RCKS Talk

30-Oct-2018

Brixton Metals Corp.

Is Atlin the Next Barkerville-Like Gold Discovery?

Impact: Positive

Brixton’s Atlin project has the potential to deliver a major discovery and we are pricing that possibility into our numbers. Based on some exceptional historic results, this district scale land package has the potential to deliver a major gold discovery. Similar to the Barkerville gold project, it is a historic placer mining camp and Brixton has already started the work to unlock its hard rock potential. We believe it is important to highlight that Brixton has now started to focus on Atlin to assess its discovery potential.

Highlights: 
    • Large placer mining camp but limited hard rock work done to-date. Atlin is British Columbia’s second largest placer mining camp but has never undergone meaningful hard rock exploration. This is very similar to Barkerville (Caribou Gold Camp) to the south, where a consolidation of the district, followed by systematic work has lead to an impressive gold discovery which gives Barkerville Gold Mines (TSXV:BGM) its C$190M market cap.
    • Not starting from scratch on this district scale land package. Over the last two years, Brixton has quietly consolidated this district scale land package (1,004 sq. km), which includes a mining lease and a permitted 200 tpd mill at its Yellowjacket target. Work from previous operators is highlighted by numerous high-grade intercepts, including 5.57m at 509.96 g/t Au within an 80m wide shear zone.
    • Atlin is now the focus, with work ramping up in 2019. Brixton has completed compilation and surface work (soil sampling and rock chips) and plans to conduct some additional surface work and geophysics in early 2019 before drilling next spring.
Valuation:
Our probability-weighted valuation method estimates Brixton’s current share price should double (Blended Valuation Estimate of C$0.28/share  – see Figure 1). Our methodology considers three possible scenarios: 1) upside-case (a Barkerville type discovery), 2) a middle case (small high-grade resource) and 3) a downside case (status quo after exploration spend). It is important to highlight that we believe there is limited downside from current levels as Brixton’s three other 100% owned projects underpin the company’s current market cap. Upcoming catalysts: 1) Additional drill results from the Cobalt camp, 2) Surface work results from Atlin and 3) Ramp-up of exploration efforts at Atlin.
22-Oct-2018

Brixton Metals Corp.

Big Grades from Hudson Bay

Impact: Positive

News from the 11 drill holes at Brixton’s Hudson Bay project comes as an exciting step forward, compounding on the ongoing exploration success at the nearby Langis mine. The Hudson Bay project is located in the Cobalt Camp, where ~500 Moz Ag and ~50 Mlb Co have historically been produced. Results support our thesis that Brixton remains an undervalued explorer with multiple prospective assets in North America.

 Highlights:
  • Impressive Ag-Co results. The company released 11 drill holes, highlighted by HB18-31, which intersected 1m grading 3,290 g/t Ag, 0.14% Co and 0.29% Ni (2.53% CoEq, equivalent to ~25% CuEq) and HB-18-34 which intersected 1.96% Co and 16.2 g/t Ag (1.97% CoEq, equivalent to ~19.7% CuEq). The results give the company additional leverage to cobalt and nickel, two battery metals with positive long-term supply and demand fundamentals.
  • Being a step ahead has Brixton delivering some of the best results in the Cobalt camp. The company started work in the Cobalt camp ~1 year ahead of the cobalt rush, putting it ahead of its peers in understanding, as evidenced by the company’s ongoing exploration success. However, these results have not translated into the share price, suggesting Brixton is significantly undervalued based on its Cobalt assets alone.
  • Other assets have high-potential but ascribed little value. The company has 3 other quality assets - Atlin, Thorn and Hog Heaven. In particular, we believe that Atlin has the potential to yield a high-grade gold discovery in the next 18 months. Historic results at Atlin include: 5.57m at 509.96 g/t Au and 6.00m at 21.07 g/t Au. We expect the company to ramp-up exploration at Atlin in 2019.
Valuation:
Undervalued based on Cobalt assets alone, investors getting Atlin and the other projects for free. Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. In our view, continued exploration success, including the ramp-up of exploration efforts at the company’s Atlin project in British Columbia, should benefit shareholders. Upcoming catalysts: 1) Additional drill results from the Cobalt camp, 2) Surface work results from Atlin and 3) Ramp-up of exploration efforts at Atlin.

24-Sep-2018

Precious Metals Commentary

Is it 2015 Again? Precious Metals Appear Poised for a Rally

This summer has not been pleasant for mining company share prices or for those of us that are invested in them. Falling commodity prices combined with excitement in other sectors has resulted in apathy towards mining companies in general. Recently, there has been a glimmer of hope with significant exploration results from GT Gold (TSXV:GTT) and RNC Minerals (TSX:RNX) that has driven each company’s share price significantly higher. One of the indicators that we follow, that we consider to be a reasonable indicator of bearish/bullish sentiment is the Gold/Silver Ratio, which is currently at a 2-year high.

  • Gold/Silver Ratio is at 83.6, levels not seen since early 2016, which was a precursor to a rally in precious metal prices and a significant rally for precious metals equities (Figure 1)
  • The last rally started in large cap names, but migrated quickly down cap, with the largest returns coming from the smallest names (Figure 2 & 3)
  • We think companies that have continued to deliver good results over the last few months without a corresponding rally in the share price are likely poised to outperform. Names that we think fit this profile:
    • Brixton Metals (TSXV:BBB)
    • NxGold (TSXV:NXN)
    • Red Pine Exploration (TSXV:RPX)
    • Amarillo Gold (TSXV:AGC)
    • Lupaka Gold (TSXV:LPK)
    • Orford Mining (TSXV:ORM)
    • Lion One Metals (TSXV:LIO, ASX:LLO)
It is always important to highlight, that while we believe a rally is likely coming, the timing of that rally is always uncertain. However, mining is a cyclical business and we believe we are very close to the bottom, suggesting now is a good time to get positioned for the pending rally.

17-Sep-2018

Brixton Metals Corp.

Brixton Hits One of the Best Holes of the Year in Cobalt

Impact: Positive

Brixton Metals announced additional drill results from its wholly owned Langis Mine Project located in the Cobalt Camp of Ontario.

  • The results were highlighted by one of the best drill holes released this year in the Cobalt camp. Hole LM-18-42 returned 6m grading 4719g/t Ag and 0.33% Co
  • This most recent round of results was highlighted by better than typical widths from the Cobalt camp, which is noted for its high-grade but narrow widths. In our view, these better than typical widths along with the expected high-grades set Brixton apart from its peers in the camp.
  • Continuing to intersect high-grade Ag-Co mineralization in areas that were not previously drilled reflects both the prospectivity of the company’s land package, its advanced state of data review relative to peers and the successful target generation by the exploration team 
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. The company has demonstrated an ability to acquire prospective, undervalued assets and is working to surface value on all four its projects. In our view, continued exploration success in the Cobalt camp, along with planned work at the company’s other properties, should benefit shareholders through Brixton.

13-Sep-2018

Brixton Metals Corp.

New Study Points to the Big Potential of Thorn

Impact: Positive

Brixton Metals announced that it has completed field work at its Thorn Au-Ag project in the northern tip of the Golden Triangle in British Columbia, located 200km NW from Imperial Metals Red Chris Mine.

  • The company is highlighting its collaboration with porphyry specialist, Brock Riedell, in conducting rock lithogeochemical analysis combined with short-wave infrared spectroscopy (SWIR) to generate Cu-Au porphyry targets on the property
  • Final results from the study are pending, but initial results have identified metal ratio patterns in soils and rocks that have been known to be consistent with gold-rich porphyry systems, where the company has compared to the Bingham Canyon porphyry in Utah
  • While it is certainly early days, given the size and intensity of the geochemical anomalies and location, we see the property as potentially prospective for a porphyry discovery and likely to be supported by final results from core re-logging, geological mapping and sample collection
Brixton has assembled four quality assets, and in our view each one could easily justify the company’s current market cap, without further exploration success. The company is actively advancing all four, with drill results pending from its Cobalt Camp assets.

06-Sep-2018

Brixton Metals Corp.

Brixton Adds Key Asset in the Atlin Camp

Impact: Mildly Positive

Brixton Metals has announced that it has closed a series of separate asset purchases and sale agreements to acquire 29,608ha of mineral rights in the Atlin Gold Camp of British Columbia, which consists primarily of the Spruce and Yellowjacket properties. Payment for the assets included issuing 4.3M common shares and a payment of $50,000 to Desert Mountain Energy Corp (TSXV:DME).

  • A non-NI 43-101 compliant resource of 453,500t grading 10.26g/t Au (~150koz Au) is hosted within an 80m wide shear zone oriented 65 degrees and steeply dipping to the south, where the gold occurs as free gold in intensely sheared, altered and silicified ultramafic and mafic rocks (Figure 1)
  • The company highlighted high-grade gold mineralization at the Yellowjacket zone (Figure 1), which includes intersecting 509.96g/t Au over 5.57m (hole YJ03-01) and collecting grab samples grading 1,615g/t Au
  • The larger 979sq. km land package in the Atlin camp, one of Canada’s most productive placer mining camps, is highly prospective for both intrusion related gold deposits and orogenic Barkerville style high-grade gold vein deposits, which provides large target areas for the company’s regional exploration plans going forward (Figure 2)
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. The company has demonstrated an ability to acquire prospective, undervalued assets and is working to surface value on all four projects. In our view, continued exploration success in the Cobalt camp, along with planned work at the company’s other properties, should benefit shareholders through Brixton. 

31-Aug-2018

Brixton Metals Corp.

Diamonds in Cobalt

Impact: Positive

Brixton Metals has announced that it has intersected a kimberlitic body in three drill holes at its Langis project in the Cobalt Camp of Ontario while targeting cobalt-nickel-silver mineralization in the shallow Archean rocks.

  • A total of 53.6kg from the three holes has been sent to SRC Geoanalytical Laboratories Diamond Services (GLDS) in Saskatoon for micro diamonds recovery tests where micro diamonds recovery tests returned one diamond from drill hole LM-18-37 (Figure 1)
  • Given the small sample size of three drill holes, recovering a diamond fragment is an interesting new development for the Langis project, the distance between the three holes (Figure 2) suggests that the property may host a large kimberlite pipe or multiple smaller pipes
  • The discovery of diamond-bearing kimberlitic rocks on the property warrants further investigation, which the company intends to pursue with further core and RC drilling to test for the extent of the kimberlitic body while consulting with diamond exploration experts to evaluate and assess the potential of the discovery 
While this is an exciting new discovery for the company, we expect that the company’s focus to remain on Co-Ag exploration while the company assesses the diamond exploration potential. Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. In our view, continued exploration success in the Cobalt camp, along with planned work at the company’s other properties, should benefit shareholders through Brixton.

20-Aug-2018

Brixton Metals Corp.

Hog Heaven Now Drill Ready

Impact: Mildly Positive

Brixton Metals has provided an update on its Hog Heaven project data review, new geophysical data acquisition and short-term project development plans.
  • Work completed to date at Hog Heaven includes the data entry of historic assay for 57,498m from 722 drill holes and the acquisition of 60 sq. km of Lidar and digital air photography
  • A total of 724 line-km of VTEM Plus and horizontal magnetic gradiometer survey have been completed over the project and have been successful in identifying several anomalies, which Brixton is planning to drill test with the objective to identify additional high-grade Ag-Au-Cu-Pb-Zn mineralization (Figure 1)
  • With no work completed since the 1990’s, the Hog Heaven project is now drill ready for initial programs, which should focus on infill and confirmation drilling to support a NI 43-101 resource estimate and to confirm the presence of new mineralization; Brixton is planning to initiate a nine-hole drill plan for the Fall 2018
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. In our view, continued exploration success in the Cobalt camp, along with planned work at the company’s other properties, should benefit shareholders through Brixton.

07-Aug-2018

Brixton Metals Corp.

Large Land Acquisition Makes Brixton Top Dog in Atlin Gold Camp

Impact: Positive

Brixton Metals has announced that it has entered into a series of separate asset purchases to acquire 100% interest in 29,608 hectares of mineral rights in B.C.’s Atlin Gold Camp.
  • Transaction includes the Spruce and Yellowjacket properties, which account for over 96% of the land acquired, by way of issuing 4,300,000 common shares and a payment of $50,000 to Desert Mountain Energy Corp (TSXV:DME)
  • Spruce is subject to a 1.0% NSR, which Brixton may purchase for $1,250,000 and the Yellowjacket property is subject to a net 1.5% NSR. Brixton also acquired 1,019 hectares of the McKee and Otter properties, which are subject to a 1% NSR, half of which Brixton holds the right to purchase
  • With this move, Brixton has consolidated 979 sqkm of land to become the dominant player in the Atlin Camp, which the company believes contains district scale potential for both intrusion related gold deposits and orogenic Barkerville style high-grade gold vein deposits
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued based on these assets alone. In our view, continued exploration success in the Cobalt camp, along with planned work at the companies other properties, should benefit shareholders through Brixton.

20-Jun-2018

Brixton Metals Inc.

Brixton Plans to Spin Out Cobalt Assets

Impact: Positive

Brixton Metals has announced that they intend to spin-out its cobalt assets in the Cobalt Camp of Ontario in order to create a cobalt focused standalone company for its shareholders.
  • With the increased demand for cobalt and overall positive market fundamentals, Brixton believes shareholders will benefit from a spin-out of its cobalt-silver assets, allowing Brixton management to tighten their focus on precious metals projects
  • If the spin-out transaction occurs, the resulting company will focus not only on cobalt, but all battery metals, including vanadium, which has seen similar growth to cobalt
  • Both the Hudson Bay and Langis projects in the Cobalt Camp are under consideration to spin-out, Brixton intends to maintain exposure to the cobalt assets through retained equity interest; spin-out ratio to shareholders, retained equity level and timing of the record date are to be announced
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example, First Cobalt (TSXV:FCC) trades at C$0.017 EV/ha, while Brixton trades at C$0.004 EV/ha. In our view, continued exploration success in the Cobalt camp should benefit shareholders through Brixton or the SpinCo and the start of exploration at the company’s Hog Heaven project should drive a re-rating of Brixton shares.

30-May-2018

Brixton Metals Corp.

Drilling at Langis Returns 3.55% Co

Impact: Positive

Brixton reported additional high-grade cobalt intercepts (Figure 1) from drilling at the company’s Langis project in Ontario’s Cobalt Camp.

  • Results were highlighted by 3.55% Co, 3.8 g/t Ag and 0.10% Ni over 0.98m which equates to 3.57% CoEq or 5,189 g/t AgEq (LM18-23)
  • Further broad low-grade Co-Ni-Ag was intersected in the basement Archean meta-volcanics and meta-sediments
  • Results continue to highlight the benefit of Brixton’s more advanced knowledge of the region and we expect follow-up drilling to yield similar success
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example, First Cobalt (TSXV:FCC ) trades at C$0.012 EV/ha, while Brixton trades at C$0.004 EV/ha. In our view, continued exploration success in the Cobalt camp and the start of exploration at the company’s Hog Heaven project should drive a re-rating. 

09-May-2018

Brixton Metals Corp.

Brixton Hits Cobalt Mineralization in Basement Rock

Impact: Positive

Brixton has identified a new broad Ni-Co-Ag mineralized zone in the Archean basement rocks at its Langis Project in addition to intersecting high-grade Co-Ag in the conglomerate sequence.

  • Experience working in the Cobalt Camp continues to pay off
  • Broad mineralized zone discovered in Archean basement rock
  • Brixton remains undervalued compared to Cobalt Camp peers
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.014 EV/ha, while Brixton trades at C$0.004 EV/ha.

30-Apr-2018

Brixton Metals Corp.

Completes Phase 1 Drilling with Impressive Grades

Impact: Positive

Brixton has released the remainder of its phase one drill results from Hudson Bay and is now focusing drilling on its nearby Langis property also in Ontario’s Cobalt Camp.

  • Hudson Bay continues to deliver high-grade cobalt intersections
  • Drilling shifts to Langis, 22km from Hudson Bay
  • Brixton remains undervalued compared to Cobalt Camp peers
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.014 EV/ha, while Brixton trades at C$0.004 EV/ha. 

11-Apr-2018

Brixton Metals Corp.

More High-Grade Ag & Co Results from Hudson Bay

Impact: Mildly Positive

Drill results from Hudson Bay are encouraging, intersecting additional high-grade silver and cobalt mineralization.

  • Drilling continues to intersect high grade silver and cobalt mineralization at Hudson Bay.
  • Past producing Hudson Bay leverages both silver and cobalt markets.
  • More results pending, additional high-grade intercepts expected to be key near-term catalyst. 
 
Based on peers in the Cobalt Camp, we believe Brixton remains undervalued, for example First Cobalt (TSXV:FCC) trades at C$0.017 EV/ha, while Brixton trades at C$0.004 EV/ha.

 

01-Jan-2018

Brixton Metals Corp. (TSXV:BBB)

RCKS Talk Blog Archive

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