RCKS talk

Tuesday, August 23, 2016 Derek Macpherson

NMI Appears to be Extending Cosmo’s Mine-Life


Download Report

Newmarket Gold Inc. (TSX:NMI) announced positive results from its 13,834 m (45 holes) diamond drilling program at the Cosmo Gold Mine in Northern Territory, Australia. These results suggest resources and reserves are likely to grow and that Newmarket is poised to extend Cosmo’s mine-life. The highlighted results include drill intercepts at the Sliver Lode and newly discovered Redbelly and Taipan Lodes which are located adjacent to the existing underground mine development. Newmarket continues to trade at a discount to peers, partially because of the perception that its mines have shorter lives. These results along with ongoing reserve and resource expansion should help close that valuation gap.

 

Results include high grade intercepts from new discoveries (Figure 1). Drilling returned high-grade intercepts such as 6.76 g/t Au over 7.55m (CE64062) and 3.61 g/t Au over 14.4 m(CE64073) at the Sliver Lode suggest the current resource extends down-plunge. One of the two new discovers, Redbelly Lode, returned results such as 4.29 g/t Au over 11.8m(CE64064) and 5.16 g/t Au over 8.75m(CE64070). The other discovery the Taipan Lode, returned high grade gold results such as 6.23 g/t Au over 21.45m (CE64083) and 10.31 g/t Au over 6.0m (CE64079). Not only have these new discoveries returned high grade intercepts but they are both in close proximity from the existing underground infrastructure. Newmarket looks to continue to outline an additional mill and plans to add a fourth drill rig in Q3 2016.


Continued exploration success should help close the valuation gap to peers. Newmarket is currently trading at 3.9x 2017 EBITDA and 1.2x NAV, versus peers at 6.3x and 1.4x, respectively. In our view, this partially reflects the shorter mine lives of Newmarket’s mines. However, with continued exploration success from all three mines, which suggest resources are likely to grow and mine lives extend, Newmarket is likely to close the valuation gap to peers.

Company Description: Newmarket Gold Inc. (TSX:NMI) is a Canadian-listed gold mining and exploration company with three 100% owned operating mines across Australia. The Company is focused on maintaining a strong foundation of quality gold production, over 200,000 ounces annually, generating free cash flow and maintaining a large resource base as it executes a clearly defined gold asset consolidation strategy.

Disclaimer
Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining companies with suitable investors that qualify under available regulatory exemptions (the "Red Cloud KS Business"). Red Cloud Klondike Strike Inc., its affiliates and associates, and their respective officers, directors, representatives, researchers and members of their families (collectively, "Red Cloud KS") may hold positions in the companies mentioned in this publication and may buy or sell, or buy and sell their securities or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
Red Cloud KS has prepared this publication for general information purposes only, NOT as part of the Red Cloud KS Business. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided by Red Cloud KS for the purposes of this publication has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis contained in this publication may be subject to change and Red Cloud KS does not undertake to advise the reader of such changes. This publication does NOT  take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud KS will not treat recipients of this publication as customers or clients by virtue of having viewed this report.
Company Specific Disclosure Details


1) A member of Red Cloud KS team has visited/viewed material operations of the issuer.
2) In the last 12 months, Red Cloud KS has been retained under a service or advisory agreement by the subject issuer.
3) In the last 12 months, Red Cloud KS has received compensation for investment banking services.
4) Red Cloud KS or a member of the Red Cloud KS team or household, has a long position in the shares and/or the options of the subject issuer.
5) Red Cloud KS or a member of the Red Cloud KS team or household, has a short position in the shares and/or the options of the subject issuer.
6) Red Cloud KS or a member of the Red Cloud KS team own more than 1% of any class of common equity of the subject issuer.
7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.

SUBSCRIBE TO HEAR FROM US

Gain access to exclusive mining industry research reports as well as additional mining industry information, promotional materials, press releases and news.

RCKS Talk Daily Analysis
RCKS News
LATEST POST
CATEGORIES
RELATED TAGS
ARCHIVES

 

RISK WARNING:

Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer (EMD) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and Yukon.

 

By accessing this website you agree to be bound by our Terms of Use and Privacy Policy.

 

Red Cloud Klondike Strike Inc. connects mining companies with suitable investors that qualify under available regulatory exemptions. For example, in Canada, according to National Instrument 45-106, Prospectus and Registration Exemptions. Similar laws and regulations apply in other jurisdictions. Companies presented on this website are considered to be highly speculative and, as such, are suitable only for purchasers who can tolerate the highest level of risk including the loss of their entire investment.

© Copyright 2017 Red Cloud Klondike Strike Inc. All rights reserved.