RCKS Talk

Thursday, March 01, 2018 Derek Macpherson

Anaconda Releases in Line Financials for Stub Year

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Anaconda Mining Inc. (TSX:ANX) reported encouraging financial results for its seven-month fiscal year ended December 31, 2017. For the stub year, the company reported cash costs, US$787/oz, which was ahead of our expectation for US$909/oz. This represents a significant improvement (vs. F2017) for the company and resulted in it achieving operating cash costs at the lower end of guidance for the stub year. As well, the company beat our expectations for end of year cash balance with C$4.0M compared to our previous estimate of C$3.6M. In addition to the company’s undrawn C$1M line of credit, we are forecasting an increase in gold production to 18,100 oz Au and a further reduction in all-in cash cost to $950/oz Au as the company transitions to the higher grade Stog’er Tight deposit in H2 2018. As the company’s fiscal year financial results have remained more or less in line with our expectations, our NAVPS estimate has only changed slightly to C$0.94/share (from C$0.95/share). Based on our current estimates, Anaconda still trades at discount to peers (0.46x NAV, peers 0.57x). In our view, upcoming catalysts include ongoing exploration at Goldboro and Argyle, improved cash flow in H2 2018 and ongoing development work at Goldboro which all should help close the valuation gap to peers. read more


Thursday, March 01, 2018 Derek Macpherson

Monarques Significantly Reduces Costs at Beaufor

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Monarques Gold Corp. (TSXV:MQR) has reported financial results for FQ2 2018 (quarter-end December 31st), following first production results since acquiring the Beaufor Mine in October 2017. The company reported revenue of C$10.3 million, producing and selling 5,444 oz Au and generating a positive EBITDA of $0.5 million and reducing costs by 31% to C$1,338/oz sold. We are impressed that the company was able to report a profitable quarter, after only owning to Beaufor mine and Camflo mill for a single quarter. Exploration remains an important focus for the company in 2018, with the goal to increase reserves and extend mine life at Beaufor as well as increasing resources at Croinor. At C$20/oz, Monarques currently trades at a significant discount to producing and development stage peers (C$40/oz). In our view, this valuation does not properly reflect the company’s recent acquisitions and we believe the upcoming resource expansion drilling and technical studies should help close the valuation gap to peers. The company is focused on growth in 2018, to improve financial performance and expand resources. We believe 2018 will be an important year for the company, and as these next steps are realized should help close the valuation gap to peers. read more


Thursday, March 01, 2018 Derek Macpherson

Metanor Drills the New High-Grade Bart Zone at Barry

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Metanor Resources Inc. (TSXV:MTO) reported results from the new Bart zone, 3.5km west of the Barry Project (Figure 1), highlighted by 18.9 g/t over 1.6m (BE0-17-80). Drilling at the Bart zone began last year to test historical gold grades, drilling a total of 2,985m (12 holes), which will continue into 2018. Results from the first 12 holes, are positive, providing more confidence a larger system exists. Metanor remains on track to increase the size of the Barry camp to better accommodate that a larger exploration program in Q1 2018, which is expected to include a 10,000 tonne bulk sample from a decline from the existing pit. We expect further results from the ongoing drill programs at both Barry and Bachelor to be important near-term catalysts for the company. read more


Thursday, March 01, 2018 Derek Macpherson

ANX Infill Results from Argyle Suggest Higher Grades Possible

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Anaconda Mining Inc. (TSX:ANX) reported encouraging initial results from 3 holes drilled as a part of a 12 hole, 1,122m infill and expansion diamond drill program underway at Argyle, 4.5km from the Pine Cove Mill and tailings facility at Point Rousse. Results have provided confidence in the geological modelling of the deposit, with holes AE-18-64 to 66, confirming the presence of high-grade zones within Argyle. Drilling returned, 4.85 g/t Au over 8.5m and 4.75 g/t Au over 8.0m. Assays are pending for the remaining 9 holes (794m), with results expected in March 2018. We highlight that the current resource grade at Argyle is 2.01 g/t Au (M&I+I) and these results suggest there could be an improvement in grade. We highlight that a 25% improvement in grade for Argyle, would improve our pre-tax NAV for Point Rousse by 34%. Based on our initial estimates, we believe Anaconda is trading at discount to peers (0.46x NAV, peers 0.57x). In our view upcoming catalysts include, ongoing exploration at Goldboro and Point Rousse, improved cash flow in H2 2018 and ongoing development work at Goldboro which all should help close the valuation gap to peers. read more


Thursday, March 01, 2018 Derek Macpherson

ORM Gets Ready for 2018 Season with Airborne Magnetic Survey at Qiqavik

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Orford Mining Corp (TSXV:ORM) is planning to undertake a helicopter-borne magnetic survey covering all 248km2 of its Qiqavik Project in northern Quebec. The survey is slated to commence March 19th and is expected to take 3 weeks to complete. Data from the survey should provide key structural and geological information to expand on the company’s current database. The company has already made 8 discoveries on the property, which will be covered in the survey. Drilling is planned for the summer exploration program and results from the survey will help define targets in preparation for the start of the season. 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. In November 2017, the company launched a two-phased exploration program on its Carolina Gold option, which results should provide additional insight on the properties potential. read more


Thursday, March 01, 2018 Derek Macpherson

RCKS Charts: SLL & LPK

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In this edition of RCKS Charts, Keith has evaluated Standard Lithium Ltd. (TSXV:SLL) and Lupaka Gold Corp. (TSXV:LPK). We remain constructive towards metals, mining and exploration stocks looking forward in the coming months. Near term there is conflict within the investment community regarding the outlook for US interest rates and the dollar which is resulting in a more defensive posture by investors. Technically this is visible by the reduced volumes across many names. However, pockets of accumulation are surfacing and, in addition to the four names highlighted last week, we add two other names which look interesting. read more


Wednesday, February 28, 2018 Derek Macpherson

Aurania Grows Latorre; Identifies 3 New Targets

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Aurania Resources Ltd. (TSXV:ARU) has identified 3 additional targets with features typical of the upper parts of epithermal gold-silver systems, Latorre A, Latorre B and Latorre C in the Latorre area. Exploration at Latorre continues to resemble the discovery of Fruta del Norte, as well, now to the Alto Chicama deposit (Lagunas Norte Mine) in northern Peru. Additional exploration is planned for the targets, including a soil sampling grid for Latorre B to search for metal-enrichment and metal-zoning soils which if successful, would be followed-up with trenching and/or scout- drilling as well, other targets in the Latorre are being mapped in more detail followed by soil sampling to define targets for scout drilling. The company expects to begin scout drilling at Latorre later in the year. We believe ongoing newsflow will be positive for Aurania, as the company explores Latorre and its Awacha target which bears similar geophysical signature as SolGold’s Cascabel. read more


Tuesday, February 27, 2018 Derek Macpherson

Pure Energy Advances Pilot Plant

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Pure Energy Minerals Ltd. (TSXV:PE) provided an update regarding activities underway at its Clayton Valley Project in Nevada. Since signing a non-binding memorandum of understanding (MOU) in October 2017, the company has been finalizing designs for a pilot plant and is expected to complete basic engineering in Q2 2018. The purpose of the pilot plant is to test the capability of the lithium brine extraction and processing technologies. The plant is expected to be built and evaluated for production and extraction in Esmeralda County, Nevada. We believe Pure Energy is well-positioned in the market, as the demand for battery-grade lithium hydroxide increases. read more


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