At this year’s Vancouver Resource Investment Conference (VRIC), Brent Cook of Exploration Insights was back with his popular Q&A on junior mining stocks.
Audience members were asked to put forward questions about their favourite junior mining companies, and Brent did his best to provide some insight. Also joining him on stage was Joe Mazumdar, a former senior mining analyst at Canaccord Genuity who recently left to join Cook at Exploration Insights.
Here’s an overview of the companies that were asked about, with a few highlights of what Cook and Mazumdar had to say. Most of the companies discussed are focused on gold, but a few silver companies were mentioned as well.
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Azure Minerals (ASX:AZS)
Azure is an Australian junior with a silver discovery in Mexico. “They’ve made a really interesting silver discovery in Mexico in Sonora just south of Cananea … one of, if not the largest copper mine in Mexico,” Cook said. “I think it’s one of the better silver discoveries I’ve seen in quite awhile.”
Cook admitted that the stock may be “tough to get at” since it is traded in Australia, but reiterated that he is “pretty positive towards this discovery.”
Roxgold (TSXV:ROG)/Semafo (TSX:SMF)
One attendee asked about Semafo, a gold mining company which operates in Burkina Faso. While Mazumdar wasn’t able to comment on Semafo directly, he offered his insights on Burkina Faso as a jurisdiction.
Put simply, Mazumdar believes that the recent attack at a luxury hotel in Burkina Faso was not part of the broader political shift with the country’s change in president. “It happening in Burkina Faso is obviously unfortunate, but it’s not unlike things we’ve seen everywhere else,” he said, citing attacks in Paris, Turkey and the US as examples. He stated that Roxgold is doing well, and that, all other things aside, being located in Burkina Faso should not alone rule out a project for consideration.
Tahoe Resources (TSX:THO)
When asked for his top pick silver producer, Cook pointed to Tahoe Resources. “They’ve got a bid on their project a couple of times,” he said. “They’ve got a nice, fat, consistent [silver] vein, very high grade, very profitable.”
B2Gold (TSX:BTO)
Cook owns a position in B2Gold as a result of the company’s acquisition of Papillon resources and the Fekola project in June 2014, but is trying to get rid of that position.
As Mazumdar explains, that has to do with the company’s recently announced drill holes at Fekola Deeps. “We pointed out in our letter that, they’re nice, but this comes in the latter stages of stage five and six of the open pit design where the strip ratio gets to seven to eight to one … in terms of NPV impact would be low,” he said.
Midas Gold (TSX:MAX)
Cook stated that Midas’s Stibnite gold project is “probably the best undeveloped gold deposit in the US right now.” His only concern for the project was the length of the permitting process in Idaho. “It’s a long process,” he said.
Pilot Gold (TSX:PLG)
While Cook called the team at Pilot Gold “one of the best exploration groups out there,” he stated that it is not a stock that he currently owns. “Their discovery at Kinsley Mountain in Nevada … It doesn’t have the size yet to be economic,” he explained. The company also has a porphyry gold system in Turkey (Halilaga) that Cook says works somewhat ok at current metals prices, and is an undervalued asset.
Sabina Gold and Silver (TSX:SBB)
Mazumdar stated that Sabina’s Back River project has a very good grade, but that the real issues he’s paying attention to there include infrastructure, upfront capital and working capital.
Focus Ventures (TSXV:FCV)
“They’ve got a fantastic phosphate deposit in Peru,” Cook said, drawing attention to the company’s recently released prefeasibility study for Bayovar 12. However, he stated that funding for the project was his issue. He had tried to sell the stock at one point, but currently holds it and says he has a lot of confidence in management to bring the project forward.
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Kaminak (TSXV:KAM)
Not surprisingly, Cook, like most others following the junior sector, was positive on Kaminak gold. He was very positive on the company’s recently released feasibility study for its Coffee project in Yukon, and believes the deposit will be an acquisition target for larger companies.
Pretium (TSX:PVG)
Pretium is another popular stock among those that follow the junior mining space. However, Cook and Mazumdar are a little more hesitant regarding the high volatility of grades within the company’s Brucejack project in British Columbia. As Mazumdar explained, the plan is to bulk mine the deposit. While it would be better to mine the deposit selectively, that isn’t exactly possible.
“I have a lot of respect for the geologists there. The reality is that uncertainty doesn’t really go away,” he said. Mazumdar and Cook do not own shares of Pretium.
Goldquest Mining (TSXV:GQC)
Cook stated that Goldquest has a nice deposit, but that it’s not a stock he owns. “The reason we don’t own it (and I could be wrong) is, we don’t think its large enough to attract someone to come in and buy it, which means they’re going to have to build it,” Cook explained.
Northern Dynasty Minerals (TSX:NDM)
Certainly, Northern Dynasty’s Pebble project in Alaska has come up against multiple roadblocks with the US Environmental Protection Agency (EPA), and the saga was brought up in several talks at VRIC. Cook believes that an eventual decision on the EPA’s position is “going to be a positive step for the company.” However, he’s hesitant about the project for other reasons.
“I don’t think that gets built in my lifetime,” he said. “It’s a nice copper deposit at depth, but the capex to build this thing is [several billion] dollars.”
For more information, contact Cook or Mazumdar at Exploration Insights.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Related reading:
VRIC 2016, Day 1: Notes from the Floor
VRIC 2016, Day 2: Notes from the Floor
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