Friday, December 30, 2016 Derek Macpherson

AuRico Adds Royalties with Kiska Acquisition

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AuRico Metals Inc. (TSX:AMI) and Kiska Metals Corp. (TSXV:KSK) announced last week that they have entered into a definite arrangement agreement whereby AuRico will acquire Kiska. With the proposed transaction AuRico expects to add six North-American non-producing royalties as well as wholly-owned exploration properties, including the Kliyul gold-copper project which is in the vicinity of AuRico’s flagship Kemess gold-silver-copper project in BC. The proposed transaction consists of a combination of ~C$2 million cash and ~8.2 million AuRico shares (at C$0.93/sh), implying a total value of C$9.6 million and is expected to close in Q1 2017. We view this tuck-in transaction positively as it highlight’s AuRico’s focus on building out its royalty portfolio. In our view, the completion of Kemess’ Environmental Assessment in Q1 2017 should allow AuRico to decouple its royalty and development, assets allowing it to unlock significant value for shareholders.  read more

Thursday, December 22, 2016 Derek Macpherson

NRN Reports Initial Results from Séquoi

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Northern Shield Resources Inc. (TSXV:NRN) announced preliminary results from the six holes drilled at its wholly owned Séquoi project located in the Labrador Trough in Quebec. Ultramafic intrusive rocks were visually identified in drill hole 16SQ-02. Of note, this hole also intersected a 15m segment of what the company believes to be a quartz and sulphide bearing shear zone that potentially contains gold (Figure 1), and further down, a 5m segment of what the company considers to be massive sulphides. Northern Shield has indicated that these results suggest the geologic model may have been altered, as is common with early stage exploration. We view the preliminary results as a technical success because of the massive sulphide intercept; however, assays are pending and the resultant grades may alter our view. Despite the lack of a true “discovery hole” and the altered geologic model, we do not believe that Northern Shield’s share price performance is reflective of the results; particularly since South32 (ASX:S32, LSE:S32) continues to fund the exploration program at the adjacent Huckleberry property. read more

Wednesday, December 21, 2016 Derek Macpherson

IDM Surfaces Value from Non-Core Yukon Assets

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IDM Mining Ltd (TSXV:IDM) announced this morning that it has signed a non-binding LOI to sell its portfolio of non-core Yukon assets to StrikePoint Gold Inc (TSXV:SKP). The proposed consideration is a combination of C$150k in cash and 10 million StrikePoint shares (valued at C$0.385 each), implying at total value of C$4 million. Based on the current structure of StrikePoint, post transaction IDM would own ~28% of StrikePoint’s outstanding shares. We note that StrikePoint also must complete C$1.5 million in exploration on the properties by year-end 2017 and IDM holds right of first refusal on the disposition of these assets for two years from closing. We view the transaction positively, as it allows IDM to surface value from this non-core asset and represents a premium to the ~C$650k (7.2 million shares at C$0.09) paid to acquire these assets. We expect IDM’s near-term share price performance to be primarily driven by the pending resource update and feasibility study for its flagship Red Mountain project in BC. read more

Tuesday, December 20, 2016 Derek Macpherson

RPX's Preliminary Drill Results Point to Growth

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Red Pine Exploration Inc. (TSXV:RPX) released preliminary findings from two drill holes and additional results from its ongoing core resampling program at the Wawa gold project in Ontario. The company reported encouraging preliminary findings from two exploration holes that suggest the deposit may be expanded to the North. In addition, Red Pine reported an update from its ongoing resampling program which continues to see the metal factor (grade x intersection length) of holes expand, suggesting the resource may be larger than currently reported. At $39/oz Au, Red Pine continues to trade at a discount to peers ($48/oz), suggesting that the potential for resource growth and planned ownership consolidation is not fully factored into the current share price.  read more

Monday, December 19, 2016 Derek Macpherson

Drill Results Likely to Expand Comstock's QV Deposit

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Comstock Metals Ltd. (TSXV:CSL) announced final results from its 2016 drill campaign at its QV gold property in Yukon’s White Gold district. The program consisted of a total of 34 holes spanning ~2.4km and indicates that the QV deposit remains open to the Southwest and Northeast but that further drilling is required at the Shadow and Stewart targets. We view the results positively as they demonstrate the potential for QV to grow beyond the existing resource. We believe that the pending winter exploration program at Comstock’s Preview SW gold project in Saskatchewan is likely to help close the stock’s valuation gap to peers.  read more

Monday, December 19, 2016 Derek Macpherson

Northern Vertex Starts Step-Out Drilling to Expand Resource

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Northern Vertex Mining Corp. (TSXV:NEE) announced it has initiated a 3,000m step-out drill campaign at its wholly owned Moss gold-silver project in Arizona. Northern Vertex has identified four priority targets outside the existing mine plan with the current drilling focused on the Moss Vein’s Western extension which extends for at least 1.5km west of previous drilling at the project. Considering the project’s relatively short-life (~5 years at 42k AuEq oz per year), even a small resource addition is likely to have a meaningful positive impact on its economics. Northern Vertex currently trades at a premium to peers, at 0.46x NAV vs. peers at 0.41x NAV, and at C$88/oz vs. peers at C$44/oz. We believe this premium valuation is warranted given funding is in place for the construction of the Moss project, coupled with the project’s stage (construction underway) and the project’s exploration potential.  read more

Thursday, December 15, 2016 Derek Macpherson

Austral's Drilling Expands Amancaya

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Austral Gold Ltd. (TSXV:AGLD, ASX:AGD) announced initial results from the recently completed 13.3km 93 hole infill drill campaign at its Amancaya project in Chile. Today’s results are from the northern part of the Central vein and returned above average grades, highlighted by 22.56 g/t Au and 713.7 g/t Ag over 7.5m, including 46.16 g/t Au and 1,445.4 g/t Ag over 3.5m (AM-038). In our view, these initial results are very positive and support our view that significant resource growth over the existing 448k oz AuEq (all categories) resource is likely. This is important since production from Amancaya is expected to play a key role in Austral’s plan to expand production from the current ~50k oz AuEq to 150k oz AuEq per year by the end of 2017. We expect that results from the drill campaign, a Prefeasibility Study (Q1 2017) and initial production from Amancaya, coupled with the completion of the mill expansion at Guanaco, to be key catalysts for the stock in the near term.  read more

Thursday, December 15, 2016 Derek Macpherson

UGD Continues to Intersect High Grades at Nieta

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Unigold Inc. (TSXV:UGD) announced drill results from five holes at Target A and Target B within the Candelones Extension deposit at its Nieta project in the Dominican Republic. Results were highlighted by 5.2 g/t Au, 3.6 g/t Ag, 0.7% Cu and 0.3% Zn over 2.7m (LP16-128) at Target B and 11.8 g/t Au, 3.5 g/t Ag and 0.2% Cu over 5.9m (LP16-124) at Target A. These additional results continue to support our view that higher grade zones are likely to be defined within the larger Candelones Extension resource and it is likely that as a result of this drill program, the grade and number of ounces contained within the Candelones deposit is likely to increase. Consequently, as additional exploration results demonstrate this potential, we believe Unigold is likely to close the valuation gap to peers.  read more


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