GT Gold Corp. GTGDF

Note the TDW comments on Red Chris not all

[MrBigger]

its cracked up to be.

We are updating our estimates for Imperial Metals to reflect our commodity price changes, and suspending our target price at this time. Impact: MIXED Uncertainty over the restructuring process — On September 17, the company announced that it has formally commenced a financial and business restructuring process, including taking steps to both 'rationalize and improve' operations at Red Chris and Mount Polley. In addition, the Board of Directors has established a Special Committee to review and implement strategic alternatives, including potential JVs, asset sales, and or sale/merger of the company. JV partnership discussions underway — The company also announced that it has already had preliminary discussions with a potential joint venture partner. We believe that a 25-49% sale of Red Chris would go a long way in addressing the company's liquidity concerns and provide future funding to help advance the development of the higher-grade east zone at depth. Temporary liquidity relief — As part of the restructuring process, the company extended its $200mm secured credit facility and $50mm second lien credit facility to February 15, 2019 from October 1 and December 1, respectively. These measures, along with the sale of 0.5% NSR on Red Chris for US$17mm, provide temporary liquidity relief, but do not address the company's broader liquidity issues, which require a larger, long-term solution. Lower near-term copper prices — We have marked-to-market our Q3/18 copper price and lowered our near-term prices slightly to US$3.20/lb in 2019 (from US $3.30/lb previously) and US$3.30/lb in 2020 (from US$3.40/lb previously). TD Investment Conclusion We are maintaining our HOLD recommendation and suspending our target price. The target-price suspension reflects the significant uncertainties that exist over Imperial's restructuring process to fix its balance sheet, along with the ongoing operational challenges at Red Chris (low grades and poor recoveries), which continue to affect profitability.