Sunday, April 30, 2017 Derek Macpherson

MTA Signs Agreement on First Cash Flowing Stream

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Metalla Royalty & Streaming Ltd. (CSE:MTA) announced it has signed a definitive agreement to acquire a 15% interest in Silverback LTD for US$1.86 million. The company announced it had signed a letter of intent (LOI) to acquire this royalty in January 2017. Silverback LTD owns 100% of the New Luika Gold Mine (NLGM) silver stream. The NLGM produced ~126,572 oz Ag in 2016 and 28,750 oz Ag in Q1 2017. We estimate that Metalla has the potential to generate annual cash flow of US$260-280k from this stream based on previous production and current spot silver price. The agreement also includes an option for the company to invest in an additional streaming transaction. We view the investment positively, as the company continues to add value to its portfolio. The transaction is expected to close on or around May 11th, 2017. read more

Thursday, April 27, 2017 Derek Macpherson

Otis Adds Experience to its Advisory Board

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Otis Gold Corp. (TSXV:OOO) appointed Michael Vint current Vice President of Endeavour Financial Ltd to its Advisory Board. Mr. Vint’s experience in reviewing and assessing mining projects worldwide is an important asset to add to the team as the company continues to advance the Kilgore gold project. Otis is planning a 10,000m exploration program for Kilgore later this year, followed by a resource update which will include 14,000m of drilling completed since the last estimate completed in 2012. At C$48/oz, Otis currently trades at a discount to peers (C$54/oz). We believe the market does not appear to fully account for the potential resource growth at Kilgore. We expect the upcoming drill program and pending resource update (H2 2017) for Kilgore to be important catalysts for the company. read more

Thursday, April 27, 2017 Derek Macpherson

EXN's Optimization Plan On-Track

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Excellon Resources Inc. (TSX:EXN) reported Q1 2017 production results and an update on its ongoing optimization program at its Platosa Mine in Durango, Mexico. The optimization plan remains on schedule for the end of Q2. The company saw higher than forecasted drawdown and expects full installation to be completed during May. Production results decreased significantly YoY and QoQ, as the company faced challenging mining conditions in the Rodilla Manto during Q1. Operations and cash flow are expected to improve in H2 2017, once the optimization program has been completed. Excellon currently trades at a premium to peers, we believe this premium partially reflects the expected increase in production and lower costs once the optimization program is completed. read more

Thursday, April 27, 2017 Derek Macpherson

MQR Advances Exploration at Croinor & Gold Bug

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Monarques Gold Corporation (TSXV:MQR) announced it is increasing the size of its ongoing drill program due to recent drill success. The company has identified 26 drill targets to be prioritized at the Croinor property and launched an 8-hole program at Gold Bug. Subsequent to the discovery made in January, on April 4, 2017, drilling at Gold Bug confirmed a 15m wide shear corridor with a vertical depth of 115m containing anomalous gold grades, returning 6.96 g/t Au over 15 metres, including 17.1 g/t Au over 5.9 metres. The company is focused on increasing current resources at Croinor, and developing the project towards production. To that end, the company has completed a number of smaller development tasks, including permitting a powerline to service the Croinor Gold mine site. In addition, drilling at Simkar is now complete (4 holes, totalling 3,000m), results are still pending. At C$117/oz, Monarques currently trades at a premium to peers (C$60/oz). In our view, this valuation is supported by Croinor’s stage of development (pre-feasibility study), ongoing exploration success and the recent acquisition of the Beacon Mill. read more

Friday, April 21, 2017 Derek Macpherson

Sierra Q1 Results Show Continued Improvements

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) reported Q1 2017 production results from its operating mines in Peru and Mexico. The company’s quarterly production showed continued incremental operational improvements at both Yauricocha and Bolivar, offsetting a weak quarter at Cusi (Figure 1). The company remains focused on improving operations and near-mine exploration, which should help it surface the value of these assets. In our view, continued exploration success along with ongoing operational improvements at Sierra’s operating mines are key to enhancing the company’s value and liquidity. read more

Thursday, April 20, 2017 Derek Macpherson

Ascendant Q1 Progress Report Encouraging

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Ascendant Resources Inc. (TSXV:ASND) announced Q1 operating results and 2017 guidance from its recently acquired El Mochito mine in Honduras both of which we view positively. For Q1, despite elevated costs and ongoing efforts to improve operations the company appears to be only modestly cash flow negative at the mine level. More importantly, the planned progressive improvements appear to be achievable and the exit run-rate suggests a much higher valuation may be warranted at the end of 2017. While there is risk associated with Ascendant executing these operational improvements, the company appears poised to deliver a progressive re-rating throughout 2017. As well, following the recent financing (C$20 million) the company should have the financial flexibility to execute on its plan, including what is planned to be a capital intensive Q2. We expect the pending financial and operating updates to be the key catalysts for the Ascendant share price over the next year. read more

Wednesday, April 19, 2017 Derek Macpherson

AMI Adds C$11.2M to Its Balance Sheet

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AuRico Metals Inc. (TSX:AMI) announced it has replaced the C$18.7 million restricted cash deposit used as security for reclamation and closure activities at the Kemess site, with a surety bond. The conversion released ~C$11.2 million in cash, as the company paid C$7.5 million in cash as collateral. In addition, the company appointed Sean Masse former Superintendent and Mine Manager at New Afton as Mining Project Manager and Mike Padula former Project Manager for Victoria Gold and Manager of Mining Wastes and Water for MMG Limited as Surface Construction Project Manager. The new additions to the AuRico team and stronger cash balance positions the company to continue to advance its Kemess Underground Project. read more

Tuesday, April 18, 2017 Derek Macpherson

GQC's Team Additions Support Romero Development

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GoldQuest Mining Corp. (TSXV:GQC) has appointed Georges Boissé former Canadian Ambassador to the Dominican Republic (2012) as Special Advisor to the company and Robert Crowley former US Agency for International Development/US Department of Agriculture liaison as Corporate and Social Responsibility (CSR) Manager. We view the new additions to the management team positively as it supports the development of Romero, as the company continues to advance the project and moves through the permitting process. GoldQuest currently trades at 0.44x NAV and $37/oz versus peers at 0.54x NAV and $35/oz. We continue to believe that the current valuation does not fully reflect the exploration potential of GoldQuest’s wider land package. We expect continued exploration drilling, along with follow-up drilling at Cachimbo are likely to be positive catalysts for the stock. read more


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