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Tuesday, May 02, 2017 Derek Macpherson

NEE Signs Equipment Financing Facility for US$9 million

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Northern Vertex Mining Corp (TSXV:NEE) has executed a commitment letter and term sheet with Caterpillar Financial Services Corporation to secure an equipment financing facility between 70-80% of the cost of the equipment for a maximum of US$9 million. Under the terms and conditions, the company also has the option to purchase the equipment at the end of the four-year lease period. Northern Vertex has actively raised capital to fund the initial capital costs of US$33.0 million required to develop the Moss gold-silver project. To date, the company has completed a C$7.35 million convertible debenture financing, received C$5 million in proceeds from a warrant incentive program and signed a credit agreement with Sprott Lending for US$20 million. Including the equipment financing, the company appears to be positioned to achieve its goal to produce gold by Q4 2017. Northern Vertex trades at C$110/oz a premium to peers (C$54/oz). We view the premium valuation as reasonable given that the Moss mine is financed and under construction. In addition, the company’s valuation does not appear to account for the potential of meaningful mine-life extension and improved economics from the ongoing optimization and exploration programs. read more


Monday, May 01, 2017 Derek Macpherson

High-Grade HS Zone Benefits Marlin's Q4 Results

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Marlin Gold Mining Ltd. (TSXV:MLN) released Q4 2016 and full year financial results for 2016 along with full-year 2017 guidance. As expected, mining of the high-grade HS zone in Q4 2016 resulted in the company’s first profitable quarter (EPS of C$0.02 and EBITDA of C$11.6 million). As previously reported the cash generated in Q4 has allowed the company to increase exploration at La Trinidad and Commonwealth, consolidate its land holdings at Commonwealth, aid to reduce the Wexford Capital debt and advance the spin-off of the company’s wholly owned royalty subsidiary Sailfish Royalty Corp. The company also provided 2017 guidance to produce 50-55k oz Au, which appears achievable considering it shipped 18.9k oz Au in Q1. Based on this, we expect strong financial results in Q1, followed by a weaker quarter in Q1; however, the company expects to reach the southern portion of the high-grade zone in June, which should see production and financial results improve in Q3. As well, Marlin has guided that it expects to spin-off Sailfish later this year, once San Albino has received permits or another cash flowing royalty is acquired. We hope to get additional details on both 2017 guidance, the ongoing exploration programs plus the planned spin-out of Sailfish on tomorrow’s 10 am ET conference call (Dial-in: 1-844-348-1683, access code: 16115066). read more


Monday, May 01, 2017 Derek Macpherson

SMT Discovers New Zone & Expands Cuye-Mascota

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) announced results from an ongoing brownfield drill program being carried out at the company’s flagship Yauricocha mine in Peru. Drilling between the Esperanza zone and the Cachi-Cachi mine, resulted in the discovery of a new mineralized structure, the Esperanza North zone, which the company will continue to drill at depth (Figure 1). In addition, results from 3 holes drilled at the Cuye-Mascota zone discovered in November 2016, extended the zone which continues to remain open at depth and longitudinally to the northwest and southeast. Drilling confirmed the current orebody continues from the 1070 level at depth to below the 1270 level, noting previous results from 2011 and 2012 were unsuccessful between the 870m and 1020m level horizon (Figure 2). The results from this program will be included in a resource and reserve estimate update expected in Q4 2017. Over the course of the year, the company will continue to focus on expansion drilling and exploring the newly discovered zones to further define areas of opportunity near existing operations. We believe continued exploration success along with ongoing operational improvements at Sierra’s operating mines, are key to enhancing the company’s value and liquidity read more


Sunday, April 30, 2017 Derek Macpherson

MTA Signs Agreement on First Cash Flowing Stream

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Metalla Royalty & Streaming Ltd. (CSE:MTA) announced it has signed a definitive agreement to acquire a 15% interest in Silverback LTD for US$1.86 million. The company announced it had signed a letter of intent (LOI) to acquire this royalty in January 2017. Silverback LTD owns 100% of the New Luika Gold Mine (NLGM) silver stream. The NLGM produced ~126,572 oz Ag in 2016 and 28,750 oz Ag in Q1 2017. We estimate that Metalla has the potential to generate annual cash flow of US$260-280k from this stream based on previous production and current spot silver price. The agreement also includes an option for the company to invest in an additional streaming transaction. We view the investment positively, as the company continues to add value to its portfolio. The transaction is expected to close on or around May 11th, 2017. read more


Thursday, April 27, 2017 Derek Macpherson

Otis Adds Experience to its Advisory Board

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Otis Gold Corp. (TSXV:OOO) appointed Michael Vint current Vice President of Endeavour Financial Ltd to its Advisory Board. Mr. Vint’s experience in reviewing and assessing mining projects worldwide is an important asset to add to the team as the company continues to advance the Kilgore gold project. Otis is planning a 10,000m exploration program for Kilgore later this year, followed by a resource update which will include 14,000m of drilling completed since the last estimate completed in 2012. At C$48/oz, Otis currently trades at a discount to peers (C$54/oz). We believe the market does not appear to fully account for the potential resource growth at Kilgore. We expect the upcoming drill program and pending resource update (H2 2017) for Kilgore to be important catalysts for the company. read more


Thursday, April 27, 2017 Derek Macpherson

EXN's Optimization Plan On-Track

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Excellon Resources Inc. (TSX:EXN) reported Q1 2017 production results and an update on its ongoing optimization program at its Platosa Mine in Durango, Mexico. The optimization plan remains on schedule for the end of Q2. The company saw higher than forecasted drawdown and expects full installation to be completed during May. Production results decreased significantly YoY and QoQ, as the company faced challenging mining conditions in the Rodilla Manto during Q1. Operations and cash flow are expected to improve in H2 2017, once the optimization program has been completed. Excellon currently trades at a premium to peers, we believe this premium partially reflects the expected increase in production and lower costs once the optimization program is completed. read more


Thursday, April 27, 2017 Derek Macpherson

MQR Advances Exploration at Croinor & Gold Bug

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Monarques Gold Corporation (TSXV:MQR) announced it is increasing the size of its ongoing drill program due to recent drill success. The company has identified 26 drill targets to be prioritized at the Croinor property and launched an 8-hole program at Gold Bug. Subsequent to the discovery made in January, on April 4, 2017, drilling at Gold Bug confirmed a 15m wide shear corridor with a vertical depth of 115m containing anomalous gold grades, returning 6.96 g/t Au over 15 metres, including 17.1 g/t Au over 5.9 metres. The company is focused on increasing current resources at Croinor, and developing the project towards production. To that end, the company has completed a number of smaller development tasks, including permitting a powerline to service the Croinor Gold mine site. In addition, drilling at Simkar is now complete (4 holes, totalling 3,000m), results are still pending. At C$117/oz, Monarques currently trades at a premium to peers (C$60/oz). In our view, this valuation is supported by Croinor’s stage of development (pre-feasibility study), ongoing exploration success and the recent acquisition of the Beacon Mill. read more


Friday, April 21, 2017 Derek Macpherson

Sierra Q1 Results Show Continued Improvements

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported Q1 2017 production results from its operating mines in Peru and Mexico. The company’s quarterly production showed continued incremental operational improvements at both Yauricocha and Bolivar, offsetting a weak quarter at Cusi (Figure 1). The company remains focused on improving operations and near-mine exploration, which should help it surface the value of these assets. In our view, continued exploration success along with ongoing operational improvements at Sierra’s operating mines are key to enhancing the company’s value and liquidity. read more


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