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Mawson Resources Ltd. (TSX:MAW) – Mawson Goes Down Under – Acquiring 3 Projects in the Fosterville Camp
Mawson Resources announced it has entered into an agreement to acquire an interest in three gold projects into the Victorian Goldfields in Australia (Figure 1). We view the transaction positively, as it provides the company a very low-cost entry (net C$1.1M) into a tier one gold camp. We have incorporated a preliminary in-situ valuation of C$30M for these projects into our valuation based on comparables in the region; thus, increasing our fair value estimate to C$0.95/sh (was C$0.85/sh).
RNC Minerals announced it has identified a new five-kilometer structure at its Higginsville operations in Western Australia. This renewed exploration focus, follows the recent restructuring of the royalty at Higginsville, which we believe unlocked the 1.9M oz Au plus further exploration potential (as demonstrated by this release). RNC remains attractively valued as its transformation to profitability is not yet priced in providing investors a low-cost option on the “High-Grade Contact Zone” at Beta Hunt and exploration upside at Higginsville.
Wallbridge Mining announced late Tuesday that it intersected high-grade gold mineralization at depth in the Lower Tabasco zone at its 100%-owned Fenelon gold project in Quebec. This intercept came from a batch of three holes from the Lower Tabasco zone that were drilled in 2019 and 2020, along with one hole from the Upper Tabasco zone. These intersections demonstrate that the Fenelon Gold system, and the Lower Tabasco zone, host significant gold mineralization at depth. We note that Wallbridge continues to have success with the drill bit at Fenelon and is en-route to defining what we believe could be a +$500M ore body that could host three distinct mines; we currently model two.
Wallbridge Mining announced that it has intersected mineralization 800m northwest of the known footprint of the gold system at its Fenelon gold project in Quebec. This intercept was part of another batch of 2019 assays being reported. Step out drilling was focused on determining the extent of gold mineralization within the Jeremie pluton (which was previously thought to be unmineralized). This success continues to support our thesis that Fenelon has the potential to host three different types of gold mines. We currently only model two types and are waiting for further open pit evidence to be demonstrated prior to including it in our valuation.
Troilus Gold announced results from seven drill holes from its 2,500m drill program at the company’s 100%-owned Troilus property located near Chibougamau, Quebec. Drilling aimed at testing prospective areas 3.5km south of the Z87 pit and successfully intersected a new zone. Given previous operators (Inmet Mining Corp.) did little to no near-mine exploration, we expect the stock to materially re-rate over the next 6-12 months as the company demonstrates organic resource expansion potential along strike from the J Zone and Z87 resources areas.
On Friday, Fiore Gold released its FY2019 (ended Sept 30th) operational and financial statements that were roughly in line with our estimates. Production results came well within guidance and generated strong operating cash flow, which the company can deploy to continue to upgrade and improve its Pan Mine and Gold Rock development projects both located in Nevada. We continue to believe Fiore is well positioned to deliver +80k oz of Au annually by 2022 driven by steady production at Pan alongside organic growth from Gold Rock.
FireFox Gold announced the discovery of a new gold target “Katajavaara”, at the company’s Jeesiö Gold Project (100% owned) in the Central Lapland Greenstone Belt, Finland. The target is adjacent to Aurion’s (TSXV:AU, FV est. C$3.25/sh) Launi project and could have the potential to house similar gold-bearing quartz-sulphide veining. FireFox has a large district land package of 80,000 ha, which we believe is not currently reflected by the company’s share price. We believe exploration success by either FireFox or Aurion (FireFox’s neighbour) should drive Firefox’s share price higher.
RNC Minerals announced 2020 production and cost guidance for its Australian gold operations. The guidance, which we view as conservative, points to improving costs and increased production – likely making 2020 RNC’s first profitable year. We expect the company to materially beat its guidance in 2020, as it does not account for coarse gold. We are maintaining our fair value estimate of C$0.90/sh (unchanged) and believe RNC should re-rate as the company continues to demonstrate that it has transformed into a profitable gold producer.