Finding our Way in Finland

We believe Finland has the potential to yield multiple major gold discoveries. We recently had the opportunity to visit several projects in Finland which was highlighted by the fact that despite having a long and significant mining tradition, there has been a late move (1990’s) to commercial gold exploration creating opportunity in this top-notch jurisdiction. Our favourite Finland focused gold exploration companies include: Mawson Resources Ltd (TSX:MAW), FireFox Gold Corp (TSXV:FFOX), and Aurion Resources Ltd (TSXV:AU). We visited a number of other quality projects discussed in-detail within this report.

    • Finland is a tier-1 country for mining and underexplored for gold. The combination of exceptional infrastructure, mining culture and favourable financial regime is the reason this country ranks among the best in the world for mining. That being said, with historic exploration effectively driven by the government and with a focus on base metals and iron ore, its gold potential has never been systematically tested providing current explorers an exceptional opportunity.
    • Mawson Resources Ltd (TSX:MAW): Maiden resource is just the start. Mawson has been advancing its Finnish projects for multiple years, and we believe the company has just unlocked the geologic controls for gold at Rajapalot. With an unconstrained inferred maiden resource of 482koz grading 2.4g/t AuEq (1.7g/t Au and 0.041% Co), the project is off to a good start and we expect the resource to grow materially with the next drill program. We believe the company is potentially worth C$0.78/share.
    • FireFox Gold Corp (TSXV:FFOX): Ready to discover. Uniquely, FireFox’s management team is predominantly Finnish, and have been actively exploring in Finland for more than 10 years. This company has acquired a number a of prospective projects in the Central Lapland Greenstone Belt (CLGB) and are poised to make a discovery with drilling underway. We believe the company is potentially worth C$0.64/share.
    • Aurion Resources Ltd (TSXV:AU): Thinking big in the CLGB. Aurion was one of the first to pursue and systematically explore for gold in the CLGB. The company has some very prospective ground and has been quickly advancing its Aamarusko project from gold-in-boulders to gold-in-core to the beginnings of a deposit. Our site visit suggests that the results to-date may only be the tip of the iceberg. We believe the company is potentially worth C$2.29/share.
    • To get exposure, majors need to come through the few active juniors. The land rush is effectively over, and other than Aginco Eagle (TSX,NYSE:AEM), the other major and mid-tier producers would likely have to acquire one of the active juniors to get exposure to this opportunity. This is supported by investments by Kinross (TSX:K) in Aurion and by Goldcorp (TSX:G) in Mawson.

Red Pine Exploration

Beefing up Resources at Wawa

Impact: Mildly Positive

With promising deposits at both Minto South and Surluga, Red Pine’s drilling continues to de-risk Surluga while also pointing to growth beyond current resources. Today’s results support our view that the Wawa corridor hosts a large gold system which may encompass multiple gold deposits.

  • Surlaga deposit model holding up under scrutiny. Red Pine infill Hole SD-238 encountered thicker mineralization than predicted by the current resource model and returned 12.6m (true width) at 4.33 g/t Au. Similarly, holes SD-237 and SD-239 encountered mineralization as predicted by the Surluga model at grades and widths in line with expectations: 2.41m @ 6.26 g/t Au and 3.76m @ 1.69 g/t Au, respectively. Assay results for 42 infill holes are pending at Surluga and we expect them to validatie the current model in addition to identifying zones with growth potential.
  • Upside within the Jubilee Shear Zone. Hole SD 18-238 intercepted mineralization in the footwall of the Jubilee Shear Zone returning 1.74m @ 5.31 g/t Au within the Surluga Road Shear Zone plus 5.9m @ 0.67 g/t Au from a newly discovered structure at 293m downhole. Although not economic, this latter intercept highlights potential for discovery of new structures at depth, where further drilling may well vector to better grades.
  • Let’s not forget Minto South. Following the Minto South maiden resource (100 koz at 6.8 g/t), hole SD-18-219 has identified a new high grade zone in the Minto South hanging wall which returned 1.2m @ 17.66 g/t Au. We note that the current Minto South resource accounts for only 20% of the mineralized structure at Minto South and we expect further drilling to shed light on additional upside at this emerging deposit.
Red Pine continues to trade at a discount to peers (US$9/oz versus peers at US$32/oz). We note that the company is well funded and is undertaking a 23km drill program in 2019. We believe ongoing exploration success and a resolution to projects ownership should drive a re-rating. Upcoming catalysts include 1) Pending assay results (Q1/19) and 2) Updated Surluga Resource estimate (Q2/19).


Coro Mining Corp

Growing Marimaca into a Potential Mining District

Impact: Positive

Coro Mining Corp announced a second batch of drilling results from La Atómica which continue to demonstrate the potential to expand oxide copper resources at its Marimaca project in Chile. With cash in the bank and 30,000 meters of drilling planned in 2019, we think Coro is well positioned to create value as it steps out to test targets on trend and contiguous to its Marimaca oxide-copper deposit (M&I: 47Mt @ 0.65% CuT).


  • Expansion of Marimaca resource towards La Atómica likely. Results to date from La Atómica suggest mineralization extends a further 300 meters northwest of Coro’s Marimaca deposit. Highlights include LAR 63 which returned 98 meters of copper oxide mineralization at 0.63% CuT and LAR 44 with 44 m @ 0.79% CuT. Overall, we expect La Atómica will contribute to expansion of resources at Marimaca – a maiden La Atómica resource estimate is anticipated by end of Q1 2019. 
  • Attention now shifting to Atahualpa. With the Phase II drilling at La Atomica now complete, Coro will be shifting focus to Atahualpa, where 18,000 meters are planned for H1 2019. We note that small scale artisanal workings extend for at least 500 meters to the north of Marimaca within the Atahualpa property. The first batch of Atahualpa drill results are expected as early as two weeks and should shed light on the potential of this area to host additional oxide copper resources. 
  • Cash in the bank and drilling underway. With its 45,000 meter Phase II drilling program fully funded we believe Coro is well positioned to create value through 2019 as it tests both near-mine and distal targets on its recently consolidated property package. Steady drilling news flow and resource updates at La Atómica and Atahualpa if positive, should eventually begin to raise market profile of this Company. We will publish more detailed thoughts on geological potential following our site visit next week.
Coro Mining trades at a premium to peer explorers – drilling progress and resource expansion key to re-rating. We view Coro mining as a growing exploration story in a favourable jurisdiction whose potential has yet to be fully priced in by the market. Upcoming Catalysts include 1) Resource estimate incorporating La Atómica Q1/19 2) Drill results from SW part of Atómica Q1/19 and Phase II.



Mawson Resources Ltd

Ready to Grow in 2019

Impact: Mildly Positive

Mawson’s newly released electromagnetic survey results from South Palokas add a potential doubling of the second component of the company’s current resource at Rajapalot. With 15km of drilling to commence shortly, we can expect significant resource growth as the company follows-up on two large conductive plates at both South Palokas and Raja. We continue to believe that Mawson is nearing a significant Au-Co discovery beyond the current maiden resource which will be confirmed with coming drilling.

  • Surveying points to a doubling beyond the South Palokas resource footprint. The conductive body extends 250m beyond the deepest drillhole PAL0016 which returned 8.4m at 5.7g/t AuEq (Figure 2) and remains open down dip to the northwest. The company is continuing to collect geophysical data across the entire 4km Rajapalot trend where it is mapping a number of additional conductive anomalies (Figure 1) supporting our theory that Rajapalot hosts a significant gold mineralization.
  • Results impact growth potential of current resource. The current unconstrained inferred maiden resource encompassing the Palokas and Raja prospects contains 482koz at 2.4g/t AuEq (1.7g/t Au and 0.041% Co) which with recent news has significant potential to grow with the down dip extension at South Palokas. The company has already highlighted a potential doubling at Raja with previous TEM results (released prior to the completion of it’s maiden resource) demonstrating the successful use of geophysical surveying for identifying Au-Co drill targets.
  • Expect resource expansion with 2019 drilling. The company will test the South Palokas and Raja conductive bodies with its coming drill program in late January. Mawson is now fully transitioned in to resource development with a refined process for translating geophysical surveying in to successful drill targets. As a result, we expect 2019 drilling to deliver a potential doubling of the existing resource.
Current pricing reflects maiden resource but does not account for exploration potential to be demonstrated in early 2019. Based solely on its maiden resource Mawson is trading at US$37/oz AuEq relative to peers at US$46/oz AuEq. We believe that this recent news demonstrates exploration upside that we expect to be confirmed with the winter 2019 drill program. Upcoming catalysts include 1) Results from WUSA drilling (Q1/19), 2) Drill permits for winter Rajapalot program (Q1/19) and 3) 15,000m drill program at Rajapalot (Q1/19).



Anaconda Mining Inc

Q4/18 Production Beats Estimates

Impact: Mildly Positive

Anaconda Mining reported record gold production for 2018, exceeding both our estimates and the company’s 2018 guidance. Financials have yet to be released but we expect these results to generate cash that would support the development efforts at the Goldboro project. We continue to believe that Anaconda’s share price still fails to account for the growth that Goldboro is expected to deliver starting in 2021.


  • Strong production growth in Q4/18 up 32% Qtr/Qtr (Figure 1). Anaconda produced 6,125 oz Au in Q4/18, which compares favourably to the 4,632 oz in Q3/18 indicating a successful transition to the higher-grade Stog’er Pit. Fourth quarter production beat our estimate of 5,690 oz Au by 8%, which was driven by higher grades processed at the Pine Cove Mill (1.93g/t versus 1.80g/t) as the company processes more ore from Stog’er Tight and less from the Pine Cove pit stockpiles.
  • Positive impact on our Q4/18 financials estimates. As result of the higher grades in Q4/18 and the additional revenue from gold sales, we have modestly adjusted our financial estimates for the quarter (Figure 1). That being said, we await Q4 financials to highlight cash costs in Q4 and fiscal 2018. Higher grades from Stog’er Tight should help fuel production and financial performance over the next 12 months.
  • 2019 production expected to be similar to 2018. The company announced 2019 guidance of 19-20koz Au at US$800-835/oz. This is slightly lower than our expected 22.1koz Au at US$707/oz. As a result, we have adjusted our 2019 estimates to reflect more lower grade ore being processed that wasn’t previously accounted for (Pine Cove Pit pushback). We now model 19.8koz Au at US$800/oz for 2019E.
Anaconda continues to trade a steep discount; development progress and operating execution key to re-rating. As a result of operating results and revised 2019 outlook our NAVPS estimate has increased to C$1.37 (was C$1.31). However, Anaconda still trades at a steep discount to peers (0.19x vs. 0.60x). In our view near-term positive operating updates, along with the continued progression of Goldboro towards production are the keys to re-rating. Upcoming catalysts: 1) Q4 Financial Results, 2) 10kt bulk sample results at Goldboro Q2/19 and 3) Goldboro resource update (H2/19).


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