In a Feb. 8 research report, analyst Bill Newman reported that Mackie Research Capital Corp. initiated coverage on Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS), a two-pronged exploration play, with a Speculative Buy recommendation and a CA$0.75 per share price target. In comparison, the stock is currently trading at about CA$0.28 per share.
"We believe Omineca is a compelling investment opportunity given that the company could be on the cusp of establishing placer gold production," Newman wrote. "Exploration is also underway for the lode gold source of the Wingdam placer gold, which provides substantial speculative upside appeal."
Newman explained that Wingdam is Omineca's flagship project, located in British Columbia's historical Cariboo Mining District. The property includes 500 square kilometers of placer and hardrock tenures throughout and around the Lightning Creek valley. Omineca has an earn-in partner on Wingdam. For an eventual 50% of the placer gold recovered from the project, the partner is providing all equipment, labor and services needed to start mining there.
Currently, Newman noted, with respect to the placer gold, preparations are being done to restart bulk sampling, along the first 300 meters (300m) of the paleochannel at Wingdam. Previously, some sampling was carried out in 2012, which yielded 173.5 ounces of gold, with an average grade of 13.6 grams per ton, from a 2.4m wide by 23.4m long crosscut drift. The goal is to begin recovering gold at Wingdam in early Q2/21.
"If Omineca could repeat the 2012 bulk sample test results down the paleochannel, the company has the potential to produce 35,000 ounces of gold per year (gross)," Newman highlighted.
As for Omineca's lode gold "blue sky potential," the company's 100%-owned, 51,000 hectares of hardrock mineral tenures are "in a parallel trend and in mirror image to the 5,000,000 ounce Cariboo gold project" owned by Osisko, Newman explained.
"The Wingdam and Cariboo gold projects share similar lithology and structure, which are the two main ingredients for the discovery of an economic gold deposit," he added.
Based on ground and airborne geological and geophysical studies to identify the source of the placer gold, Omineca identified a strong electromagnet signature near the 2012 bulk sample. With that area now its focus, the company, in Q4/20, launched a 27-hole, 8,000m drill program, now in progress. Initial results are anticipated this quarter.
Newman provided the upcoming catalysts for Omineca. They are two sets of initial results, one of the paleochannel sampling and the other of the exploration drilling. In addition, maiden diamond drill results are expected from Mouse Mountain, on which Omineca has an option agreement. Mouse Mountain is about 15 kilometers to the west of Wingdam.
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Disclosures from Mackie Research, Omineca Mining and Metals Ltd., Initiating Coverage, February 8, 2021
RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
1. This Issuer has generated investment banking revenue for MRCC.
2. Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst's personal views and (ii) no part of the research analyst's compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.
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