If it looks like a bull market (technical breakout in gold), smells like a bull market (significant negative yielding debt) and feels like a bull market (funds flowing into gold), it must be a bull market. Our analysis shows that equities in smaller sized companies outperform during a bull market. However, not all junior miners are created equal, and we believe there are three keys to picking them.
Impact: Mildly Positive
Anaconda Mining reported record gold production for 2018, exceeding both our estimates and the company’s 2018 guidance. Financials have yet to be released but we expect these results to generate cash that would support the development efforts at the Goldboro project. We continue to believe that Anaconda’s share price still fails to account for the growth that Goldboro is expected to deliver starting in 2021.
Impact: Mildly Positive
Anaconda provided an exploration update on Goldboro and the results continue to support our view that the company is poised to grow this resource in 2019 and advanced it towards production. We continue to believe that Anaconda’s share price still fails to account for the growth that Goldboro is expected to deliver starting in 2021.
Impact: Mildly Positive
Anaconda has delivered positive drill results from its Goldboro development project, driving further potential for resource growth, particularly at depth. Results continue to support our expectation for further resource growth and follow a recent 27% increase in resource grade and 21% increase in gold ounces. Overall, we believe Anaconda’s fundamental value is not reflected in the current market’s pricing and as a result, could see significant re-rating with continued exploration success at Goldboro.
Impact: Mildly Positive
Anaconda Mining’s financials reflect strong Q3 operating results. Anaconda released Q3 financials results that were roughly in-line with our estimates (strong operating results were pre- released last month). Financial and operating performance supports our view that production and costs are benefiting as higher grade Stog’er Tight ore is being processed. Improved operating cash flow should allow the company to partially fund the ongoing development work at Goldboro. Anaconda is steeply discounted relative to peers despite continued strong operating performance. We believe the advancement of Goldboro should help re-rate the stock.
Impact: Positive
Positive Resource Surprise Drives NAVPS Increase. Positive resource update materially improves our NAVPS estimate by 24%. This improvement was driven by material improvement in the overall grade of the project and goes along with recent positive Q3 operating results. In addition, the company confirmed that the PEA, assumed too large a provincial NSR, (was 2%, now 1%) has also benefited our estimates.
Impact: Mildly Positive
Anaconda Mining reported a strong increase in gold production in Q3/18 that supports our view for a robust finish to 2018. Financials have yet to be released but we expect these results to generate cash that would support the development efforts at the Goldboro project. We believe the company is on track to beat 2018 guidance by approximately 9%.
We are reiterating our positive view on Anaconda Mining as we enter H2 2018 and following the termination of the takeover bid for Maritime Resources (TSXV:MAE).
Anaconda releases financial results for Q2 2018 with higher than expected revenue and lower operating cash costs.
Anaconda Mining has received the permits to proceed with the extraction of a 10,000-tonne underground bulk sample at the Goldboro Gold Project in Nova Scotia, which we view as an important de-risking step for the project as it progresses towards production.