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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


Tuesday, June 13, 2017 Derek Macpherson

MTA Adds Another Cash Flowing Stream, Plus 3 Royalties

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Metalla Royalty & Streaming Ltd. (CSE:MTA) has entered into a Share and Asset Purchase Agreement with Coeur Mining Inc. (NYSE:CDE) to acquire a portfolio of three royalties and one stream. Adding a second cash flowing stream to the company’s portfolio and significantly increasing its cash flow both in the near and medium term. The transaction is a combination of shares and a convertible debenture, valued at US$13 million, whereby Coeur will own 19.9% of Metalla, with the balance of the value held in a convertible debenture. We view the transaction as a significant growth opportunity for Metalla and believe it now trades at a significant discount to other royalty and streaming peers. As well, we believe this highlights Metalla’s ability to accretively grow its portfolio, versus its larger peers. read more


Monday, June 12, 2017 Derek Macpherson

MLN Continues to Add Ounces at La Trinidad

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Marlin Gold Mining Ltd. (TSXV:MLN) announced additional promising results from ongoing drilling at its La Trinidad mine in Mexico. Highlighted by Hole 17TRD52 results intersected 2.73 g/t Au over 38.70m (16.30m true width), including 5.12 g/t Au over 14.00m (5.88m true width), targeting areas around previously announced holes 17TRD50 and 17TRD44. Similar to the other two holes mentioned, the upper intercept was originally understood to be waste, suggesting the company has added ounces to the current mine plan. The company is planning to mine the area within the next two months. Drilling continues to refine the current mine plan and explore targets to the southeast. 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

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


Monday, May 29, 2017 Derek Macpherson

Could AMI's Kemess have a +20-year Mine-Life or Produce >400k AuEq per Year?

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AuRico Metals Inc. (TSX:AMI) released promising results of a preliminary economic assessment (PEA) completed at its Kemess East project (KE), located ~1km east of its Kemess Underground project (KUG) in British Columbia. On a stand-alone basis, the KE PEA depicts an annual production averaging 222k oz AuEq/year, over a 12-year mine life with economics similar to the KUG project. Because the PEA is solely for KE, it does not account for what the combined project could be. In our view, the combined project is likely to have a greater than 20-year mine-life or a production profile in excess of 400k oz AuEq per year starting in year 3. While it is early days and many combinations are possible, we believe this PEA highlights the strategic and option value of Kemess. However, we also believe, the market continues to ascribe Kemess a negligible value providing investors an opportunity.  read more


Wednesday, May 24, 2017 Derek Macpherson

MLN Drill Results Adds Ounces to the Mine Plan

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Marlin Gold Mining Ltd. (TSXV:MLN) reported its second highest grade x thickness intercept from infill hole 17TRD50, which intersected 7.57 g/t Au over 63.35m including 29.34 g/t Au over 10m, 25m north of hole 17TRD44 at its La Trinidad mine in Mexico. This hole likely converts an area previously considered waste into ore and suggests that the significant positive grade reconciliation seen in the North end of the zone is possible in the South end. The company is planning to be mining this area in the later portion of this year. We expect continued exploration success from La Trinidad and Commonwealth, anticipated permitting news from its San Albino royalty and strong Q1 financial results (late May) to be positive catalysts for Marlin over the near-term.  read more


Friday, May 19, 2017 Derek Macpherson

AMI Signs IBA on Kemess

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AuRico Metals Inc. (TSX:AMI) has signed an Impact Benefits Agreement (IBA) with the Tse Keh Nay (TKN) First Nations, advancing the Kemess Underground project. Including the recently completed Environmental Assessment for the Kemess Underground project, we view these steps positively and should help unlock the project’s value. Using AuRico’s guidance the company trades at ~15.0-17.0x royalty EBITDA, versus peers at 16.9x (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


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