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Monday, February 20, 2017 Derek Macpherson

SWA's Warrant Incentive Program to Strengthen Balance Sheet

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Sarama Resources (TSXV:SWA) announced it has initiated an incentive program to encourage the early exercise of ~10 million warrants in order to fund working capital and exploration activities. At an exercise price of C$0.20 per warrant, the exercise of all of the eligible warrants would result in total proceeds of ~C$2.1 million. For each full warrant exercised, holders will receive a new half warrant. Each new full warrant is exercisable at a price of $0.35 until March 10, 2019. We expect the majority of warrants to be exercised with this incentive program and highlight that management, insiders and a significant shareholder have committed to exercise ~36% for proceeds of ~C$750k. Combined with Sarama’s cash position at the end of Q3 2016 (C$2.1 million), we believe that the proceeds from the early exercise would suffice to cover Sarama’s share (~C$1.0 million) of the announced exploration expenses at Karankasso (total C$3.4 million) and working capital needs in 2017. We expect that the ongoing exploration at South Houndé (50% interest) and Karankasso (30.5% interest), along with likely work at Bondi (100% interest), may provide the necessary catalysts for the stock to begin closing the valuation gap to peers. read more


Friday, February 17, 2017 Derek Macpherson

SCA Advancing Karankasso; Drill Results Coming

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Savary Gold Corp (TSXV:SCA) provided an update on the ongoing exploration activities at the Karankasso JV project (69.5% SCA / 30.5% SWA) in Burkina Faso. Savary has collected 5,231 soil samples and completed auger drilling of 1,381 holes and 275 line km of IP gradient geophysical surveys since the current exploration program was initiated in October 2016. Of note, the program has delineated a 3.9 km long untested target that links the Diosso South, West Trend, Kueredougou West and Kueredougou Main. In addition, geophysical surveying at the Serakoro 1 Main area appears to have extended the control shear/alteration structure an additional 13 km to the south to a total traceable distance of ~43 km. In our view, these initial results are promising and suggest that further resource growth is possible outside the existing resources. The current 10 km, 90 hole Phase 2 drill program that commenced in January 2017 has been focused on exploration drilling in the southern part of the property. In our view, pending drill results from the drill campaign that is ~27% complete with 28 holes drilled, and the resource update expected in H2 2017, are likely to benefit Savary’s share price. Savary currently trades at a discount to peers (C$27/oz vs. peers at C$43/oz), suggesting that Karankasso’s potential resource growth is not yet priced into the stock. read more


Wednesday, February 15, 2017 Derek Macpherson

SMT Reports Q4 Cost Improvements at Yauricocha

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported Q4 and full-year 2016 financial results from its Yauricocha mine in Peru (Sociedad Minera Corona – 81.8% owned subsidiary) which continues to demonstrate the benefits of the optimization program and improving grades. As the result of a planned shutdown, costs were modestly higher versus Q3 2016, with cash costs coming in ~11% higher and all-in sustaining costs (AISC) up ~6%. However, costs were substantially improved over Q4 2015, as cash costs were 23% lower and AISC were 25% lower; highlighting the operational and grade improvements Sierra has delivered in 2016. We view the results positively as continued operating execution along with exploration success at Yauricocha is key to enhancing the company’s value and positioning to bring about the necessary capital structure changes needed. read more


Wednesday, February 15, 2017 Derek Macpherson

AMI's 2017 Guidance Highlights Royalty Value

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Yesterday, AuRico Metals Inc. (TSX:AMI) released its Q4 and 2016 financial results and provided guidance for 2017. The company has guided for royalty revenues of US$8.0-8.4 million in 2017, a slight increase over 2016. The company recognized 2016 royalty revenues of US$8.1 million, reaching the top end of 2016 guidance (US$7.7-$8.1 million). At US$2.2 million, Q4 2016 revenues increased by 47% over Q4 2015, primarily driven by a production increase at Fosterville and a higher gold price. AuRico also reaffirmed that it expects the Environmental Assessment for Kemess to be completed by the end of Q1 2017, which we believe to be the key catalyst for unlocking the project’s value. This should allow AuRico to decouple its royalty and development assets and enable the company to unlock value for shareholders. read more


Tuesday, February 14, 2017 Derek Macpherson

Radisson Continues to Report Promising Results

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Radisson Mining Resources (TSXV:RDS) announced additional positive drill results from three holes at its O'Brien gold project in Quebec. Importantly, significant assays were received from the volcanics that are likely to expand the existing resource, the Pontiac sediments to the south and the Cadillac sediments to the north. While both sedimentary rock packages host significant gold deposits elsewhere along the Cadillac Break, limited exploration has been completed at O’Brien. While early days, we believe a meaningful discovery is possible and could be game-changing for Radisson. As well, the company’s exploration results from the volcanics, where the current resource is hosted, continues to suggest that the current resource is likely to grow. Radisson currently trades at a discount to peers, C$55/oz vs. peers at C$71/oz, which we believe fails to reflect the exploration potential at O’Brien. read more


Thursday, February 09, 2017 Derek Macpherson

VIT Highlights Regional Exploration Potential Near Eagle

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On February 8th, 2017, Victoria Gold Corp. (TSXV:VIT) hosted a workshop to highlight the exploration potential of its Yukon properties. The previously announced 2017 exploration program is designed to explore the regional targets nearby the company’s shovel ready Eagle Gold project. The company trades at a premium to peers on a NAV basis; however, we believe this premium is warranted given the project’s scale, jurisdiction, permits, advanced project financing and the company’s strong balance sheet. While the near-term focus of investors is likely to be on project financing, the planned regional exploration is likely to be a positive catalyst for the stock and should help demonstrate the projects exploration upside to potential acquirers.  read more


Thursday, February 09, 2017 Derek Macpherson

IDM Adds Mining Experience to Its Board

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IDM Mining Ltd. (TSXV:IDM) announced the appointment of Duncan Middlemiss, P.Eng to its Board of Directors. Mr. Middlemiss brings significant mine development experience, which we view positively since IDM is advancing its flagship Red Mountain project in British Columbia towards a feasibility study (H1 2017) and final construction decision. Mr. Middlemiss is currently the President, CEO and a Director of Wesdome Gold Mines Ltd. (TSX:WDO). IDM trades at a discount to peers on a P/NAV basis (0.43x vs. peers at 0.59x) and on a per ounce basis (C$48/oz vs. peers at C$63/oz). We expect the pending feasibility study for Red Mountain, coupled with the project’s ongoing de-risking (engineering and permitting), should help close the valuation gap to peers. read more


Wednesday, February 08, 2017 Derek Macpherson

RPX Continues to Deliver Exploration Success

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Yesterday, Red Pine Exploration Inc. (TSXV:RPX) provided another positive exploration update, including surface sampling results and the second set of results from its ongoing 6km drill program at the Wawa gold project (60% interest). The drill results were highlighted by 2.00 g/t Au over 8.96m, within a wider interval of 25.76m at 0.79 g/t Au (SD-16-43). This hole is 525m to the north of the existing inferred resource (Figure 1). The surface sample results were highlighted by 143 g/t Au, in an underexplored area ~2km south of the existing resource. These exploration results continue to suggest that meaningful resource growth is possible for the Wawa Gold project, which in our view is not reflected in the company’s modestly discounted valuation of C$44/oz versus peers at C$56/oz. We expect continued exploration success, along with the recently completed ownership consolidation of the Wawa gold project should help close the valuation gap to peers.  read more


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