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Monday, March 19, 2018 Derek Macpherson

Anaconda Plans to Make Formal Bid for Maritime

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Anaconda Mining Inc. (TSX:ANX) has announced it intends to make an offer to acquire Maritime, for consideration of 0.364 of a common share of Anaconda in exchange for each Maritime share, a 40% premium to the market. We view the potential acquisition as accretive to Anaconda shareholders, providing another source of feed for the Pine Cove Mill, specifically, providing a higher-grade source of feed than currently considered in the mine plan. While we expect a merger to be positive for our estimates, we have not yet incorporated it into our model as a formal offer has not yet been made and there is a risk that Maritime's significant shareholder Rambler Metals and Mining (TSXV:RAB), could make a counteroffer as they have similar synergies. read more


Thursday, March 01, 2018 Derek Macpherson

Anaconda Releases in Line Financials for Stub Year

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Anaconda Mining Inc. (TSX:ANX) reported encouraging financial results for its seven-month fiscal year ended December 31, 2017. For the stub year, the company reported cash costs, US$787/oz, which was ahead of our expectation for US$909/oz. This represents a significant improvement (vs. F2017) for the company and resulted in it achieving operating cash costs at the lower end of guidance for the stub year. As well, the company beat our expectations for end of year cash balance with C$4.0M compared to our previous estimate of C$3.6M. In addition to the company’s undrawn C$1M line of credit, we are forecasting an increase in gold production to 18,100 oz Au and a further reduction in all-in cash cost to $950/oz Au as the company transitions to the higher grade Stog’er Tight deposit in H2 2018. As the company’s fiscal year financial results have remained more or less in line with our expectations, our NAVPS estimate has only changed slightly to C$0.94/share (from C$0.95/share). Based on our current estimates, Anaconda still trades at discount to peers (0.46x NAV, peers 0.57x). In our view, upcoming catalysts include ongoing exploration at Goldboro and Argyle, improved cash flow in H2 2018 and ongoing development work at Goldboro which all should help close the valuation gap to peers. read more


Thursday, March 01, 2018 Derek Macpherson

ANX Infill Results from Argyle Suggest Higher Grades Possible

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Anaconda Mining Inc. (TSX:ANX) reported encouraging initial results from 3 holes drilled as a part of a 12 hole, 1,122m infill and expansion diamond drill program underway at Argyle, 4.5km from the Pine Cove Mill and tailings facility at Point Rousse. Results have provided confidence in the geological modelling of the deposit, with holes AE-18-64 to 66, confirming the presence of high-grade zones within Argyle. Drilling returned, 4.85 g/t Au over 8.5m and 4.75 g/t Au over 8.0m. Assays are pending for the remaining 9 holes (794m), with results expected in March 2018. We highlight that the current resource grade at Argyle is 2.01 g/t Au (M&I+I) and these results suggest there could be an improvement in grade. We highlight that a 25% improvement in grade for Argyle, would improve our pre-tax NAV for Point Rousse by 34%. Based on our initial estimates, we believe Anaconda is trading at discount to peers (0.46x NAV, peers 0.57x). In our view upcoming catalysts include, ongoing exploration at Goldboro and Point Rousse, improved cash flow in H2 2018 and ongoing development work at Goldboro which all should help close the valuation gap to peers. read more


Tuesday, February 27, 2018 Derek Macpherson

ANX Point Rousse Resource & Reserve Update Highlighted by Conservative Estimates

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Anaconda Mining Inc. (TSX:ANX) has filed an NI 43-101 Technical Report for its Point Rousse Project, which included the maiden resource for Argyle and updated reserves and resources for the Pine Cove and Stog’er Tight deposits. While, the update is neutral to our overall view, the company has applied more conservative assumptions than expected, on the conversion of Stog’er Tight’s resources to reserves. We have partially reflected this in our model, resulting in a slight NAVPS estimate (was C$1.00/sh, now C$0.95). We highlight that, the company has just started mining this deposit, and as initial reconciliation data becomes available, we plan to refine our estimates. As well, we highlight that we only model the current resource for Argyle; however, ongoing drilling success is likely to positively benefit our estimates. As well, we continue to believe that Anaconda trades at a discount to peers and believe that as the ongoing drill programs at Argyle and Goldboro continue, it should close the gap to peers.  read more


Tuesday, February 27, 2018 Derek Macpherson

RCKS 6th Annual Pre-PDAC Mining Showcase Presenter Preview

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On Friday, March 2, 2018, Red Cloud Klondike Strike Inc. will be hosting its 6th Annual Pre-PDAC Mining Showcase. The event features presentations from 30 companies, including a breakfast panel focused on new technology in mining and a keynote lunch presentation from Osisko Mining Inc. (TSX:OSK), SolGold Plc. (TSX:SOLG) and Ascot Resources Ltd. (TSXV:AOT). For more details, please visit our events page. In this post, we provide a brief preview on the 30 presenting companies and a list of banner participants that will be in attendance.  read more


Thursday, February 15, 2018 Derek Macpherson

ANX Expands Drilling at Goldboro

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Anaconda Mining Inc. (TSX:ANX) has expanded its drill program at Goldboro to 7,000m and initiated the second stage of the program, 4,500m of drilling targeting the East Goldbrook and Boston Richardson gold systems, underexplored portions of the deposit to increase resources. The company recently announced results from the first five holes, which suggest resource expansion is possible beyond the current resource and recent PEA. We expected continued drill success to support a higher NAVPS. If we were to incorporate a 10% resource increase at Goldboro our NAVPS estimate would increase from C$1.00/share (was C$1.01) to C$1.03/share. Based on our initial estimates, we believe Anaconda is trading at discount to peers (0.47x NAV, peers 0.62x). In our view upcoming catalysts include, ongoing exploration at Goldboro and Point Rousse, improved cash flow in H2 2018 and ongoing development work at Goldboro which all should help close the valuation gap to peers. read more


Tuesday, February 13, 2018 Derek Macpherson

RCKS Charts: LPK & ANX

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In this edition of RCKS Charts, Keith has evaluated Lupaka Gold Corp. (TSXV:LPK) and Anaconda Mining Inc. (TSX:ANX). After recently visiting Lupaka’s polymetallic Invicta project and reporting our initial estimates for Anaconda, we asked Keith to provide technical analysis on these names, that we have a fundamentally positive view. read more


Wednesday, February 07, 2018 Derek Macpherson

ANX Goldboro Drill Results Highlight Upside

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Anaconda Mining Inc. (TSX:ANX) reported initial 2018 results from the ongoing 6,000m drill program at its Goldboro project in Nova Scotia, showing multiple areas with visible gold. We view the results positively, as they suggest resource expansion is possible beyond the current resource and PEA. Resource expansion at Goldboro would represent upside to our recently released estimates.  read more


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