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Thursday, March 02, 2017 Derek Macpherson

Aurania to Acquire Lost Cities, a Historic Gold Prospect

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Aurania Resources Ltd. (TSXV:ARU) announced it has entered into a definitive agreement to acquire EcuaSolidus S.A., a private company that owns the ~2,080 km2 Lost Cities – Cutucu project in Ecuador. Consideration for the proposed transaction is C$500,000 and 1.0 million Aurania shares. Lost Cities is potentially the first project where professional historical archival research is coupled with modern exploration techniques. Findings from archives suggest the project area might host two major 16th and 17th century gold mines. The project is based at the foothills of the Andes, covering the core of a mountain range adjacent to that which hosts Lundin Mining Corp’s (TSX:LUN) 7M oz Au Fruta del Norte deposit. It was the team of Dr. Keith Barron, who currently is the President and CEO of Aurania, that discovered Fruta del Norte in 2006. Dr. Barron aims to apply the same exploration strategy this time, which might potentially lead to the expedited identification of drill targets. Dr. Barron is giving a special presentation on the Lost Cities and the process of finding them at our Pre-PDAC Conference tomorrow.  read more

Thursday, March 02, 2017 Derek Macpherson

MMX's Guidance Suggests Strong Cash Flow in 2017

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Maverix Metals Inc. (TSXV:MMX) provided guidance for its attributable gold production in 2017, the company’s first full year of operations. The company is guiding for net royalty revenues of C$17.5-20.0 million, based on a US$1,225/oz Au price and annual production of 13.4-15.0k oz AuEq. The majority of the revenue, or 93%, is driven by gold sales with the balance coming from silver (5%) and nickel (2%) sales. Based on working capital expected to amount to 13-14% of net revenues and the company’s current cash position, we believe the company is able to acquire additional small to medium sized streams and royalties. Although Maverix has growth potential in our view, we note that Maverix currently trades at a discount to peers on a P/NAV and 2017e EV/EBITDA basis. read more

Wednesday, March 01, 2017 Derek Macpherson

Initial Drilling from MLN's La Trinidad May Extend Life

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Marlin Gold Mining Ltd. (TSXV:MLN) announced the first set of results from the ongoing drill program at its La Trinidad gold mine in Mexico. This is one of the value creating initiatives undertaken by Marlin now that La Trinidad is generating significant free cash flow. With three holes returning grades significantly higher than the resource grade over good intervals suggests that Marlin may have extended the mine-life beyond La Trinidad’s current mine-life, but it is early days. Today, Marlin also announced a new Normal Course Issuer Bid (NCIB) program under which the company intends to purchase ~2.5 million shares, which represents ~1.44% of the company’s current issued and outstanding common shares, over the next 12 months. Besides ongoing near-mine drilling at La Trinidad, the company has a number of upcoming catalysts including greenfield exploration at La Trinidad, exploration at its Commonwealth property and a detailed operating plan update for La Trinidad with Q4 financial results. We expect these catalysts along with ongoing operating updates to be positive catalysts for the stock. read more

Wednesday, March 01, 2017 Derek Macpherson

Radisson Reports Further Significant Results

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Radisson Mining Resources (TSXV:RDS) announced positive drill results from four additional holes at its O'Brien gold project in Quebec. Significant assays continue to be received from the Pontiac sediments to the south and from the Piche volcanics where the current resource is hosted. Exploration results from the volcanics, in our view, are likely to expand the existing resource. The company is also in the process of re-logging and sampling previously drilled core from both the Pontiac and Cadillac sediment groups. While early days, results from these initiatives combined with results from the ongoing drilling has the potential to expand the resource area beyond the volcanics, which could be game changing for the company. Radisson currently trades at a discount to peers, C$50/oz vs. peers at C$62/oz, which we believe fails to reflect the exploration potential at O’Brien. read more

Tuesday, February 28, 2017 Derek Macpherson

RPX Intersects High Grades North of Surluga

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Red Pine Exploration Inc. (TSXV:RPX) released partial results from five holes drilled during the ongoing 6 km campaign at the Wawa gold project (60% interest) in Ontario. Hole SD-16-45, in which visible gold was identified prior to assaying, returned 44.41 g/t Au over 1.0m within a wider interval of 15.2m that returned 14.66 g/t Au. This hole was drilled in a previously untested area north of the existing resource. This, coupled with the balance of the results, suggests that meaningful resource growth is possible at Wawa. However, this potential does not appear to be fully reflected in the company’s modestly discounted valuation of C$45/oz versus peers at C$54/oz. We expect continued exploration success, along with the recently completed ownership consolidation of the Wawa project should help close the valuation gap to peers. read more

Monday, February 27, 2017 Derek Macpherson

SMT Makes High Grade Discovery at Cusi

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced the discovery of a new high grade silver zone within the Santa Rosa de Lima structure at its Cusi mine in Mexico. Given the significantly higher average grade of today’s results over Cusi’s resource grade, we believe this discovery could materially improve this mine’s economics in the same way the discovery of the Esperanza zone was for Sierra’s Yauricocha mine in Peru. We expect this discovery to add value to the Cusi asset and potentially positively impact the mine’s cash flow in the near term. However, in light of that Cusi only contributed 6% of Sierra’s consolidated Q4 2016 AgEq production, the impact of this discovery on Sierra’s overall cash flow is likely to be limited. However, this discovery may allow Sierra to monetize this asset. We continue to expect that Sierra’s performance in 2017 is going to be underpinned by operational improvements at Yauricocha, which in our view is key to enhancing the company’s value and positioning to bring about the necessary capital structure changes. read more

Sunday, February 26, 2017 Derek Macpherson

RCKS Pre-PDAC Mining Showcase Presenter Preview

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On Friday March 3th, 2017, Red Cloud Klondike Strike Inc. will be hosting its 5th Annual Pre-PDAC Mining Showcase. The event features presentations from 21 companies, including a themed lunch presentation by leading corporations in the gold mining sector. Visit the event page for more details on the day’s schedule. In this post, we provide a brief preview on the 21 presenting companies and 13 banner sponsors that will also be in attendance.  read more

Friday, February 24, 2017 Derek Macpherson

AEM Invests in Otis; Affirms Potential of Kilgore

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Otis Gold Corp. (TSXV:OOO) announced a private placement with Agnico Eagle Mines Ltd. (TSX:AEM, NYSE:AEM) for C$5.047 million to fund working capital and exploration at Otis’ Kilgore gold project in Idaho. The financing consists of 14.42 million common shares priced at a C$0.35/sh which represents a 12.9% premium to the prior day’s close. As a result of the transaction, Agnico Eagle would own ~9.95% of Otis on a non-diluted basis. In conjunction with the financing, Agnico Eagle and Otis are to enter into an investor rights agreement where Agnico Eagle has the right to participate in subsequent financings to maintain its 9.95% interest in Otis. The transaction is expected to close on February 28. In our view, this strategic investment by Agnico Eagle provides confidence for investors and supports our view on the Kilgore project’s technical merits and upside potential. We believe the market does not appear to fully account for Kilgore’s likely resource growth over the current 820k oz Au (47.5M tonnes @ 0.53 g/t Au) resource (indicated + inferred) as indicated by recent drill results and we discussed in a previous post. Coupled with the project being located in a stable jurisdiction in the vicinity of infrastructure, we expect the pending resource update (Q2 2017) and PEA (Q3 2017) to be important catalysts for the company, allowing Otis, which currently trades at C$38/oz, to close the valuation gap to peers (C$47/oz). read more


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