Opinions on Lexam Expert Analysis
The Gold Report Interview with Vikas Ranjan (11/4/11) "We believe that by early 2012, Lexam VG Gold Inc. should be able to put out a resource update. It has done probably 40–50 km of drilling in the last 12–18 months. It wouldn't be surprising to see a full revision of the resource.
It is in a highly prolific district, close to past-producing mines. Rob McEwen, the former CEO and chairman of Goldcorp Inc. and his group are the largest shareholders. Our Ubika model share price on Lexam VG Gold is $1.87, and the current share price is close to
.40."
Vikas Ranjan, Ubika Research (9/29/11) "Ubika Research believes that Lexam VG Gold Inc.'s Buffalo Ankerite is turning into a project with potential for a sizable resource deposit for the company. . .we expect the company to find a sizable resource deposit on the North zone, which when combined with the existing deposit, could propel Buffalo-Ankerite to potentially host a deposit over 1 Moz. . .we firmly believe that Lexam is considerably undervalued based on its current resource deposit at one of the most prolific gold districts in Canada-Timmins."
The Gold Report Interview with Vishy Karamadam (8/5/11) "Another example of a quality junior is Lexam VG Gold Inc. It is a Timmins gold camp play that went through a correction when all the gold juniors were going down, but it is seeing some new interest. Quality gold juniors with strong resources located in safe jurisdictions with capital to expand those resources—particularly those that can advance and develop the projects—will start to see some interest in the fall. . .After the merger between Lexam and VG Gold, the company had a strong balance sheet with more than $15M. It has a $10M exploration program this year. Four rigs are turning and the company is trying to acquire a fifth rig. Between its Buffalo Ankerite, Paymaster and Fuller properties, there is a lot of resource to come. The company issued some good results recently. . .It was a fairly significant development of high-grade gold in a new mineralized zone within the Buffalo Ankerite property. If it can continue those kinds of results, Lexam VG will have room to increase its resource estimate in the coming year."More >
The Gold Report Interview with Vikas Ranjan (2/28/11) "We started coverage on VG Gold back in July 2008 when it had a $20 million market cap. Once the merger with Lexam Explorations was concluded, the new company emerged as Lexam VG Gold, and now the market cap is close to $225 million. More and more investors are warming to the idea that Lexam VG Gold is moving in the right direction. Mr. Rob McEwen, who is the former chairman and CEO of Goldcorp and probably one of the best gold mining investors on the planet, owns close to 30% of the company. He is also the non-executive chairman. By making that investment and being on the board, he's basically saying that this is one of the most-promising companies in the Timmins Gold Camp.
The merger allows Lexam VG Gold access to more than $15M of Lexam's capital. This will really change the game for Lexam VG. Now, it can significantly expedite its exploration program. This company could become a company of choice for many people to get exposure to the Timmins gold exploration play. . .VG already has gold resources of roughly 1.5 Moz. Lexam VG has four properties that it's going to drill vigorously this year; it'll add a lot of value at these gold prices. VG is getting about $140/oz. in the market in terms of market cap. . .There's still a big valuation gap in terms of VG going to the next stage. I think this company's market cap has the potential to go to $1 billion in a couple of years if it successfully executes its exploration strategy and expands its gold resource base. . .Yes. The potential is there, considering the vast support it has and all the exploration potential of its four properties—all of which are close to past- or currently producing mines. You couldn't ask for a better address than Timmins."More >
Vikas Ranjan, Ubika Research (2/24/11) "VG Gold merged with Lexam Exploration Inc. and the combined entity, Lexam VG Gold Inc., started trading in January 2011. Lexam VG Gold has achieved all our expectations and more. The junior exploration company has undergone a significant transformation into a well-capitalized gold junior, with at least three properties that could be fully permitted and ready for small-scale production within 12 months. We had set a target price of
.82, which was handsomely crossed during 2010. Investors who followed our recommendation gained 200% since March 20, 2010, alone. LEX's market cap has risen from $63M on March 20, 2010 to $229.5M as of Feb 23, 2011—a 264% increase in less than 12 months.
Ubika believes that 2011 will be a year of transformation for Lexam VG with the following focal points:
- Expanding the resource at depth. . .at Paymaster West, Fuller, Buffalo Ankerite and Davidson Tisdale.
- Focus on Paymaster West to continue: The recently culminated near-surface drilling at the property clearly established gold mineralization and confirmed that the porphyry-type deposit has strong exploration potential and is still untapped.
- Further growth possible with merged entity.
- Valuation updated: Increasing Ubika Model Price to $1.87—a potential 83% return from current $1.02price; we continue to rate LEX as undervalued.
Significant Corporate Development: 2010 was a watershed year for VG Gold Corp. (as it was known) wherein it agreed to merge with Lexam Exploration Inc. to create a newer and better-funded gold exploration company focused on the Timmins mining camp. . .2011 to be a transformational year for LEX, in that Ubika expects the company to further define the high-grade zones in the known locations and further explore the potential of gold-bearing zones at greater depths than in the past."