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Friday, September 29, 2017 Derek Macpherson

Sierra Reports Increased Resources at Yauricocha

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Sierra Metals Inc. (TSX:SMT, BVL:SMT,NYSE:SMTS) reported an updated resource estimate for Yauricocha, which included 80,000m of drilling and 10,000m of mine exploration development from Mina Central, Esperanza, Cachi-Cachi, Escondida and Cuye-Mascota. The update resulted in a significant increase in tonnage 71% (Measured and Indicated plus Inferred). Grades were roughly unchanged, with the exception of an 18% increase in overall copper grade. As a result contained metal increased significantly for all metals, notably copper, driven by recent discoveries of copper rich zones. Importantly, results benefitted from increased zinc and copper prices, up 33% and 14% as compared to the last update in 2016. Head grades for both metals increased, 18% for copper and 7% for zinc including although decreased for lead (7%), silver (2%) and gold (9%) (Figure 1). We anticipate a strong 2017 from Sierra as operations continue to improve and exploration advances, all of which should further enhance the company’s value.  read more


Friday, September 29, 2017 Derek Macpherson

eCobalt De-Risks ICP with Feasibility Study

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eCobalt Solutions (TSX:ECS) reported results from the feasibility study completed for its fully-permitted Idaho Cobalt Project (ICP) in Idaho. The 800 tpd project is estimated to produce 31.8 million lbs of cobalt, 2.4 million lbs annually, over 12.5-year mine life, with an after-tax NPV of $135.8 million, IRR of 21.3%. The project remained essentially unchanged from the 2015 PEA, with the exception of lower head grades which resulted in lower metal production. This was offset by updated cobalt prices to better reflect current market conditions, resulting in project economics being essentially unchanged. As well, the pre-production capex has increased, primarily driven by a higher cost estimate for the Cobalt Processing Facility. In our view, the study materially de-risks the project allowing the company to advance the ICP project into detailed engineering, financing and eventually into construction. As well, there appears to be some opportunities for project improvements both with respect to the mine plan and capital costs. Next material catalysts likely include a project financing to support construction in 2018 and ultimately production in 2020. We continue to believe eCobalt is well-positioned to take advantage of rising cobalt prices. read more


Friday, September 29, 2017 Derek Macpherson

GWM Updates Clarence Stream Resource Estimate

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Galway Metals Inc. (TSXV:GWM) reported an updated resource estimate completed on its Clarence Stream project, in New Brunswick. The updated resource includes a maiden open-pit resource, suggesting both open-pit and underground potential versus the underground only scenario defined in the previous resource. Total ounces increased by 54%, despite only 50 new holes (~11,500m) being incorporated in this update. In our view, the project continues to have exploration upside, with assays from completed holes pending. The company is planning additional exploration work at both Estrades and Clarence Stream to further expand resources and with success should help close the significant valuation gap between Galway (C$17/oz) and peers (C$37/oz).  read more


Friday, September 29, 2017 Derek Macpherson

FCC Reports Results from Historic Muckpiles at Bellellen

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First Cobalt Corp. (TSXV:FCC) reported successful results from a sampling program which began in July 2017, testing historic muckpiles from the past producing Bellellen Mine. Samples returned high grade cobalt, as well as silver, nickel and copper, highlighted by 0.78% Co, 195 g/t Ag, 0.08% Ni and 0.82% Cu (L35130 – disseminated), 3.76% Co, 126 g/t Ag, 0.93% Ni and 0.04% Cu (L35129 – fracture) and 3.17% Co, 46 g/t Ag, 0.48% Ni and 0.03% Cu (E653608 – vein). The company is now planning to drill the area, and has submitted applications for a drill permit, an important next step in understanding mineralization at Bellellen. The company recently began a 7,000m drill program targeting nine vein systems over a 2km strike length, which includes Keeley, Frontier, Haileybury and Bellellen. We continue to believe the company’s unique attributes, including its land position and infrastructure are likely to see First Cobalt trade at a premium to other cobalt exploration peers, pro-forma. Important upcoming catalysts are likely to include pending exploration results and the completion of the proposed mergers. read more


Tuesday, September 26, 2017 Derek Macpherson

RCKS Charts: Uranium

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In this edition of RCKS Charts, Keith has evaluated the uranium price. Uranium shows several signs that a reversal of its 10-year decline may be finally taking hold. Work still has to be done but several factors are showing marked improvement. First and foremost, uranium has stopped breaking down to new lows, established a double bottom and is beginning to emerge from that pattern. Also notable is that momentum is about to cross into positive territory, and the 40-week moving average has already turned to the upside. A break above $23 reverses the down trendline from 2011 and essentially from 2007. Initial upside targets are $25-26 and $35-44. Support is solid across $18-20. read more


Tuesday, September 26, 2017 Derek Macpherson

VIT Shows Near-Mine Potential from Eagle Extension Zone

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Victoria Gold Corp. (TSXV:VIT) reported drill results from 14 holes over 2,467m targeting the Eagle Extension Zone, located west of the proposed Eagle Gold Mine, hosting similar geology as Eagle. Results were highlighted by 0.64 g/t Au over 21.3m (DG17-852C) and 0.76 g/t Au over 26.7m (DG17-879C), in an area that previously had been underexplored. In addition, the company completed a surface trench, which returned 0.41 g/t Au over 104m, the full length of the trench. Importantly, the results suggest that mineralization intersected during drilling extends to the surface. Exploration at Dublin Gulch continues to successfully test the Potato Hills Trend exploration model, and highlight the properties exploration upside. Victoria currently trades at a discount on a per ounce basis, or C$29/oz versus peers at C$48/oz, which we believe does not take into account the exploration potential of the Dublin Gulch property or that the project has just transitioned from shovel ready to under-construction. read more


Monday, September 25, 2017 Derek Macpherson

ASND Continues Ramp-up in August

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Ascendant Resources Inc. (TSX:ASND) reported August operational results from its El Mochito mine, highlighted by an adjusted EBITDA of $0.8 million ($0.7 million in July). Since January the company has achieved a 53% increase in ore throughput with August averaging 1,903 tpd (1,853 tpd in July). In mid-July, the company employed new mining equipment, which has made an immediate impact. More equipment deliveries are expected over the next ten months, in October a third truck is expected to be delivered followed by a fourth truck and third scoop in November, which should further increase productivity in the near term. The company remains focused on optimization with the additions of new equipment and availability to ultimately increase head grades and value per tonne mined. The company expects to realize these improvements over the remainder of the year. We believe a progressive re-rating is likely over the year as the company executes on its ongoing optimization program and reports results from ongoing exploration. read more


Thursday, September 21, 2017 Derek Macpherson

NVO To Begin Drilling at Purdy’s Reward

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Novo Resources Corp. (TSXV:NVO) received approvals for core drilling at Purdy’s Reward, the JV prospect with Artemis Resources Inc. (ASX:ARV). As previously announced, drilling will comprise of scout diamond core drill holes to test depth and thickness of the gold-bearing conglomerates, to commence around September 27th, 2017, followed by large diameter RC holes to collect bulk samples around October 15th, 2017. In addition, the company noted that trenching activities have already started, however is waiting on approvals to mobilize the hardrock trencher. The lab results for bulk sampling is expected to be turned around in 4-6 weeks. As well, the company provided a detailed explanation of how they plan to sample material generated from the large diameter RC holes and trenches. Results from initial drilling will be an important upcoming key catalyst, providing the company and market with understanding of grade, gold distribution and conglomerate thickness. 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


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