Roxgold Inc. T.ROXG

Canaccord Genuity: Buy rating and $1.10 target for Roxgold

[hockeyguy123]

According to Canaccord Genuity:

https://app.box.com/s/rnvmrx5k61x0yrx74y1x

May 6, 2014

Roxgold Inc.

SPECULATIVE BUY

Target: C$1.10

EXPLORATION AT BAGASSI SOUTH RETURNS HIGH GRADE RESULTS

Investment recommendation

Highlights from a 5,000 m drill program at Bagassi South targeting the BS-QV1 vein (infill, expansion) include 226.76 g/t Au over 3.1 m (2.7 m true width, YRM-14-BG-041) from a downhole depth of 160 m. The company expects to generate a resource update from its regional exploration program prior to year-end 2014. We are maintaining our Speculative Buy rating and C$1.10 target.

Investment highlights

- The company reported results from its C$5 M, 2014 regional exploration program (3 rigs) at its wholly owned Yaramoko project (167 km²) in Burkina Faso focussed on Bagassi South, Haho, 109 Zone, Boni Shear and Niankongo. Bagassi South lies within the permit boundary for the Yaramoko gold project, 1.8 km to the south of the 55 Zone. The 55 Zone combined with the Bagassi South/Central trends and the Kaho zone represent an 8 km long NS to NNW trending gold belt within the Yaramoko gold project (167 km²).

- Mineralization at Bagassi South occurs within a set of WNW trending en echelon veins (BS-QV1) that cross cuts the contact between a granitic intrusion and mafic volcanics. Artisanal workings effectively delineate the vein over a 0.8 km strike. Drilling has identified high grade shoots with a strike length of 300 m to a vertical depth of 200 m. The zone remains open at depth and the host rock (granitic intrusions) appears to expand down dip.

- Our valuation of ROG is based principally on the 55 Zone, where the company recently released a positive feasibility study (April 23, 2014 note), with no exploration upside. More positive results from the regional exploration program at zones such as Bagassi South leading to a resource would help quantify this upside.