Brought to you by Advance Gold (AAX.V)
In recent commentary on gold, I mentioned a magic number, of $1350, as an important technical threshold to move through. This week gold hit the magic number, and then backed off.
This $1350 range, has been a level, gold has been reluctant to jump over during its last handful of attempts during the past few years. This time on Wednesday, it was pretty stretched making the move to hit $1350, it looked a little tired when it failed to pass the test.
Then on Thursday it dipped fairly hard, then came on strong Friday to close the week with a solid green day.
With some of the recent technical chart successes. Including a cup and handle, and a golden cross for the price of gold chart, with the fundamentals of supply and demand, and an improving sentiment. We are going through the magic number soon.
As we are seeing an improvement in gold over the past few months, we are seeing confidence growing among gold stocks with reasonable valuations and good potential. I can see this blossom into enthusiasm soon from those that have been in early, as the gold market is transitioning into a serious bull market.
Next up, I have some updates from companies that had news this week.
Watchlist Stocks and Stock Picks - In The News This Week
Great Bear Resources (GBR.V)
Date started coverage: Dec. 17/2018
Closing price on date coverage started: $2.01
Second pick date: Jan. 21/2019
Second pick date close: 2.59
Friday closing price: $3.71
Great Bear had more drill results out from their Hinge Zone target at Dixie Lake. This was step outs along strike, and the grades had nice high-grade gold, but, certainly not up to the 1,600 g/t number that got everybody giddy with excitement. Why not, that is spectacular, also not easy to follow up. So far they have the strike length of 330 metres in several holes. It looks like they have determined enough strike length for a zone to follow to depth. The high-grade lenses are giving them solid direction on where to follow them to depth. So far, they have really been just scratching the surface, within the first few hundred metres below surface. In Red Lake, the mines are deep and high-grade with high margins to mine them. I’m eager to see them test the depth potential now, I think that will be the key focus of near term drilling.
Walker River Resources (WRR.V)
Date started coverage: Jan. 30/2019
Closing price on date coverage started: $0.11
Friday closing price: $0.205
On Tuesday of this week, Walker River announced two exciting holes from its Nevada project. I was fortunate enough to be able to do another online video interview with Michel David, CEO of Walker River. You can find it on the homepage at Allan Barry Reports website. During the interview, I had the chance to ask about a couple things that stood out to me in the drill results. On one hole, they hit a 1.5 metre intersection of high-grade and then went into the historical mine workings. To me, this stands out as a strong indication that those oldtimer miners didn’t get everything. Even when they were right on it. The biggest attention getter was the other hole they reported. They had a 19.9 metre intersection of 10 g/t gold, it also includes two 1.5 metre intersections, one with 18.3 g/t gold and the other 78.1 g/t gold. The best hit was further down the hole, they hit a 3 metre intersection, starting at 57.9 metres of 111.27 g/t gold. They have additional holes in the lab and I think we could also hear news soon about the 10 million warrants that expire at the end of April. They are in the money with a strike price of 12 cents. If they all get exercised, it gives them $1.2 million which will cover a lot of RC drilling in Nevada.
Bonterra Resources (BTR.V)
I’ve followed Bonterra a bit for a few years, in late 2017 they hit their high and since then has been getting cheaper. Recently hitting multiple year lows. There has been management changes. They have 51 million shares fully diluted, and at recent prices a $100 million valuation. Earlier this week, they announced a private placement of $30 million, with Sprott Capital Partners LP as the lead agent. Around $5 million is in flow through, and the remaining $25 million is in shares. Flow through priced at a premium of $2.67, the non-flow-through is at $1.95 which is the current stock price, so no premium or warrant. Obviously folks are looking at some big bets to get this ship turned around. They are in an area well known for mines. Time to start following this one as a potential turnaround play.
Amex Exploration (AMX.V)
Date started coverage: Jan. 27/2019
Closing price on date coverage started: $0.58
Today’s closing price: $1.30
While awaiting more drilling news from Amex, they delivered news on the financing front. They did a $5 million raise, with billionaire mining investor Eric Sprott coming in for $3 million of the financing and now owns 7.4% of the stock and can go up to a little over 10% on a fully diluted basis. We still await the step out hole from the high-grade zone and now they are cashed up for more drilling. The market liked the news as it closed on Friday at a new all-time high. It is up more than 100% since making it a pick which is a good time to reflect. Right now, I see few out there like Amex, considering their potential to deliver high-grade and they still have a modest share count so still a cheap valuation. It still looks to have a lot of upside.
Marathon Gold (MOZ.T)
Marathon Gold has an exciting gold project at their Valentine Lake gold project in central Newfoundland. This week they announced the closing of a royalty sale to Franco-Nevada Corp. for proceeds of $18 million. Franco-Nevada, in past iterations was an industry leader in creating the royalty business in mining. This gives them a 2% NSR to Franco-Nevada, and gives the project a strong endorsement of the potential for it to become a mine. They also mentioned this will give them funding to complete a preliminary economic assessment in 2019, ahead of previous plans. On a shares issued basis, they currently have a valuation of a little over $150 million. With a fair bit of stock out. Looking at the chart, it has been performing strongly alongside the recent stronger market for gold. They have just went through a bullish golden cross with the short term moving average going through the longer term moving average. Definitely one to do some homework on, take a closer look under the hood. You rarely go wrong, betting on the same side as a Franco-Nevada wager.
Westhaven Ventures (WHN.V)
Date started coverage: Oct. 20/2018
Closing price on date coverage started: $0.73
Closing price on end date of coverage as a pick (Feb.19/2019): $0.93
Last weekend I dropped Westhaven as a pick, mainly because I’m concerned about their potential for size. The first concern is the drilling after the big high-grade discovery holes were drilled, secondly, they did geophysics and put out a news release on the completion of the survey with an enthusiastic news release. Then when they announced this week that drilling is underway again, they mentioned the geophysics, but, this time with less fanfare. This signaled to me that the geophysics might not be great at helping them understand the known veins. At least not any more than the mag survey. They are drilling, there last drilling campaign showed a trend of making it smaller with more work not bigger. They are cashed up to drill, they have around a $100 million valuation, soon we will know more about the smaller or bigger question from the truth machine.
GoldOn Resources (GLD.V)
GoldOn promotes itself as an Ontario focused prospect generator. They are a patchy trader, with only have 9 million shares. What caught my eye is that Perry English, had joined this little company as an advisor. He has spent his career as a prospector, with a focus on Red Lake, Ontario, and done tons of option deals on his claims. One of his recent success stories is he did the deal to get Great Bear (GBR.V) its ground at Dixie Lake. This one is way too early for me, I would love to see if they do some deals on Perry English’s claims in Red Lake. I will be adding them to my watchlist as I want to watch how things progress.
Well the long awaited drill results came in this week, and as I had mentioned last week, I didn’t think they would be stellar. Sure, they hit massive sulphides, but, over narrow widths. My hope, when I got bullish on them during their 2018 drill campaign, was because I thought they had a chance of adding thick intersections of massive sulphides. Instead, they got more of the same as last year, thin intersections of massive sulphides with very good grades. They can no longer pump it up to past glory on technical successes, they are in the “Show Me” state of Kansas now. The writing was on the wall, based on how long the results took, that they weren’t what the company and exploration team were hoping for. They did mention doing downhole geophysics. Hopefully this will help them to find the thick intersections of massive sulphides. Or maybe the nickel in Nickel Mountain is just too broken up and patchy to make a mine. I can’t leave this one alone, because of the massive sulphides and grades. I will try to time it as a pick later this year, when they hit a bottom that can be played for the summer, fall and winter drilling enthusiasm.
Prize Mining Corp. (PRZ.V)
Well, on Monday, this trainwreck starts trading again as they have served out their time halted from trading while in the penalty box. Due to horrible mismanagement that basically gave away a big chunk of the company in cheque swaps for services, paid up front, that will likely never amount to a hill of beans worth of ‘marketing’ services. After the fiasco was revealed as a problem by the regulators, Mike McPhie, the leader of the company defended the ‘funding’ efforts. He is still running the company and should know the difference between what is okay or not, as he has been a top person in mining industry advocacy associations. I feel really bad for the shareholders, due to the expensive decisions by management, they will see the stock get pounded, and there will be a crippling overhang in the stock that will be an anchor for a long time. They get added insult to injury by having the same captain steering the boat as the one that ran it ashore.
MAX Resource (MXR.V)
MAX is the latest version of the we are gonna be the next Witwatersrand gold district. Their conglomerate project is in Medellin, Colombia, yes that Medellin. The bull brigade promoting this one have been eagerly awaiting lab results from the small conglomerate samples they had taken. Instead on Friday they got geophysics results that the company was bubbling with enthusiasm over. I got a feeling that the old lab results are going to make this stock’s promotion a lot harder. I’ve heard rumours of some pretty big numbers floating around, colour me skeptical until I see them.
Advance Gold Corp. (AAX.V)
Allan Barry Laboucan is President/CEO of Advance Gold
On Friday, Advance Gold announced an increase in the ongoing private placement from $325k to $370k, and also that it is expected to close within a week. This funding will fund the next drilling campaign at the Tabasquena project. A cluster of veins have been drilled, in a large epithermal vein system with indications from drilling only the top of the system has been drilled. The next step is to drill a deeper hole to get closer to the boiling zone of the system. In addition to the deep hole, the drilling will drill close to and step outs from a 12 metre intersection of a vein in the oxide portion near surface. The goal of near surface drilling will be to better understand the potential of mining in the oxide zone. The project is fully permitted for mining. The deep hole and the shallow holes will total around 1100 metres in the upcoming drilling. I’m looking forward to the upcoming drilling at our Tabasquena project, I want to find out if the geological model for epithermal vein systems holds up at depth, and also get an idea about if we have something near surface that we can use our mining permits and mining equipment to develop.
While reading this report, it reminded me how much I used to like doing the news release shows during the last gold bull market. There was so much news coming out back then, I could usually find a few to talk about each day.
We are just coming out of a bear market for gold stocks, and other commodity stocks as well. I’m starting to find more news releases to talk about on a weekly basis from companies on my watchlist and stock picks.
Tomorrow, I will be doing an interview with Bob Archer from Newrange Gold (NRG.V), this is one of the current picks in the Allan Barry Reports. I picked them based on their drilling results, reasonable valuation, and the potential to get the Nevada Premium that gold companies with good projects often receive. I will post the interview on my website and send a link once it is ready.
On that note, I encourage folks to check out the past reports on the website, plenty of hidden gems of companies and knowledge in them. Be my guest to share it around on your social media and email to friends that you think would be interested. Your efforts to promote my work is greatly appreciated.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.