The past few months were truly horrible, and a lot of junior mining companies were slaughtered to levels we haven’t seen since 2008.
Tembo Gold (TEM.V) is making good progress on its drill program at the Tanzanian Tembo-project. Despite this, the share price has fallen approximately 80% since their 52wk high in February. Tembo currently has a market of only C$19M, and has C$9M in the treasury giving the company an Enterprise Value of approximately C$10M. As said in previous alerts and reports, Tembo Gold is currently drilling 89,000 meters on the Tembo-project, to obtain a NI43-compliant resource estimate sometime next year.
CuOro Resources (CUA.V) announced a transaction with Pacific Road Resources Fund, whereby PacRoad has to buy between 2 and 3 million shares of CuOro on the open market, and will then be granted an option to acquire between 2.5 and 3.75M shares or 20M shares at a fixed price of C$2.00. You can read the entire news release here
This agreement is obviously good news, as the obligation for Pacific Road to buy stock on the open market will support CuOro’s shareprice. By adding Pacific Road as a cornerstone investor to their shareholder list, CuOro won’t have many problems raising additional capital over the next few years.
NSGold’s (NSX.V) spinoff NSX Silver (NSY.V) released their Phase I drill results on the Mexican Dios Padre silver project. NSX pulled several short but very high-grade intercepts, and one long intercept of 50m at 74.4g/t Ag, which might be an indication of a bulk tonnage target. Geologists are currently studying the data, and will design a Phase II drill program on Dios Padre.
QRS Capital (QRS.V) is currently trading at C$0.17 for a C$3.4M market capitalization. The company closed a private placement earlier this year wherein they raised C$0.75M at C$0.40. QRS currently has an Enterprise Value of C$1M, which definitely isn’t expensive as they are gearing up to drill their optioned copper project in Chile later this year.
We have been following Excalibur Resources (XBR.C) for a year now, and the company is currently on the verge of producing a first gold bar, as their 250tpd mill is being commissioned as we speak. We participated in three financing rounds over the past year, and will initiate coverage on Excalibur soon.
Goldgroup Mining (GGA.T) released their PEA on the Caballo Blanco Project. Whilst these numbers may be disappointing at first sight, it’s important to note this PEA was extremely conservative, as Goldgroup probably won’t need a crushing system and will probably be able to use the national power grid instead of diesel generators for their power needs.
Unfortunately permitting isn’t going as smooth as planned, due to political issues. Now the presidential elections are over and Nieto has been elected president, we hope to see progress this fall.
African Gold Group (AGG.V) is continuing work on the pilot plant at their Malian Kobada-project. If their project would have been located anywhere else but Mali, their share price should be multiples of the current C$0.15. The company is still on track to complete a new resource estimate before year’s end, and we maintain our 2Moz target. Once the dust settles down in Mali and the country gets quiet again, African Gold Group should be a winner.
The race for oil in East Africa is heating up after the Tullow Oil (TLW.LON) and Africa Oil (AOI.V) discovery. We think Simba Energy (SMB.V) might be a good nearology play. The company recently received a report from Sproule, wherein the consultants estimate Simba’s landholdings to contain 445M barrels of gross unrisked prospective resources.
Finally, Columbus Gold (CGT.V) fell to C$0.38, which seems to be cheap based on their 1.9Moz inferred resource estimate in French Guiana. We attended a site visit to Paul Isnard earlier this year, and are convinced the current 1.9Moz will increase rapidly towards 4-5Moz. We’ll release our site visit report in the near future.
The past few months were bad for juniors, but we hope this will change soon. There’s currently a lot of money standing by the sidelines, waiting to get back in the market. When this happens, the current race to the bottom might quickly switch into a race to the top.
Let’s hope the second half of this year will be be better than the first half!
Disclosure: Over the past 12 months; the author participated in private placements of Excalibur Resources. The author acted as a placement agent for Tembo Gold and Excalibur Resources and received a fee for his services. We visited Tembo Gold’s Tembo-project in Tanzania, African Gold Group’s Kobada-project in Mali, and Columbus Gold’s Paul Isnard-project in French Guiana earlier this year, and we visited Goldgroup Mining’s Caballo Blanco project in Mexico last year. All our costs have been reimbursed by the respective companies. Please see our disclaimer for current positions.
