received a major shareholder and substantial funding to advance its La Plata project with Newcrest's US$6.3 million (US$6.3M) strategic investment, reported Couloir Capital in a June 19 research note.
The investment "values Metallic Minerals at CA$66M, nearly 24% more than the current market cap of CA$53M," Couloir wrote, and it is "a validation of La Plata's strong drill results as well as the future resource potential."
Large Return Potential
Accordingly, Couloir maintained its Buy rating and CA$0.70 per share fair value estimate on the Canadian explorer, currently trading at about CA$0.32 per share.
The difference between these two figures implies a significant potential return for investors of 119%.
About the Transaction
Once the US$6.3M private placement by Newcrest is completed, it will own 9.5% of Metallic Minerals' issued and outstanding common shares, Couloir indicated.
"Newcrest made the investment at a price of US$0.40 per share, which was at a 13% premium to the then (May 9, 2023) 20-day, volume-weighted average price of Metallic Minerals and is at a nearly 24% premium to the current market price," Couloir added.
Also, as part of the arrangement, Newcrest, given its experience and success with deposits like La Plata, will assist Metallic Minerals with technical issues pertaining to porphyry systems and underground bulk tonnage, block-cave mining operations.
Drilling To Start in U.S.
Metallic Minerals will use the capital from Newcrest to advance La Plata, located in Colorado, Couloir relayed. It is about to start the first phase of an expansion drill program there, the goal of which is to expand already identified zones containing high-grade copper, gold, and silver mineralization. The company aims to update the La Plata resource estimate this year.
"We see a significant expansion in the resource base at La Plata," wrote Couloir.
Update on Yukon Project
In other news, Metallic Minerals announced the results of last year's drilling, six holes for 642 meters (642m), of the Caribou target at its flagship Keno project in the Yukon Territory, and they were "strong" and high-grade, Couloir wrote.
The mineralization encountered at Caribou had grades up to 1,310 grams per ton silver (1,310 g/t Ag), in hole CH22-05, Couloir reported and provided these highlight drill results:
- Hole CH22-01 intersected two high-grade vein intervals that include 0.5m of 348 g/t silver equivalent (Ag eq) from 91.5–92m along with 0.5m of 1,201 g/t Ag eq from 125.2–125.7m.
- Hole CH22-02 showed 0.5m of 849.8 g/t Ag eq.
Metallic Minerals is working toward completing a maiden resource estimate for Keno in H2/23.
What To Watch For
Given the current and imminent work at La Plata and Keno, near-term stock catalysts are expected, noted Couloir.
They include drilling or field work news from either project, news about the initial resource estimate for Keno, and news about upgrades of La Plata resources.
|Want to be the first to know about interesting Gold, Base Metals and Silver investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
- Metallic Minerals Corp. is a billboard sponsor(s) of Streetwise Reports.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
For additional disclosures, please click here.
Disclosures for Couloir Capital, Metallic Minerals Corp., June 19, 2023
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 reflect 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 with Couloir Securities Ltd., an Exempt Market Dealer. They shall be referred to interchangeably 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. This service agreement includes analyst research coverage.
- The views of the Analyst are personal.
- No part of the Analyst’s compensation was directly or indirectly related to the specific ratings as used by the research Analyst in the Reports.
- The Analyst DOES NOT maintain a financial interest in the securities or options of the Company.
- Couloir Capital DOES NOT maintain a financial interest in the securities or options of the Company.
- The information contained in the Reports is based upon publicly available information that the Analyst believes to be correct but has not independently verified with respect to truth or correctness.