Value Microcaps Junior Miners

[Lone Clone]

IAU, CEE, NRN, KRR, KTN, WM, CKG, GOT, OGC, SSL, NSR, CAPT, BTO, EDV

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IAU, CEE, NRN, KRR

I-80 Gold aka IAU announced another set of excellent drill results from the newly-discovered South Pacific zone at its Granite Creek gold property in Nevada, with headline results including 13.8 g/t Au over 2.1M & 25.2 g/t Au over 2.2M in hole iGS21-16 plus 13.6 g/t Au over 4.7M & 17.6 g/t Au over 3.0M in hole iGS21-20. The SPZ has now been extended to a strike length of approximately 600M and a dip length of approximately 250M and remains open for expansion along strike and at depth, and is destined for development and production over the coming few years. On the basis of these results the drill campaign has been extended to 30km. As well, they are extending the decline currently under construction to approach the SPZ Zone.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33808858

Centamin aka CEE released its first quarter report. The Sukari gold mine in Egypt has been in turnaround mode under new management for about a year now, and the results are starting to show from initiatives such as a revised mine plan, building a solar power plant and a paste till plant, and transitioning mining from contractors back to in house. As well, the reinstated exploration programme on the Sukari tenure is starting bear fruit. As expected, production was lower in Q1 at just over 93k oz Au, but CEE maintains their full year guidance of 430k-460 oz, so it is expected better quarters lie ahead as the transitions are completed. As of Mar. 31, their cash balance had declined to $217M, but this is expected to grow over the remainder of the year as transition expenditures end and production and costs decrease. They remain unhedged and debt-free.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33808887

Northern Shield Resources aka NRN announced they have resumed exploration on their Root & Cellar gold/copper prospect in Newfoundland. After some drilling last year, they are back to mapping and sampling around IP anomalies, to be followed up by trenching if they find anything worthwhile. It is revealing that they don't even mention what was once their hot prospect Shot Rock in Nova Scotia, at all any more.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33809268

Karora Resources aka KRR released the Q1 results from their gold mining operations in Australia. It was a difficult quarter due primarily to Covid causing staffing shortages, but they still managed to produce 27489 oz Au and are maintaining their guidance for 2022. They also invested heavily in development this quarter, so their cash balance dropped to $78, but that should start growing again, particularly when they reinstate nickel production later this year.

I'll be interested to see what costs have been when they release their financial results.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33809291

And FWIW, I read several of the large brokerage's outlooks for PM and PM equities today. In general, they are cautious, as the easy monetary policy tailwind turns into an increasing interest rates headwind, and cost inflation eats into margins. That said, RBC also increased their price deck for gold and silver in each of the next five years and the long term by 5-12%.

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KTN

Kootenay Silver aka KTN made a major announcement the other day, but very few heard abut it because it was on behalf of a spun-out subsidiary named Kootenay Resources that is not listed, and for some reason it was decided that neither 'Kootenay Silver' or 'KTN' would appear in the PR. This is just one of the problems with this kind of spinout, another of which was recently foisted on Silver Bull shareholders.

Kootenay Resources was set up to hold the company's properties in BC, of which there are dozens. KTN (and presumably Kootenay Resources too) is a project generator that may do some preliminary exploration on their prospects but looks to farm them out so another company that funds the exploration in exchange for a partial interest. In this case, it is Copley, a gold prospect on the Nechako Plateau. Centerra Gold is earning 70% in exchange for $400k cash and $4M in exploration expenditures.

KTN has been making noises about listing Kootenay Resources; let's hope the $40k goes to pay for that so shareholders can get some benefit.

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WM, CKG, GOT

Of late, when Wallbridge Mining aka WM has released a PR concerning its Fenelon gold project in Quebec, it has contained the results of infill drilling from zones of known mineralization. Instead, this time we hear about drilling in the Ripley Zone, located 1km south of the Fenelon deposits. WM has defined the Ropley deposit over an 800m strike length, and close enough to surface that followup drilling is planned to see if it is open pittable. As well, there will be more drilling into the 1km gap between Ripley and Fenelon. If things go well, it is easy to envisage the open pit being extended southward all the way to Ripley.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33821340

Chesapeake Gold aka CKG released the final results from its most recent drilling campaign on its Metates gold project in Mexico. They grades were significantly higher than those in the existing Resource Report, by 22% in fact, so CKG is going to develop a revised mine plan which will feed into the next Resource Report

https://www.siliconinvestor.com/readmsg.aspx?msgid=33819366&srchtxt=chesapeake

Goliath Resources aka GOT, which is preparing for this year's drilling season on its Golddigger gold/silver prospect in BC's Golden Triangle, released a PR details its drilling plans, including the announcement of the hiring of a four drill rig. This year's programme is expected to include 24km of drilling in 85 holes. The main focus will be on further definition of the the minerlaization already established in the Surebet Zone, in preparation for the first Resource Report.

I continue to be baffled by the way GOT trades, presumably caused the leftover from previous times when it was heavily promoted, but I am not complaining about the higher share prices of late.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33817565&srchtxt=goliath

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OGC

Oceanagold aka OGC has been on a tear lately, and with the release of their Q1 results we find out why. Halle in the US, Didpio in the Philippines, and Macraes in New Zealand all exceeded expectations, Halle very much so, leading to Q1 production of 134k oz Au & 3.5kt Cu, well above expectations, with costs coming in well below expectations. As a results they generated $63M in free cash flow and $79M in profits, allowing them to substantially pay down their debt while increasing their cash stash by over $60M to $195M. OGC also reiterated their annual guidance, which since they outperformed in Q1 means they are either planning on under-promising and over-delivering or that they expect some difficulties later this year. I suspect it is a combination.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33823004

FWIW, BMO as a result kept OGC at Outperform but raised their target by 50 cents to $3.75, while RBC kept them at Outperform but raised their target to $4.

Alas, I never did get around to adding to my OGC shares while they were down in the dumps, something I now regret.

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SSL, NSR, CAPT

Did you anticipate Sandstorm Gold Royalties aka SSL buying Nomad Royalty aka NSR? Me either. Judging by how the two stocks traded in the wake of the announcement El Marketo thinks NSR shareholders got the better of the deal.

But maybe not, because that's not the only deal SSL announced today. Besides spending $C755M for NSR's portfolio, mostly precious metals royalties and streams, SSL is also spending $C525M to buy the Basecore portfolio, mostly related to copper royalties and streams. As well, SSL is trading one of the NPI's it acquired to Horizon Copper in exchange for a royalty on Anamina, $50M cash, shares, and a $105M debenture.

It will be hard to evaluate the eventual impact of this complex deal until a few years have gone by. As a holder of both SSL and NSR shares, I am going to withhold judgment for now.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33827133
https://ca.finance.yahoo.com/news/nomad-royalty-announces-friendly-acquisition-105500407.html

FWIW, TD put out a new analysts report regarding the SSL transactions. They saw the impact as Mixed, keeping SSL at Buy with a target of $13. While liking the increased diversification and guidance, they also comment that, to paraphrase, even their highly-paid professionals will take some time to fully evaluate the potential impacts of this deal.

It's a shame for Capitan Mining aka CAPT that they put out their latest PR in the middle of a downturn for PM stocks. It contains the results of 5 more holes from the Jesus Maria silver Zone on their Cruz de Plata (formerly Penoles) prospect in Durango, Mexico. Four of the holes were stepouts, 2 each extending the minerlaization on either end of the zone, while the other was an infill hole testing the high grade silver shoot in the middle of the zone. It was the latter that generated the headline intercept of 1.5M of 2406 g/t AuEq within 16.8M of 332 g/t AuEq. I was a little skeptical when they started in on this drill programme but it looks like they might be on to something, particularly if they can define other nearby deposits on the property.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33827150

And a few updates from the IKN newsletter, which goes into much more detail on these and related issues.

Anti-mining Petro looks more and more set to become the new President of Colombia.

The Peru Mining Ministry is descending into chaos but it's unlikely the President won't last much longer in office.

Ecuador's pro-mining President completed his first year in office under great pressure and is unlikely to be able to get much of his agenda implemented.

Bottom line, stay away from Ecuador and Colombia and stick with Peru, Chile, and parts of Argentina. Brazil will join the latter once Lula replaces Barsinolo.

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BTO, IAU

i-80 Gold aka IAU released the results from the final hole of the recently-completed drill campaign in the South Pacific Zone of its Granite Creek gold project currently under development in Nevada. It is anticipated the the SPZ and the nearby Ogee Zone will be accessed by extending existing underground workings, so coming up with 16.3 g/t Au over 15.7M and 33.7 g/t over 3.7M in a hole right next to those workings is great news. Over the rest of the year, the existing decline will be extended into the SPZ even while they carry out more drilling followed by a Resource Report. The SPZ remains open along strike and at depth, so the Resource Report, which will include the Ogee Zone, could be spectacular.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33828526&srchtxt=i-80

B2Gold aka BTO released its latest financial quarterlies, and they were pretty darn good. Earning came in above expectations due to costs being lower than expected, with cash costs at $699/oz Au. BTO has already told us that the second half of the year is expected to be stronger, so if they can maintain these low costs they will generate a great deal of cash flow, which as far as I can tell is not yet reflected in the share price. As always, the major risk factor for BTO remains the location of several of its mines in Burkina Faso and especially unstable Mali.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33829871

FWIW, in response TD issued an analyst report on BTO which saw the release as Slightly Positive but kept the rating at Buy with a target of $9.50. Meanwhile BMO kept them at Outperform with a target of $7.

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BTO, EDV, IAU, KTN, SSL

B2Gold aka BTO and Aurion Resources aka AU released the results of the first three holes from their second drill campaign at Helmi, located in the Central Lapland Greenstone Belt in northern Finland.There are 26 more holes to be released, but close to surface intercepts like 2.05 g/t Au over 77.5M from 41.7M down hole, including 4.18 g/t Au over 24.55M are encouraging enough that they have already scheduled another drilling campaign over the summer and fall.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33829914

West African gold miner Endeavour Mining aka EDV released their Q1 results. They highlight them as positive by comparison to Q1 last year, while I found them a little disappointing compared to Q4. But of course Ms. Market gets the final say, and even in a poor environment for PM stocks and stocks in general, EDV is up today on both the LSE and TSX.

The numbers -- 357k oz Au at a cash cost of $723/oz, the latter roughly the same as Q4 -- are certainly encouraging, and it does appear likely they might be able to exceed guidance for the year if this continues. Encouragingly, they did add $90M to their cash stash, growing it to over $1B, while also paying out $101 in shareholder returns via dividends and share buybacks (About 1M shares were bought and cancelled during Q1.) They also continue to focus on exploration, both brownfield and greenfield, The next items in their development pipeline are the expansion at Sabodala-Massawa in Senegal, which is just underway, and an FBS underway at Lafigué in Cote d'Ivoire. They will also be installing a new circuit at Ity to improve reagent consumption and recovery.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33831422

In response, RBC released a new analyst report which saw the release as Positive. They kept EDV at Outperform but increased their target to $46.

Yesterday, i-80 Gold aka IAU released a set of drilling results from the South Pacific Zone at their Granite Creek gold project in Nevada. Today we get results from the nearby Ogee Zone. Both Ogee and SPZ are near the existing underground working at Granite, so IAU is driving a decline from those workings to aid in exploration and to start production once permits are received, hopefully by mid-year. Ogee is projected to be the initial source for ore, so getting results like 27.7 g/t Au over 12.6M, 54.7 g/t Au over 5.9M, 22.9 g/t over 6.4M, & 11.2 g/t over 11.1M in the first holes is very prospective. The ore will be trucked to a nearby facility for processing until IAU has finished renovating their Lone Tree facilities.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33831485

Kootenay Resources aka KTN reports more results from its current drill programme on the California Zone on the Cervantes Au prospect in Sonora, Mexico, JVed with Aztec Resources. Most of the results merely conformed the existence of low grade gold mineralization over decent distances in the California Zone, but they also found a new zone of copper/gold mineralization called Jasper about 600M west of California.

https://www.siliconinvestor.com/readmsg.aspx?msgid=33831578

In response to Sandstorm Gold Royalties aka SSL's announcement of several transformational transactions the other day, TD came out with another, more detailed, analyst report calling the transactions Potentially Positive while keeping SSL at Outperform with a target of $13. They like the increased liquidity and diversification, but remain concerned about the quality of some of the underlying assets.

This also gives me a chance to mention something I forgot the other day, that as the result of the transactions SSL increased their 2022 guidance from 65-70k oz AuEq to 80-85 oz AuEq.