FCM Mining News, 14 May 2019

$EQXFF : Equinox Pours First Gold at its Aurizona Gold Mine and Receives License to Operate [LINK]

$MUX : Fatality at the Gold Bar Mine, Nevada [LINK]

$TSRMF : Treasury Metal’s Weebigee Project is reporting High-Grade Gold Discovery. “The drilling confirms the highly prospective gold targets in the area…” -Greg Ferron [LINK]

$VITFF : Victoria Gold Corp.’s Eagle Mine Construction is 90% Complete. The Company is currently targeting a first gold pour early in Q4 2019. [LINK]

FCM Mining News, 20 April 2019

$SBGL : Sibanye-Stillwater and AMCU Conclude 5-Month Gold Strike. All employees will be notified to report for work as per a build-up schedule. [LINK]

$PZG : Paramount Gold Nevada Closes Royalty Agreement with Franco-Nevada on Sleeper Gold Project. Royalty Agreement = 2% NSR. [LINK]

$AAU : Lower Court in Mexico Rules on Constitutionality of Mexican Mineral Title System and Former Claims Held by Almaden. Almaden’s current claims covering the Ixtaca deposit are NOT the subject of this court decision. Almaden submitted its environmental permit for the Ixtaca Project earlier this year and continues to advance Ixtaca towards production. [LINK]

AbraPlata Resources: FCM Advanced Resource Stock Valuation

AbraPlata Valuation

Flagship Property: Diablillos = 100% Ownership … 1 Point

Resource Base = 137,000,000 oz AgEq … 1 Point

F/D Share Structure = 101,000,000 … 1 Point

Recent Price = US $0.10

F/D Market Cap = US $10,100,000

After-tax IRR = 20.3% … 1 Point

NPV/CapEx = 68% … 1 Point

F/D Market Cap per Resource Ounce = $0.07 … 1 Point

In other words, each ounce in the ground is valued at $0.07 by market cap. This translates to massive revaluation potential.

Share Price Valuation by Resources in the Ground

Each share is worth 1.36 AgEq ounces in the ground. In other words, each share is worth $22.37 @ US $16.45/oz Ag. Pause and let that sink in a minute…

Cost Structure = 47% … 1 Point

Resource Valuation as a Percentage of Market Cap

Value of Resources @ $16.45/oz Ag = US $2,253,650,000

= .4%

In other words, the market cap is valued at .4% of the value of the AgEq resources in the ground. This is laughably low. There is room for substantial market cap growth.

Near-Term Cash Flow = US $85,260,000 … Unrated

Near-Term Cash Flow Multiple = 12x … 1 Point

Future Cash Flow @ $50/oz Ag = US $414,050,000 … Unrated

Debt Coverage = 0 Debt … 1 Point

Projected Future Market Cap = US $685,000,000 … Unrated

Projected Future Market Cap Growth Percentage = 6,682% … 1 Point

Location: Salta Province, Argentina … 1 Point

Conclusion

With FCM Advanced Resource Stock Valuation results like these, AbraPlata Resources doesn’t require any editorialization. We are aggressive buyers between US $0.10 and $0.05. Diablillos will be a really big mine. It’s going to need a partner.

Score

11/11


Key

Flagship Project: 100% Ownership … 1 Point

After-tax IRR = > 20% … 1 Point

NPV/CapEx = > 1 … 1 Point

EV/Resources = < 1 … 1 Point

Cost Structure = < 50% … 1 Point

Resource Base = > 80 Mlbs. U308 … 1 Point

Future Cash Flow = Unrated

Future Cash Flow Multiple = > 5x … 1 Point

Share Structure = < 200 M … 1 Point

Debt Coverage = > 50% (or No Debt) … 1 Point

Projected Future Market Cap = Unrated

Projected Future Market Cap Growth Percentage = > 500% … 1 Point

Location: Friendly = 1 Point

Canadian Zinc (NorZinc): Every Dog Has Its Day

Flagship Property: Prairie Creek = 100% Ownership … 1 Point

Resource Base = 50,352,658 oz Ag (Includes Lemarchant, Boomerang & Long Lake) … 1 Point

F/D Share Structure = 280,433,387 … -1 Point

Recent Price = US $0.12

F/D Market Cap = US $33,652,006

After-tax IRR = 18.4% … -1 Point

NPV/CapEx = 67% … 1 Point

F/D Market Cap per Resource Ounce = $0.67 … 1 Point

In other words, each ounce in the ground is valued at $0.67 by market cap.

Share Price Valuation by Resources in the Ground

Each share is worth 0.18 Ag ounces in the ground. In other words, each share is worth $2.93 @ US $16.27/oz Ag. This is low. In an ideal world, Canadian Zinc would either have fewer shares or more resources. But this metric is not a deal-breaker, especially as this is not a primary silver producer.

Cost Structure = 92% … -1 Point

Cost Structure exceeds FCM’s ideal < 50% level, but this is a mine wherein Ag is a byproduct of primary Zn & Pb mining. Overall costs per tonne are not only competitive, but have successfully been reduced in the 2017 PFS by as much as 2.6%.

Resource Valuation as a Percentage of Market Cap

Value of Resources @ $16.27/oz Ag = US $819,237,746

= 4%

In other words, the market cap is valued at 4% of the value of the Ag resources in the ground. This is low. There is room for substantial market cap growth.

Near-Term Cash Flow = US $2,667,000 … Unrated

Near-Term Cash Flow Multiple = 13x … 1 Point

Future Cash Flow @ $100/oz Ag = US $178,500,000 … Unrated

Debt Coverage = 0 Debt … 1 Point

Projected Future Market Cap = US $503,526,580 … Unrated

Projected Future Market Cap Growth Percentage = 1,396% … 1 Point

Location: Northwest Territories … 1 Point

Conclusion

We stalked Canadian Zinc for several years before we took our first stake in early June of 2018. Prairie Creek is fully permitted and most infrastructure is in place. Startup is expected to begin within 2.5 years of financing. The project economics are robust and the mine life is long, with considerable exploration potential. We have a target price of US $1.80 a share.

Score

5/11


Key

Flagship Project: 100% Ownership … 1 Point

After-tax IRR = > 20% … 1 Point

NPV/CapEx = > 1 … 1 Point

EV/Resources = < 1 … 1 Point

Cost Structure = < 50% … 1 Point

Resource Base = > 80 Mlbs. U308 … 1 Point

Future Cash Flow = Unrated

Future Cash Flow Multiple = > 5x … 1 Point

Share Structure = < 200 M … 1 Point

Debt Coverage = > 50% (or No Debt) … 1 Point

Projected Future Market Cap = Unrated

Projected Future Market Cap Growth Percentage = > 500% … 1 Point

Location: Friendly = 1 Point

Minco Silver: Deep, Under-the-Radar Value

Flagship Property: Fuwan Silver Project = 100% Ownership (Subject to a 10% net profit interest by Guangdong Geological Exploration & Development Corporation) … -1 Point

IRR = 33.2% … 1 Point

NPV/CapEx = 153% … 1 Point

F/D Market Cap per Resource Ounce = US $0.36 … 1 Point

Cost Structure = 33% … 1 Point

Resource Base = 93,503,000 Moz. … 1 Point

Future Cash Flow = US $62,425,000 … Unrated

Future Cash Flow Multiple = 2x … -1 Point

Share Structure = 67,855,085 … 1 Point

Debt Coverage = 0 Debt … 1 Point

Projected Future Market Cap = US $631,145,250 … Unrated

Projected Future Market Cap Growth Percentage = 1,779% … 1 Point

Location: Gaoming Country … 1 Point

Conclusion

Minco Silver’s Fuwan Silver Project is an advanced-stage development property with a large resource base, nearby infrastructure and considerable exploration potential (a mere 2.8 km of 10 km strike has been explored). Upon approval of the EIA by the Chinese EPA, the Project’s preliminary mine design will be completed. It is important to note that the Project was found economic at $13/oz. Ag. In the intervening years since the release of its PFS, Minco Silver’s value has only increased. We consider Minco a deeply undervalued future mid-tier producer with a target price of $6.89 a share.

Score

7/11


Key

Flagship Project: 100% Ownership … 1 Point

After-tax IRR = > 20% … 1 Point

NPV/CapEx = > 1 … 1 Point

EV/Resources = < 1 … 1 Point

Cost Structure = < 50% … 1 Point

Resource Base = > 80 Mlbs. U308 … 1 Point

Future Cash Flow = Unrated

Future Cash Flow Multiple = > 5x … 1 Point

Share Structure = < 200 M … 1 Point

Debt Coverage = > 50% (or No Debt) … 1 Point

Projected Future Market Cap = Unrated

Projected Future Market Cap Growth Percentage = > 500% … 1 Point

Location: Friendly = 1 Point

Almaden Minerals Makes the Cut

Almaden Minerals Book Value

Flagship Property: Ixtaca= 100% Ownership … 1 Point

After-tax IRR = 41% … 1 Point

NPV/CapEx = 265% … 1 Point

Market Cap per Resource Ounce (< $50 is Spectacular) = US $38 … 1 Point

Cost Structure = 66% (< ½ Spot is Best) = -1 Point

Resource Base = 2.4 M AuEq ozs. = 1 Point

Future Cash Flow = US $242,260,000 … Unrated

Future Cash Flow Multiple = 3x … – 1 Point

Share Structure = 120 M = 1 Point

Debt Coverage = 0 Debt … 1 Point

Projected Future Market Cap = US $900 M … Unrated

Projected Future Market Cap Growth Percentage = 900% … 1 Point

Good Location: Puebla State … 1 Point

Conclusion

Though not a low-cost producer, with a mere 120 M fully-diluted shares outstanding, Almaden Minerals has a lot of potential upside. It has ticked enough boxes to convince us to preserve, but not add to, our stake in the company.

Score

7/11


Key

Flagship Project: 100% Ownership … 1 Point

After-tax IRR = > 20% … 1 Point

NPV/CapEx = > 1 … 1 Point

EV/Resources = < 1 … 1 Point

Cost Structure = < 50% … 1 Point

Resource Base = > 80 Mlbs. U308 … 1 Point

Future Cash Flow = Unrated

Future Cash Flow Multiple = > 5x … 1 Point

Share Structure = < 200 M … 1 Point

Debt Coverage = > 50% (or No Debt) … 1 Point

Projected Future Market Cap = Unrated

Projected Future Market Cap Growth Percentage = > 500% … 1 Point

Location: Friendly = 1 Point