Tiny Market Cap But Huge Potential

Peter Epstein

Headed right into a gold bull market, one ought to think about swinging for the fences with excessive danger / excessive reward junior miners like St. Anthony Gold with two tasks in Ontario. Its flagship mission may comfortably host 1M+ ounces of gold, maybe at a grade of 4-6 g/t — but the market cap is underneath CA$3M.

Canada’s gold manufacturing grew to six.7M ounces in 2021, rising to 4th place after China, Australia, and Russia. The provinces of Quebec and Ontario accounted for 73% of that determine. Final 12 months Canada was essentially the most explored nation on the earth. 

One of the best ways to achieve the high-risk/reward junior mining area is by selecting tasks in nice places internet hosting past-producing mines. The inflation-adj. substitute value of historic work, years of exploration and improvement time prevented, and working in a brownfield setting carries appreciable financial worth. 

Few gold camps are as prolific because the Crimson Lake, Timmins, Hemlo, and Kirkland Lake mining districts. Working there, with ample infrastructure, expert labor, service, and gear corporations is a recipe for achievement. 

Initiatives that may ebook one million+ high-quality ounces will likely be extremely wanted takeover targets. These with line-of-sight to multi-million-ounce assets, particularly if high-grade and/or near-surface, will entice a fair bigger universe of suitors.

That’s why corporations like Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), Newmont Corp. (NEM:NYSE), Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE), Kinross Gold Corp. (Ok:TSX; KGC:NYSE), Evolution Mining Ltd. (EVN:ASX), Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE), Centerra Gold Inc. (CG:TSX; CADGF:OTCPK), Equinox Gold Corp. (EQX:TSX; EQX:NYSE.A), Alamos Gold Inc. (AGI:TSX; AGI:NYSE), and New Gold Inc. (NGD:TSX; NGD:NYSE.MKT) are energetic throughout Ontario.

AngloGold Ashanti is a cornerstone investor in Crimson Lake’s Pure Gold Mining. Lastly, First Majestic has a considerable streaming settlement in place with First Mining

I imagine that St. Anthony Gold Corp. (CSE: STAG; OTCQB: MTEHF) has all of the attributes of a compelling gold junior. An organization that would ship outsized capital positive factors as buyers uncover the story and administration executes on key aims. An organization with a Professional-forma Enterprise Worth (EV) {market cap + debt – money} underneath CA$3M

Ontario is thought for world-famous low-grade deposits, but additionally pockets of high-grade in locations like Crimson Lake. Think about having fun with the regional infrastructure, labor pool & mining companies led to by prolific lower-grade mines, however in a high-grade setting. 

That’s what St. Anthony Gold is . It’s incomes into two very promising tasks. The St. Anthony Gold mission hosts a number of historic operations spanning 233 contiguous claims (4,224 hectares) with 22 identified gold occurrences.

4 historic operations sit on the St. Anthony Gold mission. Though slowed by COVID-19 restrictions, final 12 months administration was capable of full half of a deliberate Section 1 drill program. Press releases have reported, “distinctive seen gold showings in all drill holes.”

The Firm additionally owns a 50% curiosity (quickly to be 70%) within the 11,700 hectare Panama Lake mission, contiguous to Barrick’s JV with Kenorland Minerals and south of First Mining’s 4.9M oz., PFS-stage, Springpole mission. Previous exploration has been carried out by Goldcorp, Noranda, Benton Assets & St. Anthony.

There’s large & renewed curiosity within the area surrounding the Firm’s Panama Lake. In December, Kinross provided to accumulate Nice Bear Assets [GBR] for CA1.8 billion. It was reported that 5 Majors have been pursuing GBR. These 5 and extra may have an curiosity in Panama Lake. Barrick has invested in corporations surrounding Panama Lake together with; Crimson Lake Gold Corp., Kenorland & Dixie Gold. 

Make no mistake, St. Anthony Gold Corp. is excessive danger, however among the heavy lifting has already been carried out. Ontario hosts a number of prolific gold mining districts, allowing is easy, with no severe climate, energy, water, elevation, First Nation, or geopolitical points. 

Administration has been re-assaying the historic core, resulting in the announcement of a revised interval of three.7 m of 169 g/t gold (625 gram-meters!). given it was not a brand new discovery, it didn’t entice the eye it deserved. How robust is 625 g-m? 

It might have been within the top-25 throughout Canada in 2021. [source: Miner Deck]. All of the historic drill core, and there’s loads of it, stands to probably profit from re-assaying.

In talking with CEO Peter Wilson and marketing consultant Allen J. Raoul P Geo, evidently historic exploration was carried out sub-optimally. Prior drilling centered on figuring out the continuity of lower-grade mineralization, however didn’t systemically search for high-grade ore shoots. 

That’s why there’s a chance to select up ounces, at a fraction of the price of drilling, by re-assaying historic core. 

After three Phases of drilling are accomplished & logged + ongoing re-assaying of core, the Firm hopes to ship a NI 43-101 compliant mineral useful resource estimate of as much as 1M ounces (web to the Firm)

Administration has not given steerage on the anticipated useful resource grade, however there’s motive to imagine it will likely be good because of the historic manufacturing of 5.95 g/t gold.

Importantly, relying on how the re-assaying work goes and based mostly on new drill packages on untested zones, that focused 1M ounce aim may develop.

Administration believes there’s a chance of a multi-million-ounce useful resource, (not incl. something discovered at Panama Lake), greater than sufficient to construct a standalone mine. 

CA$1M is at present being raised, and a number of other million extra will likely be wanted to prudently advance the Firm’s key initiatives. As a consequence of a reverse break up in November, there are ~52.5M shares excellent, (professional forma for an upcoming share issuance to the seller of the St. Anthony mission)

Administration is exploring methods to lift among the capital with out issuing new shares, however there aren’t any assurances that this may be achieved on enticing phrases. 

As talked about, among the heavy lifting is behind us. We all know for sure there’s gold on St. Anthony’s namesake property. That’s greater than may be mentioned for a lot of pre-discovery gold juniors, a few of which have properties in far much less hospitable locations than Ontario. 

The rationale I see true blue-sky upside is twofold. First, the EV is underneath CA$3M. After contemplating a Firm’s tasks, folks & jurisdictions, valuation is a crucial step in assessing speculative investments. 

If St. Anthony can ship 1M web ounces, the Firm’s share value ought to soar. Furthermore, gold costs are robust and more likely to stay so. At present’s $1,851/oz. is sort of 50% above the typical gold value from 2013 to 2019 of $1,272/oz. (macrotrends.web)

If 1M web ounces may be delineated, that will show administration’s understanding of the mission’s geology and construction, probably giving buyers line of sight to much more ounces. 

The Fortunate Bones and Couture Lake targets symbolize a mineralized structural hall that extends over a 6+ km strike size with widths of 200-400 m (open for a further 7 km to the south). The hall accommodates quite a few shear zones and quartz veins (8-10 m widths). There are historic shafts, trenches & pits alongside this development.

Fortunate Bones noticed 5 holes drilled in 2013, three hit seen gold. Some suppose the mom lode might be sitting on the backside of Couture Lake. Mining operations in 1940-41 have been headed on this route. 

Previous sampling and trenching on the Bucksaw goal returned values of as much as 24.1 g/t gold. Prospecting in 2011 recognized historic trenches with grades of as much as 12.95 g/t gold plus further pits in shear zones with seize samples as much as 19.6 g/t.

Close to-term catalysts will generate information movement for months to return. Assay studies from drill program Phases 1, 2 & 3, in addition to bulletins of ongoing outcomes from re-assaying current drill core. 

It might be laborious to discover a higher gold junior in Canada, with such brilliant prospects, buying and selling with a market cap of < $3M. close by corporations in Crimson Lake; Auteco Minerals has an 80% curiosity in 1.71M Inferred ounces grading 8.1 g/t gold. Its market cap is CA$140M. 

Landore Assets has a reported 1.5M ounces @ 0.90 g/t gold and a market cap of CA$47M. Treasury Metals has a PEA-stage mission with 2.5M ounces at 1.0 g/t gold and a market cap of CA$97M. 

These three corporations are valued at between CA$30 & CA$104 per troy ounce within the floor. If St. Anthony Gold Corp can ship 1M ounces (web to the Firm), its market cap ought to rise a lot increased, topic to acquiring the required funding alongside the best way. 

GBR is being taken out by Kinross at ~CA$150/oz. (assuming a 12M ounce useful resource, there’s no maiden useful resource but)… This goes to indicate how a lot a big high-grade deposit in Ontario may be price. 

Readers are reminded that commentary about relative worth is for illustrative functions solely. St. Anthony Gold Corp. does NOT have a NI 43-101 compliant mineral useful resource estimate presently. 

Administration expects to have loads of information to report this 12 months. As soon as buyers acknowledge a budget valuation, prime jurisdiction, and robust mgmt. crew, shopping for shares at CA$0.07 or CA$0.075 might be a distant reminiscence. 

Peter Epstein is the founding father of Epstein Analysis. His background is in firm and monetary evaluation. He holds an MBA diploma in monetary evaluation from New York College’s Stern College of Enterprise.


Disclosures: The content material of this text is for info solely. Readers perceive & agree that nothing contained herein, written by Peter Epstein of Epstein Analysis [ER], (collectively, [ER]) about St. Anthony Gold, incl. however not restricted to, commentary, opinions, views, assumptions, reported details, calculations, and so forth. is to be thought-about implicit or express funding recommendation. Nothing contained herein is a suggestion or solicitation to purchase or promote any safety. [ER] will not be accountable underneath any circumstances for funding actions taken by the reader. [ER] has by no means been, and isn’t at present, a registered or licensed monetary advisor or dealer/supplier, funding advisor, stockbroker, dealer, cash supervisor, compliance or authorized officer, and doesn’t carry out market-making actions. [ER] will not be instantly employed by any firm, group, group, get together, or particular person. The shares of St. Anthony Gold are extremely speculative, not appropriate for all buyers. Readers perceive and agree that investments in small-cap shares may end up in a 100% lack of invested funds. It’s assumed and agreed upon by readers that they’ll seek the advice of with their very own licensed or registered monetary advisors earlier than making funding choices.

On the time this text was initially posted, Peter Epstein owned shares of St. Anthony Gold and the Firm was an advertiser on [ER]. 

Readers ought to think about me biased for my part of the Firm. Readers perceive and agree that they have to conduct their very own due diligence above and past studying this text. Whereas the writer believes he’s diligent in screening out corporations that, for any motive, are unattractive funding alternatives, he can not assure that his efforts will (or have been) profitable. [ER] will not be liable for any perceived, or precise, errors together with, however not restricted to, commentary, opinions, views, assumptions, reported details, and monetary calculations, or for the completeness of this text or future content material. [ER] will not be anticipated or required to subsequently observe or cowl occasions and information, or write about any specific firm or subject. [ER] will not be an professional in any firm, business sector, or funding subject.

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