We are excited to see additional share purchase from Newmont Group. Newmont exercised its right to purchase additional Metallic Minerals shares to maintain its 9.5% interest. Newmont purchased 577,776 shares at $0.36 per share, which is higher than the company’s current market price. We see this as a vote of confidence by a tier-1 miner in MMG’s resource potential.
Metallic Minerals noted good progress at its La Plata project. The results from the 4,500-metre drill pro¬gram announced in May 2024 illustrate the potential of the La Plata project as a large-scale, precious-met¬al-rich porphyry system. Multiple drill holes have yielded continuous mineralization spanning from 500 to 900 meters from the surface, with some of the highest grade-times thickness values for copper drill holes in the U.S. over the past year. Currently, resource modelling on the Allard deposit at La Plata is underway to integrate the drilling results into an updated resource estimate, likely to be completed by Q4 2024. The update will add gold, platinum, and palladium to the existing copper and silver resources.
The flow-through private placement financing announced in June 2024, which aimed to raise $2 million in proceeds, has been successfully completed. The funding will mainly support the development and explo¬ration work at the Keno Silver and Klondike Gold projects.
At Keno Silver, the focus is on expanding the resource, which includes 18.16 million ounces of silver-equiv¬alent from four deposits (Formo, Fox, Caribou, and Homestake). The initial phase of work will target the Formo target, which is the largest among the four deposits that contributed to the initial resources disclosed earlier this year. Furthermore, the Company has outlined its intention to allocate funds towards the development of our alluvial gold royalty properties in the Yukon’s renowned Klondike Gold District.
The additional investment from Newmont will further raise Metallic’s profile and attract new investors. A new 2024 exploration program is underway, and additional drilling is expected to significantly increase resources. This could trigger a re-rating in the stock and drive valuation higher.
Investment Highlights
- Metallic Minerals Corp. (TSXV: MMG) (“MMG,” or “Company”) has achieved multiple exploration milestones at its La Plata Copper Project and Keno Silver Project.
- Newmont top-up financing closed: We are encouraged to see additional share purchases from Newmont Corp. Newmont exercised its ‘top-up right’ to buy additional shares of MMG to maintain its 9.5% stake in the company. Newmont. purchased 577,776 shares at $0.36 per share, higher than the company’s current market price. We see this as vote of confidence by a tier-1 miner in MMG’s resource potential.
- La Plata resourceupdate will likely be by Q4 2024: MMG noted good progress on its La Plata project. Resource modelling on the Allard deposit at La Plata is underway to integrate the drilling results into an updated resource estimate, which is likely to be completed by Q4 2024. The update will add gold, platinum, and palladium to the existing copper and silver resources.
- MMG expects the 2024 exploration program at Keno to expand resources: MMG expects the 2024 drill results at Keno to expand upon the significant silver resource established in earlier reports. This year’s drilling efforts will focus on resource expansion at the Formo target, the most significant cur¬rent resource at the Keno Silver project.
- Alluvial claims: The Company is now earning royalty monies on alluvial gold claims at its Australia Creek property near Dawson City, Yukon, in the histor¬ic Klondike gold district.
Based on our analysis and valuation models, we maintain our BUY rating
and update our fair value per share estimate to $0.57 (earlier $0.47).
