Thursday, June 29, 2017 Derek Macpherson

Maverix Adds Cash with CEF Transactions

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Maverix Metals Inc. (TSXV:MMX) and CEF Holdings Ltd. have entered into an agreement which includes a US$20 million senior secured term loan facility and a C$6.75 million non-brokered private placement whereby CEF will obtain 5 million common shares of Maverix for C$1.35 per common share. Upon closing, expected on or before July 31, 2017, Maverix will receive the first US$10 million while the remaining amount will be received at the option of Maverix up until 2 years after the closing date. Proceeds from both transactions are to be used to grow the company’s portfolio through additional acquisitions of royalties and streams. Based on Maverix’s recent acquisitions and funding, we expect to see a strong Q2. Excluding this financing, the company’s current enterprise value (EV) is sitting at ~C$223.9 million, which implies an EV/EBITDA of ~12.8x-14.9x (based on 2017 guidance), a discount to royalty peers that trade at 18.6x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 1.12x vs. peers at 1.31x NAV. In our view, this valuation is not fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to complete accretive acquisitions. read more

Wednesday, June 28, 2017 Derek Macpherson

TK Results Support Resource Growth Potential

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Tinka Resources Ltd (TSXV:TK) released results from five holes targeting the South Ayawilca and extension of the Central Ayawilca areas at its Ayawilca zinc project in central Peru. Zinc mineralization was confirmed over a 300m strike length at South Ayawilca, suggesting it connects to Central Ayawilca (Hole A17-068 – Figure 1). Drilling intersected more high grades, highlighted by 10.4 % Zn, 17 g/t Ag & 278 g/t In over 29.3m (Hole A17-069). We believe results further support the potential for resource growth. The ~30-hole program is ongoing, with results pending for both zinc and tin. The company continues to test West Ayawilca as well as targets at Zone 3 and Chaucha. Tinka currently trades at C$0.03/lbs ZnEq, higher than other peers in the zinc space, which trade at C$0.01/lbs ZnEq. While the current valuation is at a premium to peers, when considering the project’s exploration potential, in our view some upside remains for Tinka shares. read more

Tuesday, June 27, 2017 Derek Macpherson

ASND Reports High Grades from El Mochito

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Ascendant Resources Inc. (TSXV:ASND) reported high-grade results from 29 drill holes completed from its 33,200m 2017 underground exploration aimed to upgrade and expand resources at its El Mochito mine in Honduras. Results focused on the extensions of Palmer Dyke, Santa Elena, Victoria and Esperanza, of which Esperanza is currently being mined, while the others are near current operations and the company suggests could be placed into production within 6-12 months (Figure 1). Highlights include, 5.3% Zn, 3.8% Pb and 83 g/t Ag over 17.6m (step-out Hole 10846) and 6.2% Zn, 2.2% Pb and 41 g/t Ag over 17.5m (infill Hole 10847 – Esperanza). Importantly an exploration program of this size is the first in many years at the mine. We view these results positively as it points to the possibility for a longer mine life, with more results pending. We continue to believe a progressive re-rating is likely over the year as the company executes on its ongoing optimization program and reports on exploration results. Q2 operating results (anticipated in early July) are likely to be the next catalyst for the company. read more

Tuesday, June 27, 2017 Derek Macpherson

NVO Consolidates Lands Around Comet Wall & Purdy's Reward

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Novo Resources Corp. (TSXV:NVO) announced it has entered into a binding Memorandum of Agreement (MOA) to consolidate its land holdings (6.5km in strike) at its Karratha gold discovery with Grant’s Hill Gold Pty Ltd (GHG) and Karratha Gold Pty Ltd (KG), the company’s two wholly owned Australian subsidiaries. The 5 tenements include the Comet Well property, adjacent to Purdy’s Reward (Figure 1) where trench work is set to begin shortly. Further exploration work is to be planned for the consolidated ~8km of strike, once permits and approvals are in place. Pursuant to the MOA, Novo will pay GHG and KG AU$1.5 million in cash for signing fees and will issue AU$1.5 million worth of the company’s common shares, along with further payments of AU$3 million in cash and AU$3 million in shares, three years after the initial payment. Novo trades at C$142/oz a premium to peers (C$77/oz), which is justified by Beatons Creek potential for significant resource growth, likely low operating and capital costs as well as the potential for significant regional growth. read more

Tuesday, June 27, 2017 Derek Macpherson

IDM Completes Feasibility Study for Red Mountain

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IDM Mining Ltd. (TSXV:IDM) reported results from the feasibility study completed for its Red Mountain project in B.C. The feasibility study saw improvements over the 2016 PEA highlighting a slightly longer mine life along with improved grades and recoveries for both gold and silver. Costs increased; however, NPV improved to C$104 million after-tax with an IRR of 32% (Figure 1). Considering the increased engineering needed to complete a feasibility study (vs. a PEA), we view the study as neutral for IDM, since despite higher costs it is an important milestone (both permitting and engineering) as IDM advances Red Mountain towards production. Exploration continues to expand resources, as the company remains focused on extending the project’s mine life while advancing it towards production. IDM trades at a discount to peers on a consensus P/NAV basis (0.47x vs. peers at 0.61x) and on a per ounce basis (C$44/oz vs. peers at C$62/oz). read more

Tuesday, June 27, 2017 Derek Macpherson

ANX Initiates 2017 Exploration at Argyle

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Anaconda Mining Inc. (TSX:ANX) has initiated a ~1,000m drill program at its Argyle discovery near the company’s Point Rousse Project in Newfoundland (Figure 1). The drill program is the beginning of a larger 2017 program that will comprise of infill, expansion and exploration work, to begin later in the year. The company noted, planning and permitting are underway to add future production from Argyle. Based on past drill results from Argyle, we expect the resource for the deposit to be ~40-45k oz Au. Additionally, drilling and development work is underway at Goldboro which should result in an updated resource and technical study later this year. We believe the company's current valuation does not properly account for the recent transformational acquisition of the Goldboro project in Nova Scotia, providing Anaconda increased resource life and growth. read more

Wednesday, June 21, 2017 Derek Macpherson

RPX Intersects South of the Former Minto Mine

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Red Pine Exploration Inc. (TSXV:RPX) reported partial results from 4 holes (SD-17-75 to SD-17-78) completed 150m-200m south of the former Minto Mine (Figure 1). Results were highlighted by Hole SD-17-78 which included 11.82 g/t Au over 3.49m, in the Minto Mine South Zone, which continues to remain open at depth and along strike. More results are pending, which we expect will continue to demonstrate resource growth potential, as the company advances expansion. Red Pine currently trades at a steep discount to peers (C$32/oz vs. peers at C$62/oz), which does not appear to reflect the current deposit or its significant growth potential. We believe that as Red Pine continues to demonstrate the potential of the Wawa Gold Project through its ongoing exploration program, it should close the valuation gap to peers. read more

Tuesday, June 20, 2017 Derek Macpherson

SWA Intersects High Grades at South Houndé

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Sarama Resources (TSXV:SWA) reported high-grade results from its ongoing drill program at its South Houndé Project in Burkina Faso. 1,300m of RC drilling and 4,500m of diamond drilling (11 holes) have been completed between both the MC deposit and MM deposit (Figure 1) to expand resources and to examine the potential for underground mine development in addition to open pit. Results from the MC deposit were highlighted by 112.3 g/t Au over 0.5m (Hole FR1076RE1) within a wider interval, the highest grade to be intersected at the project (Figure 2). Drilling in the MM deposits highlighted the potential for underground mining with future step-out drilling expected to expand resources by ~200m down-dip (Figure 3). The company continues to drill at the project, with drilling to date supporting mineralization to a depth of 550m. We note, recent acquisitions completed by Sarama in the area, which includes the Bondi deposit and the Botoro property, positions it as a key player in the consolidation of the South Houndé belt. Sarama currently trades at C$9/oz, a steep discount to peers at C$40/oz. We expect that the ongoing exploration at South Houndé (50% interest) and Karankasso (30.5% interest), along with likely work at its ThreeBee project (100% interest), may provide the necessary catalysts for the stock to close the valuation gap to peers. read more


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