Wednesday, March 07, 2018 Derek Macpherson

Bunker Hill Completes EPA Agreement: Clears the Path for Development & Potential Acquirers

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Bunker Hill Mining Corp. (CSE:BNKR) announced it has executed an agreement with the United States Environmental Protection Agency (EPA), and the United States Department of Justice, allowing the company to operate the Bunker Hill Mine without incurring liability for hazardous substances, pollutants or contaminants that migrated from the Mine in the past. As previously mentioned, Bunker Hill is required to make US$20 million in payments over a seven-year period to the EPA and fund the ongoing costs of the existing water treatment plant, US$960,000 per year. This agreement is important for two reasons. First it shifts the company’s focus to development, with the next key catalysts being a milling solution (toll milling or mill acquisition) and a 43-101 compliant resource. Secondly, this indemnification paves the way for potential deeper pocketed acquirers, who previously would have been hesitant because they could have been liable for some the of previously spent clean-up costs in the Silver Valley. We view this event positively, as it is a material de-risking event and expect the stock to react positively in the short-term. read more

Tuesday, March 06, 2018 Derek Macpherson

Aston Bay: Game Changing Discovery Potential in a Premier Jurisdiction

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Aston Bay Holdings Ltd. (TSXV:BAY) is a C$11.5 million market cap company run by an impressive list of geologists who have invested their own money in the company. This is a base metal exploration company in Northern Canada that many small cap resource investors have looked at before because of the projects location and early high-grade hits. However, the company has materially changed over the last year, and warrants a fresh look. In our view, as the company prepares for this summer's drilling campaign, it presents an attractive risk-reward scenario for investors. read more

Monday, March 05, 2018 Derek Macpherson

LPK PEA Confirms View; Provides Upside to Previous Estimates

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Lupaka Gold Corp (TSXV:LPK) released an updated resource estimate and PEA for its Invicta project in Peru, which was better than we expected after our recent site visit. As a result of higher than expected grades, higher than expected overall tonnes, our base case 350 tpd 10% NAVPS has increased to $0.55 (Figure 1 - was $0.34). While this is only a PEA, Lupaka is funded to production and is already building the mine, which suggests to us that this company is poised to quickly close the valuation gap to peers (0.44x base case NAV, peers 0.56x). We believe that first production, expected in H2 2018 is going to be the next key re-rating catalyst for Lupaka. read more

Sunday, March 04, 2018 Derek Macpherson

RPX Shifts to a Higher-Grade Underground Focus

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Red Pine Exploration Inc. (TSXV:RPX) is planning to start strategic optimization of the Wawa Gold Project, to focus on higher-grade zones following the discovery of the Minto Mine South Zone (MMSZ) and the re-evaluation of the Surluga deposit. We view this positively, as a higher grade underground scenario is likely to have lower upfront capital and the project can start smaller and grow organically. A similar approach was taken by Harte Gold (TSX:HRT); however, Red Pine is likely to start with a larger initial resource. Although preliminary, the company has estimated between 0.725M oz to 3M oz of contained ounces exists between three exploration targets (Figure 1); Surluga Exploration Target (3Mt to 5Mt @ 4.9 g/t to 6.5 g/t), Hangingwall-Footwall Exploration Target (0.5Mt to 3.5Mt @ 4 g/t to 9.5 g/t) and Minto-Darwin Exploration Target (1.5Mt to 3Mt at 4 g/t to 10 g/t). The Surluga Exploration Target is now also being considered for underground development as opposed to the prior open pit scenario. Plans exist to expand exploration in both the MMSZ and Surluga deposit areas to focus on under-explored targets to update property-wide mineral resource estimates. Red Pine currently trades at a discount to peers (C$23/oz vs. peers at C$49/oz). We believe that as Red Pine continues to demonstrate the potential of the Wawa Gold Project through its ongoing exploration program, it should close the valuation gap to peers, particularly when you take into account the significant growth potential of this deposit. read more

Sunday, March 04, 2018 Derek Macpherson

AbraPlata PEA Highlights Valuation & Opportunity

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AbraPlata Resource Corp. (TSXV:ABRA) announced the completion of an independent Preliminary Economic Assessment (PEA) for its 100%-owned Diablillos Ag-Au project in Argentina, which demonstrated economic potential and begins the process of de-risking this asset for shareholders. The project is planned to be mined by conventional open pit methods over a mine-life of 8 years with average annual production of 9.8 Moz AgEq (136,000 oz AuEq) at cash costs of US$7.52/oz Ag Eq (US$542/oz AuEq). In our view, the current discounted valuation that AbraPlata trades at (C$7/oz AuEq, peers C$35/oz AuEq) does not reflect the potential of the Diablillos project, or the solid economics of this PEA, which in our view presents an opportunity for investors. read more

Sunday, March 04, 2018 Derek Macpherson

NEE Files FQ2 Financials

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Northern Vertex Mining Corp. (TSXV:NEE) has announced that it has filed its unaudited interim consolidated financial results for FQ2 2018 ended December 31, 2017. The company ended 2017 with C$22.2M in cash, down from C$25M at June 30, 2017 as a result of cash outflows to the construction of the Moss Mine, which was partially offset by the cash inflows from various financings completed by the company. The company also stated that it has received the fourth and final tranche of $5M from Sprott Private Resource Lending, therefore the $20M Sprott facility is now fully drawn. Construction costs at the Moss Mine for the six months ending December 31, 2017 were $41.55M. The company has also drawn down the final US$3 million of its US$6 million working capital facility from its major shareholder, Greenstone Resources II L.P. While this, company is highly levered at this critical stage as it transitions from construction to production, there is some protection for equity investors as we would expect Greenstone (holds ~30% of the equity) to bridge a short-term financial gap to protect its investment if required. Northern Vertex trades at an EV/oz premium to peers (C$233/oz vs. peers at C$57/oz), which we view as warranted, considering it appears to be financed through to first cash flow, along with the potential for meaningful mine-life extension and improved economics from the ongoing optimization and exploration programs. read more

Sunday, March 04, 2018 Derek Macpherson

Mawson Results Encouraging; More to Come

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Mawson Resources Ltd. (TSX:MAW) reported initial results from its 2018 winter drill program at its Rajapalot Project in northern Finland, highlighted by 8.4 g/t Au over 31.7m including 21 g/t Au over 10.9m (PAL0093), the best hole drilled to date by grade X thickness. Four targets were the focus of drilling; Raja, Palokas, South Palokas and Terry’s Hammer, with intentions to expand known areas. The Raja prospect has been traced to 300m from surface which remains open laterally and down plunge. At South Palokas, drilling discovered for the first time, lower grade mineralization in the structural footwall however additional drilling is needed to better understand the extension of mineralization. In total, 4,896m of drilling (21 holes) have been completed, with results for the remaining 16 holes pending. There are currently 3 drills rigs in operation, with plans to add more over the following weeks. Results from ongoing drilling are expected to be an upcoming catalyst for the company, as it looks to build a maiden resource. read more

Thursday, March 01, 2018 Derek Macpherson

ORM Completes Phase 1 Exploration; Next Step Drilling the Carolina Gold Properties

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Orford Mining Corp (TSXV:ORM) completed the first phase of exploration at its Carolina Gold Properties in North and South Carolina. The first phase ran from December 2017 to February 2018, consisting of ground Induced Polarization (IP) and ground magnetics geophysics including surface geological mapping and relogging of historical core, suggesting more extensive mineralized systems exists beyond what was previously known to the company. Strong IP chargeability and resistivity anomalies are consistent with Haile-Style gold mineralization. Results from the Jones-Keystone property are consistent with historically drilled mineralization, extending at depth and along strike. At the Landrum-Faulkner property results one zone was consistent with a strong 600m-long chargeability and resistivity anomaly which extended under a historical surface grab sample (6 g/t Au). The company will begin drilling high priority targets in March on both properties. We believe at Orford’s current value, the stock does not properly reflect the potential of the company’s projects, both in Quebec and the Carolinas. read more


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