January 2019

Novo Resources Corp. (TSXV:NVO) – Sorting Results Continue to be Positive

Impact: Mildly Positive Novo continues to demonstrate the viability of its ore sorting technology which, has the potential of lower processing costs at its Karratha gold project. With much of Novo’s current value underpinned by its Beatons Creek resource, we believe the market undervalues the company’s Karratha, Egina and wider Pilbara projects.

GoviEx Uranium Inc. (TSXV:GXU) -Going Solar & Improving Economics

Impact: Neutral GoviEx announced a memorandum of understanding (MOU) with Windiga Energy to evaluate the feasibility of developing a solar-diesel energy power plant to supply the Madaouela project with low-cost renewable energy. While this is likely to only have an incremental impact on project economics, GoviEx remains one of the few late-stage development uranium companies positioned to start production in the next uranium up-cycle.

Atico Mining Corp. (TSXV:ATY) – Guidance Suggests More than the Market Cap Implies

Impact: Positive Atico reported production results for Q4/18 setting records for both the quarter and the full-year 2018. We expect the steady ramp-up at El Roble to continue with 2019 guidance suggesting the company is poised to have another record year. We view Atico as an undervalued low-cost copper-gold producer, with significant exploration upside that we expect to generate significant free cash flow in 2019.

Standard Lithium Ltd. (TSXV:SLL) – Adding Tonnes in Arkansas

Impact: Mildly Positive With the announcement of a second maiden resource at its South- West Arkansas Project, Standard Lithium now has a sizeable aggregated resource providing a future growth opportunity while driving its flagship South-Central Arkansas Project towards production. With the added tonnes from the second maiden resource the company trades at a further discount to peers despite being a low-risk lithium developer in North America.

North American Palladium Ltd. (TSX:PDL)- A Clean Technology FCF Machine

With materially improved operations and a rising palladium price, we believe North American Palladium is poised for a significant re-rating and that its shares are worth C$21.17 suggesting 62% upside. Recent operating improvements and a new LOM plan that points to production growth combined with a strong palladium price, we believe this company is poised to generate substantially more FCF and EBITDA than its share price reflects.

RNC Minerals. (TSX:RNX) -Sediment Does Host High-Grades

Impact: Positive Initial results from the ongoing 40,000m drill program at Beta Hunt have returned exceptional grades. The results suggest that our upside case is modestly more likely, with our current fair value estimate at C$0.97 (was C$0.94). We continue to expect ongoing exploration and development work to be the key catalysts for demonstrating the potential that we see at Beta Hunt.

NxGold Ltd. (TSXV:NXN) – Moving Forward at Mt Roe

Impact: Mildly Positive NxGold is advancing its Pilbara projects towards a maiden drill program. We continue to believe that the current enterprise value (EV) of the company does not reflect ongoing exploration success or the potential that this company has to make a gold discovery in the Pilbara. With funding in-place to advance this project through initial drilling, we believe the market is providing investors an opportunity as it has yet to price in this company’s fair value.

FireFox Gold Corp. (TSXV:FFOX) – Initial Results Demonstrate the Potential of Mustajärvi

Impact: Positive Phase I of drilling at FireFox’s Mustajärvi project successfully intersected high grade gold at depth and validated historic exploration results near surface. In our recent report on Finland, we outlined FireFox as having a potential value of C$0.63/share contingent on continued exploration success at Mustajärvi. As the company moves in to Phase II of drilling, we view this progress as aligning well with our estimates.

Mawson Resources Ltd. (TSX:MAW) – Ready, Set, Drill

Impact: Positive With renewed exploration permits for the next 3 years, four drill rigs, a ~C$ 4.5M budget and a 70-person workforce mobilized we expect that Mawson will begin to showcase the potential we see in their ability to uncover a significant gold deposit at Rajapalot. In our recent report on Finland, we highlighted our belief that Mawson could be worth C$0.79/share and we expect coming newsflow to prove this.

Finding Our Way in Finland

We believe Finland has the potential to yield multiple major gold discoveries. We recently had the opportunity to visit several projects in Finland which was highlighted by the fact that despite having a long and significant mining tradition, there has been a late move (1990’s) to commercial gold exploration creating opportunity in this top-notch jurisdiction. Our favourite Finland focused gold exploration companies include: Mawson Resources Ltd (TSX:MAW), FireFox Gold Corp (TSXV:FFOX), and Aurion Resources Ltd (TSXV:AU). We visited a number of other quality projects discussed in-detail within this report.