MAI, WGX, OGC, RRI, WRLG, DV
Minera Alamos aka MAI released quite the thunderbolt today, when they announced they are buying a group of gold properties in Nevada from Equinox Gold. I am already familiar with these properties because I used to own shares in a company that owned them, whichwas bought out by Calibre which in turn was bought by Equinox.
The main prize of the purchase if Pan, a producing gold mine, but it also includes the nearby advanced Gold Rock project and the Illipah prospect. Pan has produced over 335k oz Au since it started up in 2017 and has a current Resource of 288k oz M&I, which can expanded through exploration. Upside is available from Gold Point, which is located 8 mi from Pan and already has a Resource of 403k oz Au M&I, which again can be increased through further exploration.
The market did not like this news, pushing down MAI's share price by almost a quarter, primarily IMO because of the dilution which will come from the associated PP of $110M plus $25M of MAI shares going to EQX in addition to $90M cash to complete the deal.
I have a longer term view so I took advantage of today's sale price to add to my stash of MAI shares for the first time in a while.
Message 35217551
West Australian gold miner Westgold Resources aka WGX released its FY26 guidance, which covers the period from July 2025 to June 2026. Note that this guidance mentions that production is back-weighted to the second half of the fiscal year.
They are forecasting production of 345-395 oz Au while investing non-sustaining capex of $270M as well as spending $50M on exploration and defining Resources. All these numbers are a meaningful increase from FY25, which just ended.
If WGX can meet these targets, the share price on the TSX might break $3, but we need to keep an aye on costs, which are also forecast to increase.
Message 35217456
It's safe to say that OceanaGold aka OGC listing in the US has been a success. The share price keeps setting new ATHs.
But it is much more than the new listing. Add in the high price of gold and copper, and especially how well OGC's operations are running, and you have a recipe for success in the markets.
By any measure, it was a bang-up quarter. OGC produced a record 119500 oz Au and 3700t Cu while generating free cash flow of $120M and a net profit of $118m also both records for the company. Cash costs did rise as expected, to $1210/oz Au, but this still beat expectations. They also spent another $21M on share repurchases during Q2 as well as paying another dividend.
OGC remains debt free and thanks to all that cash flow were able to build their cash stash to almost $300M. If the PoG stays high for the rest of the year, it is not hard to see higher share price targets mentioned below being reached.
Message 35217395
FWIW, following OGC's Q2 results, TD issued a new analyst report. Citing good results at Halle, strong cash flow, and a strong balance sheet, TD called the results Positive but kept OGC at Hold with a target of $22. Scotia also issued a new analyst report on OGC. Calling the results Positive, Scotia kept OGC at Sector Outperform and raised their target to $27. Likewise, BMO issued a new analyst report on OGC. Citing the earnings, production, and costs beat, BMO kept OGC at Outperform and raised their target to $28.
Prospect generator Riverside Resource aka RRI announced the start of drilling on their JV with QQQ.CN on the La Union prospect in Sonora, Mexico. RRI has assembled the property and is running the exploration campaign paid for by QQQ.
Over the last three months RRI geologists conducted an intensive exploration campaign which has led to a better understanding of the geology of the property, in the process generating the four targets which will be drilled in this campaign, intended to comprise 6 holes totalling about 1500m.
This is just the start of the exploration of La Union, which is scheduled to take more than 5 years and will result in QQQ obtaining 100% ownership in exchange for paying for exploration and delivering RRI a nice whack of cash and QQQ shares.
Message 35215975
West Red Lake Gold aka WRLG released an update on its Madsen gold mine in Ontario which recently restarted production. As they continue to ramp up production, things so far have been going well, with the greater drill density than the past operator used meaning grades are meeting expectations, with some grades even coming in higher than expected. Recoveries are meeting or exceeding expectations, so in July WRLG was able to pour 3800 oz Au, with most of it being sold, generating over $C16M revenue.
The mine upgrade continues, with an old shaft being renovated for future use and a number of voids identified to store mine waste, thereby reducing costs.
So far things seem to be going well. Let us hope it continues.
Message 35215996
When Dolly Varden Silver aka DV was consolidating the Kitsault Valley properties in BC's Golden Triangle that are their main focus, they also acquired some other nearby properties. One of them, Red Cliff, is located within DV's American Creek property and contains a past-producing mine. It was also subject to a JV with 65% ownership by DEC, but now that share of Red Cliff has been acquired by MBL.CN.
Here's hoping MBL is more interested in moving Red Cliff forward than DEC was.
Message 35216015 |
