Some more interesting news that I thought I would bring to your attention today.
Lake Shore Gold - (LSG.TSX) - One of my favourite small junior gold producers to follow is Lake Shore Gold simply because they are generating free cash flow even at current gold prices. So many gold companies in the last few years have not delivered for investors when it comes to the bottom line (making money) but Lake Shore is one of them. Management has done a terrific job of turning the company around since the low of $0.16 cents in 2013 and as a result the company is a 6 bagger from those levels.
This morning Lake Shore released the 2014 year end reserves of 773,300 (4.4 g/t) ounces of gold proven and probable a 29% increase from 2013 year end. Reserves at the Bell Creek Mine more than doubled which will increase the length of mine and provides flexibility to increase production. A new discovery was made in 2014, when exploration drilling to the southwest of Timmins West mine resulted in the finding of the 144 Gap Zone. Drill results from the 144 Gap Zone so far are extremely promising and an initial resource estimate is expected before year end.
LSG has two producing mines that use a central mill. Free cash flow remains strong and Lake Shore is benefiting from a weaker Canadian dollar. Estimates are for that every 10 cent drop in the dollar impacts to net free cash flow is ~$30 million. Cash balance currently is ~$72 million.
Haywood is out with an updated research report this morning and a target of $1.30 (Risk: High).
Read: Lake Shore Gold Announces 29% Increase in Ore Reserves
Related: It's all about Free Cash Flow at this junior gold producer
Canamex Resources Corp - (CSQ:TSXV) - Canamex is out with an initial resource estimate on the historical Bruner project in Nevada. The market doesn't seem to care much as the stock is currently flat on only 293,000 shares traded. The resource is what I would consider small being only 300,000 ounces including indicated and inferred ounces.
The Bruner project has three separate deposits.
- HRA -86,000 indicated and 4,000 inferred ounces.
- Penelas - 153,000 indicated and 32,000 inferred ounces.
- Paymaster - 25,000 inferred ounces.
I will always like to think that small deposits are not attractive to majors. The Bruner deposit does have a bit of room to grow as all three deposits are open for expansion as well as an 200m strike length gap at the Penelas resource. Bruner is a past producer of an estimated 100,000 ounces at 19.2 grams per tonne. It appears all the high grade material was mined as the current resource has a grade of .72 g/t in the indicated category and .77 g/t in the inferred category.
Read: Canamex presents an initial resource for the Bruner Gold Project Nevada
Altius Minerals - (ALS:TSX) - Altius is out with financial results for the quarter ending January 31,2015. Third quarter royalty revenue came in at $7.58 million. Offsetting the royalty revenue was a decline in the investment in Alderon Iron Ore (ADV:TSX). At the end of January, Altius held 32,869,006 shares in Alderon or 24.9% of the company.
After selling it stake in Virginia Mines in February net debt at Altius is currently ~$62 million. The large debt position came from purchasing a large portfolio of cash flowing royalties from Sherritt that closed in May 2014. A smart acquisition that took years of negotiations brought ALS 11 cash flowing royalties in potash,coal,electricity (power), and nickel. These are all long life assets with shortest life being 11 years and the longest a whopping 1134.
Altius recently acquired Callinan Royalties to add to its royalty portfolio. The acquisition added copper and zinc to the already diversified portfolio.
Share price performance has been awesome averaging 27% annually since inception in 1997. Altius is not interested in the precious metals sector and trades at a significant discount to peers in that space Franco Nevada and Osisko Royalties. The royalty business is very sound and as debt is paid down management may look at paying a dividend.
Read: Altius Minerals Corporation Reports Third Quarter Attributable Revenue Of $7,583,000 And Net Loss Of $5,701,000 or Callinan Cash Arms Dalton for Further Deals
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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence