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Sunday, August 13, 2017 Derek Macpherson

Site Visit: RNX Setting off on the Right Path at Beta Hunt

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Last week we visited RNC Minerals Corp.’s (TSX:RNX) Beta Hunt mine in Western Australia. Our visit taught us a lot about this unique mine. A key takeaway for us was that the significant infrastructure in place, along with a substantial amount of drilling was designed around the flat lying nickel deposit, not the gold deposit. While this infrastructure and drilling provides some benefit (and reduces development costs) for the steeply dipping gold deposit, it is not ideal. The company is taking the right steps to develop new gold levels in an effort to both access the gold orebody, but also provide drill bays to better define the orebody. While Beta Hunt has a long history as a nickel mine, the gold mine is significantly younger with limited exploitation over the last ~20 years, because of split ownership of the gold and nickel rights. While this presents some challenges, it is also an opportunity as there appears to be significant exploration upside and room for potential expansion at the mine. Our visit was highlighted by the mines potential, and that RNC is taking the right steps to first stabilize operations before tapping into the upside. In the near-term investors are likely to remain focused on quarterly financial and operating results as the mine ramps up. read more


Friday, August 11, 2017 Derek Macpherson

NVO Acquires Additional Land in Karratha

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Novo Resources Corp. (TSXV:NVO) has entered into an option agreement to acquire The Pipeline Project located in the Karratha region. To acquire the option, Novo will make a payment of 500,000 Novo shares to the other party and Novo has 12 months to purchase the project, if it chooses, by issuing 2,500,000 common shares. The transaction is the most recent in a series of acquisitions to consolidate property in the Karratha region. The company has plans to complete additional work at its Karratha Gold Project in the near-term, which should begin to provide a better understanding of the project’s grade and continuity. Based on our preliminary value for Beatons Creek (C$150-200 million) plus the C$400-560 million we would ascribe to Karratha, based on our +10-million-ounce estimate at Comet Well, we believe some upside remains to the current share price, which is likely to be realized as Novo demonstrates the potential of its Karratha project. read more


Thursday, August 10, 2017 Derek Macpherson

GQC Grows Cachimbo with the Drill Bit

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GoldQuest Mining Corp. (TSXV:GQC) reported results from an additional 4 holes drilled at the Cachimbo discovery within its Tireo Concessions, all of which successfully intersected gold in a VMS system (Figure 1). Results were highlighted by hole TIR-17-35 which intersected a second deeper zone grading 1.08 g/t Au, 1.68 g/t Ag, 0.01% Cu and 0.09% Zn over 46.6m, 160m southeast of the discovery hole (TIR-16-09). To note, hole TIR-17-33 was drilled 50m southeast of the discovery hole, while hole TIR-17-34 suffered a mechanical error, TIR-17-35 hit the target. Mineralization continues to remain open along strike, and down-dip of the discovery, exploration continues with the goal to uncover systems similar to Romero. Although early in the exploration stage, initial results are positive and point to the potential for a large-scale deposit. GoldQuest currently trades at $29/oz versus peers at $28/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


Thursday, August 10, 2017 Derek Macpherson

AMI Ups 2017 Guidance for Second Time This Year

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AuRico Metals Inc. (TSX:AMI) reported Q2 2017 financial results and increased its annual royalty revenue to US$10.5-11.0 million from US$9.5-10.4 million. The increase in revenue guidance was due to an updated reserve estimate from Kirkland Lake Gold’s (TSX:KL) Fosterville Gold Mine by 110% to 1.03 million oz Au. In Q2, royalty revenues reached a record high of US$2.8 million, for a total of US$5 million (US$2.2 million in Q1 2017) year to date. The company remains focused on advancing Kemess East and Kemess Underground, planning a combined FS for mid-2018. Drill results for Kemess East are expected to be available in Q4 2017, with an updated resource estimate to follow in Q1 2018. As well, at Kemess Underground, permitting and engineering work are to be advanced for early construction in H1 2018. We believe the company is well positioned to unlock the value of Kemess. Using AuRico’s updated guidance the company trades at ~16.6-17.7x royalty EBITDA, versus peers at 16.4x (2017e EBITDA). This implies the market is ascribing Kemess negligible value, which in our view should be worth ~C$100-125 million as compared to stand alone development stage peers. read more


Thursday, August 10, 2017 Derek Macpherson

IDM Extends Mineralization North of Current Reserves

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IDM Mining Ltd. (TSXV:IDM) released further results from three underground core holes targeting the SF Zone, at its Red Mountain project in BC. Importantly, step-out hole U17-1274 intersected high-grade mineralization north of current reserves, returning 12.28 g/t Au and 27.07 g/t Ag over 8m. Follow-up drilling is planned to target the areas around U17-1274 in 2017, as well as step out holes in the Marc, NK, AV and JW Zones including surface drilling in the 141 and Marc Zones. Results continue to demonstrate the growth potential of Red Mountain, as mineralization is intersected outside of current reserves. We expect ongoing drilling news and development activities to be important catalysts for the stock as the company remains focused on advancing the project towards construction (2018). IDM continues to trade at a discount to peers on a per ounce basis (C$44/oz vs. peers at C$50/oz).  read more


Thursday, August 10, 2017 Derek Macpherson

eCobalt Begins Pre-Construction; FS Expected in September

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eCobalt Solutions (TSX:ECS) provided an update regarding the feasibility study for its Idaho Cobalt Project (ICP), which is expected to be completed in September of this year. The company is now finalizing the mine design and schedule with the CPF design completed and site purchased. In the meantime, pre-construction activities are being fast-tracked for the fall, in advance of 2018 construction. The activities currently under review include, road work, transport gravel for construction material, move crusher to site, burial of pipeline and septic, install temporary power and remediation of Tailings Waste Storage Facility drainages. The United States Department of Agriculture Forest Service is reviewing whether to take the project off care and maintenance. We continue to believe eCobalt is well-positioned in the improving cobalt market, the feasibility study is an important key catalyst for the company in the near term. read more


Tuesday, August 08, 2017 Derek Macpherson

RPX Hits More VG & Extends Minto Mine South Zone

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Red Pine Exploration Inc. (TSXV:RPX) reported additional high-grade results from 3 holes targeting and further extending the Minto Mine South Zone, as highlighted by hole SD-17-90 averaging 15.3 g/t gold over 2.03m. Visible gold was once again intersected in the Minto Mine South Zone, the zone remains open at depth and along strike and the company notes its predictability allows it to be explored efficiently. In addition, a new gold-bearing structure has been identified by hole SD-17-92 which intersected 4.01 g/t Au over 2.07m. Results from 12 boreholes are still pending from the Minto Mine South Zone, and an additional 10 holes are in the planning stages to define strike and depth which will also help to further understand the Minto E Zone. Red Pine currently trades at a steep discount to peers (C$28/oz vs. peers at C$61/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, August 08, 2017 Derek Macpherson

BAY Begins Exploration, Plans to Define 2018 Targets

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Aston Bay Holdings Ltd (TSXV:BAY) has begun the 2017 exploration program for its Storm and Seal properties on Somerset Island, Nunavut. A property-wide geophysical program is underway for August into September which includes 18,000 line km flown with 200m line spacings. In July, a two-week field exploration program was completed as a part of the 2017 program. Results from this year’s exploration work will define targets for future drilling in the summer of 2018. We expect these results to be a near-term catalyst for the company and should help provide more insight on the properties opportunity. read more


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