Value Microcaps Junior Miners

[Lone Clone]

KRR x 2, IAU, KTN, OGC

Australian gold/nickel miner Karora Resources aka KRR released their Q1 production results, and we learn they had a bit of a rough quarter, with production down about 10% from Q4 to 36147 oz Au. Min you, even those results are pretty good when you consider that one of their mills had a two week shutdown due to local grid power disruptions, the other having equipment issues, and two weeks of heavy rain that impacted all the producers in the region. All these problems have been cleared up and KRR is now back at full production.

Thanks to selling over 40k oz Au in the quarter, they were able to increase th eir cash stashby $4.8M during the quarter to $87.5M.

It is interesting to note that in spite of a less than stellar quarterly report, KRR's stock set a 52-week high on the day this PR came out.

https://www.siliconinvestor.com/readmsg.aspx?msgid=34626496

Now we know why KRR hit that 52-week high. Today, they announced a merger with fellow Australina gold miner Westgold Resources. I must confess that at this point all I know about Westgold is that their shares recently got hammered when they reduced guidance, so I can't really comment on the whether KRR shareholders will be getting enough WSG shares until I do more research.

There are several aspects to the deal I do like. First Westgold says they will apply for a TSX listing if the deal goes though, meaning current KRR shareholders won't have to deal with trading ASX shares. As well, current KRR shareholders will receive about 60 cents cash per KRR share, plus shares in a SpinCo which will hold shares of and royalties on lithium explorer Kali Metals (KMI.AX) plus cash and 'the right to receive a deferred consideration payment due to Karora relating to the on-sale of the Dumont asse'.

Pending further analysis, I am leaning toward holding through the transaction. I have seen speculation that competing bids might emerge.

https://www.siliconinvestor.com/readmsg.aspx?msgid=34628995

I wonder what Nevada gold miner/developer i-80 Gold aka IAU is going to do with all the money they are raising. IAU announced yet another PP, this time for $85M, quickly upsized to over $100M. This one is not as favourable to current stockholders, as it includes a half warrant priced at $2.25 in each unit. Nevertheless, I used to resulting dip in IAU's share price to add to my holdings at what I still continue a good price.

IAU remains very coy about what they will use the money for, but I expect we will be surprised at some point this year. I certainly hope so, given that this was priced below the 52-week low.

https://ca.finance.yahoo.com/news/80-announces-upsizing-previously-announced-143500980.html

Another company that has done multiple PPs of late is Kootenay Resources aka KTN. Their latest one was announced today as raising $5M at about the current share price, albeit including a half warrant, but it was quickly upsized to $9M. They do mention that part of the proceeds will be used for exploring KTN's Columba silver prospect in Mexico, so I hope the upcoming drilling goes well.

https://ca.finance.yahoo.com/news/kootenay-silver-announces-upsize-previously-163500763.html

FWIW, in the wake of a site visit to the Haile gold mine in South Carolina plus new Technical Reports on Haile and the Macraes gold mine in New Zealand,, BMO issued a new anlyst report on Oceanagold aka OGC. They liked the better water management system at Haile plus the good progress on the undergroind mine, but didn't like the reduction in mine life at both Haile and Macraes from the Technical Reports. Overall, their NAV for OGC declined 10% as a result of the Technical Reports, but citing the excellent growth prospects, they kept OGC at Ourperform with a target of $3.75.

Saville continues to maintain that we are near a correction in the PoG of 7-10% over 1-2 months, but also that this correction could begin from a significantly higher price. He also points to the ongoing divergence between the PoG and the amount of physical gold held by SPDR. This indicates we are still in the early phases of a gold bull as these two indicators move up together during the late stages of a gold bull market.

I like the way IKN describe the current situation of the PoG -- 'it continues to rally without the aid of capitalism'.