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July 2019

RNC Minerals (TSX:RNX) – Production Ramping Up – Expecting a Better Q3/19

Impact: Mildly Positive

RNC announced Q2/19 operating results highlighting that the company is getting close to its guided production rate of 40koz/year at Beta Hunt. In addition, the recently acquired Higginsville mine is expected to post improved Q3/19 operating results as a function of lower costs and better recoveries from the ore sourced from the Baloo pit. The newly combined assets (Beta Hunt/Higginsville) should have the potential to reach +100koz/year of gold production by 2021. We expect the market to start pricing in this potential upon the release of: 1) a resource update in Q3/19 and 2) updated mine plan/guidance in Q4/19.

FireFox Gold Corp. (TSXV:FFOX) – Jeesiö Coming in to Focus; IP Will be Key

Impact: Mildly Positive

FireFox provided an update on its ongoing summer field program at its Jeesio project in Finland. The company is testing it’s Utsamo target, which sits between Aurion’s Risti and Launi gold projects. Work to date at Utsamo suggests it hosts the major regional structure associated with local gold deposits. Upcoming activities include further sampling/mapping and detailed IP to define targets ahead of drilling. While early days at Jeesio, results to date are encouraging and further updates hinting at exploration success could drive a significant re-rating of this discounted stock.

Mako Mining Corp (TSXV:MKO) – Adding Higher-Grades at Las Conchitas

Impact: Mildly Positive

Mako released additional positive drill results from the Las Conchitas target area which supports our view that the company is positioned to substantially grow its mineable resources at San Albino. We continue to believe that Mako could be worth 3-4x where it is currently trading once there is clarity on project funding and updated economic study is released.

How to Play a New Bull Market in Gold

We believe that we are in a new gold bull market, as evidenced by negative real and nominal interest rates and over US$5.5B in funds flowing into physical gold ETFs. Our view is that smaller companies outperform in a bull market. Three keys to look at when investing in junior gold equities include scarcity, catalysts and potential.

Commentary – Golden Summer Conference

We believe that a new bull market has started in gold. This along with investor interest, caused us to host a pair of gold conferences in New York and Toronto, last week. Each conference was opened by Derek Macpherson, VP Research at Red Cloud, highlighting why we believe we are in a new bull market, and 3 keys to investing in it (link). Followed by presentations from Tonogold Resources (OTC:TNGL), Brixton Metals (TSXV:BBB), Mawson Resources (TSX:MAW), Fiore Gold (TSXV:F), Minera Alamos (TSX:MAI), NxGold (TSXV:NXN), Gran Colombia Gold (TSX:GCM), Orford Mining (TSXV:ORM), Pacton Gold (TSXV:PAC), Aquila Resources (TSX:AQA) and RNC Minerals (TSX:RNX).

SolGold Plc (TSX:SOLG; LON SOLG) – On the Path to a PFS; Still Discounted Value

Impact: Mildly Positive

SolGold has announced a positive work program for its Cascabel project where we are expecting Mineral Resource Estimate (MRE#3) later this year. With a recent PEA under its belt, SolGold appears to be undertaking extensive work programs to move the project one step closer to production. We continue to view Alpala as a world class project which the company is actively improving with ongoing development work.

Mawson Resources Ltd. (TSX:MAW) – New Discovery at Hut; Potential Scope Change

Impact: Positive

Mawson has released assay results from three holes, which yielded another high-grade discovery within the company’s Rajapalot Project in Northern Finland. We are encouraged by Mawson’s ongoing drilling success and continue to believe that the company is likely to at least double the resource at Rajapalot.

Orford Mining Corp. (TSXV:ORM) – Smoke Everywhere – Fire Not Far Behind

Orford provided details for its upcoming 2019 summer exploration program at its wholly owned Qiqavik property, where the company has potentially discovered a new gold belt in northern Quebec. We view Orford as an inexpensive call option on a highly prospective district scale exploration play and believe the company could re-rate on the first hint of drilling success.

GT Gold Corp. (TSXV:GTT) – Saddle North Grows Towards Surface

Impact: Mildly Positive

GT Gold released assay results from six holes at its 100% owned Saddle North deposit located in BC, which highlight the potential for an initial open pit operation. This would be additive to our block cave only preliminary estimate of a 14.2Moz AuEq resource grading 1.31g/t AuEq. We continue to believe that GT Gold has made an exceptional porphyry gold-copper discovery, which we believe is being ascribed very little value by investors in GT’s current share price.

Pacton Gold Inc. (TSXV :PAC) – Almost Ready to Drill Red Lake

Impact: Mildly Positive

Pacton has released preliminary surface sampling results which returned high-grade gold values from the Boyden target. Together with geophysical analysis, Pacton is quickly advancing its Red Lake project to be drill ready for later this summer. With exploration targets on two different continents and C$5.55M of funding in place, we expect exploration to be value creating for shareholders