Great Afternoon Of Corporate Updates And Presentations In Calgary

Great Afternoon Of Corporate Updates And Presentations In Calgary

My afternoon started with a phone update from Alan Carter, CEO of Cabral Gold (TSXV – CBR).  In the interest of full disclosure, I used to own Cabral and I took a relatively big haircut on it.  I initially bought Cabral on its going-public financing in late 2017 and I watched it go down immediately thereafter.  It was one part taking a position at a valuation that was too high and one part the shitty markets that followed Cabral’s listing.  But the 1.3 million ounce Cuiu Cuiu deposit in Brazil is a nice project with loads of exploration upside.  Alan Carter put $200K in the last financing at $0.25 and Dundee took an 18.6% interest too – both good signs.  Cabral has just started exploration drilling at Cuiu Cuiu and with its $8 million MCap, I’ll be keeping an eye on it as I consider giving it a second shot.

From my call with Alan, I made my way over to the Metropolitan Grill in downtown Calgary to have lunch with and get a corporate update from Steve Burega, CEO of Angkor Gold (TSXV- ANK).  For background, Angkor has five regional-scale exploration projects in Cambodia. And four of those projects are joint-ventured to partners who are either paying for exploration, or in the case of the Oyadao project, paying for development.  One of Angkor’s project partners is India’s Mesco and and another is Japan’s JOGMEC.  Furthermore, Angkor Gold has great in-country relationships and is always looking to find other high-impact projects.  I’m a really big fan of both Steve Burega and Cambodia based President JP Dau – I will continue trying to find the right valuation entry point to take a position in Angkor Gold.

From my lunch with Steve, I attended two presentations – also at the Metropolitan Grill.  The restaurant holds a nice-sized private room at the back of the establishment that is often used for corporate presentations when companies come through Calgary.  The presenting companies where Chalice Gold Mines and Amarillo Gold.  One presentation was outstanding and the other, well, in short, not so good.

Ahead of the two presentations, I had never even heard of Chalice Gold Mines (TSX – CXN and ASX – CHN).  In fact, when I was invited, I was under the impression the only presenting company was going to be Amarillo Gold.  So from not having ever heard of the company and not expecting to hear its presentation, I can tell you I was absolutely blown away by the company and its Managing Director, Alex Dorsch.  To start with, Chalice currently has about about $21 million in cash and $2 million in liquid investments.  At 266 million shares outstanding, that’s nearly $0.09 per share in cash on a company that just closed at $0.12 on the TSX today – that’s right, Chalice Gold’s valuation is 75% backstopped by cash.  I can’t say I know very much about the Chalice team except director Stephen Quin who is also CEO of Midas Gold and Capstone before that.  The company is looking for +5 million ounce gold deposits and to that end, they’ve been able to amass a large land position in the Abitibi greenstone belt.  Their East Cadillac Gold project sits on 27 km of strike on the Larder Lake – Cadillac Fault.  In Australia, they’re looking for elephants too.  At their 4500 sq km Pyramid Hill Gold project in the hotly contested Bendigo Zone of Victoria, they’re testing 3 different targets with a maiden 15,000 metre drill program.  Chalice Gold was a surprise and an eye-opener.  I’m going to try to get comfortable with its trading volume on the TSX before I contemplate buying it on the ASX.

It would have been tough for anybody to follow Alex Dorsch’s Chalice Gold Mines presentation but with that in mind, Amarillo Gold (TSXV – AGC) still gave a very poor showing.  The Mara Rosa project in Brazil seems interesting enough but after the presentation, I’m not sure if Amarillo Gold has the wherewithal to bring it into production.  In the interest of being kind, I’ll leave it at that.

Philip O'Neill
Philip O'Neill
poneill@mp1capital.com