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Thursday, November 23, 2017 Derek Macpherson

First Cobalt and CobalTech Merger Approved

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First Cobalt Corp. (TSXV:FCC) announced the merger with CobalTech Mining Inc. (TSXV:CSK) has been approved, which owns the past-producing Kerr Lake and Lawson mines as well as a fully-permitted 100 tpd mill. As previously announced, for each CobalTech share, CobalTech will receive 0.2632 of a First Cobalt common share. Earlier in the week, the company also received approval for the merger with Cobalt One. Subsequently, First Cobalt can begin to finalize the consolidation of all three companies, expecting to close the transactions over the next 2 weeks. 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, pro-forma. Besides pending drill results, important upcoming catalysts are likely to include planned metallurgical test results and the completion of the approved mergers with Cobalt One and CobalTech.  read more


Thursday, November 23, 2017 Derek Macpherson

Ascot Releases Drill Results on New Subzones

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Ascot Resources Ltd. (TSXV:AOT) reported assay results from 32 holes drilled in the Northern Lights area with 40 holes still pending, which are expected to be released before year end. The company highlighted drill hole P17-1558 with 25.1m of 6.47 g/t Au in the Prew Subzone, drill hole P17-1536 with 6m of 14.9 g/t Au in the Ben Subzone and drill hole P17-1563 with 9.2m of 9.8 g/t Au in the Northern Lights West zone. Exploration results continue to highlight the potential for a large high-grade underground resource (2-3 million oz Au) at the past producing Premier mine. This implies a current valuation of C$56-84/oz, a premium to peers at C$67/oz, which is likely warranted because of the high grades, existing infrastructure and other resources. We note that based on the current lower-grade resource Ascot trades at a discount to peers (C$39/oz). We expect additional results from the ongoing drill program to demonstrate the projects potential.  read more


Thursday, November 23, 2017 Derek Macpherson

Maverix to Acquire 2% NSR on Endeavour’s Karma Mine

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Maverix Metals Inc. (TSXV:MMX) has announced that it has entered a binding agreement to acquire a 2% NSR royalty on Endeavour Mining’s Karma gold mine for $20 million in cash. The Karma mine, located in Burkina Faso, has been producing since October 2016 and is expected to produce 100koz-110koz of gold in 2017. Karma is a low-cost operation with over ten years left of mining the 1.1Moz of gold reserves, with a total of 3Moz of gold M&I resources with the potential to further extend the projects mine life. The company’s current enterprise value (EV) is sitting at ~C$253.1 million, which implies an EV/EBITDA of ~14.5x-16.8x (based on 2017 guidance), a discount to royalty peers that trade at 18.0x (2017e EV/EBITDA). In our view, this valuation does not include potential cash flow from Karma nor is it fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to complete accretive acquisitions.  read more


Wednesday, November 22, 2017 Derek Macpherson

Lithium: Mining Industry Gears Up for the Battery Boom

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The global production of Li-ion batteries is expected to significantly increase over the next few years as the costs of production continue to decrease and auto manufacturers implement plans for electric vehicles (EV’s). With the demand of Li-ion batteries comes the demand for lithium, a silvery-white metal that under standard conditions is the lightest metal and solid element on Earth. This enables lithium to have a high charge-to-weight ratio, which makes it an important component for batteries. Li-ion batteries require both lithium carbonate and lithium hydroxide, which have both experienced a +120% price increase between the beginning of 2015 and 2017. The boom in battery demand and lithium prices were met by an estimated 12% increase in mine supply for 2016 from existing operations, with the remaining supply gap to be met by new production from emerging producers (USGS).  read more


Wednesday, November 22, 2017 Derek Macpherson

RCKS Charts: MTO, OSK, SEK & ECR

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In this edition of RCKS Charts, Keith has evaluated Metanor Resources Inc.(TSXV:MTO), Osisko Mining Inc. (TSX:OSK), Secova Metals Corp. (TSXV:SEK) and Cartier Resources Inc. (TSXV: ECR). read more


Wednesday, November 22, 2017 Derek Macpherson

ANX Drills High-Grade Gold at Argyle

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Anaconda Mining Inc. (TSX:ANX) reported the assay results from its expansion drilling program at Argyle, located approximately 4.5km from the company’s fully-operational mill and tailings facility at Point Rousse, Newfoundland. The news release reported result from four of the eight holes in the 1,002m drilling program, which include intersections of 3.65 g/t Au over 12m in hole AE-17-46 and 3.22 g/t Au over 4m in hole AE-17-45 (Figure 1). These drill holes allowed the company to extend the Argyle mineralization from up to 100m down-dip in the northeast and demonstrated continuity of a higher-grade zone over a further 50m down-dip to the north than previously known. Based on our preliminary estimates, we believe that at its current market cap (C$26.7 million), investors are either paying for Point Rousse (~value of C$30-50 million based on our preliminary DCF) or Goldboro (~ value of C$41.5 million based on C$50/oz) suggesting good value at current levels. In our view, the upcoming PEA for Goldboro, is likely to be an important catalyst for Anaconda as it should allow investors to better understand the potential of this asset. Following that, operations later in F2018 (year-end May 31) should see production and cash flow increases as mining at Point Rousse moves to the higher-grade Stog’er Tight deposit. In our view, both these catalysts have the ability to cause the market to ascribe a fair value to both projects.  read more


Tuesday, November 21, 2017 Derek Macpherson

First Cobalt Reports 9.4% Co Sample

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First Cobalt Corp. (TSXV:FCC) has announced the sampling for multiple high grade cobalt outcrops and muckpiles from the historic small high-grade Caswell mine in the Cobalt Camp. The company reported sampled cobalt grades at surface and shallow depths of 9.4%, 4.8%, 6.1% and 1.1%. The company continues to sample rock from other historic mines in the camp with several assays currently pending. In addition to grab sampling, the company will be assessing near surface high grade cobalt mineralization through shallow drilling, bore-hole geophysical surveys and ground geophysics covering larger areas in the camp. The sampling at Caswell indicates that small high-grade targets need to be targeted in addition to the current focus on bulk tonnage opportunities at the historic Bellellen, Drummond, Keeley and Frontier mines. We would also highlight that the company has recently merged with Cobalt One Ltd., which has enabled First Cobalt to trade on the ASX and given the combined company 100% ownership of a permitted cobalt refinery. Besides pending drill results (53 holes pending assay), important upcoming catalysts are likely to include planned metallurgical test results and the completion of the planned merger with CobaltTech Mining Inc. (TSXV:CSK).  read more


Monday, November 20, 2017 Derek Macpherson

Otis’ Initial 2017 Drill Results Look Good

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Otis Gold Corp. (TSXV:OOO) has reported assay results from five holes at its Kilgore Project in Clark County, Idaho. The assays are the most recent results from the company’s 25 hole, 8,000m drill program with the remaining holes nearly completed and further assays pending. The company highlighted a bulk-tonnage intercept of 110.6m grading 0.90 g/t Au in hole 17 OKC-362, 65.5m grading 1.21 g/t Au in hole 17 OKC-362 and 62.5m grading 1.11 g/t Au in hole 17-OKC 364. The objective of the drilling campaign is to follow-up on drilling in 2015 and 2016, which previously defined numerous intervals of significant thickness and grade in the Aspen zone that were open at depth. Testing for the extensions of the Aspen mineralization at depth, in addition to other extensions of the deposit, was the main objective behind 2017 drilling. At C$37/oz, Otis currently trades at a slight discount to peers (C$56/oz). We believe this valuation does not fully account for the potential resource growth at Kilgore. We expect ongoing drill results and pending resource update (Q4 2017) for Kilgore to be important catalysts for the company.  read more


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