As the result of the reallocation of resources, Red Cloud is discontinuing coverage on the following company:
• Wallbridge Mining Company Ltd. (TSX:WM) – now unrated (was HOLD, C$1.10/sh target, Jacob Willoughby)
Our previous estimates should no longer be relied upon.
We are updating our Endangered Species List, first published in mid January, which is a list of mining companies that we consider most likely to go extinct (be acquired) in the next 12-18 months. Now that we are past the halfway point of this unprecedented year, we are updating our list of companies we feel are more likely than others to disappear. In our first edition, we outlined the specific criteria used for our selections and a brief rational for the companies we chose. The list of criteria has not changed, but has been tweaked to reflect recent trends. We have decided to subtract three companies from our original list and are adding three in their place.
Wallbridge Mining reported positive drill results from a total of 24 holes for the Tabasco-Cayenne, Area 51, and Main Gabbro zones at its 100%-owned Fenelon gold project in Quebec. We continue to believe that Wallbridge is uniquely positioned to define three deposit types at Fenelon which should help the company become a formidable gold developer along the Detour gold trend.
As we anticipated, the massive liquidity injections and stimulus packages being introduced have started to drive gold and gold equities higher. We believe it is now time for investor to focus on smaller producers and large developers. If you had bought an equal-weighted basket of the larger companies we recommended in our previous note, it would have returned 60% (Top 3), and 68% (Wider Group). Based on history, we believe there are better returns to be made with smaller companies as this bull market matures. We are updating our “Precious Metals Hoarding List” and the junior producers that screened the best based on our criteria (Appendix A) are: Serabi Gold (TSX:SBI, not covered), Argonaut Gold (TSX:AR, not covered) and RNC Minerals (TSX:RNX, BUY, C$1.30 target, Derek Macpherson).
In two press releases, Wallbridge Mining reported drill results for the Area 51 gold system and the Tabasco-Cayenne shear zone at its 100%-owned Fenelon gold project in Quebec. We continue to believe that Wallbridge is uniquely positioned to define three deposit types at Fenelon and that the acquisition of Balmoral Resources (TSX:BAR, Not Covered) should help the company to become a formidable gold developer along the Detour gold trend.
Wallbridge Mining released another batch of drill results from the Main Gabbro zone at its 100%-owned Fenelon gold project in Quebec. The company is carrying out definition drilling proximal to existing mine workings in the Main Gabbro zone to better define the high-grade and shallow mineralization. We continue to believe that Wallbridge is uniquely positioned to define up to three deposit types at Fenelon and that the acquisition of Balmoral Resources (TSX:BAR, Not Covered) should help the company to become a formidable gold developer along the Detour gold trend.
Gold continues to shine, and we expect gold producers to continue to outperform as Q1 operating and financial results are announced in the coming weeks. As we noted in the Building our “Precious Metals Hoarding List” published last month, we believe that we are in a bull market for gold and gold equities. In the upcoming reporting season, we believe producers that report strong Q1 results, along with reasonable outlooks (adjusted for COVID-19), are likely to outperform. Additionally, there are several companies with strong tailwinds for Q2/20 as they are poised to benefit from significantly lower local currencies and decade low energy prices. In this note we are updating our commodity and currency estimates and highlight names from our coverage universe that we believe could outperform when quarterly reporting begins April 22, 2020.
Wallbridge released drill results from the Main Gabbro zone at its 100%-owned Fenelon gold project in Quebec. The company is carrying out definition drilling proximal to existing mine workings in the Main Gabbro zone to better define the high-grade and shallow mineralization. We note it could be the first place to start mining should the company decide to commence production in the near future, as it would likely get permitted the fastest. We continue to believe that Wallbridge is uniquely positioned to define up to three deposit types at Fenelon (see our initiation report). We also believe the recently proposed acquisition of Balmoral Resources (TSX:BAR, Not Covered) should help the company to become a formidable gold developer along the Detour gold trend.
Wallbridge released drill results from both Area 51 as well as the Tabasco and Cayenne zones at its 100%-owned Fenelon gold project in Quebec. The company put out two press releases as it was likely restricted leading up to the announced (proposed) acquisition with Balmoral Resources (TSX:BAR, not covered). We continue to believe that Wallbridge is uniquely positioned to define two or three deposit types at Fenelon. We believe the recently proposed acquisition should help the company to become a formidable gold developer along the Detour gold trend.
Wallbridge announced that it has entered into a definitive agreement to acquire Balmoral Resources (TSX:BAR, not covered) in a friendly, all-share transaction. The combined company would have a very strong balance sheet with C$67M in cash, massively expand the Fenelon property from 10.5 km² to 85.6 km², add the resource stage Martiniere gold deposit in the Abitibi greenstone belt and the nearby Grasset +3M tonne Ni-Cu-Co-PGE deposit as well as dominant land position along the Detour gold trend in Quebec. We view this transaction as an extremely positive development that is very beneficial to both Wallbridge and Balmoral shareholders.