Friday, March 23, 2018 Victoria Ellis Hayes


RCKS Talk, Redesigned.

We decided to give our RCKS Talk Research Blog a fresh new look in March 2018. Please update your bookmarks to our new link here: redcloudks.com/RCKSTalk.

Our blog archives will remain intact here in the original format, however please note that we will no longer be updating the content on these archive pages.

Our new blog has lots of new ways to sort & search our mining research content!

Research, redesigned. While still providing mining focused information, unique investment ideas, timely updates as well as company, industry, and commodity analysis, we have also made it much easier for you the reader to find specific items of interest.

New navigation features are available in the menu on the right side of the page (at the bottom for mobile/tablet viewers). These include:

Top Stories. Where we will list recent articles of interest.
Search. Type in a stock ticker symbol, a mining company name, or any other keyword you like.
Content Filters & Categories. Great if you only want to view a specific type of content
(like Site Visits, our RCKS Charts features, or our new Red Cloud TV).
Archives. Don't worry, we didn't remove our old RCKS Talk blog posts.
They are still accessible via the Blog Archive links, sorted by month & year.
Companies. Great for when you want to focus in on all posts for a single mining company.

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Tuesday, March 20, 2018 Derek Macpherson

Novo’s +5-tonne Samples Expected in ~1 Month

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Novo Resources Corp. (TSXV:NVO) has provided an update on its exploration activities at Comet Well, which includes the expected announcement of +5-tonne bulk sample results in ~1 month. The samples were taken from the few meters of basal bouldery conglomerate that has been identified to be unique to the Powerline showing (Figure 1). It must be noted that Powerline differs from Purdy’s Reward in that detector strikes have been noted in multiple horizons above the basal contact whereas most gold nuggets at Purdy’s Reward were found at the base of the conglomerate sequence. As well, the company discovered an additional gold-bearing conglomerate at Powerline, which was exposed 20m up section from the basal bouldery unit. The thickness of the conglomerate is currently unknown, but several gold nuggets encased in a rock matrix have been recovered. We hope to learn more about these recent developments when we visit the project later this week. Novo plans to continue trenching and bulk sampling along the 2km of strike at Comet Well with plans to collect a total of 60 +5-tonne bulk samples. Since mid-February, Novo field teams have also drilled 39 vertical scout diamond drill holes on a ~200m grid at Comet Well with more tightly spaced holes in areas where trenching is expected to occur in order to better understand subsurface geology before bulk sampling takes place. With trenching, bulk sampling and scout diamond drilling underway, Novo is well on its way in unlocking the value of Comet Well and communicating it to investors. Importantly, this week we will be on site at Karratha and Beatons Creek, after which we plan to provide an update on our findings.  read more

Tuesday, March 20, 2018 Derek Macpherson

Bonterra’s Initial Winter Drill Results Look Good

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Bonterra Resources Inc. (TSXV:BTR) reported encouraging initial results from its winter drill program at its Gladiator Gold Deposit which continue to confirm our view that resource expansion is likely. Highlights from these first four holes include, high grades from hole BA-18-04 intersecting 16.9 g/t Au over 6.5m at the Main Zone and 14.1 g/t Au over 1.5m at the South Zone as well hole BA-18-03A extended the strike length and depth in the Main Zone. Drilling to date, confirms a total strike length of 1,200m to depths of +1,000m from four horizons, North, Footwall, Main and South. The company is expecting to drill 70,000m in 2018 with seven active drills on site. The program is a combination of infill and definition drilling which should complement the 60,000m of drilling completed in 2017. Supported by recent exploration success we continue to believe Bonterra is well-positioned to deliver significant resource growth in 2018. Bonterra currently trades at C$64/oz, a slight premium to peers (C$45/oz). Given our expectation for meaningful resource growth at its flagship Gladiator deposit (update planned for H2 2018), Bonterra appears to be trading at a discount to peers; C$26/oz if you assume a 2M oz Au resource at Gladiator. read more

Monday, March 19, 2018 Derek Macpherson

Anaconda Plans to Make Formal Bid for Maritime

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Anaconda Mining Inc. (TSX:ANX) has announced it intends to make an offer to acquire Maritime, for consideration of 0.364 of a common share of Anaconda in exchange for each Maritime share, a 40% premium to the market. We view the potential acquisition as accretive to Anaconda shareholders, providing another source of feed for the Pine Cove Mill, specifically, providing a higher-grade source of feed than currently considered in the mine plan. While we expect a merger to be positive for our estimates, we have not yet incorporated it into our model as a formal offer has not yet been made and there is a risk that Maritime's significant shareholder Rambler Metals and Mining (TSXV:RAB), could make a counteroffer as they have similar synergies. read more

Friday, March 16, 2018 Derek Macpherson

LPK Sampling Program Confirms Grades & Continuity

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Lupaka Gold Corp. (TSXV:LPK) completed an underground sampling program, reporting similar and higher grades than outlined in the company’s recently announced PEA for its Invicta project. Sampling targeted the 3400 Level Atenea Vein, with average results returning 9.86 g/t AuEq over 130m (width 6.1m), in the footwall vein and 7.00 g/t AuEq over 70m (width 6.0m) in the hanging wall vein split. Therefore, with a combined width of 12m, the Invicta deposit extends for over 130m along strike on the 3400 level, which is expected to be accessible once the mine is operational later this year. The purpose of the sampling program was to compliment past sampling work (2014), results have provided additional confidence in continuity of the mineralized system, including further affirmation of grades. The company has recently released a PEA for its Invicta project forming the basis of our valuation of Lupaka, which is a NAVPS10% of C$0.55 assuming a 350tpd operation. We believe that first production, expected in H2 2018 is going to be the next key re-rating catalyst for Lupaka. read more

Friday, March 16, 2018 Derek Macpherson

Aurania Finds First Evidence of Porphyry-Style Alteration

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Aurania Resources Ltd. (TSXV:ARU) has found evidence of porphyry-style alteration related to its Awacha geophysical target at its Lost Cities – Cutucu Project, Ecuador. The geophysical surveys at Awacha previously detected a cluster of magnetic features, which are believed to be indications of buried magnetic cores of porphyries. This theory has recently been supported by geological and geochemical features that are typical of porphyry systems and supports the company’s belief that the company’s project area contains porphyry deposits similar to those of the adjacent Cordillera del Condor. The companies first two targets Awacha and Latorre both are developing quickly, and both have the potential to deliver a significant discovery for shareholders.  read more

Friday, March 16, 2018 Derek Macpherson

Brixton Hits Shallow High-Grade Cobalt at Hudson Bay

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Brixton Metals Corp. (TSXV:BBB) continues to have drill success at its Hudson Bay project in the Cobalt Camp, highlighted by 0.22% Co, 0.48% Cu and 17.3 g/t Ag (0.25% CoEq, 336.62 g/t AgEq) over 3.00m (HB-18-04) and 0.71% Co, 10.3 g/t Ag, 0.46% Ni, 0.37% Zn (0.80% CoEq, 908.95 g/t AuEq) over 1.00m (HB-18-05), both at shallow depths of 46m and 56m respectively. Mineralization intersected in both holes appear to be a part of a northwest trending system that has not been mined out, also intersected by previously released holes HB-18-01 and HB-18-03. Brixton is targeting high-grade silver and cobalt mineralization, historically silver was the focus of past production, drilling to date has been successful in intersecting both. We note that based on peers within the Cobalt Camp, Brixton’s 2,516ha land position in Cobalt, implies that the company is significantly undervalued, on this asset alone. For comparison, First Cobalt (TSXV:FCC) trades at C$0.020 EV/ha, while Brixton trades at C$0.006 EV/ha. This suggests to us that, especially when adding in Hog Heaven and the company’s other assets, the share price has the potential for meaningful appreciation as the company’s Cobalt potential becomes better understood. read more

Wednesday, March 14, 2018 Derek Macpherson

FCC Adds U.S. Project in Another Cobalt Camp

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First Cobalt Corp. (TSXV:FCC) has expanded into the US, announcing the all share acquisition of US Cobalt Inc. (TSXV:USCO) valued at C$149.9 million (Figure 1). Under the agreement, all of US Cobalt shares will be exchanged on the basis of 1.5 First Cobalt shares for each US Cobalt share, representing a 61.8% premium to market based on US Cobalt’s closing price of C$1.01. US Cobalt owns the Iron Creek Cobalt Project within the Idaho Cobalt Belt in Idaho, located 28km south of eCobalt’s Idaho Cobalt Project (Figure 2). The project hosts a historic resource estimate (non-compliant with NI 43-101) of 1.3Mt grading 0.59% Co, which the company is looking to upgrade to a compliant resource and complete a maiden resource later in 2018. We view the transaction positively as it provides diversity for First Cobalt outside the Cobalt Camp, adding to its large portfolio of cobalt assets in another mining friendly jurisdiction (outside the DRC) as well as adding resources. We view the deal positively and believe based on its friendly nature and substantial premium, it is very likely to be completed. read more


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