Aurion announced prospecting, trenching and channel sampling results from its 100%-owned Launi East project. A total of 544 trench channel samples and 91 grab and chip samples were taken from ten areas within Launi East. The company has also started its inaugural drill campaign at the project. We view these results favorably as they support our opinion that Aurion has the potential to discover multiple significant gold deposits on its large land package in Northern Finland.
FireFox Gold announced the first batch of assays (five out of nine holes, ~1,500m in total) from its phase 2 diamond drilling program at its 100%-owned Mustajärvi Gold project in the Central Lapland Greenstone Belt (CLGB), Finland. We view these results positively and believe they show both the scale and continuity of the system at Mustajärvi. In our opinion, the current pricing of FireFox does not reflect the potential of the company’s highly prospective 80,000 ha land package within the CLGB and the stock should re-rate on positive drill results.
Mako Mining released results from its ongoing 2019 infill drilling program at its 100%-owned San Albino gold project in Nueva Segovia, Nicaragua. The company reported assays for 40 holes out of its 242 diamond drill hole, ~11,000m drill program. In our view, we expect the stock to progressively re-rate as assays translate into ounces for the in-pit resource as San Albino advances towards production in H2/20.
SolGold announced that BHP has agreed to invest US$22M in the company by buying 77M new shares at 22.15 pence per share. This agreement makes BHP SolGold’s largest shareholder by a narrow margin, with a total ownership of 14.7%. We view this investment positively, as it refreshes their endorsement and allows for the Alpala project to be advanced. However, we note that additional financing, potentially in the form of a streaming financing, will be required to eventually develop the project.
Atico Mining announced Q3 financial results following record quarterly production. However, the strong operating results were not yet reflected in the financials, as a concentrate shipment was delayed until Q4. With two shipments now expected in Q4, we expect a very strong financial performance to be reflected in Q4. Atico remains a low-cost copper-gold producer capable of generating FCF with significant exploration upside at El Roble (Colombia) and La Plata (Ecuador).
This could be the catalyst for the expected uranium rally. After waivers for foreign companies working on Iranian nuclear were extended at the end of October, one of the four waivers were rescinded yesterday, because of the resumption of enrichment at the Fordow facility. Sanctions will come into affect for companies working at this facility on December 15th. It is estimated that the European, Chinese and Russian companies currently engaged in Iran’s nuclear program make up about ~20% of nuclear fuel supply. While companies that discontinue working at this facility would not be subject to sanctions, the potential exists for some impact on the nuclear fuel supply chain which we expect to push prices higher. This is only one of the potential near-term catalysts that we see pushing the uranium price higher in the near-term, as noted in our recent uranium update, in September. While we believe that the implementation of sanctions is likely to push the uranium price higher in the short-term, we continue to have a bullish outlook on the uranium sector and are expecting the tightening long-term supply-demand fundamentals to result in a significant uranium price increase.
Wallbridge is basically a completely new story that warrants your attention. Wallbridge is an exciting gold explorer/developer with its flagship asset being its 100%-owned Fenelon gold project in Quebec. The company’s stated goal is to produce free cash flow from operations and grow through effective exploration. Wallbridge aims to become a +60k oz Au producer within three years and a plus 100k oz Au producer within five years. In our view, the Fenelon gold project is the most exciting gold exploration play due to its high grades, size, and multi mine possibilities, which we will delve into in this report. We believe Wallbridge is in the process of drilling out what will become a +$500M ore body at Fenelon and thus would be an excellent acquisition for any producer at its present valuation of ~C$294M.
Rockcliff Metals Corp. released drill assay results from five holes at its 100% owned Rail deposit located in Snow Lake, Manitoba and announced it will be increasing its drill program at Rail to 15,000m (previously 10,000m). We expect this news will bode well for the company as Rockcliff looks to move forward with a development decision at one of its Snow Lake projects (Q4/20). We believe there is significant potential for Rockcliff to extend known mineralized zones through its ongoing 100,000m drill program, as well as strong potential to make new discoveries at its Tower, Rail and Talbot deposits in addition to a suite of green field exploration assets.
SolGold provided an exploration update on its Blanca Project in Northern Ecuador, located 8km north-northwest of its Cascabel concession (Figure 1). On the heels of encouraging rock chip sampling results, initial drill core visual impressions clearly suggest Blanca contains significant gold mineralization and we expect positive assay results to follow. It is worth noting that recent improvement in market sentiment towards base metal stocks (see SNL Base Metals Index) has not yet translated to SolGold’s share price.
Aurion released more positive drill results from its Aamurusko Northwest prospect on its wholly owned Risti Project in northern Finland. Drilling continues to intersect a thick high-grade, near-surface zone that appears to have the potential to grow into a significant deposit. We view these results positively and believe they increased the likelihood of a significant discovery causing us to boost our fair value estimate to C$3.25/sh (was C$2.75). With more drill results on the horizon and the company fully financed for 2020, we believe Aurion’s share price is poised to keep marching higher.