RCKS talk

Tuesday, February 13, 2018 Derek Macpherson

IDM’s New Geologic Model, Sets Up Spring Resource Update

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IDM Mining Ltd. (TSXV:IDM) has announced an updated and reinterpreted geological model, providing a reinterpretation of multiple zones, including the 141 zone which has been reoriented. This along with a total of 29,312m of core drilling completed in 2017 should result in an improved and modestly larger resource, when released this spring. The company has previously indicated that the 2017 drilling program was successful in expanding the known extents of all mineralized zones up and down-dip from current reserves and still remains open in several directions. Historic gold intercepts that were not previously included in the current resource will be combined with 2017 drilling data to contribute to the revised 2018 resource estimate expected to be completed by the spring of 2018. It is expected that since Osisko Gold Royalties Ltd. (TSX:OR) made a strategic investment in IDM, the company has benefitted from working with Osisko’s technical services group, Talisker Exploration Services Inc. We expect permitting updates and development activities to be important catalysts for the stock as the company remains focused on advancing the project towards construction (2018). IDM continues to trade at a discount to peers on a per ounce basis (C$42/oz vs. peers at C$54/oz).  read more


Tuesday, February 13, 2018 Derek Macpherson

Lupaka Secures Funding to put Invicta into Production

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Lupaka Gold Corp. (TSXV:LPK) has reported that it has secured the necessary funding required for the rehabilitation, preparation and development work at the Invicta Gold Development Project, which the company hopes to advance towards production in H2 2018. The company received $2.5M in proceeds from Tranche 3 of the total $7M Pre-Paid Forward Gold Purchase Agreement with PLI Huaura Holdings LP, as well as approximately $3M from the sale of 3.1M shares in GoldMining Inc. (TSXV:GOLD). The company is now well-funded with a cash balance of $7.6M and 400,000 free trading shares of GoldMininig Inc. This puts the company in a great position to execute on its plans for the Invicta project this year and unlock the value we highlighted in our recent site visit note. A PEA has been initiated for Invicta and is on track to be completed in Q1 2018, which is another step towards beginning potential production in H2 2018.  read more


Tuesday, February 13, 2018 Derek Macpherson

FCC Hits Near-Surface High-Grade Cobalt

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First Cobalt Corp. (TSXV:FCC) has intersected near-surface high-grade cobalt along the Bellellen Vein system that extends for approximately 300m of strike length. The company highlighted assays from hole FCC-18-0007, which returned 2m of 0.78% Co and 0.83% Ni from a depth of 20m. Since drilling at Bellellen began in January 2018, 13 holes (1,100m) have been drilled with assays pending for the remaining 12 holes. The results confirm the presence of high-grade cobalt and nickel south of historic mine workings along the Bellellen system. With a strike length of 300m, the Bellellen system remains a priority target for the company. The company’s objective in the Cobalt Camp remains to test several targets to confirm the cobalt grades of known systems and focus on those of sufficient size to support large tonnage mining operations. We continue to 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. We expect results from the ongoing exploration program to be an important upcoming catalyst.  read more


Tuesday, February 13, 2018 Derek Macpherson

RCKS Charts: LPK & ANX

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In this edition of RCKS Charts, Keith has evaluated Lupaka Gold Corp. (TSXV:LPK) and Anaconda Mining Inc. (TSX:ANX). After recently visiting Lupaka’s polymetallic Invicta project and reporting our initial estimates for Anaconda, we asked Keith to provide technical analysis on these names, that we have a fundamentally positive view. read more


Monday, February 12, 2018 Derek Macpherson

Austral Poised for Production Growth with Commissioning Issues Resolved

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Austral Gold Ltd. (TSXV:AGLD, ASX:AGD) reported Q4 2017 production and financial results from its operations in Chile and Argentina. Total production for the quarter was 16,914 Au oz and 590,565 Ag oz (24,621 oz AuEq), which represented a 61% and 7% increase in gold and silver, respectively, compared to the previous quarter. The significant increase in quarterly production was a result of higher output at the Guanaco and Amancaya mines due to the resolution of the operating issues associated with the commissioning of the new agitation leach plant. The company’s Casposo mine also experienced another quarter of increased production with a recent 11% increase in QoQ AuEq output. Now that the commissioning of the agitation leach plant is complete and operating issues are resolved, the processing of higher grade ore from Amancaya is likely to support higher production. In our view, Austral is poised to re-rate towards similar scale peers, as it demonstrates its increased production potential.  read more


Monday, February 12, 2018 Derek Macpherson

RCKS Charts: ASR, FM, TECK, WDO, MQR

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In this edition of RCKS Charts, Keith has evaluated Alacer Gold Corp. (TSX:ASR), First Quantum Minerals Ltd. (TSX:FM), Teck Resources Ltd. (NYSE:TECK), Wesdome Gold Mines Ltd. (TSX:WDO) and Monarques Gold Corp. (TSXV:MQR). So far in 2018, trading activity in our universe of mining and exploration stocks has been frustrating. Many names rallied into year-end then stalled and began fading as January unfolded. In many instances volumes fell off and momentum deteriorated as stocks pulled back or retraced their December strength. Fewer and fewer names had not succumbed to this drift particularly as market concerns intensified here in early February. Overall the activity in mining & exploration names, as frustrating as it has been, has not suggested a ‘race for the exits’ as much as a rotation of investor interest to other areas of the marketplace. That happens. We, however, remain constructive towards the improving, underlying trends in commodity sectors, notably metals/mining, and expect interest to return.  read more


Monday, February 12, 2018 Derek Macpherson

Osisko Metals 2018 Outlook: Close Acquisition & Drill

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Osisko Metals Inc. (TSXV:OM) provided an outlook for the company in 2018 and a summary of its 2017 corporate milestones. In 2017, the company materially grew its land position in the Bathurst Mining Camp (BMC) and announced the acquisition of Pine Point Mining (TSX-V:ZINC) which is expected to close in February. The company has planned to complete a detailed airborne gravity surveys and 50,000m of drilling at its Bathurst Mining Camp (BMC) in New Brunswick in 2018.  read more


Sunday, February 11, 2018 Derek Macpherson

Lupaka Site Visit: Ready, Set, Grow

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Our recent site visit to Lupaka Gold Corp’s (TSXV:LPK) polymetallic Invicta project suggests that the market has mispriced, both the near-term production potential and the likely stepwise growth. Based on this growth potential, we believe a fair 10% NAVPS estimate for Lupaka is C$0.79 (5% NAVPS of C$0.97) and that the company, should be able to demonstrate this potential to the market over the next 18 months. We note that this estimate is underpinned by a 10% NAVPS, base case estimate of C$0.34. The difference between the likely case and base case is an expansion from 350 tpd to 500 tpd in 2020, and 25% mineable resource growth. We believe the stock does not fully reflect our base case view given that a technical report outlining economics for the project won’t be released until later this year. The company is a mere few months away from production and is currently rehabbing and installing the necessary infrastructure, upgrading the mine access road, creating an operations team, evaluating toll milling alternatives and negotiating an offtake agreement. Two 4.2-yard PLH Scoops have arrived on site along with a single boom drill jumbo in preparation of accelerated development and stope preparation. Upgrading the site access road is approximately three months away from being completed to accommodate the larger production profile considered in our likely case. We believe the company is taking the appropriate steps to demonstrate the potential that we see, through expanded production and drilling. Part of this process is evaluating slashing the existing access adit to 4.5x4.0 metre which would help improve operating efficiency; lower operating costs and improve the ability to ramp up production to a higher rate. We expect a number of catalysts over the next two years, which should demonstrate the potential we see, in the near-term, we believe additional funding from Pandion and marketable security sales (~US$7 million), an updated technical report highlighting project economics, an off-take agreement and initial production.   read more


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