*Disclaimer: This is not financial advice. Do your own Due Diligence.
*Disclosure: I have a beneficial long position in the shares of one or more of the companies discussed in this article, either through stock ownership, options, or other derivatives. I wrote this article without external assistance, and it expresses my personal opinions. I was not compensated for this article, and I have no business relationship with any company whose stock is mentioned in this article.
*All amounts in CAD, otherwise mentioned.
I will talk about the (1) balance sheet, (2) management, (3) the three projects with high gold and copper grades less than 100m below surface, (4) Meaning of high grades, (5) pending results and (6) comparable companies and market caps and last but not least an (7) invitation.
Company: Transatlantic Mining: TCO.V / TRRG.F
Shares Outstanding: 87Mln
Options: 14Mln (outstanding at 5 cents, expiry date June 23, 2024. I don't see any new stock options or warrants for management over the past years.)
Warrants: Nihil
Corporate / Investor Presentation: http://www.transatlanticminingcorp.com/
Market Cap: $6Mln
Stock Price: 0.07
Important tip: Read the MDA every time it is released
Commodities: Gold and Copper but also Silver as a byproduct.
(1) Balance sheet
The balance sheet is clean. Management has the salary “accrued”. Q3 said the amount of 160k for 9 months is accrued as you see in Note 7 and Note 10. That's why accrued liabilities is large. A CEO who doesn't care would simply pay himself but they use the cash for the assets.
They have no loans and a cash position of $1.8Mln and 197K Endomines shares worth $1.8 mln in September but they are up 75% from €3.83 in the FSA (calculated) to €6.70 today is $1.9Mln. Total cash and investments for drilling is then $3.7 Mln. That is the majority of the market cap and they have 3 assets with proven mining production in the past.
(2) Management
Bernie Sostak has proven himself. See LinkedIn for exact years. Specifically, when he worked at the Australian company Northern Star Resources (Nov 2010 – Sep 2014). Stock price from 58c to 1.26 during his tenure and now at 13.72
- geologist with over 35 years’ experience.
- General Manager of Business Development and Technical Services for ASX listed Company Northern Star Resources. During that tenure he was responsible for growing the Company and teaming to acquire four new mines.
- Prior to this, Bernie was Director of Resource and Reserve Strategy for Barrick Gold Corporation. His experience includes mine geology, resource estimations, exploration, mine planning and operations management."
At TCO he sold in April 2020 Kearsage project + US Grant mine + Mill for $10mln US when Gold price was roughly $1600.
10 mln USD = 13 mln CAD = 15 cents per share based on 86 shares. Now gold is at $2200 so put a value of 20 cents on that deal today.
(3) Three Projects
TCO has 3 projects, some which are former mines that were in production. These are:
1. Golden Jubilee, focused on Gold. Sporadic production between 2000 and 2014. Location Montana (USA).
2. Miller, focused on Gold. Sporadic production between 1901 and 1948. Location Montana (USA).
3. Monitor, focused on Copper with Gold second. Production until 1910, closed after the great Idaho fire. Location Idaho (USA). Including St. Lawrence Property and Big Elk Prospect.
*Permits are getting in place and more drilling is planned. You can read it in the MDA.
1. Jubilee Project
Please look at the picture below of the map for the results. Over the past years more samples have been drilled to make a clear picture of the deposit size and grades. Gold is mostly at less than 100 meters and some examples are:
• Previous 2014 Bulk mine development sample represented on vein + 100 m long and 2.0 m wide which averaged 10,000 tonnes at a mined and processed grade of 9.00 g/t Au.
At 64 meters below surface 7.8 g/t Au and at 87m 6.9 g/t Au. (Drillhole # 2201)
At 111m they measured 13.1 g/t Au. (Drillhole # 2203)
Source (Press release 13-4-2023): http://www.transatlanticminingcorp.com/wp-content/uploads/2023/04/NR_GoldenJubilee_Drilling20230413_Final.pdf
2. Miller Project (sporadic production 1901-1948)
Enclosed I have a picture of the project.
Miller had an average recovered grade mined of 248 g/t Au (7.94 Oz /ton) and 143 g/t Ag (1901-1948).
Miller project is pending mud samples from the lab. Physical gold was clearly visible shown in the pictures shared by management. Water is being pumped out of the mine a new Lower Winze Drive has been uncovered with first grab samples of 27.6 g/t Au (Non Quartz, press release 14-6-2023)! Visual gold has been observed (no wonder with such high grades). This is directly below the Lower Level of 100m.
Source (press release 15-6-2023): http://www.transatlanticminingcorp.com/miller-mine-extension-and-gold-results-27-gt-au/
At 105m below the 100m Lower Level, or 200m depth a measurement of 516 g/t Au with 2,5m (Drillhole DDH_01 in 1968-69). The pending mud samples and current exploration will shine some light on this in 2023.
Quote: "A Hole #1 was drilled 300 feet below the lowest recorded workings and recorded 14.7 Oz /ton Au (516 g/t Au)."
The # 4 Lower Level has been more recently accessed by Transatlantic with high grades above 15 g/t Au having been received.
3. Monitor Project including St. Lawrence and Big Elk Prospect
Last mined in 1920s. The amazing part is that this is mainly a Copper Project but the gold grades are of a hight that you could have defined it as a gold project!
Historic average production from 1920s:
15 % Cu, 8 g/t Au and 30g/t Ag-Monitor
8% Cu, 3 g/t Au and 15 g/t Ag-Richmond
• Recent maximum assay results from the mine waste dumps returned values of 13.55% Cu, 15.45 g/t Au and 57.7 g/t Ag
*UPDATE 20-10-2023: 1,000 meters of diamond core drilling with 14 holes completed. Please note that the average is only 71 meters, meaning everything is measured close to the surface.
Take a closer look at the maps below and you see a large project is in the making with clearly using samples to find out where the deposit is located. Not for nothing the picture enclosed was titled ‘Plan of Monitor Project- Big Elk Prospect” in the latest MDA. The MDA is a source of hints given by the CEO Bernie Sostak.
http://www.transatlanticminingcorp.com/monitor-copper-drilling-commences/
(4) Meaning of high grades
High Grades Gold:
To help put this all into perspective: What is considered high gold grade according to bullionbypost?
Source: https://www.bullionbypost.co.uk/index/gold/gold-grade/
High Grades Copper:
"COPPER: Anything over 100 metres and 1% copper equivalent or better is considered to be high-grade. For example, Serengeti Resources announced 119.6 metres of 0.9% copper equivalent (copper plus gold values added together) at depths from 180 to 300 metres. The stock then increased from $0.30 to $1.50 after those drilling results were reported."
(5) Pending Results
I expect updates on all 3 projects. Quick overlook with my sources:
1. We got Big Elk - Monitor 14 diamond drill holes
2. We got Miller mud samples from press release 14 June. Why 9 months? Did I miss something in the MDA Q3?
Quote MDA Q3 page 6:
"Upcoming activities. The activities include continuing running sample and testing rock over a gravity table, keep pumping the Lower Winze Drive to the end and then sample exposed winze drive. New drilling and sampling is planned on the Lower Level development once the Lower Level and Lower Level Winze drive are pumped out sampled and cleared of mud."
Also worth mentioning is: "A new Winze Drive lower immediately below the Lower Level has been uncovered and is exposed currently over 30 metres of strike at a minus 20 degree gradient."
3. Golden Jubilee has mentioned in the last MDA Q3 that new samples were sent to the lab.
Page 9 Quote: " Since receiving the new assays additional logging has been completed with new samples sent to the Laboratory for analysis, in concert with upgraded geologic modelling of the new data."
(6) Comparable companies and market caps
This chapter is a challenge. TCO has high grades between 0-100 meters depth while other companies are many times starting at 100m or far deeper for decent results. Furthermore, small exploration companies have many times only few good samples which are mostly outliers, while TCO has multiple good samples and proven historic production. Moreover, many companies release results over short ranges with a sudden higher result which is unstable.
I looked at multiple companies but each is limited in comparing a project from TCO to put an estimated value for each project.
I like to use the deal between Orla Mining and Contact Gold of February 26, 2024 as a decent comparison. Not as a value but as a compass.
Let’s start with the fact that Contact Gold was acquired for roughly $12mln CAD, or $10mln if you exclude the warrants.
It's buying price is 3 cents per share and they had 350mln shares + 50mln warrants. If I'm correct it was bought for roughly 12mln CAD with empty balance sheet besides projects.
I see 433,000 “inferred” pit constrained ounces at an average grade of 0.52 g/t Au. Let’s not forget that Golden Jubilee has multiple high samples as can be seen on the map of the paragraph.
Source: https://www.contactgold.com/projects/pony-creek/
Source: https://ceo.ca/@thenewswire/orla-mining-to-acquire-contact-gold
Comparable is probably the Golden Jubilee project but first we need a resource estimate. Please note that the resources were only “inferred” or estimated and not even “indicated” (read “Probable” mineral reserve) or “measured” (read “Proven” mineral reserve) which would give it more confidence.
(7) Invitation
Please allow me to invite everyone to comment on this article to show comparable companies for the projects TCO has. I believe it is best to compare each project separately to get to a decent valuation. Please share your findings and let’s all be more informed investors.
