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

Tuesday, August 15, 2017 Derek Macpherson

Site Visit: RPX is Unlocking Surluga’s Secrets

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Last week we had the opportunity to visit Red Pine Exploration Inc.’s (TSXV:RPX) Wawa Gold Project. Red Pine is the operator with a 60% stake in the project, with the balance held privately by Citabar Limited Partnership (“Citabar”). The company has two rigs turning as part of its ongoing 20,000m drilling program, with one rig currently testing the Surluga North Zone and another at the Minto Mine South Zone. Results from the latter have been especially encouraging, as the company consistently continues to intersect gold mineralization in step-outs to the south-south-east.  read more

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

Monday, August 07, 2017 Derek Macpherson

NVO Site Visit: Comet Well has +10M oz Potential; Plenty of Work Remains to Prove it

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We had the opportunity of visiting Novo Resources Corp. (TSXV:NVO) Karratha Project in Western Australia. The main goal of our visit was to determine if the recent significant increase in the share price (up 240% since July 10th) was warranted and in our opinion, it was. Based on our trip, the company’s recently acquired Comet Well property (80% owned), has the potential to host more than 10 million ounces of gold. We highlight that it is very early days, and the company has a significant amount of work to prove us correct. As well, the exceptionally nuggety nature of the deposit is going to provide challenges to determine a true resource grade and the potential exists that an initial NI 43-101 compliant resource could understate grade. We highlight that our view on the project’s potential has been adjusted for these factors and does not include the additional 2km of strike on the adjacent Purdy’s Reward (option to earn 50% from Artemis Resources Ltd. – ASX:ARV). We are comfortable with this opinion because of the pervasiveness of gold nugget discoveries across the trend. Important catalysts remain on the horizon for the company, including the initial bulk sample results from Purdy’s Reward, and the start of exploration at Comet Well. read more

Monday, June 19, 2017 Derek Macpherson

TK Site Visit: Just Scratching the Surface of Ayawilca's Potential

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Last week we had the opportunity to visit Tinka Resources Ltd’s (TSXV:TK) wholly owned Ayawilca zinc project, in central Peru. Although still early days, we were impressed by recent drilling success at South Ayawilca, Tinka’s first foray outside of the Ayawilca Zinc Zone, which hosts an Inferred Resource of 18.8Mt at 8.2% ZnEq. Given there are several other coincident geochemical and geophysical targets to be tested on this 15,000 Ha property, we expect Tinka to continue to expand resources and believe potential exists for the discovery of another zone. read more

Wednesday, November 16, 2016 Derek Macpherson

Site Visit: Euromax is Getting Ready to Build

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Last week we visited Euromax Resources’ (TSX:EOX) Ilovica-Shtuka project in Macedonia. The visit confirmed our favourable view of the project and highlighted that Euromax is on the path to production in a jurisdiction that appears to be more favourable than we initially thought.  read more


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