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Thursday, January 12, 2017 Derek Macpherson

ICG Continues to Demonstrate Triangle's Potential

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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 17 holes, totalling ~6km, continue to suggest the likely continuity of the “C” structures’ and the potential of the C Splays to add ounces, underlining the potential for further resource growth beyond Lamaque’s recently updated resource of 1.9M oz Au (6.8M tonnes at 8.83 g/t Au - all categories at 5 g/t cut-off). Yesterday’s results were highlighted by 18.7 g/t Au over 8.1m (uncapped) in TM-16-211AM01 at C4 and 66.46 g/t Au over 5.10m (uncapped) intersected by hole TM-16-211A at C2. We believe Integra’s premium valuation, C$115/oz versus peers at C$53/oz, is warranted given the project’s location and takeout potential, existing infrastructure, and above-average grades. Upcoming catalysts include ongoing drill results and an updated PEA and resource estimate (Q1 2017).  read more


Thursday, January 12, 2017 Derek Macpherson

ANX's Forward Sale Highlights Need for H2 Cash Flow

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Anaconda Mining Inc. (TSX:ANX) announced it has sold forward a portion of its production to raise C$551,000 as well as early-stage exploration results from the recently acquired Jackson Arm property. At the end of Q1 the cash balance was lower than expected and while operations started to improve in FQ2, ongoing improvements have been guided for in H2 2017 (YE May 31st). We believe continued improvements are crucial to not only shore-up the balance sheet but also to add ounces through exploration. The company also announced that preliminary geological work at its recently acquired Jackson’s Arm property has identified potential drill targets. While this exploration work is mildly positive, the company needs to generate meaningful cash flow from operations to complete a material exploration program. In our view, the mine-life extension via exploration is crucial for Anaconda to re-rate towards typical producer valuations. We note that FQ2 financial results are expected in the near-term which should give us an early indication on the financial impact of the operating improvements.  read more


Thursday, January 12, 2017 Derek Macpherson

Permitting Catalysts on the Horizon for AuRico

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AuRico Metals Inc. (TSX:AMI) provided a permitting update for the Kemess Underground project which continues to suggest the Environmental Assessment decision will be made shortly. The process has now entered the final stages with the Assessment Report and conditions being made available to the public for a month long public comment period. The company expects a final ministerial decision regarding the EA certificate by the end of Q1. We view this positively as in our opinion the receipt of environmental assessment is a key catalyst to unlock the value Kemess and its royalty assets. Based AuRico’s current EV of ~C$149 million implies an EV/EBITDA for royalties only (excluding Kemess costs, annualizing Q3 results) of ~23.1x. This is higher than the EV/EBITDA of royalty peers at 18.7x, which suggests the market currently allocates a value of ~C$28.4 million to Kemess. Similar stage development peers trade at C$49/oz and 0.53x NAV which implies Kemess could easily be ascribed a value between C$115-120 million. This suggests to us that with the completion of the Environmental Assessment (Q1 2017), followed by the mine permit (H2 2017), AuRico should be positioned to decouple its royalty and development assets in 2017, allowing it to unlock significant value for shareholders.  read more


Thursday, January 12, 2017 Derek Macpherson

MQR Intersects Above-Average Grades at Croinor's West

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Monarques Gold Corporation (TSXV:MQR) announced further results from its ongoing 10,000m drill program at its Croinor Gold Project in Quebec. Hole CR-16-506 tested Section 770W at Croinor’s relatively undrilled Western side. The hole returned 15.7 g/t Au over 0.7m within a wider 3.2m interval at a depth of 230m, which is 90m below the last developed level, 500 (Figure 1). These results continue to support our view that Croinor has the potential to grow at depth.  read more


Tuesday, January 10, 2017 Derek Macpherson

RPX's Resampling Continues to Suggest Resource Growth

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Red Pine Exploration Inc. (TSXV:RPX) released further results from its ongoing core resampling program at the Wawa gold project in Ontario. Results continue to improve the metal factor (grade x intersection length) in known zones while identifying new areas of mineralization. In addition, the company announced that it intersected visible gold in hole SD-16-45 as part of its ongoing drilling program, assays are pending. These results along with recent exploration success continues to suggest that the current resource is likely to grow. At $44/oz Au, Red Pine continues to trade at a slight discount to peers ($47/oz), suggesting that the resource growth potential and planned ownership consolidation is not yet fully factored in by the market.  read more


Tuesday, January 10, 2017 Derek Macpherson

GQC Discovers New VMS Zone at Tireo

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GoldQuest Mining Corp. (TSXV:GQC) announced the discovery of new zone, Cachimbo along with additional results from its regional exploration program. This new VMS zone was intersected on multiple horizons and the results were highlighted by 13.8 g/t Au, 73.7 g/t Ag, 11.8 % Zn and 1.1% Cu over 4.9m (TIR-16-09) and is located 20.5km to the South of the company’s 2.5M oz AuEq (23Mt at 3.35 g/t AuEq) flagship Romero gold-copper project. These results from target 3 of 20 in the current regional exploration program highlight that Goldquest’s district-scale land package along the Tireo formation has the potential to yield multiple discoveries. In our view, GoldQuests current valuation, at 0.36x NAV and $27/oz (peers 0.48x NAV and $39/oz) does not account for the exploration upside demonstrated today. In our view, this drilling success could be the catalyst that starts to close the valuation gap to peers.  read more


Thursday, January 05, 2017 Derek Macpherson

MLN's Near-Term Cash Flow Should Fund the Future

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Following Marlin Gold Mining Ltd.’s (TSXV:MLN) conference call to discuss strong December operating results, we are maintaining our estimate for US$17-19 million per quarter of cash flow from La Trinidad. We highlight that this equates annually to US$68-76 million, or US$136-152 million over the next two years of La Trinidad’s mine-life. This cash flow is going to allow Marlin 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 (TSXV:GRR) San Albino project in Nicaragua. Our preliminary estimates suggest that Marlin is now trading at ~2.0x 2017E CF on a EV/CF basis versus peers at 4.6x. If you only account for La Trinidad and its short mine-life, this could be considered a fair valuation; however, it does not account for resource growth potential at La Trinidad, medium term production from Commonwealth or streaming cash flows from San Albino that the near-term cash flow from La Trinidad is expected to fund. This suggests that the stock has more room to run and in our view, further upside is likely to come from ongoing operating success, Q4 financial results demonstrating improved cash flow and exploration results from La Trinidad. read more


Wednesday, January 04, 2017 Derek Macpherson

MQR Intersects High Grades at Croinor's South

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Monarques Gold Corporation (TSXV:MQR) announced results from an additional hole from the ongoing 10,000m drill program at its Croinor Gold Project in Quebec. Hole CR-16-505 was drilled to test the extension of Section 720W (Figure 1), extending the zone by 50m along strike and to a depth of 300m, which is at a similar depth to that of the current resource boundaries. Of note, the hole returned the highest grades that have been intersected during the ongoing drill campaign to date returning 58.6 g/t Au over 0.9m within a wider 2.3m interval. These results continue to support our view that the Croinor deposit has potential to grow at depth.  read more


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