RCKS Talk

09-Jan-2019

Brixton Metals Corp

"More Cobalt and More Kimberlite"

Impact: Mildly Positive

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Brixton continues to deliver drilling success in the Cobalt camp expanding a recently discovered high-grade silver-cobalt zone in addition to discovering a shallow kimberlite.
We believe Brixton’s Atlin project has the potential to yield a significant gold discovery in 2019 and believe the current valuation is underpinned by its multiple prospective projects in North America.

Highlights:
    • Cobalt results continue to demonstrate potential. Final results from the company’s 2018 program continue to deliver high grades on the heels of the company’s recent announcement of one of the best drill holes in the Cobalt Camp (6m grading 4719 g/t Ag and 0.33% Co). Located 3km southeast of the historic Langis mine (Figure 1), these latest results from the Benner Harris target highlight 3m at 41.03 g/t Ag and 0.44% Co within 47m from surface. The mineralization remains open and more drilling is warranted, and the company is looking for a way to maximize the value of this project with shareholders.
    • Kimberlite results give investors a free option. Brixton has delineated a 50-hectare kimberlite (Figure 2) intersected in 22 of 24 holes drilled at shallow depths. The company is waiting on results of kimberlitic material analysis and the diamond potential may attract interest from diamond producers.
    • Focus still on Atlin – a big potential target. We believe that Brixton’s Atlin project has the potential for a major discovery, like Barkerville, based on historic drill results, previous placer mining and a district scale land package (1,004 sq. km). The company is ramping up exploration with plans for further surface work and geophysics ahead of spring 2019 drilling.
Valuation:
Our probability-weighted valuation method estimates Brixton’s current share price could be C$0.22/share (Figure 1). Based on what we know today, we continue to believe that Atlin could deliver a major discovery (+3Moz, 5% chance) and should deliver an economic deposit (~1Moz, 45% chance), both of which should deliver material share price improvements (See Figure 1). Additionally, we believe the current share price, is supported by the company’s three other projects, where management is looking to maximize value. Upcoming catalysts: 1) Surface work results from Atlin (Q2/19) and 2) Drill results from Atlin (Q3/19) and 3) Kimberlite analysis results from Langis (H2/19).
 

Derek Macpherson | VP Mining Analysis 
Edmond Thorose | VP Corporate Development
Alex Pitcher | Associate, Mining Analysis
Beatrice Cigagna | Associate, Mining Analysis 

 
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Brixton Metals Corp - TSXV:BBB - 2,3,4


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