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Tuesday, June 06, 2017 Derek Macpherson

GQC Continues to Hit Gold at Cachimbo

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GoldQuest Mining Corp. (TSXV:GQC) reported 8 drill results from its ongoing ~10,000m drill program, targeting the Cachimbo discovery within the company’s Tireo Concessions (Figure 1). Results were highlighted by Hole TIR-17-28 which included an interval of 22.3 g/t Au, 76.8 g/t Ag, 10.7% Zn and 1.02% Cu over 0.3m. In our view, these results support the potential of the new discovery at Cachimbo; however, it remains early days and more work is needed to determine its scale and potential economic impact. The company plans to continue to drill test the area along strike to the southeast and northwest. The remaining results were from Mineros Ridge and Las Avispas, the company will be reviewing the results to determine the appropriate strategy. GoldQuest currently trades at 0.39x NAV and $31/oz versus peers at 0.52x NAV and $33/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


Monday, June 05, 2017 Derek Macpherson

VIT Continues to Demonstrate Resource Growth Potential

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Victoria Gold Corp. (TSXV:VIT) released initial drill results from the 2017 Dublin Gulch exploration program, 22 of the 41 results (3,600m) drilled to date targeted the Eagle West zone, near its Eagle Gold deposit. The program commenced early April, which followed the Potato Hills Trend mineralization concept, noting Eagle West showed similar geological features as both Eagle and Olive-Shamrock. Results were highlighted by 2.1 g/t Au over 21.3m from Hole DG17-805C, 0.88 g/t Au over 21.0m from Hole DG17-783C, and 0.85 g/t Au over 16.2m from Hole DG17-779C. In addition, metallurgical sampling was completed to determine whether the material is heap leach recoverable, the process to be used at the Eagle Gold Mine. More results are pending from the program, we expect these along with further regional exploration results to likely to be positive catalysts for the stock and should help demonstrate the projects exploration upside and growth opportunities to potential acquirers. At 0.73x NAV, Victoria currently trades at a premium to peers at 0.63x NAV, while trading at a discount on a per ounces basis, or C$41/oz versus peers at C$60/oz. We believe Victoria’s premium valuation versus peers is warranted given the project’s scale, jurisdiction, permits, advanced project financing and the company’s strong balance sheet. read more


Monday, June 05, 2017 Derek Macpherson

SMT Confirms Structure at Cusi

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Sierra Metals Inc. (TSX:SMT, BVL:SMT) released initial drill results from 36 holes averaging 371 g/t AgEq over 4.1m, from an exploration program targeting the Santa Rosa de Lima zone adjacent to current operations at its Cusi mine, in Mexico (Figure 1). All results intersected mineralization at the previously identified structure, which remains open along strike to the northwest and southeast. To further define the structure, the company is undertaking a 13,200m (24 holes) program, to be completed this month. Results will then be used in an updated resource estimate for Cusi expected in early Q4 2017. Sierra continues to achieve exploration success and deliver improvements at its operating mines, we anticipate a strong 2017 from Sierra which should further enhance the company’s value.  read more


Monday, June 05, 2017 Derek Macpherson

Austral Takes Important Step for Growth in Chile

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Austral Gold Ltd. (TSXV:AGLD, ASX:AGD) announced Guanaco will receive electricity connection to the northern Chile National grid on June 6, 2017, pending final approval from the national grid operator. Importantly, the connection allows the company to begin ramp-up testing for the new agitation leach plant, which is expected to be in full operation by the end of the month. In the near-term, this should result in the ore currently being stockpiled at Amancaya to be processed, a significant growth step for Austral. We continue to expect improved performance from the company over the course of the year, as the new agitation leach plant comes online, Amancaya advances towards production and the planned combined PFS for Amancaya and Guanaco (Q2 2017) is complete. In our view, Austral is poised to re-rate towards similar scale peers. read more


Thursday, June 01, 2017 Derek Macpherson

Otis Adds Acres at Kilgore

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Otis Gold Corp. (TSXV:OOO) has increased its land package at its Kilgore Gold Project to 9,080 acres, by staking 52 claims in and around the property (Figure 1). The action was supported by successful regional exploration work and achieved in order to acquire a 300m by 180m structural corridor along the property’s boundary. Otis continues to own 100% of the project, including the additional claims and continues to seek potential opportunities for further expansion. At C$41/oz, Otis currently trades at a discount to peers (C$50/oz). We believe this valuation does not 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, June 01, 2017 Derek Macpherson

MLN Meets Expectations; Reports Strong Q1

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Marlin Gold Mining Ltd. (TSXV:MLN) announced strong Q1 2017 financial results producing 15,556 oz Au and selling 20,401 oz Au. Following a profitable Q4, revenues of C$32.6 million and adjusted EBITDA of C$21.8 million were realized during the quarter. Importantly, cash flow from the high-grade HS Zone has allowed the company to complete the expansion of the leach pad and remove waste to access the southern part of the zone. It is anticipated that Marlin would start mining the HS zone again in June 2017, setting up the company for a strong H2. Based on Q1 production results, the company appears to be well-positioned to meet its guidance expectations of 50-55k oz Au for 2017. However, we do expect Q2 2017 to be weaker because of increased stripping and the processing of lower stockpiled grades. The company noted it’s in the final stages of completing the spin-out of its wholly owned royalty subsidiary Sailfish Royalty Corp., upon receiving permitting news from San Albino or the addition of another cash-flowing royalty. Marlin’s continued exploration success from La Trinidad and Commonwealth as well as anticipated permitting news from its San Albino royalty should be positive catalysts for the company over the near-term. In addition, the company has initiated exploration at San Cristobal, a sizeable regional target near La Trinidad and while early days results have the potential to be game-changing for the company.  read more


Thursday, June 01, 2017 Derek Macpherson

Maverix Benefits from Portfolio Growth in Q1

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Maverix Metals Inc. (TSXV:MMX) announced Q1 2017 financial results reporting revenue of C$3.8 million, implying EBITDA of C$2.9 million, which is slightly below the run-rate suggested by the companies guidance (revenue of C$17.5-C$20.0 million, implying EBITDA of C$15.0-17.5 million). However, the company’s recent acquisitions of three cash flowing royalties (Florida Canyon and Beta Hunt in Q1, along with a 2.5% NSR on the Silvertip mine subsequent to quarter end) suggests that it should be well positioned to meet its 2017 guidance. Based on Maverix’s expanding portfolio, we expect to see a strong Q2, as royalty revenues ramp up. The company’s current enterprise value (EV) is sitting at ~C$181.5 million, which implies an EV/EBITDA of ~10.4x-12.1x (based on 2017 guidance), a discount to royalty peers that trade at 18.2x (2017e EV/EBITDA). Maverix also trades at a discount on a P/NAV basis, or 0.91x vs. peers at 1.22x 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 do accretive acquisitions. read more


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