Sean Mason | March 10, 2016 | SmallCapPower: Attendees at the 2016 PDAC convention in Toronto seemed more optimistic than last year, due in large part to the recent run in the gold price. There was talk that the ‘PDAC Curse’, in which junior resource stock prices would often decline following the Convention, might be lifted this year. Regardless, we have identified four junior resource stock stories that had people talking at this year’s event.
Belo Sun Mining Corp. (TSX: BSX): The Company is developing its 100% owned Volta Grande (open pit gold) Project in northern Brazil. A Feasibility Study completed last year estimated average annual gold production of 205,000 ounces per year over a 17 year mine life at all-in sustaining costs of US$779 per ounce. This is based on Proven & Probable reserves of 3.8 million ounces of gold at a grade of 1.02 grams per tonne. Agnico Eagle Mines owns a 17.4% stake in Belo Sun. Trading volume in Belo Sun Mining’s stock spiked during the first two trading days of PDAC and the ‘buzz’ at the Convention was that its construction permits are pending and that Agnico Eagle could make a bid for the remaining shares that it doesn’t already own sometime in the next year.
NexGen Energy Ltd. (TSXV: NXE): This junior uranium stock market darling, with its Rook I property Saskatchewan’s Athabasca Basin, has been on a tear lately, as its share price surged as much as 50% since the Company released its maiden Mineral Resource estimate for the Arrow deposit on March 3, 2016. It showed 201.9 M lbs grading 2.63% U3O8. Analyst and newsletter writer John Kaiser, in an interview with BNN, believes there’s an “institutional appetite for a high-grade discovery in the Athabasca Basin.”
Kaminak Gold Corporation (TSXV: KAM): Its Coffee gold project in the Yukon has been the talk of more than a few experts/analysts. And, a January 2016 feasibility study confirmed its potential – estimated production of 184,000 ounces of gold per year over a 10-year mine life from heap leach operations. Requiring C$318 million of capital, this project could generate an NPV (5% discount) of C$295 million and an IRR of 27%, at a gold price of US$1,000 per ounce. John Kaiser, in the same BNN interview, thinks Kaminak will get acquired “within a year.”
Red Pine Exploration Inc. (TSXV: RPX): This tiny explorer is set to merge with Augustine Ventures Inc. (CSE: WAW) and will own 60% of the Wawa Gold Project in northern Ontario, which has an Inferred resource of 1.1 million ounces of gold at 1.71 grams per tonne. The property also contains eight past-producing gold mines with historic production of more 120,000 ounces at an average grade of 9.04 g/t gold. An interesting aspect to this story is that billionaire Barry Sherman, founder of pharmaceutical giant Apotex, has a big stake in Augustine and the ‘Word on the Street’ is that he’s held onto the Wawa deposit for decades and no one had been able to do a deal with him until early in 2013.