RCKS talk

Wednesday, July 20, 2016 Derek Macpherson

Shamrock Success Suggests VIT May Continue Adding Ounces

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Victoria Gold Corp. (TSXV:VIT) announced the final drill results from the Phase I Olive-Shamrock drill program that were highlighted by 40m at 2.1 g/t (DG16-718C) and 37m at 1.9 g/t (DG16-719C). This round of results is primarily focused on the Shamrock zone, which we do not expect to be included in the pending resource and feasibility update. However, the results from the Olive and Connector zones released earlier this year are expected to be included and in our view, should have a positive impact on project economics. Today’s results from the Shamrock zone provide the potential for further upside.
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Wednesday, July 20, 2016 Derek Macpherson

Sierra’s Operations Continue to Improve in Q2

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Sierra Metals Inc. (TSX:SMT,BVL:SMT) released second quarter production results which continue to demonstrate improving operations after a weak H2 2015. Overall copper equivalent production was 9% lower than Q2 2015 but a 15% improvement Q1 2016 and a 21% improvement over Q4 2015 (Figure 1). Production benefited from increased throughput at all three operations and improved grades at the company’s flagship Yauricocha mine in Peru. In our view, these results demonstrate progress in management’s ongoing turnaround of operations at Yauricocha. In our view, the expectation for continued operating improvements from Yauricocha and Bolivar, along with the release of a maiden resource from the Esperanza zone should benefit Sierra’s share price in the second half of this year.
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Tuesday, July 19, 2016 Derek Macpherson

Reasonable Drill Results from Karankasso JV (SCA/SWA)

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Savary Gold Corp (TSXV:SCA) and Sarama Resources Ltd (TSXV:SWA) provided an update from the ongoing drill program at the Karankasso JV (66.3% SCA/33.7% SWA) project in Burkina Faso. While the highlight results were impressive 9.75 g/t over 7m and 1.73 g/t over 28m and the uncut weighted average grade was over 2 g/t, the overall results only returned an average width of 3m, which we would consider to be narrow for open-pit mining. However, it remains early days and the results continued to extend mineralization along strike at depth in multiple areas suggesting resources are likely to grow beyond the currently defined 680k ounces. While the results may have missed elevated expectations, they do not appear to warrant he 25% decline Savary’s share price experienced. read more

Tuesday, July 19, 2016 Derek Macpherson

Regional Surface Work Highlights IDM’s Exploration Potential

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IDM Mining Ltd. (TSXV:IDM) has released surface mapping and sampling results from its ongoing regional program. The results highlighted the potential of the Lost Valley Prospect and the identification of the Waterfall Prospect. In our view, these results point to the exploration potential at IDM’s Red Mountain project, and while early days, suggest that the mine-life may extend beyond the five years outlined in the PEA. We believe that as IDM continues to de-risk, the current project, and demonstrate the potential for mine-life extension it should re-rate towards peers.
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Monday, July 18, 2016 Derek Macpherson

GSC Releases Solid Q2 Operating Results

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Golden Star Resources Ltd. (TSX:GSC, NYSEMKT:GSS, GSE:GSR) reported Q2 2016 production of 42,472 oz Au which brings YTD production to 95,678 oz Au, 53% of the lower-end of full-year 2016 guidance (180,000 to 205,000 oz Au). In our view, Golden Star remains on-track to meet this year’s guidance, despite a 2.5 week shutdown in Q2. As well, the company continues to make steady progress in its transition to becoming a higher-grade, lower-cost underground miner, with the first stope blasted at Wassa underground. The company’s YTD outperformance is supported by the ongoing transition; however, continued operating success, particularly with respect to costs, is likely needed to maintain this trend.  read more


Sunday, July 17, 2016 Derek Macpherson

Failed Coup Raises Risk for Projects in Turkey

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On Friday, there was an attempted coup of the Turkish government. While the coup was quickly thwarted by government forces, effectively maintaining the status quo; in our view this has increased the risk profile for foreign mining companies operating in Turkey. We expect that this increased risk is likely to negatively impact the stocks Monday morning. Those that essentially have pure-play exposure, like Alacer Gold (TSX:ASR) or key projects within the country like Eldorado Gold (TSX:ELD, NYSE:EGO) and Pilot Gold (TSX:PLG) are likely to be the most impacted.  read more


Friday, July 15, 2016 Derek Macpherson

Smaller Cos likely to Outperform in New Bull Market

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Data continues to support our view that we are in the early innings for a new bull market for precious metals and the related equities. Smaller gold company’s materially outperformed in the last two bull markets as evidenced in the charts below. While the investment in smaller companies, particularly in the early stages of a bull market, comes with inherently more risk, this can be outweighed by the potential for better returns. We note that while a rising tide can float all boats, investors should remain selective when choosing which small cap gold companies to invest in. read more


Wednesday, July 13, 2016 Derek Macpherson

RCKS Drilling Deeper Lunch Features Three Latin American Explorers

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Yesterday, Red Cloud Klondike Strike Inc. (RCKS) hosted the fourth installment of our Drilling Deeper lunch series, this time featuring three Latin American based gold exploration/development companies. The presenting companies were Golden Reign Resources Ltd. (TSXV:GRR), GoldQuest Mining Corp (TSXV:GQC) and Unigold Inc. (TSXV:UGD). In our 3 THEMES & 10 COMPANIES FOR A NEW BULL MARKET IN PRECIOUS METALS post published last month, we highlighted that we believe good news is good for stocks (catalysts) and we believe all three presenters have the potential to add value with planned exploration or project development. read more


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