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Tuesday, March 07, 2017 Derek Macpherson

SCA Confirms Karankasso's Strike Potential

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Savary Gold Corp (TSXV:SCA) announced results from the first 24 holes from the ongoing 10km Phase 2 drill program at the Karankasso JV project (69.5% SCA/30.5% SWA) in Burkina Faso. Results identified new mineralized zones south of the existing resource. This first set of results returned a weighted average grade of 1.59 g/t Au, which is below the current resource grade, over a relatively narrow average width of 2.6m. The results were highlighted by 14.66 g/t Au over 6.0m (HE-RC-17-019) intersected in the southern part of the Serakoro 1 Main Area. In our view, these results confirm the strike potential at Karankasso and imply that the resource is likely to grow beyond the current 671k oz (9.2M tonnes at 2.28 g/t Au - inferred) with the pending update (H2 2017). Prior to that, further results from the ongoing 10km drill program is likely to benefit Savary’s share price, which at C$23/oz trades at a discount to peers (C$37/oz). read more


Sunday, February 26, 2017 Derek Macpherson

RCKS Pre-PDAC Mining Showcase Presenter Preview

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On Friday March 3th, 2017, Red Cloud Klondike Strike Inc. will be hosting its 5th Annual Pre-PDAC Mining Showcase. The event features presentations from 21 companies, including a themed lunch presentation by leading corporations in the gold mining sector. Visit the event page for more details on the day’s schedule. In this post, we provide a brief preview on the 21 presenting companies and 13 banner sponsors that will also be in attendance.  read more


Monday, February 20, 2017 Derek Macpherson

SWA's Warrant Incentive Program to Strengthen Balance Sheet

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Sarama Resources (TSXV:SWA) announced it has initiated an incentive program to encourage the early exercise of ~10 million warrants in order to fund working capital and exploration activities. At an exercise price of C$0.20 per warrant, the exercise of all of the eligible warrants would result in total proceeds of ~C$2.1 million. For each full warrant exercised, holders will receive a new half warrant. Each new full warrant is exercisable at a price of $0.35 until March 10, 2019. We expect the majority of warrants to be exercised with this incentive program and highlight that management, insiders and a significant shareholder have committed to exercise ~36% for proceeds of ~C$750k. Combined with Sarama’s cash position at the end of Q3 2016 (C$2.1 million), we believe that the proceeds from the early exercise would suffice to cover Sarama’s share (~C$1.0 million) of the announced exploration expenses at Karankasso (total C$3.4 million) and working capital needs in 2017. We expect that the ongoing exploration at South Houndé (50% interest) and Karankasso (30.5% interest), along with likely work at Bondi (100% interest), may provide the necessary catalysts for the stock to begin closing the valuation gap to peers. read more


Friday, February 17, 2017 Derek Macpherson

SCA Advancing Karankasso; Drill Results Coming

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Savary Gold Corp (TSXV:SCA) provided an update on the ongoing exploration activities at the Karankasso JV project (69.5% SCA / 30.5% SWA) in Burkina Faso. Savary has collected 5,231 soil samples and completed auger drilling of 1,381 holes and 275 line km of IP gradient geophysical surveys since the current exploration program was initiated in October 2016. Of note, the program has delineated a 3.9 km long untested target that links the Diosso South, West Trend, Kueredougou West and Kueredougou Main. In addition, geophysical surveying at the Serakoro 1 Main area appears to have extended the control shear/alteration structure an additional 13 km to the south to a total traceable distance of ~43 km. In our view, these initial results are promising and suggest that further resource growth is possible outside the existing resources. The current 10 km, 90 hole Phase 2 drill program that commenced in January 2017 has been focused on exploration drilling in the southern part of the property. In our view, pending drill results from the drill campaign that is ~27% complete with 28 holes drilled, and the resource update expected in H2 2017, are likely to benefit Savary’s share price. Savary currently trades at a discount to peers (C$27/oz vs. peers at C$43/oz), suggesting that Karankasso’s potential resource growth is not yet priced into the stock. read more


Saturday, February 04, 2017 Derek Macpherson

Acacia Earns 50% of SWA's South Houndé

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Sarama Resources (TSXV:SWA) announced that its JV partner Acacia Mining (LSE:ACA) has fulfilled the minimum exploration spending requirement of US$7M over the first two years to obtain a 50% stake in the South Houndé gold project in Burkina Faso. Under the earn-in agreement, Acacia has the option to earn up to 75% in the project. By spending an additional US$7M over the next two years, Acacia can earn an additional 20% interest and the remaining 5% by establishing a mineral reserve of 1.6M oz Au. Acacia, has elected to become the project’s operator and has advised it plans on spending US$4M on exploration in 2017, including a 50km drill campaign, comprised of 12km of diamond core, 10km of reverse circulation and 28km of aircore drilling. Sarama currently trades at C$15/oz, a steep discount to peers at C$44/oz. We expect that the ongoing exploration at South Houndé (50% interest) and Karankasso (30.5% interest), along with likely work at Bondi (100% interest), may provide the necessary catalysts for the stock to begin closing the valuation gap to peers.  read more


Tuesday, January 17, 2017 Derek Macpherson

Savary's Drill Results Point to Resource Growth

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Savary Gold Corp (TSXV:SCA), along with its partner Sarama Resources Ltd (TSXV:SWA), announced results from 22 step-out and infill holes, totalling ~3km, drilled at the Karankasso JV project (69.5% SCA/30.5% SWA) in Burkina Faso. Today’s results returned a weighted average grade of 1.79 g/t Au over a relatively narrow average width of 3.2m. Although the weighted average grade of today’s results is below the current resource grade, results continue to extend mineralization to depth and along strike at the Karangosso and Diosso South zones and were highlighted by a wider interval of 7.5m returning 6.73 g/t Au (HE-RCD-16-56). In our view, recent results imply that resources are likely to grow beyond the currently defined 671k oz (9.2M tonnes at 2.28 g/t Au – Inferred) with the update planned for later this year. Prior to that, results from the upcoming 10km drill program is likely benefit Savary’s share price, which at C$26/oz, trades at a discount to peers (C$39/oz).  read more


Tuesday, December 13, 2016 Derek Macpherson

SWA Provides Update on Acquisition of Bondi

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Sarama Resources (TSXV:SWA) provided an update on its previously announced acquisition of the Bondi project from Orezone Gold Corp (TSXV:ORE). The transaction appears to be on-track to be completed in early 2017 as only the final approvals and opinions of the Burkina Faso government remain. Once complete, we expect Sarama to undertake an exploration program on this 100% owned project, applying the knowledge gained from South Houndé (75% owned) and Karankasso (30.5% owned). We view this project, along with Sarama’s interest in the other project in the region, as an important part of the likely regional consolidation by either a larger entity, like Acacia Mining (LSE:ACA), or a junior developer already active in the region. Sarama currently trades at C$8/oz, a steep discount to peers at C$38/oz and we believe the ongoing exploration programs at South Houndé and Karankasso, along with the planned exploration at Bondi may provide the necessary catalysts to begin closing the valuation gap to peers.  read more


Thursday, November 24, 2016 Derek Macpherson

SWA Starts New Drill Program at South Houndé

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Sarama Resources (TSXV:SWA) announced it has initiated a new drill program at its South Houndé project in Burkina Faso. The program’s focus is to follow up on results of its last drill campaign which appears to have expanded higher grade areas both at depth and along strike as we had discussed in a previous post. Of note, 2.2km of drilling is allocated towards testing structures that are expected to link the MM-MC and the Phantom East-MM prospects. In addition, Samara is looking to test the Djimbake prospect which is located 3.2km South of the current 2.1M oz Au (43M tonnes at 1.5 g/t) resource (Figure 1). The likely resource growth at South Houndé is in our view not reflected in Sarama’s share price, as at C$5/oz it trades at a steep discount to peers at C$37/oz. We believe that as South Houndé continues to advance (US$3.5 million spending planned for the current drill campaign), the acquisition of Bondi closes allowing Sarama to advance that 100% owned project, and as Savary Gold (TSXV:SCA) continues to advance Karankasso (30.5% interest), Sarama should close the valuation gap to peers.

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