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Tuesday, August 30, 2016 Derek Macpherson

AMI Site Visit: Kemess Worth More than Valuation Suggests

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Last week we visited AuRico Metals Inc.’s (TSX:AMI) Kemess project in Northern British Columbia and were impressed by the existing infrastructure and the management team's technical expertise. In our opinion, once management completes the project’s environmental assessments (expected early 2017) it should be positioned to unlock the value of Kemess. In our view the market appears to ascribe Kemess zero value, providing investors an opportunity for a viability re-rating as management de-risks this project. read more


Sunday, August 28, 2016 Derek Macpherson

IDM Site Visit Highlighted by Exploration Potential

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This past week we visited IDM Mining Ltd’s (TSXV:IDM) Red Mountain project in British Columbia. While it appears the company is on-track to make its final permit submission and deliver a feasibility study early next year, the highlight of the trip is the exploration potential both near-mine and regionally. In our view, this potential for resource growth is not incorporated in IDM’s current valuation. As well, the underground tour suggests the existing underground infrastructure is in decent condition and that ground conditions appear to be good. IDM continues to trade at a discount to peers and we believe that as the company continues to de-risk the current project and demonstrate the potential for resource growth, it should trade at least in-line with similar stage development peers.  read more


Tuesday, August 23, 2016 Derek Macpherson

NMI Appears to be Extending Cosmo’s Mine-Life

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Newmarket Gold Inc. (TSX:NMI) announced positive results from its 13,834 m (45 holes) diamond drilling program at the Cosmo Gold Mine in Northern Territory, Australia. These results suggest resources and reserves are likely to grow and that Newmarket is poised to extend Cosmo’s mine-life. The highlighted results include drill intercepts at the Sliver Lode and newly discovered Redbelly and Taipan Lodes which are located adjacent to the existing underground mine development. Newmarket continues to trade at a discount to peers, partially because of the perception that its mines have shorter lives. These results along with ongoing reserve and resource expansion should help close that valuation gap. read more


Wednesday, August 17, 2016 Derek Macpherson

Higher Grade Thesis Continues to Pan Out for UGD

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Unigold Inc. (TSXV:UGD) has announced good drill results from its Candelones Extension deposit, in the Dominican Republic, which continue to confirm our view that higher grade zones may lie within the existing inferred resource. Results from Target C were highlighted by 4m at 10.07 g/t Au, 20.9 g/t Ag, 0.2% Cu and 2.4% Zn (LP16-109). Two holes, collared on Section 1150 East (Figure 1) have extended the mineralization at Target C for 25m west of drill hole LP16–105. This is important as west of the Candelones Extension deposit was thought to be barren based on historic drill results at the andesite-dacite contact. Unigold continues to trade at a steep discount to peers and we believe that as they continue to prove the thesis that there are higher grade zones within the existing resource, the stock is likely to re-rate. read more


Wednesday, August 17, 2016 Derek Macpherson

Precipitate Advances New Targets

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Precipitate Gold Corp. (TSXV:PRG) announced the final results from a follow up and infill soil sampling program from five targets at the Juan de Herrera project, Dominican Republic. The five targets (South East, Jengibre South, Melchor, Peak and JT - Figure 1) are multi-element surface anomalies which are coincident with magnetic anomalies and located in the Tireo Gold Trend. Surface expressions of the targets vary from about 200m by 300m to the newest South East zone currently measuring 1400m by 200m. The company has initiated a control grid line over these anomalies in preparation for an IP geophysical survey in the coming weeks.
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Tuesday, August 16, 2016 Derek Macpherson

Algold’s Eleonore Delivers on High-Grade Potential

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Algold Resources Ltd. (TSXV: ALG) has announced ~25% of results from its Phase I 10,000 m drilling campaign at its Tijirit Property in Mauritania. Results were highlighted by 9.64 g/t Au over 6 m (T16RC031) and 16.4 g/t Au over 6 m (T16RC027) supporting the company’s belief in a potential high-grade gold deposit. These results support our view that the maiden resource, which appears to have disappointed some investors, from Algold’s Tijirit project in Mauritania, is just the beginning. In our view, ongoing exploration success is likely to result in a larger resource than suggested by the current share price, providing upside potential for investors.
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Tuesday, August 16, 2016 Derek Macpherson

IDM’s Splashy Drill Results Highlight Potential

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IDM Mining Ltd. (TSXV:IDM) released drill results from the first four holes of its underground drill program at Red Mountain. Results from the Marc zone were highlighted by 20.66m of 6.48 g/t Au and 33.58 g/t Ag (U16-1177) and 20.35m of 9.24 g/t Au and 49.73 g/t Ag (U16-1178). As well, hole U16-1182 (6.3m of 9.91 g/t Au and 53.52 g/t Ag) appears to have the potential to extend the Marc zone to the South beneath the existing decline. IDM continues to trade at a discount to peers on a NAV basis and we believe the combination of infill drilling, regional exploration work, and metallurgical testing should all benefit project economics and provide important catalysts for the stock, potentially closing the valuation gap to peers.
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Monday, August 15, 2016 Derek Macpherson

Esperanza Zone + Q2 Results Should = a Strong Q3

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Last week, Sierra Metals Inc. (TSX:SMT,BVL:SMT) released an updated reserve and resource estimate for its Yauricocha Mine in Peru and this morning released Q2 financial results. The update includes a maiden resource for the Esperanza zone, which was discovered a little over a year ago, and went into production earlier this month, as discussed in our previous post. While reserves and resources declined (tonnes and metal basis), reflective of depletion; M&I and reserve grades improved, reflecting the introduction of the higher grade Esperanza zone. We consider Q2 financial results to be mixed and not necessarily reflective of the improving operations seen in the quarter. With Sierra now processing the higher grade Esperanza Zone material, we expect Q3 to be a strong quarter for Sierra.
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