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Tuesday, November 28, 2017 Derek Macpherson

ORM Begins Two-Phased Field Program in the Carolinas

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Orford Mining Corp. (TSXV:ORM) has initiated its two-phased 2017 field program at its Carolina Gold properties in North and South Carolina. Phase one will comprise of relogging of historical core, surface mapping, trenching and geophysics, to be followed by drilling in phase two. The properties, Jones-Keystone and Landrum-Faulkner (70% option with Carolina Gold Resources Inc.), are located near OceanaGold Corp.’s (TSX/ASX:OGC) producing Haile Mine and past-producing Ridgeway Mine. We believe at Orford’s current value, the stock does not properly reflect the potential of the company’s projects. Upcoming results from exploration at its Carolina Gold properties will provide additional insight on the properties potential. In addition, recent results from Orford’s Qiqavik support our view that significant exploration potential exists. read more


Tuesday, November 28, 2017 Derek Macpherson

Maverix Reports Improved Quarterly Results

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Maverix Metals Inc. (TSXV:MMX) announced Q3 2017 financial results reporting revenue of C$4.6 million, operating cash flow of C$3.6 million and C$0.7 million of net income, which is significantly higher than the previous quarter by 15%, 57% and 250%, respectively. The company achieved attributable AuEq ounces sold of 2,882 ounces and an average cash cost per attributable AuEq ounce of C$160, which results in cash operating margins of C$1,438 per ounce. Other updates during the quarter includes the closing of a $20 million loan facility, the first gold pour from the Moose River gold mine on which Maverix has a 3% NSR and expected H1 2018 production from the Silvertip mine on which Maverix has a 2.5% NSR. Although the company has significant growth prospects for 2018, it has lowered 2017 guidance for expected revenue and attributable AuEq production to C$16 – C$18 million and 10,000 – 11,000 ounces, respectively. The company’s current enterprise value (EV) is sitting at ~C$263.3 million, which implies an EV/EBITDA of ~15.0x-17.6x (based on 2017 guidance), a discount to royalty peers that trade at 19.7x (2017e EV/EBITDA). In our view, this valuation is not fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to do accretive acquisitions. read more


Friday, November 24, 2017 Derek Macpherson

NVO Exploration Update Shows Progress & Challenges

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Novo Resources Corp. (TSXV:NVO) has announced an update on exploration activities in Australia at its Purdy’s Reward tenement and Karratha gold project. The company has reported that the Western Australian Government’s Department of Mines, Industry Regulation and Safety (DMIRS) has granted a 20,000-tonne excess tonnage permit for the extraction of a bulk sample from Purdy’s Reward tenement. The company has indicated that the desired results from large diameter drilling were not achieved. Therefore, the company is going to have to rely on the ongoing bulk samples for grade estimation. Scanning electron microscopy of the gold-bearing conglomerate has indicated that the fine-grained gold previously reported occurs as halos of particles within a few millimeters of the coarser grained gold nuggets. While early, this suggests that the grade of any future resources is going to rely solely on the nuggets and there may not be a background fine gold component. At Novo’s current share price, the market is pricing in a sizeable resource at Novo’s Karratha project, which based on the data to date, we continue to view as very possible. However, additional data, including additional diamond drilling to determine conglomerate thickness (ongoing) and assay results from the ongoing systematic bulk samples (early 2018), is needed to fully understand this projects potential.  read more


Thursday, November 23, 2017 Derek Macpherson

First Cobalt and CobalTech Merger Approved

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First Cobalt Corp. (TSXV:FCC) announced the merger with CobalTech Mining Inc. (TSXV:CSK) has been approved, which owns the past-producing Kerr Lake and Lawson mines as well as a fully-permitted 100 tpd mill. As previously announced, for each CobalTech share, CobalTech will receive 0.2632 of a First Cobalt common share. Earlier in the week, the company also received approval for the merger with Cobalt One. Subsequently, First Cobalt can begin to finalize the consolidation of all three companies, expecting to close the transactions over the next 2 weeks. 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, pro-forma. Besides pending drill results, important upcoming catalysts are likely to include planned metallurgical test results and the completion of the approved mergers with Cobalt One and CobalTech.  read more


Thursday, November 23, 2017 Derek Macpherson

Ascot Releases Drill Results on New Subzones

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Ascot Resources Ltd. (TSXV:AOT) reported assay results from 32 holes drilled in the Northern Lights area with 40 holes still pending, which are expected to be released before year end. The company highlighted drill hole P17-1558 with 25.1m of 6.47 g/t Au in the Prew Subzone, drill hole P17-1536 with 6m of 14.9 g/t Au in the Ben Subzone and drill hole P17-1563 with 9.2m of 9.8 g/t Au in the Northern Lights West zone. Exploration results continue to highlight the potential for a large high-grade underground resource (2-3 million oz Au) at the past producing Premier mine. This implies a current valuation of C$56-84/oz, a premium to peers at C$67/oz, which is likely warranted because of the high grades, existing infrastructure and other resources. We note that based on the current lower-grade resource Ascot trades at a discount to peers (C$39/oz). We expect additional results from the ongoing drill program to demonstrate the projects potential.  read more


Thursday, November 23, 2017 Derek Macpherson

Maverix to Acquire 2% NSR on Endeavour’s Karma Mine

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Maverix Metals Inc. (TSXV:MMX) has announced that it has entered a binding agreement to acquire a 2% NSR royalty on Endeavour Mining’s Karma gold mine for $20 million in cash. The Karma mine, located in Burkina Faso, has been producing since October 2016 and is expected to produce 100koz-110koz of gold in 2017. Karma is a low-cost operation with over ten years left of mining the 1.1Moz of gold reserves, with a total of 3Moz of gold M&I resources with the potential to further extend the projects mine life. The company’s current enterprise value (EV) is sitting at ~C$253.1 million, which implies an EV/EBITDA of ~14.5x-16.8x (based on 2017 guidance), a discount to royalty peers that trade at 18.0x (2017e EV/EBITDA). In our view, this valuation does not include potential cash flow from Karma nor is it fully reflective of the company’s growth potential, both when considering its development stage royalties and ability to complete accretive acquisitions.  read more


Wednesday, November 22, 2017 Derek Macpherson

RCKS Charts: MTO, OSK, SEK & ECR

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In this edition of RCKS Charts, Keith has evaluated Metanor Resources Inc.(TSXV:MTO), Osisko Mining Inc. (TSX:OSK), Secova Metals Corp. (TSXV:SEK) and Cartier Resources Inc. (TSXV: ECR). read more


Wednesday, November 22, 2017 Derek Macpherson

ANX Drills High-Grade Gold at Argyle

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Anaconda Mining Inc. (TSX:ANX) reported the assay results from its expansion drilling program at Argyle, located approximately 4.5km from the company’s fully-operational mill and tailings facility at Point Rousse, Newfoundland. The news release reported result from four of the eight holes in the 1,002m drilling program, which include intersections of 3.65 g/t Au over 12m in hole AE-17-46 and 3.22 g/t Au over 4m in hole AE-17-45 (Figure 1). These drill holes allowed the company to extend the Argyle mineralization from up to 100m down-dip in the northeast and demonstrated continuity of a higher-grade zone over a further 50m down-dip to the north than previously known. Based on our preliminary estimates, we believe that at its current market cap (C$26.7 million), investors are either paying for Point Rousse (~value of C$30-50 million based on our preliminary DCF) or Goldboro (~ value of C$41.5 million based on C$50/oz) suggesting good value at current levels. In our view, the upcoming PEA for Goldboro, is likely to be an important catalyst for Anaconda as it should allow investors to better understand the potential of this asset. Following that, operations later in F2018 (year-end May 31) should see production and cash flow increases as mining at Point Rousse moves to the higher-grade Stog’er Tight deposit. In our view, both these catalysts have the ability to cause the market to ascribe a fair value to both projects.  read more


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