Algold Resources Ltd. (TSXV: ALG) announced the final set of drill results from its recently completed 10,000m program at its Tijirit project in Mauritania.
Results from Eleonore continue to highlight its potential as a higher-grade gold target. In our view the results from Phase I along with the planned
Phase II program should significantly increase the existing resource with an update expected in late 2016 or early 2017. We expect the Phase II drill
results and updated resource to support Algold’s current valuation relative to peers.
Grades from Eleonore continue to impress
. The results to date from the Eleonore deposit have made it the focus of Algold’s exploration
work at Tijirit. This set of results were highlighted by 28 g/t Au over 2m (T16RC081) and 1.75 g/t over 12m (T16RC080). In our view, this 3.1km, higher-grade
zone which only made up ~9.5% of the overall resource is likely to be the main driver of resource growth with the pending update.
Valuation only partially reflects resource growth potential. Algold currently trades at C$137/oz, a significant premium to its West African
peers at C$48/oz, indicating that the market expects the resource to grow ~2.9x (to ~770k oz). Considering the high-grade results from the Eleonore
zone, we believe the market's expectation is mildly conservative. We believe that the upcoming results from Phase II drilling coupled with the updated
resource estimate should support Algold’s valuation and should provide positive momentum for the share price.
Company Description: Algold Resources Inc (TSXV:ALG) is an early stage West African gold exploration company that controls meaningful
land packages to the North and South of Kinross Gold’s (TSX:K, NYSE:KGC) Tasiast mine in Mauritania. The team includes Benoit La Salle (Chairman) a
founder and former CEO of SEMAFO and Francois Auclair (President and CEO), who was the General Manager of Tasiast during its early stages of development.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
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