RIO, TECT EDV, WEX, MAI
Rio2 aka RIO announced they have completed the purchase of 99.1% ownership -- the rest is held by a local company -- of the producing Conestable copper mine in Peru. There is still one hurdle to cross, the delivery to RIO by the vendor of a Peruvian tax certificate, which will release the rest of the cash involved in the deal. Apparently the certificate is still winding its way through the slow Peruvian bureaucracy.
RIO figures it will take about six months to integrate Conestable fully into its operations, and have maintained guidance for 2026 of production of 27kt CuEq. (Conestable also produces decent amounts of Ag and Au.) Then we will hear more detail about Rio's plans going forward for the this long life mine with plenty of exploration upside on the property.
Message 35412852
The shares of Tectonic Metals aka TECT have really taken off after the release of excellent drill results from the Chicken Mountain zone on its Flat gold prospect in Alaska. Now we hear about 20 more holes drilled into four exploration targets.
Drilling at Black Creek has confirmed it is another intrusion related gold deposit on Flat, with the highlight assay being 4.50 g/t Au over 48.7m7, including a high-grade core of 7.79 g/t Au over 24.3m with 15.19 g/t Au over 610 m, starting from surface Note that Chicken Mountain mineralization also starts from surface, greatly reducing the potential cost of mining it.
Drilling at Alpha Bowl, highlighted by 10.60 g/t Au over 1.52m, extended mineralization 500m north, making the total combined strike length of Chick Mountain and Alpha Bowl to 3.3 km.
Drilling at two other intrusion related targets, Jam and Golden Apex, found enough gold to warrant follow-up.
Assays for 14 more holes drilled last year at Chicken Mountain remain pending. I expect we will receive details about about this year's exploration plans once they are released.
These results were good enough that today, a day after the releases of the PR, TECT was up big again on a day when almost all gold-related stocks were down down down.
Message 35411509
West African gold Endeavour gold aka EDV released its annual and Q4 results and outlook for 2026.
As has become usual for EDV the last few years, they had an excellent quarter, allowing the achieve guidance for 2025. Q4 production increased significantly to 298k oz Au, though cash costs also increased to $1450/oz.
In spite of the cost increase, as well as paying out a record dividend, buying back shares worth $3.4M, plus reducing debt to a negligible $61M, EDV has so much FCF that they were able to increase their cash stash to $445MB.
Due to mine sequencing, EDV has guided to lower production in 20026 at 1090k to 1265k oz of Au, but in spite of this they expect to generate enough revenue to further increase dividends over the next three years while continuing share buybacks. Some of this growth will come from the Assafou development project in Côte d’Ivoire for which they have received the necessary permits and an FBS is expected shortly, aiming for first gold production in H2 2028. As well, they are maintaining a large exploration programme on their many properties in West Africa.
EDV has done very well the last few years, with the share price tripling in short order, and I expect they will be able to maintain that momentum for as long as the PoG allows. And note that almost all of their asseys are in stable well-governed countries.
Message 35411349
FWIW, BMO issued a new Analyst report on EDV. Citing significant deleveraging and expected strong FCF, they maintained EDV at Outperform with a target of $100.
FWIW, TD also issued a new analyst report on EDV. Citing steady production and increasing dividends, they called the Q4 results a Slightly Positive, and kept EDV at Buy with a target of $94.
FWIW, likewise Scotia for similar reasons called the Q4 results a Slight Positive and maintained EDV at Sector Outperform with a target of $90.
Last May, Western Exploration aka WEX announced they had completed a PEA for its Dilby George Au/Ag project in Nevada. At the base case with a gold price of $2150, the numbers were decent, but at what they called the Upside Case at a gold price of $3000, they became very good, with an after tax IRR of 62.2% and a Payback Period of 1.4 years. You can imagine that at the current POG the numbers would be outstanding, more than justifying the estimated capex of $128M.
Now WEX has announced they have begun the permitting and EIA process for Dolby George, with the Mine Plan of Operations to be submitted next quarter and the baseline environmental reports to be submitted Q2 2027.Meanwhile, drilling up of more Resources continues. It is unclear if WEX intends to build the mine itself, bring in a partner, or sell to a developer. In any case, the more now gold and silver they can find on the property the better.
Message 35409932
Noting that PMs and PM stocks remain at overbought extremes, Saville continues to maintain that the first serious down day in PMs and PM stocks, i.e. today, will lick off a multi-month correction within an ongoing bull market.
Saville also comments on Minero Alamos aka MAI. He contends that it remains undervalued and maintains his $10 target, while mentioning the $5-5.50 range as a good place to add to your holdings if the share price gets there. |
