Unigold Inc. (TSXV:UGD) announced drill results from four holes at Target A within Candelones Extension deposit at its Neita project in the Dominican
Republic. The results were highlighted by 21.2 metres at 6.0 g/t Au; 0.9% Cu (LP16-114), supporting our view that the potential exists for a higher
grade resource within the larger lower grade system. While Unigold trades at a meaningful discount to peers, we believe that the definition of higher
grade targets should improve the projects viability suggesting a re-rating could be on the horizon. The company´s 2016 drill program is 70% complete
and results from Target B are expected in the near-term, potentially providing a near-term catalyst for the stock.
Results expand Target A
. Target A is a higher grade Au-Cu-Ag massive sulphide target and the results have been characterized by narrower
higher grade intervals within wider lower grade intervals. Results from this release were highlighted by 3.3 g/t Au and 0.4% Cu over 52.2m including
6.0 g/t Au and 0.9% Cu over 21.2m (LP16-114) and 0.6 g/t Au and Cu 0.1% over 106.5m including 3.8 g/t Au and 1.2% Cu over 5.7m (LP16-115). These results
follow-up drill holes from 2015 and earlier this year and continue to suggest that this higher grade massive sulphide zone is growing (Figure 1). As
well, these results are reminiscent of the grades, widths seen at GoldQuest’s (TSXV:GQC) Romero deposit, which has a higher grade core, with a lower
grade halo. However, it is early days for Target A and more drilling is needed to define this target's full potential.
As the higher grade targets develop, we expect the valuation gap to peers to close. Unigold currently trades at C$5/oz a steep discount
to peers which trade at C$45/oz. In our view as Unigold continues to release high-grade drill results, improving the viability of Nieta, it should
re-rate towards peers. The 2016 drill program is 70% complete and Target B drill results are expected in the near-term. As well, the company expects
to finish the current drill program with sufficient funds to initiate a follow-up drill program.
Company Description: Unigold Inc. (TSXV:UGD) is a Canadian-based, growth-oriented, junior natural resource company focused on exploring
and developing its gold projects in the Dominican Republic - a country highly prospective for gold and polymetallic mineralization.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
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