Trading Ideas |
Tuesday, August 12, 2014
Sunday, August 10, 2014
http://www.midasgoldcorp.com/i/pdf/ppt/Midas-Gold-Presentation-2014.pdf
GM: Midas Gold Corp. (MAX:TSX) has the Golden Meadows project in Idaho. This is a fantastic asset, a cornerstone asset, and was a site of historic but fragmented production over an extensive period. Midas has strong management led by CEO Steve Quin with experience in advancing projects through permitting, development and into production, as well as remediation. You don't get that very often at all in a development-stage company.
Midas has more than 7 Moz in resources, of which we estimate 5 Moz would be mined over a 13-year period at a cash cost of about $420/oz gold net of byproduct credits. However, we're quite conservative on U.S. permitting and the time it will take for its plan of operations to be reviewed and approved. It could take as little as three years, but our valuations are typically generated considering a longer permitting process.
TGR: What's your rating for Midas?
GM: We've given it a Buy rating and a target price of $1.50.
MARCH 2014
JK: Look for a company that has a high enough deposit grade so that even at the current metal price there is still a decent profit margin. These companies are available at bargain prices. One that I've recently recommended is Midas Gold Corp. (MAX:TSX), with its Golden Meadow gold project in Idaho, which has a grade of about 1.5 gram gold per ton (1.5 g/t), plus an antimony byproduct credit. This is significantly better than the 0.8 or 0.9 g/t deposits with their 5–10 million ounce (5–10 Moz) resources that everybody was excited about during the past few years. Midas Gold is working on its prefeasibility study; it has 5 Moz that it would mine over a 14-year period. You are not paying much of a premium to own this type of company.
TMR: Does the company have enough money in the bank to keep going?
JK: Yes. It recently raised almost $10 million ($10M) from Teck Resources (TCK:TSX; TCK:NYSE), a company that makes shrewd acquisitions. It's counting on a lot more ounces being present than are already outlined. The company has a 9.9% foothold. Teck is a potential future exit strategy for Midas.
Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) also paid $15M for a 1.7% net smelter return, which, based on the permitting timeline and the ore mining schedule that the company proposed in its Preliminary Economic Analysis (PEA), suggests a 19% discount rate for the future royalty stream. Both these investments, totaling $25M, have given Midas sufficient capital to complete the prefeasibility study expected sometime in the first half of next year.
http://www.theaureport.com/pub/na/10-strategies-for-success-in-a-flat-commodity-price-market-john-kaiser
BRENT COOK JUNE 12
BC: In central Idaho's old Yellow Pine District, up in the mountains east of McCall, Midas Gold Corp. (MAX:TSX) consolidated the district and has been very successful in proving up gold, silver and antimony resources. It has a resource in excess of 6 Moz in all categories in three main deposits, grading almost 2 grams/ton, open pittable. The antimony and silver scattered through it provides an extra byproduct. Permitting is likely to be a long endeavor, but probably doable, because of this area's long history in large-scale mining operations. Midas is doing some intelligent things, environmentally speaking.
This area is in the headwaters of one of the forks in the Salmon River. Salmon spawn in the river below, but can no longer get up the river because the old pit stopped them. So Midas plans to reroute the river so the salmon can continue up above the mine. Also, because the metallurgy is more complex, Midas probably will produce concentrate and may truck it to the Snake River Plain for processing. As a result, no cyanide will be used onsite.
TGR: Have you stomped around on this property yet?
BC: Not since Midas came in. I looked at it probably about 10 years ago as a consultant and in fact in my teens I used to run around Yellow Pine fishing and causing trouble. Another positive is that Midas is now led by Stephen Quin, who's been very successful growing and selling companies in the past including Miramar Mining Corp., which was sold to Newmont, and Sherwood Copper Corp., which was combined with Capstone Mining.
TGR: What's Midas' next big step?
BC: It is currently drilling now and working on its prefeasibility study. That's probably the next big thing.
http://www.theaureport.com/pub/na/follow-the-majors-to-find-investment-prospects-brent-cook
http://www.kaiserbottomfish.com/i/jk/pdf/KaiserChicagoUniversityClub20140625.pdf
NPV 1400 $5 NPV 1800 $10
March 2014
JK: Among the producing companies that I cover, B2Gold Corp. (BTG:NYSE; BTO:TSX; B2G:NSX) is my top pick and rated Sector Outperformer. The company has an attractive cost profile across its asset base, and all-in costs are expected to decline in 2015 and capital spending at the Otjikoto mine in Namibia will wind down next year. This is a mine that's currently being constructed now. We expect all-in costs to be sub-$900/oz in 2015 and that the company will be positioned to generate significant free cash flow by next year. Otjikoto coming on-line will contribute to a nearly 50% increase in gold output from 2013 to 2015.
That does not take into account the recently discovered Wolfshag zone. I would expect that once the company is able to incorporate the higher-grade Wolfshag zone into the Otjikoto mine plan, we'll see further improvement in cost and gold output from that project.
Beyond the development of Otjikoto, B2Gold's management has shown improvements at each of the company's three projects currently in production, and we're expecting modest increases in output from each of the La Libertad, El Limon and Masbate mines this year. With B2Gold projected to exceed a half-million ounces (0.5 Moz) gold by 2015, that certainly puts it into a fairly substantial production base.
The bottom line is that B2Gold is a company with attractive margins and significant near-term growth that's all internally funded. That's a great combination for any producer to have.
TGR: There were concerns raised about B2Gold's acquisition of Volta Resources Inc. Do you think that's a good fit?
JK: It was an acquisition the market didn't expect, but I can understand why the company likes the asset. It liked the exploration and management team. Plus, it was a rather small acquisition, at roughly 3% of its market cap, for something that could be important in the longer term. I think it made sense.
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