Coverage on Metallic Minerals Corp. (MMG:TSX; MMNGF:OTCQB) was recently initiated by Couloir Capital with a Buy rating and a fair value estimate of $0.68 per share, the research and advisory firm reported in a Feb. 22 note. Given MMG's current share price is around $0.38, the stock is trading at a discount, Couloir noted.
In its research report, Couloir outlined the highlights of this compelling investment story.
Metallic Minerals has a robust portfolio of assets. Its projects are Keno, in a historically prolific silver production district in the Yukon, McKay Hill to the north of it and La Plata in Colorado. Also, the explorer has a 12% royalty on Australia Creek and a 15% royalty on Dominion Creek, in the Yukon's Klondike Gold District.
Metallic Minerals, concurrently advancing Keno and La Plata, completed a drill program at each in 2021, results for which are pending. Both projects are approaching the maiden resource estimate stage.
At its cornerstone project Keno, now with six advanced-stage and 12 early-stage target areas, the silver junior plans to start a reverse circulation and diamond drill program shortly.
"We expect that at the very least, Metallic Minerals will continue with substantial drilling initiatives this year, which we believe is a major driver of potential valuation upside given it develops resource assets further and allows for potential advancement along the development cycle," Couloir noted.
Couloir pointed out that the 16,600-hectare Keno silver property is highly prospective because its location is next to Alexco Resource Corp.'s low cost, producing Keno Hill project, estimated to yield 35.5 million ounces of silver annually over the next eight years. Also, recent drilling at Keno showed multiple mineral occurrences of geology similar to that at Keno Hill.
Further, Metallic Minerals management believes the same vein structure is present in West and East Keno, meaning those and the central portions of the project share the same large mineralized system.
"Were this to be proven true, it would indicate the company's belief that Keno Silver is prospective for bulk-tonnage silver mineralization also be similarly true, which would be bullish for the company," Couloir pointed out.
Couloir added that Keno could eventually be a takeout target, "a long-term value driver" and the Canadian company "could be well-positioned over the long term to develop Keno silver into a relatively derisked silver development asset."
In terms of its financial position, Couloir indicated, at the end of Q1 FY22, Metallic Minerals reportedly had $2.69 million in cash and $3.41 million in working capital.
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Disclosures and Disclaimers, Couloir Capital Ltd., Metallic Minerals Corp., Feb. 22, 2022
This report has been prepared by an analyst on contract with or employed by Couloir Capital Ltd. The analyst certifies that the views expressed in this report which include the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report accurately reflects his or her personal views about the subject securities and the issuer. No part of his / her compensation was, is, or will be directly or indirectly related to the specific recommendations.
Couloir Capital Ltd. is affiliated Couloir Capital Securities Ltd., an Exempt Market Dealer. They shall be referred to interchangeable as Couloir Capital herein. Part of Couloir Capital's business is to connect mining companies with suitable investors that qualify under available regulatory exemptions. Couloir Capital, its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Couloir Capital may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
Couloir Capital has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not consider the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before making an investment. Couloir Capital will not treat recipients of this document as clients by virtue of having viewed this document.
Company specific disclosures, if any, are below:
- In the last 24 months, Couloir Capital Ltd. has been retained under a service agreement by the subject issuer.
- Couloir Capital Ltd. or a related entity holds shares or warrants in the Company. Warrants have an exercise price of $0.60 and expire in August 2022.