Feedback from Mine Open HouseRecently Continental Hosted an Open House and Corporate Discussion at the Buritica site. Various reports are coming out. TD Earl's report is pasted below. Also know that Otto of IKN has reported in his newsletter.
TD's Daniel Earle Earlier this week, Continental Gold hosted a site visit to its flagship Buritic gold project (100%) in Colombia. We attended the event, participating in presentations on the company's exploration, development, CSR, and financing plans. We also toured site infrastructure and visited the town of Buritic.
Impact: POSITIVE
After the completion of permitting announced on November 30, we suggested that Buritic was one of the largest and highest grade, independently owned, construction-ready gold projects in the world.
We would add that the project enjoys strong community and government support and benefits from the technical leadership of Don Gray who joined as COO in January 2015 from Tahoe Resources, where he was pivotal in bringing the Escobal mine into production, as it moves into detailed engineering and construction.
Since the receipt of its permit, CNL has strongly outperformed its peers in a down market (up 26% while the GDXJ has been flat). We expect the re-rating to continue as the company advances the project, with the next major milestone, debt financing, anticipated in Q1/17.
Recall, the company completed a Feasibility Study (FS) for the project in February 2016, which outlined Proven & Probable Reserves of 3.7 Moz grading 8.4 g/t. Total Resources (inclusive) were estimated at 9.0 Moz at 9.8 g/t. These estimates were, in our view, well supported by extensive drilling (736 holes) and underground sampling (7.2 km).
We estimate that the company has cash and equivalents of $25mm (as at November 10) and expect that the next step will be debt-financing. In the current market, we expect the company to be successful at financing the majority of its forecast capital expenditures with debt at terms comparable with recent transactions, e.g., TMAC Resources (TMR-T).
TD Investment Conclusion With the company's permit in place, we believe that Buritic stands as one of the largest and highest grade, independently owned, construction-ready gold projects in the world. We expect the stock to re-rate progressively higher with its final permits in hand as it continues to advance the project, with the next key catalyst being the completion of debt-financing, which we anticipate in Q1/17.