Today, Golden Dawn Minerals Inc. announced the completion of the $4 million USD financing with private equity fund RIVI Capital LLC of San Francisco, USA. This is a major milestone for the company and its shareholders as money is key to make the big step from exploration and development into production. With this major hurdle now behind, the press in Germany and coverage in North America may accelerate with production start coming closer.
On February 7, Steven Ralston of Zacks Research provided an update on Golden Dawn Minerals, raising the target market capitalization from $32 million to $50 million, which equates to a target price of $0.51 CAD/share. He provided the following outlook:
“Golden Dawn Minerals is a junior mineral exploration company that is on the verge of becoming an early stage gold-producing company... We anticipate that the mill will begin processing ore from the May Mac mine once a permit is received. Raising target slightly due to rally in the price of gold.”
Today, Marc Davis from BNWNews published the article “Golden Dawn is Primed for a Breakout Year in 2017”, highlighting the chances for the company and its shareholders in the upcoming weeks and months while the transition to a junior miner is being executed by management.
More drill results from May Mac are expected by the end of the month.
Last week, the German print magazine Derivate Magazin included an article in which Golden Dawn Minerals is presented as a promising investment candidate because “2017 could upgrade the company from explorer to producer”, which is “the most important step in the life of a resource company and mostly goes hand in hand with considerable increases in company valuations”. The magazine also mentioned that “numerous institutional commodity analysts” will be visiting the project and may report on Golden Dawn Minerals shortly thereafter. This would clearly increase awareness of this young company, which intends to start producing precious and base metals during within the next 3 months.
As the ongoing drill programs at the historic May Mac Mine have been delivering high grades of gold, silver, zinc and lead, a 10,000 t bulk sampling program is set to commence once the permit is in hand (expected any day) with material to be processed at the near-by Greenwood Mill, potentially for immediate positive cash-flow generation).
Zacks Research analyst Steven Ralston calculated a discounted asset value of $0.51 CAD/share, which is based on around 180,000 ounces of gold contained in the 3 historic mines Lexington-Grenoble, Golden Crown and May Mac. Resource development programs are ongoing at the historic May Mac Mine and are poised to significantly increase its relatively small contribution ($2.8 million CAD) to Golden Dawn’s total net asset value (Lexington-Grenoble: $48 million CAD; Golden Crown: $33 million CAD). On top of that, Ralston’s valuation does not (yet) include the acquisition of the substantial Kettle River property package, which includes 29 historic metal mines. Ralston stated:
“The company recently acquired the Greenwood Gold Project, which is located in south-central British Columbia and which includes two past producing mines and the Greenwood mill. The company is expected to significantly expand its portfolio again by exercising its option to acquire 100% interest in the Greenwood Area Properties (aka Kettle River Resources Ltd)...
Managements of junior mineral exploration companies create value through evaluating, acquiring, exploring and/or developing mining properties. Management’s strategy is to increase shareholder value through acquiring projects in the Greenwood Mining Camp, where management has considerable experience, and subsequently advancing the properties to production. With the acquisition of the Greenwood mill, management is able to fast-track the May Mac, Lexington-Grenoble and Golden Crown mines to production. Our calculation of share value of attributable resources is based on the ascertained net asset value of each property, which is determined by adjusting the value of estimated resources for the expected recovery rate, mining/processing costs and royalties, if any. Also, the resources are assigned a confidence factor that attempts to take into account the risks of each project, such as the locality of the deposits, the assurance level of the resources, various technical mining/production risks, etc. The methodology also accounts for balance sheet adjustments for working capital and assets, such as property, plant and equipment, along with anticipated development capital costs. Based on our calculation of share value of attributable resources, our target for Golden Dawn stock is $0.51. The target was raised slightly due to rally in the price of gold.”
Recent pictures of underground drilling at May Mac and the near-by Greenwood Mill processing facility.
“At the May Mac mine, 3 surface diamond drill holes (totaling 550 meters) were completed, along with 9 underground diamond drill holes (totaling 805 meters). In addition, one jackleg test hole was drilled from the end of the No. 7 drift. At May Mac, one of the 3 surface drill holes (BF16-26) intersected 6.07 meters of mineralization (located 13 meters below the No. 7 level and 100 meters northeast of the end of that level) grading 79.6 g/t Ag, 0.57 g/t Au, 1.9% Pb and 1.4% Zn. Assay results from the other two drill holes were not significant. The first hole (MU16-01) in the underground campaign was drilled horizontally from the end of the level No. 7 adit in order to locate the Skomac vein. At a distance between 17.45 and 19.78 meters, MU16-01 intercepted 2.33 meters of mineralization grading 131.3 g/t Ag, 2.34 g/t Au, 0.59% Pb and 0.42% Zn. This discovery could be the potential target for the planned bulk sample. The samples for the remaining 8 holes have been sent to the lab for analysis.” (Steven Ralston of Zacks Research on February 3, 2017)