Canada Asset 'Sale Helps Company Focus on Mexico'

Source: Streetwise Reports 11/30/2019 The specifics and benefits of the transaction are addressed in a ROTH Capital Partners report. In a Nov. 22 research note, ROTH Capital Partners analyst Joe Reagor reported that Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE) agreed to sell its Bralorne gold project in British Columbia to Talisker Resources. “The sale is a positive for the company as it improves its balance sheet and allows the company to refocus on its Mexico asset,” highlighted Reagor. Also, the transaction should “remove some holding costs and general and administrative expenses from future expenses.” The resulting cash infusion should help improve Avino’s overall valuation. According to the agreement, Reagor relayed, the total consideration for the asset will include about $6.6 million in cash, 9.9% of Talisker’s outstanding shares following an announced financing, a 50% warrant coverage and a $2.5 million cash payment if and when Talisker starts commercial production at Bralorne. Reagor noted that the deal terms appear fair and in line with the value ROTH assigned the project. ROTH has a Buy rating and a $1.25 per share price target on Avino. The stock is now trading at around $0.71 per share. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid … Continue reading

Analyst Downgrades Gold Producer After It Agrees to Acquire Midsized Miner

Source: Streetwise Reports 11/30/2019 The perceived pros and cons of the transaction are provided in a CIBC report. In a Nov. 25 research note, analyst Cosmos Chiu reported that CIBC downgraded its rating to Neutral and lowered its target price to CA$60 per share from CA$73 (current share price CA$55.79) on Kirkland Lake Gold Inc. (KL:TSX; KL:NYSE) due to the increased risk associated with the miner’s agreement to acquire Detour Gold Corp. (DGC:TSX). The transaction is expected to close in Q1/20. Chiu pointed out that another potential downside to the deal is that it could cause a slowdown in Kirkland Lake’s current efforts to optimize its operations, the Fosterville and Macassa projects, and hamper progress with its Macassa mine. The major benefit of the transaction, Chiu noted, however, is it will expand Kirkland Lake’s project portfolio. “Long term, we see the merits of this acquisition, by adding a third cornerstone [open-pit] mine to the asset base and potentially creating a Canadian champion,” he added. With the acquisition, Kirkland Lake’s reserve base will jump to 21 million ounces (20 Moz) from 5.75 Moz. Its production will increase in 2020 to 1.621 Moz from 1 Moz. However, the all-in sustaining cost will rise in tandem, to CA$773 per ounce from CA$564 per ounce. Merging the two companies is estimated to result in about CA$75–100 million of pre-tax synergies per year. The analyst reviewed the terms of the acquisition agreement. All outstanding Detour Gold shares will be exchanged for Kirkland Lake shares at … Continue reading

Tax-Loss Selling Drives Down Junior Stock Prices

Source: Adrian Day for Streetwise Reports 11/27/2019 Money manager Adrian Day looks at three junior resource companies whose stocks are down significantly in the past few months, and attributes some of this to tax-loss selling. He also lists a handful of companies he believes are best buys right now. Vista Gold Corp. (VGZ:NYSE.MKT; VGZ:TSX, US$0.59) has published an updated prefeasibility study (PFS) on its Mt Todd project in the Northern Territories in Australia, the largest undeveloped gold project in that country. The revisions to the old PFS include updating both the gold price (upward to $1,350/ounce) and the Australian dollar (downward to US$0.70). Both of these revisions help boost the returns on the project, as did other improvements, including on gold recoveries. Using the sensitivity table for today’s prices, the project has a net present value (NPV, with 5% discount) of $1.15 billion and an international rate of return (IRR) of over 30%. Mind the gap These are very strong numbers. It should be noted, though, that any strengthening in the Australian dollar—and the Aussie dollar, as other “commodity currencies,” usually appreciates in a resource bull market—would affect costs negatively. For a company with a market capitalization of under $60 million and no debt, this is an enormous gap. The question is, how do shareholders realize at least some of that value. Now that the updated PFS and metallurgical testing have been completed, the company is continuing to derisk the project and seek a development partner. Vista has made clear … Continue reading

White Gold Hits Gold Bigly

Source: Bob Moriarty for Streetwise Reports 11/26/2019 Bob Moriarty of 321gold provides an update on the company’s recent exploration results. I called for a pop in the price of White Gold Corp. (WGO:TSX.V; WHGOF:OTCMKTS) when I wrote about them two weeks ago. We got it. The shares were $0.77 when I wrote and went as high at $0.99 in short order. I compared WGO to Great Bear and in my view stated that I thought White Gold was better. In a release on Tuesday Nov 26th they seemed to have proved it. The hole showed 72.81 g/t gold over 6.09 meters including 136.36 g/t Au over 3.05 meters. That hole mineralization began near surface, only 10.67 meters down hole. The Titan property has barely been scratched. You do not get results like that in a vacuum. I see WGO following up with more similar holes. Previous grab samples from Titan tested as high as 605 g/t Au, 497 g/t Au and 113 g/t Au. There is a mag anomaly measuring 650 meters by 650 meters at Titan including half a dozen similar targets to the one just drilled. I think White Gold just hit the big time. Look for higher prices when they tie similar holes together. White Gold is an advertiser and I bought shares in the open market. Do your own due diligence. White Gold Corp WGO-V $1.00 (Nov 26, 2019) WHGOF-OTCBB 113.4 million shares White Gold website. Bob Moriarty founded, with his late wife, Barbara Moriarty, … Continue reading

Tax Loss Silly Season Whacks Viva Gold

Source: Bob Moriarty for Streetwise Reports 11/25/2019 Bob Moriarty of 321gold explains why he sees the stock of this gold explorer as a buy right now. Investors spend a lot of time pondering both Technical Analysis and fundamentals to determine entry and exit points for investing. Perhaps they would make more money studying human behavior. Investing is not as difficult as the Gurus and Experts try to make it; it is no more complex than buying cheap and selling dear. Every year human behavior gives us a month long sales event where investors dump shares just like the after Christmas sales rack at Macy’s. It has to do with selling shares that have gone down and taking the tax loss rather than sitting on long term losses. In other words, it has to do with the tax laws and has nothing at all to do with either TA or fundamentals. If you understand human behavior you can make a lot of money as a result. In general investors want to buy what has gone up and sell what has gone down. When Tax Loss Silly Season starts to kick in November investors start unloading those shares that have gone down for the year to write off those losses. Once that starts, the herd instinct kicks in with the rest of the sheep and they keep selling into mid-December. So if a wise investor looks at a number of charts of otherwise good companies they will soon find some suitable candidates. … Continue reading


Source: Michael Ballanger for Streetwise Reports 11/25/2019 Sector expert Michael Ballanger interprets year-end investment tactics by looking back at a childhood encounter. “Gold is money; everything else is credit.” —J.P. Morgan My first faithful dog Fido (circa 1963) and I used to play a game years ago before his eyes and hips started to go a tad “wonky,” and in that respect, we were and are quite similar. They say that dogs tend take on the appearance of their owners (or vice versa), so I guess that goes for the aging process as well. Anyway, we used to live in a neighborhood in the GTA that was once considered “working class:” That is to say, the wartime houses all looked the same (dull); were quite modest (small); and all were affordable (cheap). However, the yards were actually disproportionate to the dwellings because my dad could flood a near-regulation-size hockey rink as long as the cops didn’t see him open up the local fire hydrant with that god-awful wrench the size of a baseball bat. In the winter, even on school nights, kids from around the neighborhood would be in the Stanley Cup finals until well after bedtime, as Dad strung up the ugliest set of lights in history to illuminate the playing surface. As the winter wore on, the snow shoveled from the ice became the boards and after a number of mild spells where melting and refreezing occurred, those boards were the most unforgiving boards in hockey history. The … Continue reading

Gold Miner Achieves 'Q3/19 Beat' on Top, Bottom Lines

Source: Streetwise Reports 11/23/2019 The financial results are reviewed in a ROTH Capital Partners report. In a Nov. 6 research note, ROTH Capital Partners analyst Jake Sekelsky reported that Kirkland Lake Gold Inc. (KL:TSX; KL:NYSE) in Q3/19 “beat our estimates on both the top and bottom line, and Macassa and Fosterville continue to drive strong cash flow generation.” Sekelsky relayed that Kirkland Lake, reported in Q3/19, a “strong quarter,” an adjusted net earnings of $0.84 per share on revenue of $381.4 million, which exceeded ROTH’s projection of $0.74 earnings on revenue of $371.2 million. He added that “while the company beat our earnings estimate, we attribute the majority of this to increased capitalization of exploration expenditures.” Costs were roughly consistent with estimates at the Fosterville and Macassa mines, Sekelsky pointed out, but higher than expected at the Holt complex. As such, Kirkland Lake is considering longer term options there. The gold company ended Q3/19 with $615.7 million in cash and no debt. “[We] believe the company’s strong cash balance and currency places Kirkland Lake in a strong position to pursue both organic and inorganic growth opportunities heading into 2020,” commented Sekelsky. The company increased its quarterly dividend by 50% to $0.06 per share. Test processing in progress at the Union Reefs mill indicates Kirkland Lake is advancing its Northern Territory assets. Further, ROTH expects a positive production decision in 2020. Kirkland Lake is expected to release exploration results from Fosterville by year-end 2019, Sekelsky noted. ROTH believes the market has … Continue reading

Is Another Sharp PM Sector Down-Leg Imminent?

Source: Clive Maund for Streetwise Reports 11/22/2019 Technical analyst Clive Maund examines the data and answers the question. The precious metals sector has been on the defensive since gold’s COTs reached extreme readings in August, and silver broke down from its parabolic uptrend in September. Many think that the sector correction has now run its course, but has it? That is the question that this update is intended to answer. On gold’s latest six-month chart we can see the correction in force from the start of September and how it has unwound its earlier overbought condition and brought it back to a support level. Given the bullish alignment of moving averages, which shows the existence of a larger uptrend, many are concluding that all this will be sufficient to get it moving north again from here. However, there are several bearish factors in play, which suggest that instead we are likely to see another sharp drop before this corrective phase is done. The quite sharp drop early this month was on heavy volume, and the feeble rally of the past week or so looks like a countertrend rally—a bear flag—that will lead to another sharp down-leg very soon. This will break gold out of the channel shown and take the price to our downside objective in the $1,380–$1400 area. Gold’s COTs are still decidedly bearish. The Large Specs haven’t given up—they need a good kicking so that they retreat back into their holes. When this happens the picture will look … Continue reading

Canadian Gold Miner Achieves 'Strong Q3/19 Operationally'

Source: Streetwise Reports 11/21/2019 The company’s performance during the quarter is covered in a Haywood report. In a Nov. 1 research note, Haywood analyst Kerry Smith reported that Equinox Gold Corp. (EQX:TSX.V), in its first quarter of commercial production at the Aurizona mine, “delivered a solid Q3/19, beating expectations, and is already generating free cash flow.” Smith highlighted that Equinox’s Q3/19 financials beat expectations. Cash flow per share was US$0.33, above Haywood and consensus’ forecast of US$0.28 and US$0.31, respectively. Earnings per share of US$0.07 was slightly below consensus’ forecast of US$0.075. As for gold production, Equinox yielded 62,656 ounces in Q3/19 from both its Aurizona and Mesquite mines at an average cash cost of US$800 per ounce (US$800/oz) versus Haywood’s projected 65,000 ounces (65 Koz) at an average cash cost of $895/oz. Another achievement during the quarter, Smith pointed out, was commercial production from Aurizona, which began July 1. Subsequently, Aurizona delivered 29,350 ounces in Q3/19 at an average cash cost of US$781/oz. Production was just below Haywood’s 30 Koz estimate; average cash cost was well below its US$910/oz forecast. “The mine exceeded our expectations,” Smith commented. Accordingly, Haywood boosted its 2019 production projection for Aurizona to 75 Koz from 68 Koz. As for Mesquite, it continued to do well, noted Smith, “delivering good cash flow with US$11.7 million in Q3/19.” This resulted from 33,306 ounces of production at an average cash cost of US$819/oz. This result compares to Haywood’s 34.9 Koz and US$945/oz cash cost projections. Haywood models … Continue reading

Underground Sampling Extended at Past-Producing Nevada Mine

Source: Streetwise Reports 11/21/2019 The mine developer extends its sampling program to include two historical shafts. Goldcliff Resource Corp. (GCN:TSX.V) announced in a news release the results from extended sampling at the past producing Lone Star mine at its Nevada Rand project. Two areas were accessed, mapped and sampled. One was the lower levels of the Nevada Rand shaft. Sampling at the 250-foot level, which contains the most stoped areas, showed continuity of silver and gold mineralization with strong grades. “Nevada Rand is ideally positioned for re-rating and upside.” – Michael Ballanger Around the former ore chutes in the southeast extension of the mine, a rock chip sample returned 491 grams per ton (491 g/t) silver and 5.6 g/t gold. A grab sample demonstrated 208 g/t silver and 5.29 g/t gold. The locations of the raises and stopes at the 250-foot level relative to strike and mined areas suggest potential for new mineralization to the southeast, both updip and down dip, the company noted. The second area investigated was the upper levels of the Number 2, or middle, shaft at the Lone Star mine. Drifting on the 135-foot level was sampled, and results are pending. The lack of stoping despite the presence of mineralization suggests the area was not economical to mine back in the early 1900s. However, “this presents an opportunity on the Nevada Rand property to develop this mineralization as it may be of economic interest at today’s metal prices,” the release noted. From mapping and historical reports, … Continue reading