October 2018

Amarillo Gold Corp. (TSXV:AGC) – Drilling to Improve the Resource and Feasibility

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Impact: Positive Amarillo Gold has announced drill results from the ongoing infill drill program at its Mara Rosa open-pit project in Brazil. The company’s goal is to upgrade the current inferred resource ahead of a feasibility study (H1/19). We expect the current M&I of 1.27Moz Au grading 1.30g/t Au to grow. These results support our thesis that Amarillo’s Mara Rosa project is a highly undervalued development asset in the hands of a proven development team, where drilling and the upcoming feasibility study should gain market support.

Novo Resources Corp. (TSXV:NVO) -Shifting to the Egina

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Impact: Mildly Positive Novo intends to aggressively explore it’s Egina tenements (948 km2), to which we currently ascribe no value in our preliminary valuation. As such, any success would be accretive to our estimates. Following recent bulk sample results, Karratha has transitioned to permitting ahead of large scale bulk sampling, shifting the company's exploration focus to Egina where it has laid out an aggressive program.

Red Pine Exploration Inc. (TSXV:RPX) – Impressive Results Validate Geological Model

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Impact: Positive We continue to believe that the market fails to appreciate the potential size, scope and strategic value of this land package. Red Pine Exploration announced the intersection of additional wide zones of high-grade gold at the Surluga deposit, which follows recent high-grade intercepts announced last week. These holes targeted the Jubilee Shear and intersected underground ore grade gold mineralization over significant widths, which continues to support our thesis that the Wawa corridor hosts a large gold system which may encompass multiple gold deposits.

Brixton Metals Corp. (TSXV:BBB) – Is Atlin the Next Barkerville-Like Gold Discovery?

Impact: Positive Brixton’s Atlin project has the potential to deliver a major discovery and we are pricing that possibility into our numbers. Based on some exceptional historic results, this district scale land package has the potential to deliver a major gold discovery. Similar to the Barkerville gold project, it is a historic placer mining camp and Brixton has already started the work to unlock its hard rock potential. We believe it is important to highlight that Brixton has now started to focus on Atlin to assess its discovery potential.

Novo Resources Corp. (TSXV:NVO) – Time to get Mining

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Impact: Mildly Positive Novo has announced a joint venture agreement and US$30M farm-in with Sumitomo Corporation at its Egina project. The update is a positive endorsement and provides technical and financial resources to materially move the project ahead. We expect important catalysts are coming as the company completes systematic bulk sampling at Egina.

Standard Lithium Ltd. (TSXV:SLL) – Breaking down the Brine; Rapid Rerate on the Horizon

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Impact: Mildly Positive Commissioning of the prototype pilot plant has started and is an important step before a commercial production decision (2020). We believe the commissioning of the prototype pilot plant is an important step towards securing an offtake agreement. This in turn would help fund the construction of a full-scale operation. We continue to believe that Standard Lithium is one of the best ways gain exposure to the space as it already has access to a producing brine field (permits in-a-hand, no exploration work required).

Anaconda Mining Inc (TSX:ANX) – Higher Grades = Higher Estimates

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Impact: Positive Positive Resource Surprise Drives NAVPS Increase. Positive resource update materially improves our NAVPS estimate by 24%. This improvement was driven by material improvement in the overall grade of the project and goes along with recent positive Q3 operating results. In addition, the company confirmed that the PEA, assumed too large a provincial NSR, (was 2%, now 1%) has also benefited our estimates.

Red Pine Exploration Inc. (TSXV:RPX) – Wawa Wows with Grade and Thickness

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Impact: Positive Red Pine Exploration announced wide high-grade intercepts from the Surluga Deposit, which follows recent positive results from the nearby Minto South Zone. These results continue to support our thesis that the Wawa corridor (Figure 1) hosts a large gold system which may encompass multiple gold deposits. We continue to believe that the market fails to appreciate the potential size, scope and strategic value of this land package.

RNC Minerals (TSX:RNX) – Gold Discovery Delivers Record Q3

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Impact: Positive RNC has announced record gold production from Beta Hunt. Production increased 135% QoQ and 199% YoY to 31.4koz Au. As expected, Q3 production materially benefited from the specimen grade gold processed in September. The company’s Father’s Day Vein discovery has resulted in a transformation of its balance sheet, enabling it to properly explore and develop Beta Hunt to demonstrate the potential of the pyritic sediment structures to host high-grade coarse gold. If the company is successful in demonstrating a repeat of this structure, we believe it could provide the next leg up on the stock.