Analysts' Ideas of the Week Ross Beaty Backed Junior Announces Improvements
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Analysts' Ideas of the Week Ross Beaty Backed Junior Announces Improvements January 27, 2020 www.researchfrc.com Page 2 Mining / Exploration Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: Lumina Gold TSXV: LUM $0.74 $1.06 Jan-21-2020 Corp. PR Content FRC Opinion Trade off studies conducted, as part of an Positive – The updated PEA is likely to be upcoming updated Preliminary Economic completed in Q2-2020. We are expecting a Assessment (“PEA”) on the Cangrejos significant improvement in economics, not project in Ecuador, returned promising only based on the recent results, but also results indicating potential for both from an updated resource estimate improvement in recovery rates and completed last year, which showed 10.4 reductions in operating costs. As a result, Moz gold and 1.40 Blbs of copper indicated, the updated PEA will add a carbon-in- and 6.3 Moz gold and 0.79 Blbs copper leach circuit and high pressure grinding inferred. A 2018 PEA had shown an After rolls. Tax – Net Present Value (“AT-NPV) at 5% of US$920 million at US$1,300 per oz gold, and US$528 million at US$1,170 per oz gold. Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: East Africa TSXV: EAM $0.155 $0.54 Jan-24-2020 Metals Inc. PR Content FRC Opinion Partner, Tibet Huayu Mining Co. Limited Positive - In exchange for a 70% interest in ("THM" / SHSE:601020 / market the Mato Bula and Da Tambuk deposits, capitalization of $643 million) has THM made a cash payment of US$1.2 informed EAM that site construction million to EAM, and will fully finance and activities will begin in March 2020. develop the two projects (budgeted at US$88 million). A FS on Mato Bula and Da Tambuk is being prepared. Note that EAM retains exploration rights outside of the current resource. We also note that EAM is in a very comfortable position as it has a 30% interest in fully funded projects with near-term production potential. ©2020 Fundamental Research Corp. “16+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Page 3 Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: Premier Gold TSX: PG $1.57 $3.24 Jan-23-2020 Mines Limited PR Content FRC Opinion Announced gold production of 67.4 Koz in Negative - Actual production was lower 2019, including 59.9 Koz from the than our 73 Koz estimate. Although Mercedes mine and 7.5 Koz from the production at South Arturo beat our South Arturo mine. estimate (7.5 Koz versus our 5 Koz estimate), Mercedes’ production fell below our estimate (59.9 Koz versus our 68 Koz estimate) due to lower grades. On a positive note, management has provided guidance of 65 – 75 Koz for 2020 production at Mercedes, and indicated that they expect production to improve and costs to decline in 2020. We expect a number of catalysts for the share price this year; key ones being ramp up of production at South Arturo, a Feasibility Study (“FS”) on Cove in 2020, and an updated FS on Greenstone Gold, which has a measured and indicated resource of 7.11 Moz, and an inferred resource of 3.10 Moz. Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: Kerr Mines Inc. TSX: KER $0.15 $0.40 Jan-23-2020 PR Content FRC Opinion Received approval for its Mine Plan of Positive - This is a very positive Operations / MPO on the Copperstone development as Kerr now has all the mine gold project in Arizona from the U.S. permits required to operate the mine at an Bureau of Land Management. expanded rate of 600 tpd. Kerr is targeting to commence production by Q4-2020. The company is planning to commence a 10,000 m / Phase II drill program. Management is also evaluating potential to lower the initial CAPEX (2018 PFS showed US$23 million) by using floatation. ©2020 Fundamental Research Corp. “16+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Page 4 Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: UEX TSX: UEX $0.11 $0.45 Jan-20-2020 Corporation PR Content FRC Opinion Commencing a 15 hole / 1,900 m drill Neutral – The company is currently working program on its West Bear project in on an updated resource estimate on West February 2020. The program’s objective Bear. We are expecting a significant is to identify potential for satellite cobalt- increase in resource estimate as the 2019 nickel deposits. The company is also drill program of 126 holes / 11,413 m is commencing an exploration program on estimated to have expanded the known its Christie Lake project, more specifically strike length from 250 m to 600 m. The the Ōrora North Area, where a strong and project has a high-grade cobalt inferred wide anomaly was identified in a 2019 DC resource of 3.17 Mlbs cobalt (0.37%), and resistivity survey. An electromagnetic 1.93 Mlbs of nickel (0.22%). UEX’s portfolio survey will be initially conducted to refine has a combined indicated resource of 69.8 drill targets. Mlbs, and inferred resource of 28.8 Mlbs. Cameco Corporation (TSX: CCO) is the largest shareholder. ©2020 Fundamental Research Corp. “16+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Page 5 Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: GR Silver TSXV: GRSL $0.23 $0.98 Jan-20-2020 Mining Ltd. PR Content FRC Opinion Results from the final three holes of the Positive – We believe the 2019 drill 2019 drill program (eight holes totaling program clearly indicates potential to 1,211 m outside the current resource improve on the February 2019 indicated estimate) at San Marcial returned resource of 36 Moz at an average grade of additional high-grade silver mineralization 147 gpt AgEq, and an inferred resource of and anomalous gold mineralization. 11 Moz at 108 gpt AgEq. Note that this Latest results included 92 gpt silver at estimate includes a shallow, high-grade 28.7 m, including 154 gpt over 13.75 m. open pittable indicated resource of 23 Moz The company is preparing for a 2020 drill AgEq at 239 gpt AgEq. The company is program, which will incorporate a maiden currently conducting due diligence on the underground program, as well as surface recently signed letters of intent related to drilling. land acquisitions adjacent to the San Marcial project. We believe property consolidation shows management’s strong conviction in the area. Special Situations Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: Siyata Mobile TSXV: SIM $0.28 $1.14 January 27, Inc. 2020 PR Content FRC Opinion Received a purchase order (“PO”) valued Positive – Since the start of the year, the at $1.1 million by an undisclosed US company has appointed a US VP Sales, a cellular B2B distributor for its Uniden Canada VP Sales, and launched its Uniden UV350. Senior management has noted UV350 in Sweden. We expect numerous that this is the company’s single largest additional POs for the company’s Uniden PO for its Uniden UV350 to date. UV350 in the months ahead. ©2020 Fundamental Research Corp. “16+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Page 6 Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: FinCanna CSE: CALI $0.10 $0.34 January 23, Capital Corp. 2020 PR Content FRC Opinion Advanced the final tranche of US$0.88 Neutral – We are pleased to see the million to portfolio company QVI Inc. company advance its final tranche to QVI, (“QVI”). In addition, the company has which provides a strong indication that QVI agreed to provide a working capital bridge is achieving its milestone(s). With that said, loan of up to US$0.30 million (6-month it was noted that QVI is still building out its term, 12% interest rate per annum) to 8,300 sq. ft. manufacturing facility (expected transition QVI to full production. completion date undisclosed). In our previous update report on the company, we had expected QVI to be in commercial operation by December 2019. We will provide an update report shortly. Cannabis Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: AgraFlora CSE: AGRA $0.09 $0.38 January 23, Organics 2020 International Inc. PR Content FRC Opinion Announced that Farmako GmbH Positive – We see this as an attractive (“Farmako”), the company’s wholly owned opportunity for Farmako to extend its subsidiary, received a Home Office revenue growth. According to Prohibition Controlled Drug License. Farmako is now Partners, United Kingdom’s medicinal fully licensed to pursue medical cannabis cannabis market is expected to reach a trading in the United Kingdom. value of US$1.29 billion by 2024. ©2020 Fundamental Research Corp. “16+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT Page 7 Company Ticker Current Share FRC Fair Value Date of PR: Name: Symbol Price: Estimate: The Yield CSE: BOSS $0.27 $0.45 January 23, Growth Corp.