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Friday, January 05, 2018 Derek Macpherson

Alpala Maiden Resource Just the Start; Recent Site Visit Suggests Significant Exploration Upside Remains

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SolGold Plc. (TSX:SOLG) announced a maiden resource for the Alpala deposit at its 85% owned Cascabel project in northern Ecuador. At a 0.3% CuEq cut-off, 1.08 billion tonnes at 0.68% CuEq (Figure 1) have been defined, but this includes a high-grade core of 120 million tonnes at 1.8% CuEq. Based on existing block cave operations, the tonnage and grade of the high-grade core are likely to be supportive of an economic operation. Moreover, our recent site visit highlighted the exploration potential within the Alpala Complex and on the wider Cascabel property beyond. Consequently, we believe this maiden resource is a good first step, but that there is likely more to come. read more

Wednesday, December 06, 2017 Derek Macpherson

Toachi Site Visit: Exceptional Grades Make La Plata Shine

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Last month we had the opportunity to visit Toachi Mining Inc.’s (TSXV:TIM) La Plata Project in Ecuador, which hosts the gold-rich polymetallic volcanic-hosted massive sulphide (“VHMS”) La Plata Deposit. We were impressed with grades of the recently announced inferred resource (2Mt @ 13 g/t AuEq) at La Plata and look forward to the PEA expected in H1 2018 evaluating a small underground mining operation, which we expect to have strong economics based on the exceptional grades. Our review of the data, core, sections and work done to date gave us a positive view on the current resource and its potential to grow. We highlight that VHMS deposits typically occur in clusters and that the 2,335 hectare La Plata property hosts more than a dozen targets which remain to be tested, suggesting regional exploration upside exists.  read more

Friday, October 20, 2017 Derek Macpherson

Orford Site Visit: High Discovery Potential on a Regional Scale Land Package

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This summer we had the opportunity to visit Orford Mining Corp.’s Qiqavik gold property located in northern Quebec. Orford Mining Corp is to be formed following the completion of the amalgamation between True North Nickel Inc. and Focused Capital Corp. The company is expected to begin trading shortly. We were impressed with the level of work completed to date and believe the company is well positioned to make a discovery on its regional scale land package. As well, the company has been active during this summers field season, including 2,723m of drilling, which should provide steady news flow towards the end of the year once the company begins trading. Finally, Orford has been able to attract a strong management and technical team, which should have them well positioned to advance Qiqavik.    read more

Friday, October 06, 2017 Derek Macpherson

Site Visit: NEE Progressing Towards First Gold Pour

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Recently we had the opportunity to visit Northern Vertex Mining Corp.’s (TSXV:NEE) Moss mine which is progressing towards its first gold pour. The construction period can be a challenging time for any company and a risky period for investors, as the company works to take the major de-risking step of transitioning from a developer to a producer. Our site visit highlights that Northern Vertex is well down the path to production, with all major components showing meaningful progress. Based on what we saw on-site, we expect Northern Vertex to pour gold before year-end. We highlight that Northern Vertex is very well funded with both debt (Sprott loan, CAT finance facility) and recent equity investments resulting in low completion risk (i.e. running out of capital before construction). Northern Vertex’s current valuation does not appear to reflect likely reserve growth, currently excluded from the mine plan. We expect ongoing construction updates and first production to be key catalyst for the stock. read more

Wednesday, October 04, 2017 Derek Macpherson

Site Visit: NM’s Sterling Mine - There’s Something Out There

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Recently we visited Northern Empire Resources Corp.’s (TSXV:NM) Sterling mine and Crown project’s which interestingly is close to the fabled Area 51, Barrick Gold’s (TSX:ABX) past producing Bullfrog Mine (2.3M oz Au produced), and Corvus Gold’s (TSX:KOR) North Bullfrog (1.5M oz at 0.29 g/t Au and 6.6 Moz of at 1.25 g/t Ag) and Mother Lode (within Northern Empires claims) projects in Nevada. In our view, the company benefits from both an economic permitted small scale operation (30-40k oz Au/year) at Sterling and an exciting exploration project on the northern portion of the property (Crown project). Based on our site visit, we believe the current EV of ~C$31 million the market is ascribing, values either the exploration potential of the Crown project or the permitted Sterling mine, but not both.  read more

Tuesday, September 12, 2017 Derek Macpherson

FCC Site Visit: Rediscovering a Historic Camp

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Last week we visited First Cobalt Corp’s (TSXV:FCC) properties in the historic Cobalt Mining camp. First Cobalt, recently announced mergers with Cobalt One Limited (ASX:CO1) and CobalTech Mining Inc. (TSXV:CSK) which on a pro-forma basis will make it the largest landholder in the Cobalt Mining camp. While previous mining in this camp was focused on narrow vein exceptionally high-grade silver, First Cobalt is focused on finding a primary cobalt deposit. While the exploration and resource development process is at an early stage, the camp is known to have economic cobalt grades. We 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. Important upcoming catalysts are likely to include exploration results and the completion of the proposed mergers. read more

Friday, September 01, 2017 Derek Macpherson

ANX Site Visits: A Stable Base with Significant Growth Potential

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This week we visited Anaconda Mining Inc.’s (TSX:ANX) Goldboro (Nova Scotia) and Point Rousse (Newfoundland) projects. Overall, we were impressed and believe the current valuation ascribed by the market does not adequately reflect both projects as they currently sit or the upside potential that they have. At Goldboro, we believe the current resource (830k oz at 4.95 g/t Au) has room to grow and does not properly account for the starter-pit potential that likely exists. We note that the company needs to increase its understanding of the mineralization prior to mining; however, the contemplated bulk sample would certainly help. Point Rousse provides a stable production base, generating enough cash flow to fund small exploration programs. We expect Point Rousse to operate well beyond the existing reserve life with the Stog’er Tight pits coming on later this year, likely to be followed by the recently discovered Argyle deposit. We note that the Point Rousse project hosts many other targets; however, a shortage of time and money has limited the company’s ability to advance them. Based on our site visit, and preliminary estimates, we believe that at its current market cap (C$26.7 million), investors are either paying for Point Rousse (~C$30-50 million based on our preliminary DCF) or Goldboro (C$41.5 million based on C$50/oz) suggesting good value at current levels. read more

Wednesday, August 16, 2017 Derek Macpherson

Site Visit: SGI is Systematically Building a Business

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Last week we visited the prolific Plutonic mine, which was recently acquired by Superior Gold Inc. (TSXV:SGI). While the asset itself impressed us, both from an operating and upside potential, we were most impressed by the company’s systematic approach to build a gold mining business. This has manifested itself by first converting Plutonic into a profitable mining operation (as evidenced by Q2 financial and operating results), then starting the process to add near mine resources and reserves (update expected in H1 2018) and now starting to look outside the existing operations then expanding. As well, we believe the addition of the Hermes project, is likely to have a positive impact on output, recoveries and consequently costs when it comes online later this year. Despite a short reserve life, we believe Superior Gold may be undervalued as it trades at 3.1x EV/CF and 4.2 EV/FCF (annualized Q2 results), versus peers that trade at 6.2x 2017 EV/CF.  read more


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