RCKS Talk

12-Sep-2018

Orford Mining Corp.

Visual Results from Qiqavik Drilling Suggest Good News Could be on Horizon

Impact: Mildly Positive

Orford Mining has announced the completion of its 2018 summer prospecting, mapping and drilling program at its Qiqavik property in Northern Quebec.

  • Highlights of the program include the discovery of a thick sequence of quartz-carbonate veining in three drill holes (QK-18-002, -007 & -008) with assays pending (Figure 1)
  • The company has made multiple new discoveries of visible gold on the property, which add to the eight separate high-grade gold discoveries made in previous exploration programs and continue to highlight the prospectivity of the company’s land package in the 40km long under-explored Northern Cape Smith Belt
  • Results of exploration to date along the strike length of the Qiqavik trend warrants further exploration by the company, which we expect is likely to be further reflecting through the upcoming results from 8 holes (1,211m) drilled on the property this year
We believe at Orford’s current value, the stock does not properly reflect the potential of either of the projects in Quebec or the Carolinas and with assays pending from holes QK-18-002, -007 & -008, there is a near-term catalyst that could drive re-rating to close this company’s valuation gap to peers.

12-Sep-2018

Standard Lithium Ltd.

Standard Lithium Ticks Another Box for Lithium Extraction

Impact: Positive

Standard Lithium has provided an update on its progress in developing and constructing a large-scale Pilot Plant for deployment at its 30,000 acre project on the Smackover Formation in Southwestern Arkansas.

  • The company’s mini Pilot Plant has operated continuously for long duration's and has demonstrated that lithium can be selectively extracted from brine and converted into a concentrated and substantially purified lithium chloride solution with overall lithium extraction efficiencies achieving >90%
  • This announcement ticks another box for the company and allows for the design of the larger-scale lithium extraction Pilot Plant to be sufficiently completed, which now enables the company to start the process of procuring long lead-time equipment
  • Testwork to crystallise battery-grade lithium carbonate from the company’s lithium chloride has been successful in making high purity lithium carbonate material (>99.5% purity), which also paves the way for the company in demonstrating that the company’s proprietary crystallisation technology can be used in place of existing OEM crystallisation technologies
Standard Lithium is unique with respect to other junior lithium companies, in that, rather than developing a new resource, their plan is to tap into existing brine production, significantly reducing development costs and permitting requirements as they progress towards developing a pilot plant. Over the next few months, we believe there are going to be a number of catalysts in the near-term that should demonstrate the value of this unique company.

12-Sep-2018

Amarillo Gold Corp.

Amarillo Improves Mara Rosa Economics with New PFS

Impact: Positive

Amarillo Gold has announced the results of an updated pre-feasibility study (PFS) for its Mara Rosa Project in the Goias state of Brazil, which follows a prior PFS completed by the previous management team in March 2017.

  • The updated PFS has improved the economics of the project with an increase in after-tax NPV to US$194 from US$178 and in increase in after-tax IRR from 35% to 42% at a gold price of US$1,200/oz (Figure 1)
  • The major changes to project components include the addition of 89koz Au of lower grade P&P reserves into the mine plan, a 17% reduction in CAPEX based on declines in the Brazilian Real and the inclusion of the 1.75% NSR sold to Royal Gold (NASDAQ:RGLD)
  • With the help of Whittle Consulting, the company has been able to decrease the resource cut-off grade to 0.2g/t Au from 0.35g/t Au based on the results of a mine optimization study, which has allowed for an increase in resources and we expect to see further improvements in the Mara Rosa resource base following the company’s ongoing 10,000m drill program
The updated PFS incorporates changes to both market conditions, highlighted by the favourable change in exchange rates, highlighted by the results from the mine optimization study performed by Whittle Consulting. We believe Amarillo is a well-positioned gold developer in South America to successfully permit its Mara Rosa project while continuing near-mine and regional exploration for an upcoming resource update and feasibility study. The company currently trades at a significant discount to peers ($10/oz vs. peers at $22/oz). Considering our expectation for modest resource growth ahead of the feasibility study early next year, along with ongoing drill results, we believe Amarillo could close that valuation gap to peers.

 

10-Sep-2018

Avidian Gold Corp.

New Gold Showing at Golden Zone

Impact: Positive

Avidian Gold has announced that it has discovered a new gold showing at its Golden Zone project and has staked an additional 4,403ha of ground immediately west, south and contiguous with its project, located 320 km north of Anchorage, Alaska.

  • After acquiring additional ground at the Golden Zone project, property-wide prospecting led to the discovery of multiple sulphide-bearing gossan zones ranging in thickness from 0.5-3.0m over a true width area of ~150m across ~300m in height, where the surface exposure of the new zone appears to extend into and through the mountain side to the other side giving a total strike length of ~450-500m (Figure 1)
  • The company obtained 23 grab samples across the 150 m width of the gossan with additional sampling underway, highlights include 6.14g/t Au, 5.41 g/t Au, 3.83g/t Au and 2.08 g/t Au
  • The JJ zone adds another large-scale potential target to the Golden Zone property, highlighting the district scale potential of it. We note that it now covers 105 sq. km of concessions (Figure 2)
In a previous report, we have highlighted that Avidian has only just scratched the surface at its highly prospective portfolio of exploration properties in Alaska where previous work has demonstrated signigicant potential. Near-term catalysts for the company include exploration drilling updates at its Golden Zone property, where assays are pending for a number of holes.

 

10-Sep-2018

NxGold Ltd.

Systematic Exploration Confirms our View on Mount Roe’s Potential

Impact: Positive

NxGold has provided an update on its 2018 exploration program at the Mt. Roe Project in the Pilbara, which includes results from recently completed reconnaissance stream sediment sampling and assay results from the preliminary follow-up trenching/stripping program.

  • Initial exploration has led to the identification of vein structures in the ‘Specimen Area’, Dryblower area, and 80oz area among others, selective sampling of which returned 102g/t Au and 12.7g/t Ag (samples 18SH024) from the vein structures in the Specimen Area
  • Stream sediment results, were also positive and other sampling on the property continue to return encouraging values. As well, the company has exposed 420m2 of conglomerate in tow areas. Samples from these trenches have been completed, to test for fine gold, the company is assessing locations for larger scale sampling
  • In our view, the company’s systematic approach and the results yielded by it continue to support our view that Mt. Roe is highly prospective for a paleo placer conglomerate gold deposit, with recent work suggesting the potential also exists for a traditional hard rock deposit
We view this update as positive as it continues to support our view of the potential conglomerate gold mineralization at Mt. Roe, we view that with ongoing exploration and newsflow, a re-rating is possible as the company’s now C$9.8M market cap (C$4M EV) does not properly account for the potential of the project, relative to its Pilbara peers. We expect ongoing assay results from grab sampling, mapping results and ongoing trenching to be important catalysts for the stock.

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