Extensive Analysis

Balmoral Resources: Flagship Asset Martiniere Definitely Looks Like It's Heading In The Right Direction

Executive Summary:

  • Balmoral Resources is advancing two interesting discoveries, the Martiniere gold project and the Grasset nickel/copper/PGE deposit
  • Grasset is one of very few nickel deposits available in safe jurisdictions, decent grade but small
  • Martiniere is the flagship project, and continuing high grade drill results seem to define a collection of several interesting mineralized envelopes, all starting near surface
  • The company was too optimistic in the recent past about timelines of the maiden resource estimate, but I believe Q3 2017 to be my own realistic estimate for Martiniere this time
  • Martiniere could very well top 2M ounces of high grade gold, partly open pittable which could generate very interesting economics, making it one of the premier exploration plays in the Abitibi Greenstone Belt

Black Sea Copper & Gold: A New Eastern European Exploration Powerhouse

Kalabak region, Bulgaria

1. Introduction

Sometimes excellent exploration projects are being dropped by major resource plays during downsizing efforts in downturns. Some of those projects are easily forgotten, but other projects are almost immediately picked up by other, usually (much) smaller, companies that have been waiting for this specific opportunity to occur.

Set Up By Frank Giustra For Exploration Success: Fiore Exploration

Pampas El Penon; drilling

Introduction

With the recovering metals- and commodity sentiment in 2016 (although the Trump election (unexpected by many) and last rate hike were negative for gold and silver so far), a lot of influential groups and individuals in mining are setting up new ventures since the end of 2015 to position themselves the best they can for possibly the next big bull market in mining. One of these individuals is one of the most successful mining titans of our time: Frank Giustra. Having founded 5 (multi) billion dollar resource companies (for example Pacific Stratus Energy, the predecessor of Pacific Rubiales Energy, and Wheaton River, predecessor of Goldcorp and Silver Wheaton) and a multi billion dollar film studio (Lionsgate), he became a billionaire himself because of it. That wasn't it, as Giustra did some remarkable things before he started founding companies himself.

Kerrisdale Analysis On First Majestic: A Critical Review

Executive summary

  • Kerrisdale Capital Management, a short selling hedge fund run by Sahm Adrangi, wrote a short thesis on First Majestic
  • The author implied that this well-known silver producer was currently 70-80% overvalued, and also focused on the promotional background/nature of CEO Keith Neumeyer
  • He isn't the only big name promoting his company, and not the only big name betting on much higher metal prices
  • Although First Majestic actually has a high valuation based on the main ratios and multiples, 70-80% seems to be harsh and doesn't do justice to the company in my opinion
  • Surprisingly, after a few weeks since the report came out, it seems that instead of shorting, Kerrisdale actually called a bottoming process for First Majestic

One Of The Last Quality Gold Juniors To Come Out Of Bear Market Hibernation: Moneta Porcupine

Executive summary

  • Moneta Porcupine Mines is a gold developer, and owns the 100% owned 4.3Moz Au Golden Highway deposit in the mining friendly province of Ontario, Canada
  • The project has solid Dec 2012 PEA economics with an after tax NPV5 of $420M and IRR of 24.7% at a gold price of $1350/oz, and a market cap of just C$60.3M
  • Management likes to picture the company as an exploration play, looking for more high grade zones to improve economics
  • With already established, positive PEA economics it is also very much a development play in my view, probably of interest for mid tiers or majors looking for profitable, sizable assets in excellent jurisdictions
  • Moneta recently announced a long awaited C$7M private placement which is scheduled to close around September 7, 2016, which would finally enable them to advance Golden Highway after a long bear market

Terraco Gold: A New Royalty Player With An Excellent Cornerstone Asset And Substantial Growth Potential

  • Terraco Gold recently closed a $19M deal with Waterton, involving the Spring Valley royalties
  • As Waterton plans to advance the excellent Spring Valley project quickly and controls $2B in assets, Terraco can probably expect significant royalty payments in 3-4 years time
  • The company also aims at completing a PEA on the prospective Almaden/Nutmeg project in Q4 2016, which will be a big near term catalyst and significantly increase and indicate asset value
  • Terraco strives to become an established royalty player, and is looking to expand its portfolio rapidly

IDM Mining's Updated PEA Wasn't Exactly What I Hoped For, But Upcoming FS Could Be World Class

Executive summary

  • IDM Mining is developing Red Mountain, a small but high grade underground gold project in the Golden Triangle
  • The updated PEA was decent, but had relatively high capex and a short LOM, neutralizing the excellent after-tax IRR of 32.3% @$1250/oz
  • There are several realistic opportunities to improve LOM and economics considerably for the upcoming FS in Q1 2017
  • One of those being a likely significant increase in ounces, which will be defined by an updated resource estimate in November 2016
  • Recent sampling results on adjacent terrain, recently exposed through retreating glaciers, indicates excellent exploration potential

The Dalradian Resources FS Will Probably Define A Smaller But Still Excellent Project, The Impact Of Brexit Remains To Be Seen

Executive summary

  • Dalradian Resources has a high grade gold project in miningfriendly Northern Ireland, Europe, very high profile management/backers and no shortage of cash
  • Their Curraghinalt project is one of the highest grade and most economic gold projects worldwide
  • The Dalradian share price suffered lately because of negative market commentary on continuity of mineralization, mining dilution and politics
  • In my view the concerns on politics are legit right after the Brexit, but this hasn't cristallized yet, and continuity issues did cause the latest NI43-101 update to contain less Measured and Indicated resources than expected, but concerns on mining dilution are probably unfounded
  • The upcoming Feasibility Study will probably present a smaller project because of this, but still with excellent economics, still implying a real investment opportunity

Why Excelsior Mining's Perceived Permitting Risks Could Be Unwarranted

Executive summary

  • Excelsior Mining owns the unique Gunnison in situ recovery (ISR) copper project in Arizona, and has strong financial backers
  • The Gunnison project isn't just the only advanced standalone ISR copper project owned by a junior, but it also has the best economics of any undeveloped copper project worldwide
  • The recently updated PFS indicated excellent figures at just $2.00/lbs copper: an after-tax NPV7.5 of $563M and an after tax IRR of 26.2%
  • The company performed lots of testing to solidify those figures
  • Excelsior doesn't seem to risk the same local opposition regarding permitting issues as former nearby competitor Curis did on its Florence project, but it has suffered from longtime negative perceptions on its UIC/APP permitting procedures
  • I will discuss why these perceptions could be unwarranted.

Nemaska Lithium On Its Way To Become A Lithium Powerhouse

Executive summary

  • Nemaska Lithium has one of the best hard rock lithium deposit worldwide
  • The Whabouchi project, located in mining friendly Quebec, is fully permitted, and has the second highest grade of lithium oxide and second largest hard rock reserves globally behind the Greenbushes deposit in Australia
  • An updated Feasibility Study has been completed this year, generating solid results with an after tax NPV8 of US$928M (C$1.2B) and IRR of 30.3% based on a $439M capex and conservative $9500/t lithium hydroxide price, making it the most advanced lithium project around, and indicating lots of upside left after the recent run up
  • Nemaska just finalized the $12M Johnson Matthey Battery Materials off take agreement which was the last building block needed to complete the $38M funding needed for the important Phase 1 plant, and expects to start production from the Phase 1 Plant in Q1 2017
  • Through a series of catalysts, commercial production of the Whabouchi Mine and commercial Hydromet plant is planned to commence in H2 2018, which makes it the first new lithium producer in the Americas after Orocobre, and is in time to profit from the rapidly developing global EV/energy storage/fossil free trend

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