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Wednesday, November 30, 2016 Derek Macpherson

Cobalt: Our Favourite Battery Metal

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Battery production is expected to ramp up significantly in the next few years and in our view, the best way to play this theme via mining is with cobalt and the underlying equities. While investors have primarily been focused on lithium, and to a lesser extent graphite, to-date, we believe that cobalt, which is the largest battery metal component by weight of the favoured lithium ion battery technology, is the best way to play this theme going forward because of expected meaningful demand growth coupled with lack of supply growth and the elevated political risk from the world’s largest miner of cobalt, the Democratic Republic of Congo (DRC). While we have identified several exploration and development stage companies looking to advance primary cobalt projects, we favour eCobalt Solutions Inc. (TSX:ECS), which is developing the Idaho Cobalt Project (ICP), because it is best positioned to benefit from the anticipated near to medium term increase in the Cobalt price.  read more


Tuesday, November 29, 2016 Derek Macpherson

ICG Continues to Intersect High Grade Mineralization

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Integra Gold Corp. (TSXV:ICG) announced further results from its ongoing drill campaign at the Triangle zone at its Lamaque Gold project in Quebec. The results from 54 holes, totalling ~19km, continue to underline the “C” structures’ likely continuity and suggest that further resource growth is possible at Triangle. Today’s results were highlighted by high-grade intercepts that expanded C5 at depth and 50m to the West. We believe Integra’s premium valuation, C$95/oz versus peers at C$44/oz, is warranted given the project’s location, existing infrastructure, takeout potential, active drill program and above-average grades. Upcoming catalysts include ongoing drill results and an updated PEA (Q1 2017). read more


Tuesday, November 29, 2016 Derek Macpherson

RPX Identifies New Veins at Wawa Gold Project

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Red Pine Exploration Inc. (TSXV:RPX) released encouraging results from its ongoing trenching and mapping program at the Wawa gold project in Ontario. Results identified new high-grade quartz veins in the hanging wall of the Surluga Deposit and suggest that gold mineralization extends to surface at both the William Gold and Hornblende Shear zones. In addition, the company announced that two holes have been completed as part of the ongoing 6km drill campaign at Wawa. In our view, the ongoing drill program has the potential to grow the project’s current 1.1 million oz Au inferred resource (19 million tonnes at 1.71 g/t Au). At $33/oz Au, Red Pine currently trades at discount to peers ($54/oz), suggesting that the potential for resource growth and planned ownership consolidation are not factored into the current share price.  read more


Monday, November 28, 2016 Derek Macpherson

ALG Continues to Intersect High Grades at Eleonore

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Algold Resources Ltd. (TSXV: ALG) announced additional drill results as part of its Phase II 10,000m program at its Tijirit project in Mauritania. These results are primarily from the North, Central and South areas of the higher grade Eleonore zone and indicate that those areas remain open in all directions. Like the initial results we discussed in a previous post, we view today’s results favorably as they appear to continue to suggest that the project has the potential for significant resource growth. We expect further drill results from the Phase II program to support our view that a larger resource is probable, which is likely to backfill the current premium valuation and provide investors with some upside potential.  read more


Thursday, November 24, 2016 Derek Macpherson

SWA Starts New Drill Program at South Houndé

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Sarama Resources (TSXV:SWA) announced it has initiated a new drill program at its South Houndé project in Burkina Faso. The program’s focus is to follow up on results of its last drill campaign which appears to have expanded higher grade areas both at depth and along strike as we had discussed in a previous post. Of note, 2.2km of drilling is allocated towards testing structures that are expected to link the MM-MC and the Phantom East-MM prospects. In addition, Samara is looking to test the Djimbake prospect which is located 3.2km South of the current 2.1M oz Au (43M tonnes at 1.5 g/t) resource (Figure 1). The likely resource growth at South Houndé is in our view not reflected in Sarama’s share price, as at C$5/oz it trades at a steep discount to peers at C$37/oz. We believe that as South Houndé continues to advance (US$3.5 million spending planned for the current drill campaign), the acquisition of Bondi closes allowing Sarama to advance that 100% owned project, and as Savary Gold (TSXV:SCA) continues to advance Karankasso (30.5% interest), Sarama should close the valuation gap to peers.

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Tuesday, November 22, 2016 Derek Macpherson

IDM Intersects High Grade at the JW Zone

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IDM Mining Ltd (TSXV:IDM) announced results from additional 10 underground holes at its Red Mountain project in British Columbia. The results are primarily from infill holes drilled at the upper part of the JW zone and were highlighted by 18.70 g/t Au and 66.85 g/t Ag over 6.80m (U16-1201). In our view, the results continue to confirm both Red Mountain’s current resource potential and highlight the potential for resource growth. The 2016 drill program, both infill and step-out, is expected to be incorporated in the early 2017 resource update, ahead of the planned feasibility study (H1 2017). In our view, ongoing drill results and project de-risking are likely to be positive catalysts for the stock, which continues to trade at a discount to peers on a NAVPS basis.  read more


Tuesday, November 22, 2016 Derek Macpherson

RPX's Resampling Returns Promising Results

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Red Pine Exploration Inc. (TSXV:RPX) released positive results from its ongoing core resampling program at the Wawa gold project in Ontario. The program resulted in a 3.2% increase in average grade and a 7.9% increase in intersection length from previous sampling of the same drill holes and identified two new potential gold-bearing structures near the Jubilee Shear zone. In our view, results from the sampling program to date are promising and in combination with the ongoing 6,000m drill program, might have the potential to add to the Wawa gold project’s current 1.1 million oz Au resource. At $32/oz Au, Red Pine currently trades at discount to peers ($55/oz), suggesting that the potential for resource growth and planned ownership consolidation are not factored into the current share price.  read more


Tuesday, November 22, 2016 Derek Macpherson

VIT Reports Positive Phase 2 Results from Olive-Shamrock

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Victoria Gold Corp’s (TSXV:VIT) has announced results from its Phase 2 Olive-Shamrock drill program at its Eagle Gold Project in Yukon. Results were highlighted by 0.70 g/t Au over 70.1m (DG16-750C) and 1.34 g/t Au over 15.2m (DG16-768C) which compares favorably to the deposit’s resource grade. The results suggest the deposit’s expansion potential to the Northeast, underlining the resource upside potential at Olive-Shamrock. We believe that additional results from the company’s planned drilling along the Potato Hills trend in conjunction with a project financing have the potential to be positive catalysts for the stock.  read more


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