductive plates identified beneath the current resource outlined at Raja, Palokas and South Palokas could extend significantly at depth. Our fair value estimate of Mawson values the company’s shares at C$0.79/sh and we expect that the eventual tabling of a sizeable gold-cobalt discovery Rajapalot to re-rate the stock.

Highlights:
  • Successful drilling in to large conductive plates at Raja. Drill highlights from Raja returned 3m at 2.3 g/t Au drilled 130m down plunge from the existing resource (482koz at 2.4g/t AuEq (1.7g/t Au and 0.041% Co)). The large conductive plates at Raja suggest the mineralization could double down dip from the current resource outline. Additionally, the results offer encouragement that the conductors identified at Palokas, South Palokas and beyond could also be associated with further mineralization (Figure 1).  
  • Similar size potential at Palokas and South Palokas. Drill hole PAL0173 is the deepest hole drilled at South Palokas and returned 17m at 3 g/t Au (Figure 2). Drilling at both Palokas and South Palokas will target the large plunging conductors recently identified as extending 450m down plunge and 100m wide and we expect similar hits to continue as the company tests the extremities of these anomalies. 
  • Drilling continues to target resource expansion. This recent update encompasses only 6 holes of the 18 completed to date (6,003m). With results from 12 holes pending and another ~9000m to drill. As well, additional TEM surveying is underway focusing on targets such as the Rumajärvi area and Terry’s Hammer area. The company expects expand the resource at Palakos and Raja while advancing its less advanced targets.
Valuation:
Currently valuation barely reflects the maiden resource; initial results support our view that the resource is set to grow and support our fair value estimate of C$0.79/sh. Based solely on its maiden resource Mawson is trading at US$47/oz AuEq relative to peers at US$46/oz AuEq. We believe that ongoing drill results are likely to demonstrate the upside that we see and should re-rate the stock towards our estimated value. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19) 2) Ongoing results from 15km drill program

 

21-Jan-2019

Mawson Resources Ltd

Ready, Set, Drill

Impact: Positive

With renewed exploration permits for the next 3 years, four drill rigs, a ~C$ 4.5M budget and a 70-person workforce mobilized we expect that Mawson will begin to showcase the potential we see in their ability to uncover a significant gold deposit at Rajapalot. In our recent report on Finland, we highlighted our belief that Mawson could be worth C$0.79/share and we expect coming newsflow to prove this.

Highlights: 
  • Drilling permits enable action and reduce risk. The Kairamaat 2-3 1,462 ha exploration permit overlain by the Rajapalot project area should allow the company to focus its 15km drilling program on growing the Rajapalot Maiden Resource. With 18% of its claims overlapping protected Natura 2000 land, the permit defines clear agreement terms that should allow Mawson to undertake exploration methods including diamond drilling, base of till drilling and geophysics while minimizing any environmental concerns associated to the exploration of the area. 
  • Large electromagnetic targets to be confirmed with drilling. The company is continuing to collect geophysical data across the entire 4km Rajapalot trend where it has mapped a number of conductive anomalies (Figure 2). The current unconstrained inferred maiden resource encompassing the Palokas and Raja prospects contains 482koz at 2.4g/t AuEq (1.7g/t Au and 0.041% Co) and has significant potential to grow with drilling. Geophysics now to be followed by drilling should support our theory that Rajapalot hosts a significant gold mineralization.
  • 2019 to focus on resource expansion. Mawson’s current resource could double with results from its winter drilling program which is set to commence immediately following ground preparation. The company will focus its efforts on the large conductive plates down dip at Raja which has shown potential to extend further down than previously drilled. Mawson is now well positioned to pursue resource development with a viable system for translating its numerous geophysical anomalies (Figure 2) in to drill targets.
Valuation:
Current pricing reflects maiden resource but does not account for exploration potential to be demonstrated in early 2019, we estimate Mawson could be worth C$0.79/share. Based solely on its maiden resource Mawson is trading at US$37/oz AuEq relative to peers at US$45/oz AuEq. We believe that this recent news moves the company closer to the upside that we expect to be confirmed with the winter 2019 drill program. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19), 2) 15,000m drill program results from Rajapalot (H1/19).

 

17-Jan-2019

Mawson Resources Ltd

Ready to Grow in 2019

Impact: Mildly Positive

Mawson’s newly released electromagnetic survey results from South Palokas add a potential doubling of the second component of the company’s current resource at Rajapalot. With 15km of drilling to commence shortly, we can expect significant resource growth as the company follows-up on two large conductive plates at both South Palokas and Raja. We continue to believe that Mawson is nearing a significant Au-Co discovery beyond the current maiden resource which will be confirmed with coming drilling.

Highlights: 
  • Surveying points to a doubling beyond the South Palokas resource footprint. The conductive body extends 250m beyond the deepest drillhole PAL0016 which returned 8.4m at 5.7g/t AuEq (Figure 2) and remains open down dip to the northwest. The company is continuing to collect geophysical data across the entire 4km Rajapalot trend where it is mapping a number of additional conductive anomalies (Figure 1) supporting our theory that Rajapalot hosts a significant gold mineralization.
  • Results impact growth potential of current resource. The current unconstrained inferred maiden resource encompassing the Palokas and Raja prospects contains 482koz at 2.4g/t AuEq (1.7g/t Au and 0.041% Co) which with recent news has significant potential to grow with the down dip extension at South Palokas. The company has already highlighted a potential doubling at Raja with previous TEM results (released prior to the completion of it’s maiden resource) demonstrating the successful use of geophysical surveying for identifying Au-Co drill targets.
  • Expect resource expansion with 2019 drilling. The company will test the South Palokas and Raja conductive bodies with its coming drill program in late January. Mawson is now fully transitioned in to resource development with a refined process for translating geophysical surveying in to successful drill targets. As a result, we expect 2019 drilling to deliver a potential doubling of the existing resource.
Valuation:
Current pricing reflects maiden resource but does not account for exploration potential to be demonstrated in early 2019. Based solely on its maiden resource Mawson is trading at US$37/oz AuEq relative to peers at US$46/oz AuEq. We believe that this recent news demonstrates exploration upside that we expect to be confirmed with the winter 2019 drill program. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19), 2) Drill permits for winter Rajapalot program (Q1/19) and 3) 15,000m drill program at Rajapalot (Q1/19).

 

17-Dec-2018

Mawson Resources Ltd

Gold-Cobalt and Plenty of Potential

Impact: Positive

Mawson’s newly released maiden mineral resource estimate at its Rajapalot Project in northern Finland provides a good start to the project’s lifecycle and leaves plenty of room for growth. This maiden resource underpins Mawson’s value but does not account for the significant growth potential that we see at Rajapalot.

Highlights: 
  • Maiden Resource confirms high-grade potential. The unconstrained inferred maiden resource contains 482koz at 2.4g/t AuEq (1.7g/t Au and 0.041% Co) at a 0.4g/t cut-off grade (Figure 1 & 2). We view this resource as a positive first step for a project that we believe has significant exploration upside. The company has tested only 20% (or 800m) of the 4km known mineralized trend (Figure 3) and the deposits remain open down-dip (Figure 4 and 5).
  • Strength in grade and tonnage. The resource is supported by high open pit and underground grades at 2.8 g/t AuEq and 5.2 g/t AuEq, respectively. The unconstrained inferred mineral inventory at various cut-off grades is shown in Figure 2, which we believe demonstrates a robust resource, particularly at underground only cut-off grades. Additionally, 28% of the unconstrained resources are provided from a cobalt by-product strategically positioning Mawson as the only source of cobalt in Finland close to one of the world’s largest cobalt refineries.
  • Resource expected to grow with 2019 drilling. Based on our recent site visit, we believe this project has transitioned from exploration to resource development. As a result, we expect 2019 drilling has a high likelihood of doubling the existing resource. Additionally, we believe that recent geophysics point to the potential for a subsequent doubling just from these two deposits. We note that balance of Rompas-Rajapalot project has prospective areas where follow-up testing could provide further upside potential.
Valuation: 
Market pricing in the maiden resource but does not account for exploration potential that we expect to be demonstrated in early 2019. We continue to believe that the Rompas-Rajapalot project hosts a large high-grade mineralized system. Based on the maiden resource, the company is trading at US$38/oz AuEq, peers US$47/oz AuEq (Figure 6). In our view, this does not properly account for the exploration upside that we expect to be demonstrated with the winter 2019 drill program. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19), 2) Drill permits for winter Rajapalot program (Q1/19) and 3) 15,000m drill program at Rajapalot (Q1/19).

 

06-Dec-2018

Mawson Resources Ltd

Initial Results from New Asset Promising

Impact: Positive

Mawson released drill results from both its Finnish and US assets. Results from the US look promising and while drilling was unsuccessful at the company’s secondary Finnish targets where further work is needed. Our thesis that the Rompas-Rajapalot project hosts a sizeable high-grade mineralized system remains unchanged and we are awaiting assay result from the US assets to understand that project’s potential.

Highlights:  

  • First look at WUSA looks promising. The company wrapped-up its fall drilling season on the Western USA project (WUSA) in Oregon with three drill holes into the Scorpion and one at the Huckleberry project. Geochemisty points to intense silification and argillic alteration. Iron oxides were associated with brecciation and stockwork fractures and disseminated pyrite was present in the less-altered hosts. Initial results look encouraging, assays for the holes are expected in January.
  • More work needed on secondary Rajapalot targets. The company drilled 11 holes (1,660m) at the Hirvimaa and Korkiakoivikko prospects located
    2.6-4.3km from the high-grade Palakos and Raja areas, from where most of the drilling has been done to-date. Drilling confirmed previous base of till anomalies and VTEM data at the targets but only intersected the desired stratigraphy in 3 holes with only one ore grade intercept of 2m grading 0.11% Co (PAL0157). In our view more work is needed on this prospect.
  • Maiden Resource on high-grade Palokas expected before year-end. The company expects release a maiden high-grade Au-Co resource for the Palakos target for year-end and plans to keep aggressively drilling the area with 15km of drilling planned for 2019 (permits pending). Our recent site visit suggests the potential exists for 1Moz on this area, and recent geophysical results suggest it could be double that. 
Valuation:
Maiden resource appears to be partially priced in, upside excluded. The current enterprise value implies a maiden resource of ~440k oz (using US$40/oz). We expect the maiden high-grade resource to be roughly in line to slightly larger than the implied size; however, the deposit appears to be much larger based on our recent site visit.
We believe Mawson is well positioned to deliver a sizeable high-grade resource from Rajapolot. Upcoming catalysts include 1) Results from WUSA drilling 2) Drill permits for winter Rajapalot program and 3) Maiden Resource estimate on Rompas-Rajapalot (Q4 2019).

 

26-Nov-2018

Mawson Resources Ltd

Raja Prospect has the Potential to Double

Impact: Mildly Positive

Mawson has announced geophysical survey results at its Raja prospect, which have highlighted the potential doubling of its mineralized footprint. These results as well as exploration to date continue to support our thesis that the Rompas-Rajapalot project hosts a sizeable high-grade mineralized system in a tier one mining jurisdiction.

Highlights:  

  • Doubling the mineralized footprint. TEM surveying across the northern region of the Raja prospect suggests the mineralization extends 450m down plunge from the current drilled area to >1km down-plunge, which could double the known footprint. The survey results confirm recent finding from drillhole PAL0093, which returned 33.6m grading 9.4 g/t AuEq (Figure 1).The depth potential at the Raja prospect could represent significant exploration upside. 
  • Increasing confidence with drilling. The Au-Co mineralized zones on the property form excellent conductive targets, allowing the company to use geophysics to increase drilling hit rates (Figure 2). We expect ongoing geophysics along the 3.5km Rajapalot mineralized trend to further highlight the prospectivity of the property ahead of the 15,000m winter drill campaign scheduled to start in January 2019 (drilling subject to final permits).
  • Maiden resource expected by year-end.
    The current enterprise value implies a maiden resource of ~440k oz (using US$40/oz). Based on our recent site visit, we expect the high-grade resource to be roughly in line to slightly larger than the implied size. However, in our view the current drilling defined strike length implies a potential size of up to 1Moz, and the above geophysics suggests there is room to grow. With C$8.5M in cash, the company is well funded for ongoing resource expansion drilling.
Valuation:
Maiden resource appears to be partially priced in, upside excluded. With the current market cap only implying a small resource, there remains upside for investors as the company demonstrates the potential of the high-grade, Au-Co Rajapalot project. We believe Mawson is well positioned as a top explorer in Finland with the added benefit from Co content improving continuity and grade throughout the mineralization. Upcoming catalysts include 1) Results from ongoing drilling 2) Drill permits for winter Rajapalot program and 3) Maiden Resource estimate on Rompas-Rajapalot (Q4 2019).

 

04-Sep-2018

Mawson Resources Ltd.

Results Continue to Highlight High Grade Au-Co Potential of Rajapalot

Impact: Positive

Mawson Resources has announced the results of 43 holes drilled during the winter drill program at 6 prospects within its 100% owned Rajapalot Au-Co project in Northern Finland.

  • Highlights holes include: 33m grading 4.2g/t AuEq, 3.1g/t Au, 0.0547% Co from 38.7m (PRAJ0109) at the Palokas prospect and 20.7m grading 5.6g/t AuEq, 3.6g/t Au, 0.0956% Co from 365.2m (PAL0118) at the Raja prospect (Figure 1 & 2)
  • One of the key takeaways from our recent site visit, is that Palokas, South Palokas and Raja prospects all appear to be developing into deposits and geological modelling is underway in order to feed into an upcoming independent maiden resource
  • Cobalt content is not only increasing gold equivalent grades by 1-2g/t AuEq, but it is also improving width and continuity of the mineralized zones (Figure 2); metallurgical testwork studies are underway to assess the relationship of the cobalt minerals to the gold, sulphide and silicate minerals
The company remains focused on high-priority exploration targets on the property, which includes base of till drill hole and geophysical targets to be tested with a ~2,000m diamond drill program commencing late September. We expect results from re-assaying and drilling to be upcoming catalysts for the company, as it looks to build a maiden resource.

27-Jun-2018

Mawson Resources Ltd.

Mawson Reports Au-Co Drill Results

Impact: Mildly Positive

Mawson Resources has announced the results of 10 holes drilled during the winter drill program at its100% owned Rajapalot Au-Co project in Northern Finland.
  • Cobalt assays were added to previously gold-exclusive assays results for hole PAL0093, returning 33.6m of 9.7g/t AuEq (8.0g/t Au and 823ppm Co) - a 22% increase from gold-only results, which continues to reflect the spatial relationship with gold (Figure 2)
  • Drilling extended the Polokas zone 1.8km and 100m down plunge and as drilling continues, increased knowledge of the mineralized system is facilitating regional targeting with 1-2km step-out holes
  • Ground magnetic surveys will commence in late June while downhole electromagnetic surveys will begin in September, with the purpose of further refining winter 2019 drill targets
Assays from 36 drillholes have now been released with 39 holes currently being logged and assayed. We expect results from re-assaying and drilling to be upcoming catalysts for the company, as it looks to build a maiden resource.

22-May-2018

Mawson Resources Ltd.

Raja Continues to Deliver

Impact: Positive

Mawson continues to have drill success at Rajapalot, we expect continued newsflow as the company re-assays for cobalt mineralization and advances drilling in new areas.
  • High-grade gold intersected at Raja, cobalt assays pending
  • Along with past assays, latest results to be tested for cobalt
  • Newsflow expected as gold and cobalt assay results become available
We expect results from re-assaying and drilling to be upcoming catalysts for the company, as it looks to build a maiden resource.
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-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.

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.



01-Jan-2018

Mawson Resources Ltd. (TSX:MAW)

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