The Morning News – Lake Shore Gold, Continental Gold, and Roxgold

POSTED ON April 07, 2015 BY James Fraser
CATEGORY Continental Gold, Lake Shore Gold, Roxgold, Stories,

Lake Shore Gold Pour February 2015 (Image: Lake Shore Gold)

Lake Shore Gold - (LSG:TSX) - Lake Shore Gold is one of the first companies out with first quarter results. The company had record production of 53,000 ounces in the quarter. Production was helped by having an average grade of 5.7 grams per tonne. LSG continues to generate free cash flow and in my opinion should be a go to name for investors looking at junior gold producers.

Additional highlights in the quarter included:

Cash and bullion of $77.0-million at March 31, 2015;
$4.3 million in debt repayments;
29-per-cent increase in ore reserves announced on March 12, 2015;
Continued exploration success at 144 Gap zone, seventh surface drill added in the first quarter of 2015.

Tony Makuch, president and chief executive officer of Lake Shore Gold, commented: "We had a very successful first quarter highlighted by strong production results, considerable growth in our cash position and further debt reduction. We also announced a significant increase in reserves and continued to advance the 144 Gap zone. Our average grade for the quarter was the highest since we declared commercial production and reflected a combination of mine sequencing and improvements in grade control.

Management is currently maintaining guidance while they assess the situation at between 170,000-180,00 ounces of gold in 2015 so investors are unlikely to see the current production level sustained. Costs though are expected to better than estimated.

LSG stock is up 4 cents on the day last at $1.04.

Read: Lake Shore Gold Reports Record Quarterly Production

Continental Gold - (CNL:TSX) - Continental has released 15 drill holes on the Veta Sur vein system at the Buritica project in Antioquia, Colombia. The goal of the program is to upgrade inferred resources to the measured and indicated category.

Highlights:

Drilling was successful in infilling sections of the eastern Veta Sur vein system, covering more than 200 metres of lateral strike by 700 metres of vertical extent.
Step-out drilling extended the eastern Veta Sur system below and to the south of the current mineral resource envelope.
Infill drill holes encountered multiple vein families with grades times thicknesses that are substantially greater than those expected from the current mineral resource block model for Veta Sur. Broad and/or high-grade intercepts in related Veta Sur master veins

Veta Sur currently hosts 37 veins (growing) and currently encompasses approximately 40% of the current combined M&I mineral resources and 24% of the combined Inferred mineral resources at Buritica. Management expects a large portion of future resource growth at Buritica to come from Veta Sur.

"Results from the 2014 infill and extension drilling program in Veta Sur continue to demonstrate robust continuity of master veins, commonly with better grades than predicted from the current mineral resource estimate," commented Ari Sussman, President and CEO of Continental. "This bodes well for the next mineral resource estimate for the Buriticá project, anticipated in late Q2 2015, as well as for the future development of Veta Sur."

A March corporate presentation states CNL has $50 million in cash. Continental investors can expect steady news flow with environmental permits, an updated resource estimate, and an updated PEA expected before years end.

Read: Continental Gold Continues To Drill Greater Grades and Widths Than The Current Mineral Resource Block Model for the Veta Sur Vein System, Buritica, Colombia or Continental drills high-grade ahead of new resource and final permit

Watch: Continental Gold (CNL.TO) 2015 Subscriber Summit Presentation with CFO Paul Begin

Roxgold - (ROG:TSX) - Roxgold has announced construction is under way at the Yaramako gold project in Burkina Faso. First production is expected in a years time (Q2 2016).

The Yaramako project is one of the highest grade (15.8 g/t) undeveloped gold projects in the world. The high grade leads to robust economics (after tax) of a $250 million NPV (5%), 48.4% IRR, and a 1.6 year payback period at $1300 gold.

Pre-Production capital is budgeted for $106.5 million for the 1 year build. Expansion potential remains strong at the 55 zone as well as regionally with several drill targets.

"We are delighted to announce that we have officially broken ground at Yaramoko. In less than three years, Roxgold has advanced the project from a maiden resource through feasibility and permitting and now into construction," said John Dorward, President and CEO. "We remain well-funded and expect to be pouring gold at our high grade, low cost operation in the second quarter of next year."

I am definitely following the Roxgold story but I am personally not buying the stock at these levels as gold stocks tend to remain fairly range bound during the construction phase. The only real exception is if you have a significant move in the price of the commodity.

Read: Roxgold Commences Construction at the Yaramoko Gold Project

Video: What to expect from Roxgold in 2015: CEO John Dorward

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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.

James Fraser

Mr. Fraser joined CEO.ca in October 2014. He is passionate about the mining industry. His passion led to co-authoring the e-book "Mining Stocks Investor Guide: A Guide to Investing in Mining Companies." He has a finance background and has completed his Canadian Securities Course (CSC) and Conduct and Practices Handbook (CPH). When Fraser is not "digging" up the latest mining stock, he can be found enjoying a wide variety of sports or travelling the world. More →

Twitter: @miningstocks

james@miningstocksguide.com

James Fraser

Twitter: @miningstocks

james@miningstocksguide.com

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