Value Microcaps Junior Miners

[Lone Clone]

The IKN newsletter surprised me with a small speculative buy of Chesapeake Gold aka CKG shares. The accompanying write-up brought me up to date in a number of ways, but since it is a paid publication, I will just mention two: 1) the latest PEA does include a significant drop in the formerly outlandish capex, now down to under $400M (which is still a lot); and CKG is now a bet on an unproven technology brought along by the new CEO which is supposed to be able to turn the sulphides into oxides, meaning no need for a very expensive autoclave.

I stand corrected, but am still not ready to buy any myself.

FWIW, in response to Sandstorm Gold Royalties aka SSL's announcement about a transaction involving their equity holdings, TD put out a new analyst report that called the developments Potentially Positive, and kept them at Buy while raising their target to $11.50. Interestingly, they note that during its conference call SSL said it was in discussions with several companies to purchase a gold stream on the next mine that those companies purchase.

Canada Silver Cobalt Works aka CCW released more drilling results from their Castle East property in Ontario, where they are preparing to release an Updated Resource Report in a few months. Once again, they results are narrow but high grade, with the headline result being 5887.59 g/t Ag and 0.17% Co over 0.53M (which CCW bizarrely also reports in AuEQ even though there is no gold in the deposit). They have probably extended the veins a significant distance, though it will require more drilling, which is ongoing, to confirm the length of the extensions.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33721975

Goliath Resources aka GOT announced an almost $3M increase to their previously announced financing of $11M, which will allow them to increase this year's exploration on their Au prospects in BC's Golden Triangle. It still feels weird and offputting to own shares in a company associated with the incredibly overrated Quinton Hennigh, but his name sure attracts money.

https://ca.finance.yahoo.com/news/goliath-increases-financing-13-825-120000469.html

Nomad Royalties aka NSR announced the results of its first full year of operations. You wouldn't know it by how the stock has traded but that actually had a pretty good year, more than doubling their credit facility, acquiring a number of streams, and instituting a dividend. After selling 3231 AuEq oz in Q4, they managed to end the year with a cash stash of $12.4M. In Q4, 79% of their revenue was from PMs and 21% from their Caserones Cu royalty.

To this point they have managed to keep the share structure pretty tight -- 61M basic, 88M FD -- so we'll have to monitor how they do on that going forward.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33722024

B2Gold aka BTO released 2 PRs.

The first was about new drill results at their JV with Aurion Resources at the Helmi gold prospect in northern Finland. This was the first drill programme at this blind discovery from last year, and it does look like they are on to something, with intercepts like 1.11 g/t Au over 45.80M from 139.00M from one hole and 1.78 g/t Au over 10.85 m from 30.60M and 18.00 g/t Au over 1.40 m from 209.10M from another. The strike length is now over 1300M and another drill programme has begun.

I need to take a closer look at Aurion; this discovery has opened up the possibility of more deposits being found on their nearby 100%-owned properties.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33723692

Of more interest to the market was the release of BTO's Q4 and annual results. Earnings came in above expectations thanks to lower than expected costs, and as a result their cash stash is up to $673M and their credit facility remains undrawn. A few years ago this would have meant that the company, which back then was always ready to take on debt to achieve growth, would be ready to make a purchase or two, but these days they seem to have become more conservative, relying more on organic growth on their existing properties for now.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33723688

FWIW, TD saw the results as slightly positive but kept them at Buy with a target of $9, while , while RBC, already more pessimistic on BTO, also saw the results as slightly positive and kept them at Sector Perform with a target of &US4.75.

I-80 Gold aka IAU announced a milestone today withe the commencement of mining has begun at the first of four Nevada gold deposits they will be bringing into production over the next three years. They recently announced a new high grade discovery proximal to existing underground workings at Granite Creek, and that ore is what they will be stockpiling for delivery to Nevada Gold Mines' nearby facility for processing. (It will take a few years for IAU to get their own processing facilities at Lone Tree back into working shape.)

It will be close to the end of the year before they actually start producing gold, but this announcement of commencement of mining ahead of schedule is welcome news.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33723729

Of interest to investors in Endeavour Mining aka EDV, Geodrill announced they have signed a contract to perform 350 km of drilling on a number of EDV's properties in western Africa over the next two years. EDV said that with the recent acquisition spree concluded, they are going to be focusing on exploration for the next while, and here is tangible proof.

https://ca.finance.yahoo.com/news/geodrill-announces-usd-31m-contract-120000919.html

Kootenay Silver aka KTN released more drilling results from the California target on the Cervantes property in Sonora, Mexico, JVed with Aztec Minerals. This set of drill holes has expanded the mineralization at California to an envelope 250-500M wide, 900M long, and 245+M vertically, with the headline result being an impressive 167.2M grading 1.002 g/t Au including 24.4M grading 4.247 g/t Au. This drill programme is complete with more assays pending, and the JV has moved on to mapping and sampling in preparation for another upcoming drill campaign.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33723775

Oceanagold aka OGC released its annual results after a difficult 2021, hit by weather and startup issues at its Haile Au mine in the US and permits issues, since resolved, at its Didipio Au/Cu mine in the Philippines. Still, they managed to make a decent profit and ended the year with a cash stash of $133M They also reiterated their 2022 Au production guidance of 445k-495k oz Au plus 11-13kt of Cu at a cash cost of $675-775 per oz Au. (As near as I can recall, most everything in this PR was known as it was covered in previous PRs.)

https://www.siliconinvestor.com/readmsg.aspx?msgid=33726380

FWIW, Barclays kept OGC at Equal Weight with a target of $2.50, BMO, citing a return to Free Cash Flow generation, kept them at Outperform with a target of $3.50, and RBC, saying they are 'heading in the right direction', kept them at Outperform and raised their target from $250 tp $2.75.

As well, BMO, in reaction to yesterday's annual results, kept B2Gold aka BTO at Outperform with a target of $7.

Calibre Mining aka CXB delivered two PRs.

The first concerns their annual results for 2021, a pivotal year for the company as they extended their reach beyond Nicaragua by acquiring Fire Gold and it producing and development assets in Nevada. The results were largely positive, as they met or exceeded expectations for production, earnings, and cash flow. Cash costs were still relatively high, around $1000 per oz Au, but thanks to the high PoG they were able to increase their cash stash to $107M with no debt. (Some of this cash will have used while closing the Fiore deal earlier this month.)

https://www.siliconinvestor.com/readmsg.aspx?msgid=33726456

The second PR highlighted a strength of CXB, exploration and development, outlining how they have increase their reserves in Nicaragua to more than 1M oz Au in spite of production depletion.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33726498

I had stayed away from CXB due to the country risk in Nicaragua, but decided to hold my Fiore shares through the takeover to see what would happen. Given the latest news out of Nicaragua -- unreserved support for the Russian invasion of Ukraine -- I have just about had it. I will sell out once I study the trading patterns a bit more closely and pick a target price.

And FWIW, in response to these PRs TD released a new analyst report calling the impact 'slightly positive' but kept them at Buy with a target of $2.25.

One of the ways a prospect generator like Riverside Resources aka RRI keeps the doors open is by staking properties or acquiring them on the cheap, doing some exploration to raise the value, and then selling them on. Today they announced they have successfully followed this process with the Pima property in Sonoma Mexico being sold to Agnico-Eagle Mines. This property is inside AEM tenements near the Santa Gertrudis mine, and was part of a package of properties acquired by RRI from Millrock a few years ago. They give no numbers connected to the transactions, other than to say that what they got for Pima paid for the entire transaction with Millrock, leaving them with the other four properties for free.

Canny operators indeed -- you can see how they have managed to keep their share count so low.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33726523

In the years I have been following Northern Shield Resources aka NRN moves smoothly from one property to another, one target to another, never finding exactly what they are looking for, but always finding ways to phrase the situation hopefully. Their latest PR, which reports drilling results from the Root & Cellar Au/Cu prospect in Newfoundland, is no exception. No, they didn't get drill results to match the surface, but now they are sure they oriented the drill holes incorrectly, and plan another try with drill holes instead aimed at N-S trending targets. We shall see if this is the time they finally get it right.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33726545