TeckPro wrote: Fundamental Research Corp.
BUY
Current Price: C.90
Fair Value: C$2.48
Risk: 5
Highlights
TUD has completed an updated resource estimate for its 60% owned Treaty Creek project, located in the Golden Triangle, B.C.
Resources increased by 10% to 34 Moz AuEq (78% gold + 22% copper/silver). Eighty-two percent of resources are in the indicated category vs just 76% for the previous estimate, implying a higher level of confidence.
The weighted average grade was up 10% to 1.20 g/t AuEq, implying potential for lower OPEX/CAPEX.
We believe there is resource expansion potential as the Goldstorm deposit remains open in multiple directions. In addition, multiple high potential targets remain untested.
Management intends to continue resource expansion drilling prior to completing a maiden Preliminary Economic Assessment (PEA), possibly by 2025.
Gold has surpassed its previous high, and is currently trading at US$2,170/oz. We maintain a positive outlook on gold given the potential weakness in the US$, fueled by the Fed's relatively dovish stance compared to other central banks.
Upcoming catalysts include resource expansion drilling, and a PEA. We believe TUD is a promising M&A candidate as Treaty Creek is one of the largest undeveloped gold projects in the world.
M&A activities in the junior gold sector are on the rise. Notable transactions include Calibre Mining’s (TSX: CXB) acquisition of Marathon Gold for $345M, Yintai Gold’s (SZSE: 000975) acquisition of Osino Resources (TSXV: OSI) for $368M, and Silvercorp Metals’s (TSX: SVM) acquisition of Orecorp (ASX: ORR) for $186M.