An iA Securities note reviewed the latest news about drill results and financings for this firm's Canadian project.
In a Dec. 6 research note, analyst George Topping reported that Barkerville Gold Mines Ltd. (BGM:TSX.V) announced "more high-grade hits" at its Cariboo project's Cow Mountain, however, recent financings have been dilutive to the share price. As such, iA Securities lowered its target price on the Buy-rated company to CA$1.05 per share from CA$1.40. Barkerville is currently trading at around CA$0.34 a share.
Topping reviewed results from the 63,000-meter (63,000m) drill program at Cow Mountain. Infill drill holes returned averages of 14.1 grams per ton (14.1 g/t) gold over 1.3m beginning 180m deep. "Today's results bring the overall raw average at Cow Mountain to date to 11 g/t Au over 1.4m at a depth of 218m before dilution ( about 6.5–7 g/t post mining dilution)," Topping indicated.
As for specific assays, one hole, CM-18-124, demonstrated 10.5 g/t gold over 7.8m starting at 209m down. This was down dip of a prior hole, CM-18-034, that showed 9.3 g/t gold over 2.7m. A second highlight hole, CM-18-128, intersected 24.1 g/t gold over 6.5m beginning at a 94m depth.
Topping explained the results also exhibit continuity of high-grade mineralization at Cow Mountain in the quartz veins and extensions down dip and down plunge, with vein corridors remaining open. "Continued infill drilling and a higher cut-off grade (4 g/t) should push the resource to a profitable roughly 7 g/t," Topping noted.
The analyst pointed out that despite the positive drill results, Barkerville's stock has been negatively impacted by the cumulative, dilutive effect of two recent financings. The newest of those transactions, which took place in November, was a CA$25 million capital raise. Earlier, in September, Osisko Gold Royalties (OR:TSX; OR:NYSE) acquired another 1.75% net smelter royalty (NSR) on Cariboo for CA$20 million, taking its total NSR to 4%.
Barkerville, however, remains focused on advancing the project, now working on updating its mineral resource. That is expected to be ready in Q1/19, followed by a feasibility study in Q2/19. Both reports "should be positive," wrote Topping.
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Disclosures from iA Securities, Barkerville Gold Mines Ltd., Research Update, December 6, 2018
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