In this blog post we’d like to highlight three companies which could definitely be worth to keep an eye on, as we expect a lot of potential catalysts.
First of all, Azincourt Uranium (AAZ.V) has dropped to a low of C$0.11/share, which is remarkable given the most recent deal with Macusani Yellowcake (YEL.V). Macusani will acquire Azincourt’s Peruvian uranium interests and will issue 68.35 million shares to Azincourt Uranium, which currently have a value of C$6.5M. This means that at the current market capitalization of C$5.5M, Azincourt is trading below the value of the Macusani Yellowcake shares it will receive and you basically get the cash position and the Patterson Lake North project for free. As we have the impression Azincourt Uranium plans to distribute the Macusani Yellowcake shares to its shareholders, a ‘holding-discount’ is definitely not warranted for Azincourt. Even if you’d assign a value of just C$4M to the Patterson Lake North project and Azincourt’s current cash position, the sum of the parts indicates the company should be trading at C$0.21 and not C$0.11. We expect a re-rating of the Azincourt shares when the deal with Macusani Yellowcake will have been finalized.
A second very interesting company is Minaurum Gold (MGG.V) which signed a joint venture agreement with Lowell Copper (JDL.V) on its Santa Marta VMS system in Mexico. Lowell Copper is headed by David Lowell who discovered the gigantic Escondida copper mine in Chile. Needless to say this man isn’t targeting just ‘mediocre’ projects and is only aiming for potential world class discoveries. Lowell Copper can earn an initial 60% interest in the Santa Marta project by spending at least $6M in exploration expenditures within the next 30 months. Should Lowell Copper complete a pre-feasibility study before the end of 2018, it can increase its stake to 70%. We expect Minaurum (which will be the project operator) to receive its drill permits by the end of Q3 of this year and to commence drilling shortly thereafter. The company holds three more properties in Mexico which definitely warrant some attention. The Vuelcos del Destino project is located in the hotspot of the Guerrero Gold Belt (where Osisko Mining (OSK.TO) staked a huge land package) and could be an excellent ‘nearology’-play once the companies surrounding the Vuelcos project release their drill results. The Aurena project has a strike length of 1.8 km (open along strike) and an initial drill program has encountered almost 30 meters of almost 2g/t gold so the potential for a large gold deposit is definitely there. Finally, the Adelita project is located just 6 kilometers from Pan American Silver’s (PAA.TO, NYSE:PAAS) Alamo Dorado mine and the drill bit has encountered gold, silver and copper at economical grades.
The third one for your watch list is Defiance Silver (DEF.V) which will re-start its exploration efforts on the Veta Grande vein at San Acacio and will no longer try to aim for near-term production through the Santa Gabriela plant. Exploring the veta grande vein should be relatively straight forward as the trend is known and neighbor MAG Silver (MAG.TO, NYSE:MVG) has intersected the vein on its property approximately 4 kilometers away, so basically Defiance would have to drill test the strike length to prove the vein is continuous over such a distance. If that’s effectively the case, the company could be off to the races, as such a strike length could host several tens of millions ounces of silver. So we’re definitely keeping an eye on Defiance Silver during its next exploration season.
Disclosure: The author holds a long position in Azincourt Uranium and in Minaurum Gold. Azincourt Uranium is a sponsor of the website. Please see our disclaimer for current positions.
