reports
- Ben Pirie
LVG: Corporate Update & Thesis Rehash
What you need to know: • Progress at the Imwelo Project is continuing with the final step before the official transfer of the mining license underway, and other preparatory work at site is proceeding. • Barrick Gold continues to invest substantial capital into the surrounding Tembo licenses which excites us as LVG will share in Barrick’s exploration success (see initiation report here for more details). • We value LVG at $0.45/share representing 150% upside. This morning, Lake Victoria Gold (...
- Ben Pirie
Mining Monthly: April Edition
What you need to know: • Following a big breakout in March, gold pressed on hitting new all-time highs, however, lost steam and fell towards the end of the month up just 2% in April. Silver outperformed gold, being up 5% on the month. • Copper held its big gains from early in the month, up 13% to $4.6/lb. However, copper equities lagged, being up only 8%. • We continue to see substantial M&A activity in the sector and have consolidated some transactions as of late in Figure 1. We view M&A as a...
- Nicholas Cortellucci
- CFA
BQE: Excellent Q4 Financials; Increasing Target Price
What you need to know: • BQE reported Q4 & 2023 financial results yesterday that came in largely ahead of our expectations on revenue. • Proportional revenue was $5.4M compared to our estimate of $4.2M and adjusted EBITDA was $0.5M compared to our estimate of $0.6M. • BQE remains well positioned for another record year in 2024, we are expecting 8% revenue growth and 36% EBITDA growth. • We are increasing our target to $71/share based on 11.0x 2025E EBITDA. BQE Water (BQE:TSXV, BTQNF:OTC) repor...
- Ben Pirie
- Nicholas Cortellucci
- CFA
JEV: Exploring Spin-off for Hydrogen Assets
What you need to know: • JEV announced that it has commenced a strategic process to explore the spin-off of its hydrogen portfolio. We view this as a strong positive for shareholders. • Over the past month, JEV also closed a $2.2M private placement and amended the terms on its debentures, setting up the Company for this transaction. Yesterday after market close, Jericho Energy Ventures Inc. (JEV:TSXV, JROOF:OTC) announced that it has commenced a strategic process to explore the spin-off and s...
- Ben Pirie
EDG: 2024 Exploration Plans; Work Commencing in May
What you need to know: • EDG announced its 2024 exploration program at the Reliance Gold Project. • Plans include up to 10,000m of diamond drilling, Geochemical sampling, and geotechnical, structural, mineralogical and metallurgical studies, as well as other initiatives. • Work is expected to commence in early May, well ahead of Golden Triangle peers. • We view the pullback in EDG stock as a buying opportunity. On April 8th, Endurance Gold Corp. (EDG:TSXV) announced plans to commence 2024 exp...
- Ben Pirie
ETU: Company Update & 2024 Exploration Program
What you need to know: • ETU’s land package remains one of the largest (681km2) and most prospective in Ontario, sitting in a top mining jurisdiction in the world spanning 80km along the Porcupine-Destor Fault hosting >100Moz Au. • The Company has laid out its 2024 exploration plans, highlighting a new focus to high-grade gold showings along the eastern extent of the Hawkins zone – a high probability target for resource growth. • ETU remains to be one of the cheapest stocks and hosts one of the ...
- Nicholas Cortellucci
- CFA
DRX: Another Quarter, Another Beat; Increasing Target Price
What you need to know: • ADF Group reported Q4 & FY24 financial results this morning that beat our expectations across the board. • For Q4, revenue came in at $88.4M (+72% YoY) vs. our estimate of $77.1M and EBITDA came in at $15.5M (+164% YoY) vs. our estimate of $13.6M. • FY24 marked another stellar year for ADF as it benefits from infrastructure spending across North America and the automation capex program at its Terrebonne facility. Management expects this cycle to extend 3-5 years. ADF Gr...
- Nicholas Cortellucci
- CFA
BQE: Q4 Financials Preview
What you need to know: • BQE will be reporting Q4 & 2023 financial results in ~2 weeks, we are expecting proportional revenue of $4.2M, gross margin of 45%, and adj. EBITDA of $0.6M (14% margin). • Metals prices have been rising steadily over the last month with copper up 9%. BQE’s China JV has leverage to the copper price as it sells recovered metals. • BQE remains cheap at 10.0x/8.6x 2024E/2025E EBITDA. BQE Water (BQE:TSXV, BTQNF:OTC) will be reporting Q4 and 2023 financial results around A...
- Ben Pirie
OMG: Highly Economic PEA on the Wenot Open Pit
What you need to know: • Omai announced its initial PEA on the Wenot Open Pit, reporting a highly profitable, low capex project, with substantial upside. • The PEA reported a low AISC of US$1,009/oz, IRR of 19.8%, and an after-tax NPV5% of US$556M (at US$1,950/oz Au). • The average annual production is expected to be 142Koz over a 13-year mine life, mining an average grade of 1.51 g/t Au at 92.5% recovery. • We are increasing our target price from $0.30/share to $0.40/share. This morning, O...
- Nicholas Cortellucci
- CFA
DRX: Q4 Financials Preview
What you need to know: • ADF Group will be reporting Q4 & FY24 financial results on April 11th before market open. • For Q4, we are expecting revenue of $77.1M (+50% YoY), gross margin of 22% (vs. 18% last year), and adjusted EBITDA of $13.6M (+132% YoY). • We view the recent pullback in DRX stock as a major buying opportunity ahead of another record year ahead while valuation remains cheap at 4.5x FY25E EBITDA. ADF Group (DRX:TSX, ADFJF:OTC) announced that it will be reporting Q4 & FY24 financ...
- Ben Pirie
DNG: A Low-Risk, High-Growth Gold Processor
What you need to know: • Dynacor is entering its next phase of growth as it continues to expand production capacity and move beyond a single asset. • DNG has a stellar track record over the last decade, highlighting the strength of its business model, its ability to navigate tough jurisdictions, fund growth using cashflow, and returning capital to shareholders. • DNG has a strong balance sheet with $23M in cash, $51M in working capital, and negligible debt. • DNG is trading at 4.2x 2024E EBITD...
- Ben Pirie
Mining Monthly: March Edition
What you need to know: • Following a long period of consolidation, gold broke out in March, hitting record highs, and continuing to push higher as we enter April. • Silver and copper also had strong months up 10% and 4%, respectively. • More notably, we are finally seeing the equities outperform their underlying metal price with the GDX, SIL, and COPX up 22.7%, 21.1% and 19.4%, respectively, significantly outperforming broader markets. • With precious metals taking the limelight, the rest of the...
- Nicholas Cortellucci
- CFA
QYOU: Setting Up for a Record 2024
What you need to know: • QYOU Media announced the launch of two new channels for its Connected TVs business as well as a distribution agreement for QPlay+. • On its March 7th townhall, QYOU USA highlighted that it is currently having its best quarter ever, bouncing back from the Hollywood strike. • This sets up QYOU for a record 2024, as seen in our model and Q1/24 preview section below. This morning, QYOU Media (QYOU:TSXV) provided an update on its Connected TVs (CTVs) business including the l...
- Nicholas Cortellucci
- CFA
BQE: Profitable & Growing Micro-Cap in the Water Treatment Industry
What you need to know: • BQE’s recurring revenue is growing as a percentage of total revenue, making its business more predictable and stable. • The Company has major tailwinds from increasing environmental regulations on water discharge as well as increasing mining capex. • BQE’s EBITDA margins have been steadily improving over the past five years due to its asset-light model, reaching 22% in 2023E. • BQE trades at 5.5x 2025E EBITDA, a significant discount to its peers. BQE Water (BQE:TSXV, B...
- Ben Pirie
TM: Positive Feasibility Study + Updated Resource/Reserve
What you need to know: • Trigon reported results from the Feasibility Study on the Kombat Open Pit and Asis West Underground, confirming expectations. • TM also announced a Mineral Resource and Reserve update for its Kombat Mine, reporting its first underground probable reserves. • By way of resource conversion, new exploration, and the implementation of the Asis Far West Underground, TM still has substantial upside from what is depicted in the FS. • Last week we interviewed management, watch i...
- Ben Pirie
Mining Monthly: February Edition
What you need to know: • Gold held flat in February, continuing a long period of consolidation, and most other metals were down modestly. • The precious metal equities further sold off in February, compounding the losses in January, highlighting to the market this industry is still out of favour. • We had several significant updates from companies within our coverage. Sentiment Update Gold and PMs had another flat-to-down month, starting the year off poorly. Gold closed the month of Februar...
- Ben Pirie
TM: Production & Financial Highlights for Q3
What you need to know: • TM announced its operational highlights for Q3 ending Dec 31st. • The Company reported its first operational profit, albeit small, setting itself up for a big year in 2024 as the underground comes online. • TM announced plans to spin-out its Moroccan assets, namely the Silver Hill and Addana projects. • Earlier this week, we interviewed management, watch it here. • We expect the Feasibility Study to be reported in the coming weeks. This morning, Trigon Metals Inc. ...
- Nicholas Cortellucci
- CFA
QYOU: Executing on its Growth Strategy
What you need to know: • QYOU Media has reported several positive announcements over the last month that reaffirm our confidence in the story. • This includes record months for its influencer marketing business and QGamesMela reaching various milestones. • We recently published a management interview with QYOU, watch it here. QYOU Media (QYOU:TSXV) has reported several positive updates over the last month, reiterating our confidence in the Company. This includes record growth from its influence...
- Nicholas Cortellucci
- CFA
DRX: Increasing Target Price on Improved Outlook
What you need to know: • We are revisiting the assumptions in our model for ADF following strong industry data and positive conversations with management. • We are increasing our revenue and profitability estimates from Q4 onward to reflect the more bullish outlook. • We have increased our target multiple to 6.5x FY25 EBITDA (previously 6.0x), leading to a new $13.00/share target price (previously $10.00/share). • Watch our recently published management interview here. We are revisiting our m...
- Ben Pirie
OMG: Substantial Resource Update; Advancing to PEA
What you need to know: • Omai announced a substantial MRE, increasing its Wenot indicated and inferred resources by 10% and 45% respectively. Resource grades also increased significantly (10% indicated, 16% inferred). • Today’s Resource Update highlights the Company’s ability to cost- effectively increase the resource while producing what we believe should be a much more economical open-pit resource (578 Koz Au was added to the open-pit resource in this update) • OMG plans to release a Prelimin...
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