RCKS Talk

11-Apr-2019

Solgold Plc

Another High-Grade Core?

Impact: Mildly Positive

SolGold has provided a positive exploration update that points to the potential for a new high-grade zone and expansion of the overall resource, ahead of several larger catalysts that we expect to be positive for the share price. Today’s results reinforce our view that Alpala is a world-class copper-gold deposit and highlights the potential for upside beyond our current estimates.

Highlights:
  • Higher grades in hole 86 could represent the beginnings of another high-grade core. Previous results suggested there may be another high-grade core to the North and Northwest of the main Alpala deposit, with hole 86 (318m at 0.67% CuEq including 100m at 1.34% CuEq) supporting this view. We note that it remains early days and we look to the results of hole 105, along with the step out holes between Alpala NW and Triviono towards Moran (Figures 1 and 2) as being important future indicators of this potential.
  • Overall resource growth positive, but another high-grade core would have a significant impact to our valuation. The results today point to resource growth, with 30% of the total meters drilled to date not included in the most recent resource update (November 2018). We highlight that overall resource growth would have a small impact on our estimates (25% increase would expand our NAVPS estimate by 2%); however, a material increased to the high-grade core would have significant impact (25% increase would expand our NAVPS estimate by 18%).
  • PEA expected to be a positive near-term catalyst. The maiden economic study for Alpala is expected this quarter, and we believe could be positive for our estimates, which are based on typical block-cave operations over which Alpala has some advantages. Additionally, we are expecting the formal bid for Cornerstone Capital Resources (TSXV:CGP) shortly and expect ongoing exploration updates with 10,000m being drilled each month.
Valuation:
Market appears to be waiting for the PEA. SolGold trades at 0.44x NAV, relative to peers at 0.45x and is only up 3% in 2019 (vs. the SNL Base Metal Index up 26%). We believe the market is waiting on the PEA, which we expect to demonstrate the world-class nature of Alpala. Given the scale and potential of the Alpala deposit alongside the current interest from majors, we believe a 0.90x NAV multiple applied to our C$1.50 NAVPS estimate (was C$1.47 prior to Q4 2018 financials) would be appropriate implying a value of C$1.35/share. Upcoming catalysts: 1) Maiden PEA for Alpala (Q2/19) 2) Formal bid for Cornerstone and 3) Ongoing exploration results.
27-Mar-2019

SolGold Plc

Important Catalysts Coming Soon

Impact: Neutral

A recent update on SolGold’s activities concerning its upcoming PEA, Cornerstone bid and exploration activities, reinforce our view that the company is still inexpensive ahead of a number of major catalysts. We continue to view Alpala as a world-class copper-gold deposit and believe that ongoing de-risking and growth of the project should make it an attractive target for major mining companies.
Highlights:
  • PEA coming soon. We believe the upcoming PEA has the potential to better our current economic projections for the project. The company noted delays related to metallurgical and geotechnical complexities, but we highlight that in the mining industry most technical reports are late, and considering the world-class nature of the project, along with the current valuation, we believe there is limited downside risk, particularly since we now believe that our current estimates may be conservative.
  • Finalizing documentation for Cornerstone bid. SolGold offered an update on its planned offer to acquire all outstanding common shares of Cornerstone Capital Resources (TSXV:CGP) stating that the coming announcement aims to provide the most advantageous tax treatment for Cornerstone shareholders. We believe the consolidation of the project is going to be advantageous for both sets of shareholders.
  • 10,000m of drilling per month should demonstrate project and regional potential. The company has 11 drills turning at site and is continuing to pursue growth at Alpala, particularly on higher-grade mineralization to the Northwest and Southeast of the Alpala resource. As part of the development process at Cascabel, the company is completing sterilization and geotechnical drilling to develop the project plant site and decline route.
 
Valuation:
With our estimates still unchanged, SolGold remains inexpensive. SolGold trades at 0.48x NAV, relative to peers at 0.47x. Given the scale and potential of the Alpala deposit alongside the current interest from majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Maiden PEA for Alpala (Q2/19) 2) Ongoing exploration results.

 

31-Jan-2019

SolGold Plc

SolGold Targets 100% Interest in Cascabel

Impact: Mildly Positive

SolGold has announced its intention to make an offer to acquire all the outstanding common shares of Cornerstone Capital Resources (TSXV:CGP), the 15% owner of SolGold’s flagship Cascabel Project. We view this all-share transaction as a sensible and logical step forward, as consolidated ownership puts the shareholders of both companies in the best position to optimize the value of the world-class Alpala Deposit as would be suitors come calling.

Highlights: 
  • Offer looks attractive; when you investigate the details. SolGold intends to offer 0.55 SolGold shares for every Cornerstone share, representing an 18% premium to yesterday’s close and valuing Cornerstone at ~US$170M. While at first this may appear to undervalue Cornerstone, the details suggest otherwise. Cornerstone’s passive 15% interest is debt-carried, such that the anticipated US$200M in expenditures prior to the completion of a feasibility study is repaid out of project cash flows. Post feasibility, we estimate Cornerstone would need to pay ~US$500M prior to first cash flow, which could be highly dilutive. If Cornerstone elects not to fund its pro-rata share it would eventually dilute to a 0.5% NSR, which SolGold can fully acquire for US$3.5M. We highlight that Cornerstone’s shareholders would also be getting exposure to SolGold’s exploration projects, which we value at US$150M. 
  • Smart strategic move for SolGold. Should the transaction go through as outlined, our NAVPS estimate would increase by ~15%, particularly since SolGold would be purchasing 170M (~9%) of its own shares with the acquisition of Cornerstone. Additionally, the acquisition of Cornerstone eliminates the ability of would be suitors to get a stake in the project via Cornerstone, all would have to come through SolGold, likely increasing competitive tension, resulting in a higher price for the shareholders of the combined company.
  • First steps of what is expected to be a complex process. With two potential outside bidders with demonstrated interest in the project restricted (BHP until Oct-2020 and Newcrest until Oct-2019) and Cornerstone indicating that 50% of its share holders are not interested, it is likely to take several months for a transaction to be completed, if at all.
Valuation:
Estimates unchanged, but SolGold is still cheap. SolGold trades at 0.42x NAV, a discount to peers at 0.50x. Given the world class nature of the Alpala deposit and the interest from majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA for Alpala (Q1/19).

 

02-Jan-2019

SolGold Plc

Beyond Alpala

Impact: Positive

Sampling results from SolGold’s Porvenir porphyry targets in Southern Ecuador provide exciting new prospects for SolGold as it continues to demonstrate its copper-gold expertise in Ecuador. These results support our thesis that SolGold may be in possession of not one but multiple world class copper discoveries in an emerging mining jurisdiction (Figure 1).
Highlights: 

  • High-grade discovery. Results from initial rock-saw channel sampling across the exposed outcrops at Porvenir include an open intersection of 62m grading 1.16% CuEq at Target 15 (Figure 2). The outcrop appears to be well-preserved and thus could be the top of a vertically extensive system. The intersection discovered within an 800m wide by 1200m long mineralized corridor is part of a greater 1km by 6km zone which has been identified to host at least two porphyry centres. While it is early days, this reflects the size potential we see at Porvenir.
  • Systematically demonstrating exploration potential. Target 15 is similar in age, mineralization style and may prove to be similar in size to the company’s world-class Alpala deposit where the company has defined a resource of 2.95Bt grading 0.52% CuEq (0.2% cut-off). These results highlight the benefits of the company’s first mover advantage into Ecuador back starting in 2014 and reflect the fact that while Cascabel is the most advanced, there is much more potential to the company’s wider portfolio of highly prospective assets. 
  • A significant portfolio with news to come. SolGold is rapidly establishing itself as an important player in Ecuador with 11 priority projects and 42 geologists in regional exploration. The company’s other important regional projects include La Hueca and Blanca, which, alongside Porvenir and other regional projects, we expect are likely to bring exciting catalysts following drilling this year.
Valuation:
The market does not account for the potential beyond Alpala. SolGold trades at 0.44x NAV, a slight discount to peers at 0.46x. Given the world class nature of the Alpala deposit and the interest from majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA for Alpala (Q1/19).


 

17-Dec-2018

SolGold Plc

Newcrest Takes Down More Shares

Impact: Positive

Newcrest has again increased its interest in SolGold by purchasing 27.87M shares from two third parties. Newcrest now owns 15.3% of SolGold, cementing its position as the largest strategic shareholder ahead of BHP at 11.1% ownership. This update aligns with our thesis that SolGold is in possession of a world-class copper project that is continuing to grow and receive increasing interest from major miners looking to bolster future production.

Highlights:
    • Newcrest buys a little bit more. Newcrest Mining has agreed to acquire 27.87 M shares at £0.40/sh (C$0.68/sh) bringing its total ownership of SolGold up to 15.33%. This follows its most recent purchase at £0.37/sh (C$0.63/sh), and BHP’s recent purchases at £0.45/sh (C$0.76/sh) and £0.27/sh (C$0.46/sh). These two major miners now collectively control 26.4% of the company and are likely to provide competitive tension should a bidding process for the asset or company occur (Figure 1). 
    • Newcrest bought pre-resource update and now buys pre-PEA. Newcrest’s prior purchase of occurred ahead of the most recent resource update , and now this purchase comes ahead of the pending PEA (due Q1/19). In our view, these continued purchases ahead of major news, speaks to Newcrest’s confidence in the project. We also highlight that Newcrest has proposed and operating block-caves at Wafi-Golpu & Cadia East (Figure 2), implying strong technical knowledge for this type of project. 
    • Likelihood of a premium takeout increasing. We believe that SolGold is a highly prospective target warranting a takeout premium. Historic multiples at 0.75x NAV or US$0.08/lb CuEq (Figure 3) come to mind through comparable transactions including the recent acquisition of Nevsun by Zijin Mining for their Timok project. That transaction was done at 1.25x NAV, implying a value of C$1.84/sh based on our estimates suggesting 192% from the last close of C$0.63/sh.
    Valuation:
    Newcrest continues to bring attention to Alpala. SolGold trades at 0.43x NAV, a slight premium to peers at 0.35x. Given the world class nature of the deposit, and the demonstrated interest of multiple majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA (Q1/19).

28-Nov-2018

SolGold Plc

Another Exciting Year Ahead for SolGold

Impact: Positive

On November 28th, we hosted a live webinar with Nick Mather, CEO of SolGold. The full replay is available online (click here replay ), and our key takeaways were that Alpala could get bigger, operating costs could be better than expected and that there is expected to be lots of newsflow in 2019. The call confirmed our view that Alpala is a world-class copper-gold deposit and that its scale, grade (Figure 1) and continued growth potential puts it at the top of the shopping list for most major mining companies.

Highlights:
    • Alpala continues to have exploration upside (Figure 2). As previously highlighted , mineralization in hole 64 drilled deep towards Trivino and Alpala NW suggested potential for an adjacent porphyry system and management sees this as the area with the highest resource expansion potential. As well, the high-grade core remains open up dip to the west and down plunge to the north. Continued growth of the high-grade core is likely to have the largest positive impact on project economics. 
    • PEA in Q1 2019 may deliver better economics than we expect. On the call, management touched on a few common areas of concern for block cave operations. CEO, Nick Mather, highlighted the potential for favourable rock conditions at Alpala for caving, as the mineralized zones are highly fractured and altered, thus allowing for greater cavability. This suggests that the mining cost assumptions of US$7/t ore, based on similar scale block-caves, could be conservative. 
    • Plenty of news flow expected in 2019. Beside the PEA in-late Q1 2019, the company is continuing to aggressively drill at Alpala. As well, the drilling is expected to ramp-up at the company’s many regional targets, with a focus on the Blanca and La Hueca projects. 
    Valuation:
    Solgold should trade at a significant premium to peers. Solgold trades at 0.43x NAV, a slight premium to peers at 0.37x. Given the world class nature of the deposit, and the demonstrated interest of multiple majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA (Q1/19).

26-Nov-2018

SolGold Plc

Newcrest Tops Up!

Impact: Mildly Positive

SolGold has announced that Newcrest Mining has exercised its top-up rights, to maintain 13.7% ownership in the company (Figure 1), which follows a strategic investment by BHP and a significant increase in the resource at the company’s flagship Cascabel project. This update aligns with our view that Alpala, within the wider Cascabel project, is a world-class deposit with scale potential that separates it from the pack and is receiving ongoing interest from majors. We highlight that we will be hosting a live webinar with Nick Mather, CEO of SolGold, on Wednesday, November 28th

Highlights:
    • Largest predators still lurking. Newcrest Mining, Australia’s largest gold miner and block caving expert (Wafi-Golpu & Cadia East – Figure 2), has increased its stake in SolGold by purchasing an additional 6.71M shares pursuant to its top up rights under its original August 2016 share subscription agreement, which were priced at 37.14p (C$0.63/sh).  
    • Competitive tension, which should provide a takeout premium. With two majors on its share register and others likely lurking in the background, we believe the eventual takeout of SolGold is likely to occur at a premium to historic multiples of 0.75x NAV or US$0.08/lb CuEq (Figure 3). A potential transaction is likely to be similar to the recent acquisition of Nevsun by Zijin Mining, as Timok and Alpala are very similar. That transaction was done at 1.25x NAV, implying a value of C$1.85/sh based on our estimates suggesting 185% from the last close of C$0.65/sh.
    • An exciting 2019 expected for SolGold. Besides the maiden PEA (expected in Q1/19) for Alpala, we are looking forward to ongoing exploration results, particularly from the northwest portions of the deposit, where early results imply the potential for a 2nd porphyry center. 
    Valuation:
    Newcrest top-up highlights ongoing interest in Alpala. Solgold trades at 0.44x NAV, a slight premium to peers at 0.38x. Given the world class nature of the deposit, and the demonstrated interest of multiple majors, we believe we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA (Q1/19).

20-Nov-2018

SolGold Plc.

Alpala Exceeds Expectations

Impact: Positive

SolGold has exceeded expectations with its recent resource update for its Alpala deposit in Ecuador. The expansion of the high-grade core has exceeded our previous estimates, resulting in an increase to our NAVPS estimate. This resource update paves the way for company to publish initial economics on this world class project in early 2019E. We continue to view Alpala and the wider Cascabel project as a world-class deposit with scale potential that separates it from the pack.

Highlights:
    • Expansion of the high-grade core exceeds expectation, benefits our estimates. Besides our expectation of a doubling of the Alpala resource, we expected a 50% increase in the high-grade core at Alpala Central (Figure 2). High-grade core results beat our estimates by 17% on tonnes, 17% on grade and 33% on contained metal. In our view, project economics are driven by the high-grade core, and this growth has boosted our estimates. 
    • A significant increase in contained CuEq. Using the 0.3% CuEq cut-off, contained copper increases by 77%, while grades remained relatively consistent. Importantly, there was a significant increase in Indicated tonnes both overall and for the high-grade core, improving our confidence in the potential of this deposit (Figure 1). It is likely that the most recent strategic investment in to Solgold by BHP anticipated this higher-grade core improvement. 
    • Better grades, better payback. To remain conservative, we have modelled the continuous portion of the high-grade core (mined years 1-7) to be 180Mt grading 1.85% CuEq (was 180Mt grading 1.67% CuEq), which has allowed for a better payback, reflected in an increase in the project IRR to 24% (was 20%). The increase in grade has allowed for a 19% increase in the projects after-tax NPV to US$2.82B (was US$2.38B). 
    Valuation:
    Resource update drives increase in our estimates. By accounting for the recent resource update at Alpala, we have increased our NAVPS for SolGold to C$1.47/sh (was C$1.30/sh). SolGold trades at a slight premium to peers (0.44x NAV vs peers 0.36x) and we believe a further premium is warranted given the scarcity and scale of Cascabel and that willing suitors are ready to pounce. Upcoming catalysts: 1) Ongoing exploration and 2) Maiden PEA (Q1/19).
13-Nov-2018

SolGold Plc.

Technical Success Reveals Potential Alpala 2.0

Impact: Positive

    Ongoing exploration by SolGold continues to support our thesis that Alpala is likely to double with the resource update expected in Q4 2018. The technical success from hole 64 also supports our theory of a potential second porphyry adjacent to Alpala, further reflecting the world-class scale of Cascabel.
    Highlights:
  • Results support our view for a potential 50% increase of the high-grade core. We previously stated that the high-grade core was set to grow by 50% as the company further defined controls of the high-grade mineralization at Alpala Central. This is supported by hole 68 returning 664 m grading 1.53% CuEq, including 348m grading 2.25% CuEq, which intersected wide intercepts of high-grade mineralization (>1.5% CuEq cut-off) and is open at depth.
  • Potential doubling of the overall resource. We continue to believe the resource is set to double with the pending Q4/18 update, which was reflected by hole 69 that was drilled in the Alpala West Limb and returned 852m grading 1.14% CuEq. A total of 82,400m has now been drilled since the last Mineral Resource Estimate in December 2018 and therefore further reflects the amount of successful exploration drilling has been completed for the pending update.
  • A second Alpala deposit? Our estimates assume a 100% increase in the Alpala deposit but we have not accounted for the potential of an adjacent porphyry system. Hole 64 was drilled deep into the northwest target and returned 402m grading 0.65% CuEq of primary bornite mineralization, which is indicative of an additional porphyry core. Although a technical success, more drilling in this northwest sector towards Trivino needs to be done to confirm potential scale and grade.
    Valuation:
    Technical success of hole supports meaningful upside in scope and scale of an already world class size project. In our view, this warrants premium valuation. We believe that the pending resource update and ongoing exploration success are likely to drive our base case NAVPS8% to C$1.30. SolGold trades at a premium to peers (0.51x NAV vs peers 0.35x) and we believe a further premium is warranted given the scarcity and scale of Cascabel and that willing suitors are ready to pounce. Upcoming catalysts: 1) Ongoing exploration, 2) Resource update (Q4/18) and 3) Maiden PEA (Q1/19).



01-Nov-2018

SolGold Plc.

Growing Monster with Largest Predators Circling

Impact: Positive

We are publishing our initial estimates on SolGold Plc with a NAVPS 8% of C$1.30. SolGold’s Alpala deposit is a world-class copper project with significant exploration upside. We believe SolGold’s asset suit is coveted by multiple major miners that may lead to a competitive takeout scenario over the next two years. We view Alpala and the wider Cascabel project as a world-class deposit with scale potential that separates it from the pack. We believe the maiden resource is set to double in December with room to grow further. As a result, we believe that the significant interest that major copper miners already have in SolGold is about to heat up.

Investment Thesis: 
  • Already a World-Scale project with solid economics. The size and grade of this project places it among the largest undeveloped copper projects in the world (Figure 2) and our estimates suggest that Alpala would be one of the larger lower cost producers in the world once in production (Figure 3 & Figure 28).
  • This monster is about to have a high-grade growth spurt and may double again thereafter. We believe the resource is set to double with the Q4/18 update. More importantly, we believe the high-grade core is set to grow by 50% improving project economics (we estimate project post-tax NPV8% of C$2.38B and an IRR of 20%). As well, preliminary evidence suggests the company may have only found “half” the deposit and could double it again with 2019 drilling (see section on Geology). 
  • Largest mining predators circling. With few available undeveloped world-class copper assets, major mining companies have been on the hunt globally for projects such as Cascabel. With two majors already on the share register, our expectation is that a takeout is likely by the end of 2020.  
  • Valuation: 
    Market is not pricing in pending resource update, let alone the premium warranted for this world class deposit. We believe that the pending resource update and ongoing exploration success are likely to drive our base case NAVPS8% to C$1.30. While SolGold already trades at a premium to peers (0.49x NAV vs peers 0.37x), we believe a further premium is warranted given the scarcity and scale of Cascabel and that willing suitors are ready to pounce. Upcoming catalysts: 1) Ongoing exploration, 2) Resource update (Q4/18) and 3) Maiden PEA (Q1/19).
16-Oct-2018

SolGold Plc

Great White Shark Takes Another Bite

Impact: Very Positive

BHP makes a statement by increasing its stake in SolGold at a premium. BHP Billiton (ASX:BHP; LON:BLT) has increased its stake to 11% and has provided a good portion of the funds required for SolGold’s 2019 exploration program. This should lift any perceived financing overhang and opens the door to a valuation rerating. With copper fundamentals improving and few large-scale undeveloped projects available (Figure 1), we expect Alpala to be coveted by major miners looking to bolster future production.   

Highlights:
  • BHP’s second investment should act like blood in the water with other majors circling this world class asset. BHP Billiton (ASX:BHP; LON:BLT), the world’s biggest miner, purchased 100M shares at £0.45/sh (C$0.77/sh), a 30% premium to the 20 day VWAP. BHP is now at 11.2% or 203M shares (was 6% or 103M shares), putting it just behind Newcrest Mining (ASX:NCM) currently holding 14.5% (247M shares) (Figure 2). We believe Alpala is one of the few large-scale copper assets available (Figure 1); thus, it is likely other large mining companies noticed the feeding frenzy.
  • Multiple strategic investors create competitive tension. With two strategic shareholders over 10%, we expect that a takeout is most likely to occur at a premium to historic transactions. We note that copper projects historically sell for, ~US$0.07/lb CuEq and BHP’s investment implies a value of ~US$0.065/lb CuEq (pre-material resource update).
  • Exploration upside on an already world-class deposit is attracting attention. The current resource of 16.18Blb CuEq, is based on 53,616m of drilling. The updated resource estimate expected in Q4/18 is expected to include an additional 70,400m of drilling; which we believe should grow the resource materially.
Valuation:
Valuation neither reflects likely resource growth nor competitive tension on a take-out. SolGold trades at US$0.050/lb (pre-resource update) versus peers at US$0.037/lb CuEq (Figure 3). In our view, the upcoming resource growth and the strategic interest in the project should warrant a share price re-rating given that the company is largely funded for 2019 exploration efforts. Upcoming catalysts: 1) Ongoing exploration and 2) Resource update (Q4/18).

 

05-Oct-2018

SolGold Plc.

Results Suggest Alpala NW Could Be a 2nd Porphyry

Impact: Positive

SolGold Plc has provided an exploration update which highlights the expansion of its high-grade core. Expanding the high-grade core, should increase the overall grade of the deposit and likely improve project economics. The company is expected to release a resource update later this year that we believe should materially increase the current global resource of 16.18Blb CuEq. In addition, hole 64 shows evidence of a potential second porphyry system that could accelerate the company’s growth profile. These results continue to support our view that this world class deposit is poised to grow materially with its late 2018 resource update. 

05-Sep-2018

Solgold Plc.

The Sharks are Circling, is a Bidding War About to Begin?

Impact: Very Positive

BHP Billiton (LON:BLT, ASX:BHP), the world’s biggest miner, has entered into a $35M deal for a 6.1% stake in SolGold Plc (TSX:SOLG) that it has acquired from Guyana Goldfields Inc (TSX:GUY), which adds a second major miner (Newcrest currently owns 14.54%) to the race to acquire the Cascabel Cu-Au project in Ecuador.

  • Share purchase by BHP reminds the market that the Alpala deposits and wider Cascabel project are among the world’s largest undeveloped copper projects and are likely to be multi-generation mines. This is the type of asset that is highly coveted by major miners, like BHP and Newcrest, who have been actively searching for large scale copper projects.
  • In our view, significant upside exists if a bidding war breaks out. Historically, copper projects sell for ~US$0.07/lb CuEq, this implies a share price of C$0.83 for SolGold.
  • Since the maiden mineral resource estimate of 16.18Blb CuEq (1.08Bt grading 0.68% CuEq) at Cascabel, a total of 80,538m of additional drilling has been completed by the company, which continues to outline a higher-grade core at Alpala and point to significant resource growth expected in a revised resource estimate.
In our view, the SolGold's current valuation (C$0.041/lb vs. peers at C$0.026/lb CuEq) does not reflect the potential of the existing Cascabel project, its the meaningful exploration upside or the fact the multiple majors have now demonstrated interest in acquiring the company.

 

20-Aug-2018

SolGold Plc.

SolGold Plans for 100km of New Drilling Ahead of Updated Resource

Impact: Mildly Positive

SolGold has provided an update on recent drilling at Alpala Central at the Cascabel project located in Ecuador, which showed wide intercepts of visible copper sulphide mineralization and visual estimates of chalcopyrite.

  • Alpala Central infill drill hole 41-D1-D2 intersected 0.64% Cu and 0.85g/t Au over 582m (1.18% CuEq), including 340m of 0.78% Cu and 1.21g/t Au (1.54% CuEq)
  • A total of 83km of drilling has been completed since the Alpala maiden resource estimate, which included an initial 53,616m of drilling, and has confirmed that the gold-rich high grade core of the deposit has uninterrupted true dimensions of up to 750m vertically, 700m long, and 300m wide, at a cut-off grade of 1.5% CuEq
  • Additional high-grade tonnage is being defined along the western lobe, adjacent to the high-grade core, and with 17,000m of planned drilling outstanding, a total of 100km of drilling is expected to be incorporated into an updated resource estimate to further boost the resource base for the project
In our view, the SolGold's current valuation (C$0.032/lb vs. peers at C$0.026/lb CuEq) does not fully reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

13-Aug-2018

SolGold Plc.

Alpala Central Drilling Enhances High Grade Core; Points to Resource Growth

Impact: Positive

SolGold has provided an update on recent infill drilling at the Alpala Central zone of the Cascabel project in Northern Ecuador, where the company continues to successfully execute its strategy of enhancing the high-grade core of the Alpala deposit.

  • Highlights from this round include infill results of 832m of 0.72% Cu and 1.10g/t Au at Alpala Central and 1062m of 0.69% Cu and 0.52g/t Au at the Alpala Central northwest extension
  • These results point to not only a stronger resource base, but also to a larger and more cohesive high-grade core which could support a higher mine production rate in early years, which would boost project economics
  • Since the maiden mineral resource estimate of 16.18Blb CuEq (1.08Bt grading 0.68% CuEq), a total of 80,538m of additional drilling has been completed and signficant resource growth is expected with a revised resource estimate
In our view, the SolGold's current valuation (C$0.038/lb vs. peers at C$0.026/lb CuEq) does not fully reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

15-Jul-2018

SolGold Plc.

Strong Mineralisation 30m below Surface at Cascabel

Impact: Mildly Positive

SolGold has provided an update on the drilling programs at the Alpala and Aguinaga deposits at the Cascabel Cu-Au project in Ecuador.

  • Extension drilling at the high-grade core is expected to extend the mineralization along the lower and northeast margins of the deposit. Results included 0.71% CuEq over 458m (incl. 1.17% CuEq over 66m) 
  • Shallow mineralization continues to be intersected by extension drilling at Alpala Central within 450m of the surface, above the existing resource limits along the southwest margin of the deposit and 250m shallower than previously modeled
  • Drilling at Aguinaga has confirmed near surface potential, with Hole 6 intersecting strong mineralization at 30m depth and Hole 7 intersecting 67m of visual copper sulphide mineralization from 55m below surface
In our view, the SolGold's current valuation (C$0.034/lb vs. peers at C$0.026/lb CuEq) does not properly reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

27-Jun-2018

SolGold Plc.

Drilling at Alpala Progresses Beyond 120,000m

Impact: Neutral

SolGold has provided an update on the drilling programs at the Alpala and Aguinaga deposits at the Cascabel Cu-Au project in Ecuador.

  • Infill drilling continues to upgrade the resource with early stage copper and gold rich intrusions appearing to be more continuous than previously modeled
  • More extension drilling at Alpala Central is intersecting shallow high-grade mineralization above existing resource limits in a large lobe of early diorite intrusion extending to within 450m of the surface – 250m closer than previously modelled
  • An increase in estimated resource grades and resource growth are expected by management in a revised mineral resource estimate to include the 70,000m drilling since the last update
In our view, the SolGold's current valuation (C$0.031/lb vs. peers at C$0.027/lb CuEq) does not properly reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

07-Jun-2018

SolGold Plc.

Epithermal Gold Targets Identified at Cisne Loja

Impact: Mildly Positive

SolGold has provided an exploration update from its Cisne Loja Project in Southern Ecuador, where field teams have been conducting reconnaissance stream and rock chip sampling since December 2017.

  • Follow-up work on previously identified gold anomalies led to discovery of outcropping epithermal style alteration and mineralisation in quartz veins with rock chip samples of 15.25g/t Au and 23.6g/t Ag
  • Epithermal style alteration at Cisne Loja bears similar signs to the epithermal gold system at Lundin Gold’s Fruta del Norte (14M oz Au)
  • SolGold is planning a gridded soil geochemistry program as well as possible trenching and rock channel sampling to help determine the extent of the epithermal system in the hopes of discovering a significant gold deposit 
In our view, the SolGold's current valuation (C$0.039/lb vs. peers at C$0.029/lb CuEq) does not properly reflect the exceptional nature of the existing Cascabel project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

06-Jun-2018

SolGold Plc.

Resource Growth Expected at Alpala

Impact: Positive

SolGold has provided drilling results from the active programs at its Cascabel Project in Northern Ecuador, part of the 120,000m drill program planned for 2018 in efforts to infill and extend the Alpala resource while also testing the Aguinaga prospect and Trivinio target.

  • Drilling has extended the current Alpala resource to the northeast including an intersection of 0.82% CuEq over 756m (Hole 41-D1), as well as to the southwest with 0.83% CuEq over 278m, including 52m of 1.63% CuEq (Hole 42-D2)
  • Infill and extension drilling is continuing to upgrade the high-grade core of the deposit by intersecting strong visible copper mineralization with infill drilling returning 974m of 0.71 % CuEq (including 478m of 1.02% CuEq and 160m of 1.56% CuEq)
  • Incorporating the initial 53,616m of drilling data at Alpala into the geological model has led management to expect significant resource growth in a revised estimate with 60,300m of drilling remaining in the program
In our view, the SolGold's current valuation (C$0.039/lb vs. peers at C$0.029/lb CuEq) does not properly reflect the exceptional nature of the existing project, its the meaningful exploration upside or the company’s portfolio of exploration projects in Ecuador.

22-May-2018

SolGold Plc.

SolGold Enhances Previous Discovery in Ecuador

Impact: Positive

SolGold has provided an exploration update at its La Hueca, Timbara and Porvenir Project concessions covering 60km of strike along Ecuador’s Southern Jurassic porphyry corridor. 

  • Two new target zones at La Hueca project
  • Projects located along the same belt hosting Fruta del Norte
  • Current market value does not properly reflect Solgold’s exploration potential in Ecuador
In our view, the SolGold's current valuation (0.041/lb vs. peers at 0.032/lb CuEq) does not properly reflect the exceptional nature of the meaningful exploration upside at the company’s portfolio of exploration projects in Ecuador.

17-Apr-2018

SolGold Plc.

Alpala Keeps Getting Bigger

Impact: Positive

SolGold’s exploration drilling is continuing to hit high-grade copper-gold mineralization outside existing 16.2Blb CuEq resource at Alpala, with the company’s Cascabel Project in Northern Ecuador.

  • First drill hole at Aguinaga intersected 373m of porphyry-style mineralization in hole AGD-18-001 with assays pending and a second drill hole planned to test the mineralization at greater depths
  • Infill drilling at Alpala continues to support an increase in resource grade, highlighted by 478m grading 1.28% CuEq in hole 42 open at depth
  • Step-out drilling continues to expand the Cu-Au mineralization beyond the current resource boundaries, highlighted by 504m grading 1.28% CuEq in hole 43
In our view, the SolGold's current valuation (0.030/lb vs. peers at 0.041/lb CuEq) does not properly reflect the exceptional nature of the existing orebody or the meaningful exploration upside at the company’s projects as suggested by this press release.

26-Mar-2018

First Look Encouraging at Aguinaga; Alpala Expanding

Impact: Mildly Positive

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Initial results from Aguinaga are encouraging, providing a secondary resource target at Cascabel. Alpala continues to show potential for growth.

  • Initial visual results from the first hole at Aguinaga, a regional target at Cascabel, suggest a new discovery is possible; assays pending.
  • Visuals from most recent Alpala expansion drilling suggests the resource may grow.
  • Infill work on Alpala's high-grade core suggests this could expand, which may benefit project economics. 
 
In our view, the SolGold's current valuation (0.036/lb vs. peers at 0.031/lb CuEq) does not properly reflect the exceptional nature of the existing orebody or the meaningful exploration upside at the company’s projects as suggested by this press release.

21-Mar-2018

SolGold Plc.

Extension of Epithermal Gold Mineralization Highlights Regional Exploration Potential

Impact: Positive

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New discovery highlights the company’s large land package and ability for additional growth and discovery beyond Cascabel

  • New discovery connects and expands known mineralization over a 10km trend.
  • Early stage work yields positive results and supports our view that there is significant regional exploration upside
  • Assays pending; detailed follow up work underway
These results continue to highlight that the current valuation, (C$0.035/lb vs. peers at C$0.029/lb) does not properly reflect the exceptional nature of the Alpala deposit, or SolGold’s regional exploration potential.

01-Jan-2018

SolGold Plc. (LSE:SOLG)

RCKS Talk Blog Archive

We updated the look & feel of our RCKS Talk Research Blog in March 2018.

To access the historical archives of our original blog format, please click on the link(s) below to be re-directed. Please note that we no longer update those archive blog pages.

Click here to access the RCKS Talk Blog Archive for SolGold Plc. (LSE:SOLG)


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