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Wednesday, October 18, 2017 Derek Macpherson

FCC Expands Drill Program, Targets Bellellen

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First Cobalt Corp. (TSXV:FCC) has announced an expansion of their 2017 drilling program by 2000m. A sampling program of surface muck pile material from the past-producing Bellellen mine revealed high grade cobalt assays that the company plans to follow up on through 20 shallow drillholes of 50m to 150m in length. The new targets are the suspected halo of cobalt mineralization surrounding the previously mined high-grade veins (Frontier 2 and Bellellen – Figure 1). The extension of the company’s drilling is expected to commence in November and will bring the total drill program for 2017 from 7000 m to 9000 m. We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers, pro-forma. Besides pending drill results, important upcoming catalysts are likely to include planned metallurgical test results and the completion of the planned mergers. read more


Wednesday, October 18, 2017 Derek Macpherson

GQC Continues to Expand Cachimbo

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GoldQuest Mining Corp. (TSXV:GQC) has reported assay results for 8 drill holes from its recently discovered Cachimbo deposit. Results were highlighted by hole TIR-17-44 which returned 21.0 m at 7.86 g/t Au, 39.6 g/t Ag, 0.17% Cu and 1.81% Zn (10 g/t AuEq) within a wider interval of 59.5 m at 3.27 g/t Au, 18.94 g/t Ag, 0.07% Cu and 0.73% Zn (4.4 g/t AuEq). These results continue to grow the deposit (Figure 1) and we believe this has the potential to be a second significant deposit within the company’s district scale Tireo project. GoldQuest currently trades approximately at a slight discount to peers at $26/oz (peers $32/oz). We continue to believe that the current valuation does not reflect the exploration potential of GoldQuest’s wider land package. We expect continued exploration drilling, along with permitting updates at Romero to likely be important catalysts for the stock.  read more


Wednesday, October 18, 2017 Derek Macpherson

RDS Extends Vintage Zone

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Radisson Mining Resources Inc. (TSXV:RDS) has announced that they have extended the Vintage Zone by an additional 125m along strike (Figure 1). The company intersected 2.9m of 9.7 g/t Au along strike towards the past-producing O’Brien Mine. We continue to view the discovery of this zone very positively, as it has the potential to materially expand the existing resource, while adding ounces per vertical meter which could expand a future production scenario. The extension of this zone to 325m of strike length, supports our view. The company is awaiting 20 drill holes currently being assayed for a total of approximately 10,500m, which we believe could continue to expand the Vintage zone. The discovery also suggests that the opportunity exists for the company to discover additional zones within the Cadillac and Pontiac sediments. At C$49/oz, Radisson trades in line with peers at C$49/oz; however, this does not properly reflect the recent discovery and expansion of the Vintage Zone, or the expected resource increase with the pending resource update (Q4 2017). We note the company continues to be actively exploring in the sediments around the Vintage zone (results pending) and near the current resource. read more


Wednesday, October 18, 2017 Derek Macpherson

Early NVO Drill Results Suggest Consistent Conglomerate Thickness

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Novo Resources Corp. (TSXV:NVO) has completed drilling of 12 diamond core holes in a 400x200m area (Figure 1), at its earn-in and JV, Purdy’s Reward in Western Australia. In the area drilled the conglomerate had a true width of between 4 and 15m, hole 17PDD007 (pictured in the press release) had an interval of 9.5m of conglomerate. This confirms our view and is important step in de-risking the project. The two main risks to our +10M ounce potential estimate, are conglomerate thickness and grade. This diamond drill program has started reducing the risk around thickness, the ongoing bulk samples and planned large diameter drill program should have the same impact on grade. At its current share price, the market is pricing in a sizeable resource at Novo’s Karratha project, which based on the data to date, we view as very possible. However, additional data, including additional diamond drilling to determine conglomerate thickness (ongoing) and assay results from the ongoing bulk samples and planned large diameter drilling (early 2018), is needed to fully understand this projects potential.  read more


Tuesday, October 17, 2017 Derek Macpherson

VIT Drills Catto Target

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Victoria Gold Corp. (TSXV:VIT) reported analytical results from their ongoing 2017 exploration program. The targeted Catto Zone is located on the Dublin Gulch property between the flagship Eagle Gold Deposit and the Olive-Shamrock Deposit. Victoria Gold reported 11 exploration drill holes with exceptional results including 24.4 m of 1.64 g/t in drillhole DG17-867C at a depth of 33.5 m. The zone is historically known to host gold and has had limited exploration done to test for potential extensions southeast of the nearby Olive-Shamrock mineralization. Grab samples of 23.7 g/t Au and 65.4 g/t Ag have been found in the Catto Zone indicating the potential for near surface, high-grades. These drill results continue to indicate the exploration potential of the company’s land package and indicates the potential extension of the Olive-Shamrock deposit to the recently drilled Catto Zone. Ongoing exploration should be an important catalyst for the company, as they highlight the potential to expand the resource base on the Dublin Gulch property.  read more


Tuesday, October 17, 2017 Derek Macpherson

Sierra Reports Higher Q3 2017 Results

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Sierra Metals Inc. (TSX:SMT, BVL:SMT, NYSE:SMTS) reported modestly improved production results for Q3 2017 with an increase in CuEq production of 2% versus Q2 2017. However, metal production remains weaker than Q3 2016 due to lower production from its projects in Mexico. The sharp QoQ decrease in metal production at Cusi is due to the company’s implementation of a new plan to improve operational performance. The program has already been successfully implemented at Yauricocha and is expected to improve production, modernize operations and lower costs at both Cusi and Bolivar by early 2018. We note the company is likely to need a strong Q4, to achieve 2017 production guidance. In our view, the ongoing operational improvements in addition to ongoing exploration are key to enhancing the company’s value and liquidity. read more


Tuesday, October 17, 2017 Derek Macpherson

As Anticipated Excellon Reports Improved Q3 Results

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Excellon Resources Inc. (TSX:EXN) has reported a significant increase in grades and tonnage at its Platosa mine in Mexico. By mining the high-grade 623 manto and ramping up production from 125 tpd in Q2 2017 to 200 tpd, the company was able to increase metal AgEq production by 96% compared to Q3 2016. The company also completed the first stage of a new tailings management facility at their milling facility in Miguel Auza, Zacatecas, which, once in commission, will allow for a 300 tpd production rate in five stages for approximately 19 years. The commissioning of this facility is in line with the company’s plan to continue expanding their resource base and the mine’s production rate. Management also pointed out that their AISC decreased during this past quarter to approximately $11-$13 per payable silver ounce. As previously suggested, the production and cost improvements are a direct result of the company’s recently completed mine optimization plan which has resulted in dry mining conditions in higher grade areas. In our view, these operational improvements are key to enhancing the company’s value and liquidity in the years to come. Excellon currently trades similarly to peers at 5.9x 2017e EV/CF versus peers at 5.8x 2017e EV/CF. Ongoing exploration should be an important catalyst for the company, as they highlight the potential to expand and grow operations in the near-term.  read more


Tuesday, October 17, 2017 Derek Macpherson

NEE Plans for Exploration with Strengthened Team

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Northern Vertex Mining Corp (TSXV:NEE) announced it has an agreement with La Cuesta International Inc. to design a ~$10 million exploration program. Founders, Frank (Bud) Hillemeyer and Perry Dunning have been appointed as Exploration Advisors for the Oatman District, further strengthening the company’s team. The agreement provides the company access to the La Cuesta Proprietary Resource Data Bank of the Oatman District which hosts data going back to the 1970’s. Northern Vertex trades at C$138/oz a premium to peers (C$48/oz). We view the premium valuation as reasonable given that the Moss mine is financed, permitted and under construction. In addition, the company’s valuation does not appear to fully account for the potential of meaningful mine-life extension and improved economics from the ongoing optimization and exploration programs. read more


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