Endeavour Silver is a mid-tier precious metals mining company that operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Full year production exceeds guidance. For the full year 2022, silver and gold production amounted to 5.9 million ounces and 37.5 thousand ounces, respectively, or 9.0 million ounces on a silver equivalent basis. Silver and gold ounces sold amounted to 6.5 million and 38.9 thousand ounces, respectively. Production exceeded the company’s guidance of 7.6 million to 8.0 million ounces on a silver equivalent basis. During the fourth quarter, the company reduced inventory to 525,485 ounces of silver and 1,512 ounces of gold bullion and 4,766 ounces of silver and 195 ounces of gold concentrate.
Updating estimates. We have increased our fourth quarter and full year 2022 EPS estimates to $0.07 and $0.10 from $0.03 and $0.06, respectively. Our revisions reflect greater than expected fourth quarter production and sales from inventory. We have increased our 2023 EPS and EBITDA estimates to $0.11 and $59.2 million, respectively, from $0.09 and $52.5 million based on modestly higher gold and silver prices.
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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
On the second hole at Tatasham. Drilling began at the Tatasham porphyry copper target in late November. Drilling is expected to continue through this month. Aurania is on the second hole at Tatasham and expects to drill three or four holes to test areas identified during the company’s Anaconda mapping program. Following Tatasham, the company anticipates drilling at the Awacha porphyry copper target.
Surprising outcome on the first hole. While no assays have been received from rock samples or drilling, the first hole intersected a zone of massive silicification framed by two fault zones which management believes may have acted as feeder systems. Interestingly, the alteration is more typical of a gold system rather than porphyry copper. Management thinks it is probable that an epithermal system may be on top of a porphyry and shallow drilling could expose the volcanic plumbing system in at least one location. The goal is to locate the zone where gold could no longer be transported in the geothermal waters and deposited in the veins somewhere below the siliceous sinter.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Private placement closed.Aurania closed the second and final tranche of its private placement of 4,244,598 units of the company for gross proceeds of approximately C$1.9 million. A total of 2,417,166 and 1,827,432 units were sold in the first and final tranches, respectively. In each case, units were priced at C$0.45 per unit and were comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of C$0.75 per warrant share for up to 24 months following the date of issuance. Net proceeds will be used to fund drilling and exploration activities at the Lost Cities project, along with working capital needs.
Drilling continues at Tatasham. Drilling began at the Tatasham porphyry copper target in late November. Except for a brief holiday break, drilling is expected to continue through January 2023. The company expects to drill three or four holes at Tatasham to test areas identified during the company’s Anaconda mapping program. Following Tatasham, the company anticipates drilling at the Awacha porphyry copper target.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2022 exploration and drilling program. The 2022 exploration program focused on identifying new precious metal-rich volcanogenic massive sulphide (VMS) deposits, often found in district scale clusters, across the Consolidated Eskay project. Much of the focus was on defining the extent of VMS systems along the eastern and western limbs of the Eskay Anticline. Eskay Mining completed 29,500 meters of diamond drilling along the TV-Jeff corridor and along the Scarlet Ridge-Tarn Lake trend.
Assay results released. Eskay Mining released assay results for 42 holes drilled along the TV-Jeff corridor, including north of the Jeff deposit. Assays returned from holes completed in areas close to the TV deposit yielded significant intercepts of gold and silver mineralization. Wide-spaced drilling approximately 800 meters north of Jeff encountered a new zone of mineralization that yielded high-grade gold and silver values, some within longer intervals of lower grade mineralization. The company is awaiting assay results from maiden drilling in the Scarlet Valley-Tarn Lake area where several new VMS targets were drill tested in 2022.
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Endeavour Silver is a mid-tier precious metals mining company that operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Updated technical report. Endeavour’s Pitarrilla project is an undeveloped silver, lead, and zinc property in Durango State, Mexico and encompasses 4,950 hectares across five concessions with well-developed infrastructure and access to utilities. Endeavor recently published an updated technical report highlighting total open pit and underground indicated mineral resources of 491.6 million ounces of silver, 1.1 million pounds of lead, and 2.6 million pounds of zinc, representing 693.9 million silver equivalent ounces. Total inferred resources include 99.4 million ounces of silver, 281.0 million pounds of lead, and 661 million pounds of zinc, representing 151.2 million silver equivalent ounces.
Next steps. In January, Endeavour will provide more detail regarding 2023 exploration plans at Pitarrilla. We expect it will represent the largest exploration expenditure in 2023, with Terronera shifting to development. At Pitarrilla, Endeavour expects to finish up a 1-kilometer-long tunnel that the previous owners had started which will be used as a drill platform to verify high-grade core.
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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Private placement financing. Aurania closed the first tranche of its private placement financing of up to 4,444,444 units of the company for gross proceeds of up to C$2,000,000. In aggregate, 2,417,166 units were sold at a price of C$0.45 per unit for gross proceeds of C$1,087,725. Each unit is comprised of one common share and one common share purchase warrant that entitles the holder to purchase one common share at an exercise price of C$0.75 per warrant share at any time until November 29, 2024. Aurania received an extension by the TSX Venture Exchange to close the second tranche by January 9, 2023, although we believe it will likely close by mid-December.
Drilling begins at Tatasham. Aurania has commenced its drilling program at the Tatasham porphyry copper target. We expect the company to drill up to four holes for a total of 2,700 meters, or an average depth of 675 meters per hole. Because Tatasham is a blind geophysical target with no mineralization at surface, we expect drilling will be an iterative process subject to refinement. Following Tatasham, the company anticipates drilling at the Awacha porphyry copper target.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
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Newrange is focused on district-scale exploration for precious metals in the prolific Red Lake District of northwestern Ontario. The past-producing high-grade Argosy Gold Mine is open to depth, while the adjacent North Birch Project offers additional blue-sky potential. Focused on developing shareholder value through exploration and development of key projects, the Company is committed to building sustainable value for all stakeholders. Further information can be found on our website at www.newrangegold.com .
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Acquisition agreement terminated. Newrange terminated its agreement to acquire the Coricancha mine in Peru from Great Panther Mining Limited. Newrange was unable to raise the necessary funds to close the transaction and fund an exploration program. Newrange had sought to raise ~C$10.1 million through a private placement offering which has been canceled. The company will not pursue a share consolidation or corporate name change.
Near-term focus will be on Argosy and North Birch. Newrange will renew its focus on district-scale exploration for precious metals in the Red Lake District of northwestern Ontario. The 100%-owned projects are almost contiguous and comprise 4,454 hectares. The past-producing high-grade Argosy Gold mine offers significant potential with prior drilling indicating that gold mineralization extends below the mine workings and is open to depth, while the adjacent North Birch project offers an attractive folded iron formation setting for gold discovery.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Third quarter financial results. Sierra Metals reported an adjusted net loss of $10.7 million or $(0.07) per share, compared to an adjusted net loss of $3.1 million or $(0.02) per share during the prior year period. Third quarter revenue from metals payable declined 36% to $38.8 million due to a decrease in metal sales and a decline in average realized prices for all metals. Adjusted EBITDA declined to $(3.9) million compared to $17.4 million during the third quarter of 2021 due mainly to lower sales and commodity prices. Third quarter production was negatively impacted, among other things, by a mudslide at the Yauricocha mine and flooding at the Bolivar mine.
Updating estimates. We have lowered our full year 2022 EPS and EBITDA estimates to $(0.13) and $18.0 million from $(0.08) and $29.9 million, respectively. Additionally, we have reduced our 2023 EPS and EBITDA estimates to $0.07 and $63.2 million from $0.12 and $76.1 million. Our estimates reflect lower production levels for both Yauricocha and Bolivar.
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Endeavour Silver is a mid-tier precious metals mining company that operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Third quarter 2022 results. Endeavour generated a third quarter adjusted net loss of $3.1 million or ($0.02) per share compared to a net loss of $4.5 million or $(0.03) per share during the prior year period. We had projected net income of $2.0 million or $0.01 per share. Financial results were negatively impacted by the company’s decision to withhold sales for inventory, along with higher direct production costs. At quarter end, Endeavour held 1,527,549 ounces of silver and 3,210 ounces of gold in bullion inventory and 2,770 ounces of silver and 143 ounces of gold in concentrate inventory. For the nine months ended September 30, adjusted EBITDA and EPS amounted to $33.1 million and $(0.01), respectively.
Updating estimates. We expect stronger financial performance during the fourth quarter although we have trimmed our 2022 EPS estimate to $0.06 per share from $0.09 to reflect third quarter financial results. We have lowered our 2023 EBITDA and EPS estimates to $52.5 million and $0.09, respectively, from $0.11 and $53.3 million to reflect modestly lower margin on sales.
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Newrange is focused on district-scale exploration for precious metals in the prolific Red Lake District of northwestern Ontario. The past-producing high-grade Argosy Gold Mine is open to depth, while the adjacent North Birch Project offers additional blue-sky potential. Focused on developing shareholder value through exploration and development of key projects, the Company is committed to building sustainable value for all stakeholders. Further information can be found on our website at www.newrangegold.com .
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Creating a new silver-focused development and production company. Newrange recently signed a definitive agreement with Great Panther Mining Limited (NYSE American, GPL) to acquire a 100% interest in the past-producing Coricancha mine in central Peru. Coricancha is a high-grade, narrow-vein, gold-silver-copper-lead-zinc underground mine in the Central Polymetallic Belt of Peru and will take the stage as the company’s flagship project. It is ninety kilometers east of Lima and includes a 600-tonne per day processing plant, dry-stack tailings storage facility and requisite surface and underground infrastructure.
Acquisition terms. Newrange has agreed to make a single cash payment of US$750,000 to Great Panther upon closing. Because the transaction is on a cash basis, it does not require shareholder approval. Newrange is considering a “one new for six old” share consolidation and subsequent name change to be effective upon closing. Closing is subject to certain conditions, including financing by Newrange, and receipt of all necessary third-party approvals, including by the TSX Venture Exchange.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Private placement financing. Aurania Resources announced a non-brokered private placement financing of up to 4,444,444 units at a price of C$0.45 per unit for gross proceeds of up to C$2,000,000. Each unit will consist of one common share and one common share purchase warrant. Each warrant will entitle the holder to purchase one share for C$0.75 per warrant for a period of 24 months. Proceeds will be used to fund drilling and exploration activities and general working capital. Closing is subject to receipt of approvals, including from the TSX Venture Exchange.
Drilling to commence shortly. Detailed interpretation of the “Anaconda Method” mapping program at Aurania’s Tatasham porphyry target in southeastern Ecuador is nearing completion and the first few drill holes are being defined for a drill program expected to begin in the latter half of November or early December 2022, with drilling at the Awacha target to follow.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Exploration potential may be greater than previously thought. Relogging of drill core, along with the integration of geophysics and geochemistry from the Tiria-Shimpia target, revealed the presence of three structural grabens in the middle of Aurania’s concession block in Ecuador. Grabens are bordered by parallel faults. The identification of grabens is significant given that their faults are often conduits for hydrothermal fluids and have significant potential to host mineralization.
Long and wide. The north graben is 10 kilometers long and 3.5 kilometers wide, while the central graben is 26 kilometers long and 3 kilometers wide. The south graben is 18 kilometers long and 5 kilometers wide.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Toronto, Ontario, September 26, 2022 – Aurania Resources Ltd. (TSXV: ARU; OTCQB: AUIAF; Frankfurt: 20Q) (“Aurania” or the “Company”) is pleased to announce that an intensive “Anaconda method” mapping program (see press release dated August 8, 2022) at the Company’s Tatasham target has discovered highly prospective porphyritic felsic intrusive rock, and at the Awacha target area, mapping has confirmed diorite and other intrusive rocks, with local hydrothermal breccias. The intrusives are crosscut by several generations of quartz veinlets locally containing chalcopyrite and galena (see Figures 1 and 2). These results are considered positive indications of porphyry-style mineralization at both localities.
Tatasham and Awacha are contained in Aurania’s large, 207,764-hectare concession block in southeastern Ecuador, located immediately north of the highly productive mineralized belt containing Solaris Resources’ Warintza and SolGold’s Porvenir porphyry copper deposits, as well as operating mines at Mirador (copper) and Fruta del Norte (gold).
The mapping program at Tatasham has been completed and is currently underway at Awacha. This work is being carried out ahead of a drilling campaign which is anticipated to commence in the last quarter of 2022.
The Tatasham target is a blind geophysical target with no previously recognized alteration or mineralization at surface. The 3-kilometre (km) x 1 km target is both a magnetic and resistivity high, flanked by conductive anomalies, that are speculated to represent a mixed magnetite skarn and porphyry cluster.
The Awacha target area comprises a cluster of geophysical anomalies representing porphyry targets located in an area approximately 9 km x 6 km in size. These targets are covered by post-mineral sedimentary rock. Where streams have cut down through these sediments, they have exposed the classic phyllic alteration envelope (quartz-sericite-pyrite alteration) which typically accompanies copper mineralization. Low levels of copper and molybdenum have been returned in analyses of stream sediments in this area, as well as copper in soils (see press release dated April 19, 2022).
Figure 1: Quartz diorite porphyry from Tatasham
Figure 2: Hydrothermal breccia exposure at Awacha
Amendment to Option Terms
An amendment was made to the vesting period of the stock options granted to SRC Swiss Resource Capital AG (“SRC”), the details of which were announced in a press release dated August 18, 2022. The 35,000 stock options granted to SRC at a price of $0.84 CAD, will vest in quarters with ¼ vesting three months from the date of grant, ¼ vesting six months from the date of grant, ¼ vesting at the one-year anniversary from the date of grant, and ¼ vesting at the two-year anniversary from the date of grant. All other terms remain unchanged.
Qualified Person
The geological information contained in this news release has been verified and approved by Jean-Paul Pallier, MSc. Mr. Pallier is a designated EurGeol by the European Federation of Geologists and a Qualified Person as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
About Aurania
Aurania is a mineral exploration company engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper in South America. Its flagship asset, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador.
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking information as such term is defined in applicable securities laws, which relate to future events or future performance and reflect management’s current expectations and assumptions. The forward-looking information includes statements about: Investor Relations Activities (as such term is defined in the policies of the TSX Venture Exchange) to be performed by SRC and the anticipated approval of the TSX-V for said activities, Aurania’s objectives, goals or future plans, statements, exploration results, potential mineralization, the corporation’s portfolio, treasury, management team and enhanced capital markets profile, the estimation of mineral resources, exploration, timing of the commencement of operations and estimates of market conditions. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and information currently available to Aurania, including the assumption that, there will be no material adverse change in metal prices, all necessary consents, licenses, permits and approvals will be obtained, including various local government licenses and the market. Investors are cautioned that these forward-looking statements are neither promises nor guarantees and are subject to risks and uncertainties that may cause future results to differ materially from those expected. Risk factors that could cause actual results to differ materially from the results expressed or implied by the forward-looking information include, among other things, a failure to obtain or delays in obtaining the required regulatory licenses, permits, approvals and consents, an inability to access financing as needed, a general economic downturn, a volatile stock price, labour strikes, political unrest, changes in the mining regulatory regime governing Aurania, a failure to comply with environmental regulations and a weakening of market and industry reliance on precious metals and copper. Aurania cautions the reader that the above list of risk factors is not exhaustive.
