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Tuesday, January 31, 2017 Derek Macpherson

EXN Ops Continue Transition with Ongoing Optimization

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Excellon Resources Inc. (TSX:EXN) reported Q4 and 2016 production results and provided an update on the ongoing optimization program at its La Platosa mine in Durango, Mexico. Production in Q4 2016 increased by 4% QoQ and 3% YoY on an AgEq basis when adjusting for metal price differences. Operations continue to be impacted by water management challenges, limiting development into higher grade areas; however, the company continues to progress its optimization program which is expected to be completed in Q1 2017, resulting in dry mining conditions in Q2 2017. The completion of the optimization program is the key step to accelerate development and increase production while reducing costs at La Platosa. read more


Monday, January 30, 2017 Derek Macpherson

NEE Results Highlight Resource Growth Potential

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Northern Vertex Mining Corp. (TSXV:NEE) announced the first results from the ongoing 3km step-out drill campaign at its wholly owned Moss gold-silver project in Arizona. Today’s results include two holes and of note, hole WW-16 intersected gold and silver mineralization ~40m below the Moss mine’s current open-pit resource boundaries. Although it is early days, in our view, this intercept highlights there is potential for the resource to grow at depth. Considering the project’s relatively short life (~5 years at 42k AuEq oz per year), even a small resource addition is likely to have a meaningful positive impact on the project’s economics. To date, the company has completed seven holes as part of the ongoing program and we expect pending results should provide positive momentum for the share price. Northern Vertex currently trades at a premium to peers at C$79/oz vs. peers at C$50/oz. read more


Monday, January 30, 2017 Derek Macpherson

MLN Reports Good Drill Results from Commonwealth

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Marlin Gold Mining Ltd. (TSXV:MLN) announced results from the first nine holes of the ongoing infill and step-out drill program at its wholly owned Commonwealth gold and silver project in Arizona. The first part of the drill program was focused on modest step-out from the existing resource and acquiring metallurgical samples for flow sheet optimization. Today’s results were highlighted by hole 16CDDH06 which extended mineralization by 100m along strike and returned 2.91 g/t AuEq over 25.8m, and infill hole 16CDDH09 which returned 2.27 g/t AuEq over 18.0m. The company plans on following-up on today’s results during the ongoing drill campaign as well as commencing a geochemistry and geophysics program to develop additional targets. The company’s strong cash flow generation from La Trinidad is funding this program along with exploration efforts at La Trinidad (near-mine and greenfield) and the company’s financial commitment for the San Albino stream. These results highlight the importance of that cash flow. read more


Thursday, January 26, 2017 Derek Macpherson

Augustine Shareholders Approve Merger with RPX

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Earlier this week, Red Pine Exploration Inc. (TSXV:RPX) and Augustine Ventures Inc. (CNX:WAW) announced that Augustine’s shareholders have approved the proposed business combination with Red Pine. As we discussed in a previous post, the two companies entered into an arrangement agreement on November 14, 2016. Upon completion of the transaction, Augustine will become a wholly-owned subsidiary of Red Pine. The transaction is expected to be completed on or about February 1st, 2017. Once completed, Red Pine plans to rename the company Wawa Gold Inc., and will hold a 60% interest in the Wawa Gold Project. The project’s remaining 40% interest will continue to be held by Citabar Ltd. In our view, the completion of this merger is an important catalyst for the company and should help close the valuation gap to peers. Red Pine currently trades at C$41/oz a discount to peers that trade at C$51/oz. As well, we expect the ongoing exploration and resampling programs to benefit the share price. read more


Wednesday, January 25, 2017 Derek Macpherson

MLN Reduces Debt with La Trinidad's Cash Flow

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Marlin Gold Mining Ltd. (TSXV:MLN) announced it has made an US$5.5 million dollar repayment, reducing the unsecured credit facility with its majority shareholder, Wexford Capital, to US$32.0 million (due January 2018). Following the payment and further investment in Golden Reign Resources (TSXV:GRR) to maintain its interest (18.94%), Marlin’s cash and refined gold totaled ~C$8.5 million. With January’s production and costs expected to be similar to December’s (9,924 ounces sold at cash costs below US$250/oz), the company is well positioned to fund near-mine and step-out exploration at La Trinidad, additional exploration and development activities at Commonwealth and fund the remaining commitments for its stream on Golden Reign’s San Albino project in Nicaragua. We highlight that although grades are expected to decline for the balance of 2017, we estimate that the going forward quarterly cash flow would on average be US$17-19 million for the remaining ~2 years of La Trinidad’s current mine life.  read more


Wednesday, January 25, 2017 Derek Macpherson

VIT Takes First Step Towards Financing Eagle

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Victoria Gold Corp. (TSXV:VIT) announced it has signed an engagement letter with BNP Paribas (EPA:BNP) to arrange a US$220 million (C$289 million) project debt facility. The syndicated facility is expected to have a tenor of six years and close in Q2 2017. This is an important de-risking step for Victoria to progress the fully permitted Eagle project towards production. This debt coupled with Victoria’s strong cash position at the end of FQ3 2016 (C$62.9 million in cash + marketable securities) moves Eagle closer to production, however, Victoria is likely to need additional capital to fully fund the project (C$50-80 million). At 0.66x NAV, Victoria currently trades at a premium to peers (0.54x NAV), while trading at a discount on a per ounce basis, or C$37/oz versus peers at C$55/oz. We believe Victoria’s premium valuation versus peers is warranted given the project’s scale, jurisdiction and permits. The company’s 2017 exploration program in conjunction with closing of the project financing has potential to be positive catalysts for the stock.  read more


Tuesday, January 24, 2017 Derek Macpherson

Bay Reports Soil Sampling Results; Looks to Future

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Aston Bay (TSXV:BAY) announced it has received complete geochemical results from its summer soil sampling program at its Storm property in Nunavut. The sampling program covered an area of 120 km North-South and 20-40 km East-West (Figure 1) on the property, collecting 2,005 samples in total. Results supported the presence of previously known copper in soil anomalies in addition to identifying new areas hosting copper and zinc concentrations. The company will use these results together with results from its 2016 drill program to plan future exploration programs. With the recent termination of the BHP’s option agreement we look forward to the company’s updated plan to advance Storm in 2017. read more


Tuesday, January 24, 2017 Derek Macpherson

RPX's Drill Results Point to Resource Expansion

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Red Pine Exploration Inc. (TSXV:RPX) released results from SD-16-40, the first hole of its 6km drill program that is currently underway at the Wawa gold project in Ontario. The hole intersected six separate gold shear zones, including a newly discovered zone, an extension of the Hornblende Shear Zone and the William Gold Zone. In our view, these results support Wawa’s resource growth potential while it appears that the likely resource growth from the ongoing drill and resampling programs are not fully incorporated into Red Pine’s share price. This likely growth, along with the planned ownership consolidation of the Wawa gold project, should allow Red Pine to close the valuation gap to peers. Red Pine currently trades at C$42/oz vs. peers at C$53/oz.  read more


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