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In this edition of RCKS Charts, Keith has evaluated Golden Star Resources (TSX:GSC), Novo Resources (TSXV:NVO), Tinka Resources (TSXV:TK), Austral Gold (TSXV:AGLD, ASX:AGD), Ethos Capital (TSXV:ECC), Group Ten Metals (TSXV:PGE) and Teras Resources (TSXV:TRA). read more
Anaconda Mining Inc. (TSX:ANX) reported the results of metallurgical testing on a 25kg sample of blended core samples with an average grade of 2.7 g/t Au from the Argyle discovery. The sample was able to achieve a flotation recovery of 97.3% and a leach recovery of 94.5% for a combined recovery of 91.9%. The company’s objective was to determine the metallurgical characteristics of the Argyle mineralization and the company was successful in verifying its compatibility with the circuit at the Pine Cove Mill and confirms that the mill will not have to be modified in order to process Argyle ore. Based on our preliminary estimates, we believe that at its current market cap (C$24.8 million), investors are either paying for Point Rousse (~value of C$30-50 million based on our preliminary DCF) or Goldboro (~ value of C$41.5 million based on C$50/oz) suggesting good value at current levels. In our view, the upcoming PEA for Goldboro, is likely to be an important catalyst for Anaconda as it should allow investors to better understand the potential of this asset. Following that, operations later in F2018 (year-end May 31) should see production and cash flow increases as mining at Point Rousse moves to the higher-grade Stog’er Tight deposit. In our view, both these catalysts have the ability to cause the market to ascribe a fair value to both projects. read more
Victoria Gold Corp. (TSXV:VIT) has reported an update on its Eagle Project Phase 1 De-Risking Program, on its Dublin Gulch project in the Yukon. The objective of the $40M 2017 program was to de-risk the earthwork areas of the capital budget and prepare the construction site for Phase 2. Phase 1 activities included heap leach embankment preparation, control pond construction, project access road and bridge upgrades, pioneering of site roads to crusher and recovery plant, expansion of camp to 250-person capacity, advancing detailed engineering and securing pricing on long-lead items. Management stated that Phase 1 was successful in de-risking the project. We note that the company started construction without the full funding in-place; however, with a cash balance of C$43 million (at August 31, 2017) and a commitment letter in place for a US$220 million debt facility, we estimate the company requires additional funding of ~C$70-100 million. Victoria Gold currently trades at a discount on a per ounce basis, or C$31/oz versus peers at C$46/oz, which we believe does not take into account the exploration potential of the Dublin Gulch property or that the project has just transitioned from shovel ready to under-construction. read more
Novo Resources Corp. (TSXV:NVO) has announced its strategy for its ancillary assets including the company’s 100% owned Tuscarora property in Nevada and several tenements in Marble Bar, Western Australia. Novo has signed an option agreement with American Pacific Mining (“APM”) where it has the option to acquire the Tuscarora property’s 24 unpatented mining claims in Nevada. American Pacific will initially pay to Novo C$375k and issue C$200k worth of shares to Novo once the company is listed on the CSE. Beginning on the one-year anniversary of American Pacific’s listing date, APM will be required to incur annual expenditures of $100k on the property. American Pacific will also grant Novo a 0.5% NSR, which can be repurchased for $500k. As for Novo’s tenements in Western Australia, further to forming a joint-venture with Calidus Resources Ltd. (ASX:CAI), the company will be issued 20M fully paid ordinary shares of Calidus upon the receipt of all necessary environmental approvals. This strategy allows Novo to focus on its Karratha projects, which represents the most value to the company. At Novo’s current share price, the market is pricing in a sizeable resource at Novo’s Karratha project, which based on the data to date, we view as very possible. However, additional data, including additional diamond drilling to determine conglomerate thickness (ongoing) and assay results from the ongoing bulk samples and planned large diameter drilling (early 2018), is needed to fully understand this projects potential. read more
Centerra Gold (TSX:CG) has announced a friendly all-cash bid for AuRico Metals (TSX:AMI) at a price of C$1.80 per AMI share, which represents a premium of 38.5% to yesterday’s close for a total transaction value of C$310M. In our view this bid undervalues AuRico’s diverse assets (development assets and royalty portfolio) which leaves room for another bidder. We believe Aurico’s assets are worth more than $2/share (Figure 1); however, the diverse nature of them is likely to require a joint bid from a royalty and operating company. Consequently, we consider the odds of another bid to be ~30% (medium). read more
Aquila Resources Inc. (TSX:AQA) has reported the final drill results from its 2017 drilling program at the Back Forty project in Michigan. The company had identified a new zone of massive sulphide mineralization during the 2016 drilling program and have just tested the area. Drilling results released by the company include 1.27 g/t gold, 15.78 g/t silver and 12.17% zinc over 7.09m in hole LK-17-537, the hole had tested a southwest extension of the 2016 zone. The drill results support management’s objective of connecting the new zone’s mineralization to the project’s existing resource base in the near future. The drilling indicated that the mineralization extends for more than 120m and is open along strike. Aquila currently trades at a premium to peers on an EV/lb basis (C$0.022 vs. peers C$0.017). We believe a premium is warranted given the company’s advanced permitting stage, good jurisdiction, exploration upside and stage of development. We expect additional exploration results and the pending feasibility study along with the final permit needed for construction to be important near-term catalysts for the company. read more
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Red Cloud Klondike Strike Inc. connects mining companies with suitable investors that qualify under available regulatory exemptions. For example, in Canada, according to National Instrument 45-106, Prospectus and Registration Exemptions. Similar laws and regulations apply in other jurisdictions. Companies presented on this website are considered to be highly speculative and, as such, are suitable only for purchasers who can tolerate the highest level of risk including the loss of their entire investment.
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