September 2019

Mako Mining Corp. (TSXV:MKO) – Adding Ounces at San Albino; Construction 25% Complete

Impact: Positive Mako Mining Corp. released more high-grade results from its infill drill program at its wholly owned San Albino gold project in Nueva Segovia, Nicaragua. It appears that this infill program is continuing to add ounces at higher grades. The open pit project is currently in construction and is roughly 25% complete. In our view, the market is undervaluing the cash generating potential and exploration upside that Mako has, we expect the stock to re-rate with additional exploration success as first production approaches in H2/20.

RNC Minerals (TSX:RNX) – More High-Grade Gold from Beta Hunt

Impact: Mildly Positive RNC Minerals announced that additional high-grade coarse gold has been recovered at its Beta Hunt Mine in Western Australia. An estimated 1,750 ounces of coarse gold has been recovered from 160 meters south and 25 meters below the Father’s Day Vein discovery. We believe that Beta Hunt is likely to continue yielding similar spectacular high-grade zones; however, RNC must demonstrate it can be a profitable producer based on the current resource (excluding these higher grade “jewelry boxes”) before the market will reward them for the additional upside.

Anfield Energy Inc. (TSXV:AEC) – Charlie Doesn’t Need Government Handouts; But it Would be Nice

Impact: Mildly Negative Anfield Energy Inc reported the results of its Preliminary Economic Assessment (PEA) for the its Wyoming-based Charlie Uranium Project. The PEA highlights a low-initial capital, reasonable cost ISR project. Based on our updated estimates, we expect the project to have an IRR of 43% at US$55/lb U3O8. This PEA highlights that the Charlie Uranium Project is likely to be one of the first developed when the long-term uranium price rises to a sustainable level.

Pacton Gold (TSXV:PAC) – Two Camps, One Mission — High Grade Gold

Pacton is exploring for gold in two of the world’s most prolific gold camps – Red Lake in Canada and in the Pilbara region of Western Australia. In Red Lake, Pacton aims to repeat the Great Bear success story, by demonstrating that the southern half of the camp could be as rich as the north. In the Pilbara, the company is literally on the hunt for the motherlode and intends to drill a number of high-grade gold showings. With exploration targets on two continents and C$5.6M of funding in place, we expect the coming season to be value creating for shareholders.

Fission Uranium Corp. (TSX:FCU) – Underground Only PFS In Line with Expectations; Onto Feasibility

Impact: Mildly Positive Fission Uranium Corp has announced the results of its prefeasibility study (PFS) for an underground-only mining scenario which has lower opex and capex than the previously released hybrid PFS. As well, the operating and economic parameters within this study match the previously released underground only PEA and our estimates. This study paves the way for the company to proceed to feasibility and extend mine life by upgrading known targets within the planned underground footprint. We continue to believe that the high-grade nature and politically safe jurisdiction of Patterson Lake South (PLS) warrants a substantial premium relative to current prices. Development assets like PLS should be among the first to re-rate in a stronger uranium market, especially with an estimated IRR of 29%.

Novo Resources Corp. (TSXV:NVO) – Finding Low Cost Processing Options for Egina

Impact: Mildly Positive Novo Resources has announced that the company has completed encouraging gold processing trials for its Egina gravel gold project in the Pilbara region of Western Australia. The update is a positive one as this could provide the company a low-cost dry processing option for this unique deposit. Technical work and mechanical sorting are needed to allow for proper grade control and the processing of the samples. Novo continues to add value to Egina, even though the market continues to ascribe little to no value for the project.

Brixton Metals (TSXV:BBB) – Brixton Hones in on Newly Identified Targets; Thorn Results Expected Shortly

Impact: Positive Brixton has announced positive results from its summer 2019 exploration program at its Atlin Goldfields Project in British Columbia, Canada. The focus of the program was to test for near surface gold mineralization, define new targets and follow-up gold-in-soil anomalies. With positive results from Atlin we believe there is increased potential that the project could yield a high grade orogenic-intrusion related gold discovery. These results support our view that Brixton has the potential to make a meaningful gold discovery at Atlin.

Multiple Catalysts Converging this Fall – Uranium Update

Following the publication of both the UxC’s quarterly report and the World Nuclear Association’s (WNA) biannual nuclear fuel report, we have updated our uranium supply/demand model to reflect evolving market conditions since our last update on June 3rd, 2019. Following various sector updates, most importantly the outcome of Section 232, we have also updated our uranium company assessment. We are maintaining our bullish outlook on the uranium sector. We expect multiple catalysts converging in October 2019 may bring utilities back to the term market to secure long term supply.

Gran Colombia Gold (TSX:GCM) – On Track to Meet 2019 Guidance

Impact: Neutral Gran Colombia Gold reported August gold production that kept the company on track to meet its annual guidance but suggests that Q3 production may be slightly less than we previously modelled on lower grades. We continue to view Gran Colombia as a company with significant leverage to gold and fundamental catalysts (exploration, operations) that should drive a progressive re-rating to our C$10/sh fair value estimate.

Orford Mining (TSXV:ORM) – Drilling Success Points to Further Discoveries at Qiqavik

Impact: Positive Orford Mining announced the completion of its summer 2019 exploration program at its Qiqavik gold project in northern Quebec, which continues to define shear-hosted gold mineralization in near-surface drilling. With the identification of thick structural zones coexistent with high sulphidation, Orford is looking to further extend these targets. Additionally, with the discovery of new untested EM anomalies and up to 648 g/t Au in boulders, Orford is on track to continue drilling high-grade intercepts at Qiqavik.