Rokmaster Resources: Constructive Drill Results at the Gold-Rich Revel Ridge Project
May 28, Rokmaster Resources Corp. (TSXV: RKR) announced constructive assay results on the first nine of 42 drill holes it plans to complete in 2021 on its Revel Ridge project in southeastern British Columbia. The 42 holes will represent a total of 16,400 meters of drilling as part of a Phase 1 drilling program on the gold-rich polymetallic sulphide resource. The cost of the drilling program is estimated at $ 5 million.
Drill results indicated significant silver-zinc mineralization, as well as an expansion of the resource.
Revel Ridge Project Details
Based on a January 2020 Mineral Resource Estimate, the Revel Ridge Main Zone (RRMZ) contains, on a measured and reported basis, 1,089,000 ounces of gold equivalent (AuEq) grading 8.07 grams of gold. AuEq per ton of resource (g / t AuEq) and 961,000 additional AuEq ounces with a composition of 6.55 g / t AuEq on an inferred basis.
At the end of December 2019, Rokmaster entered into a definitive option agreement with Huakan International Mining Inc. to acquire a 100% interest in the Revel Ridge property of 14,277 hectares. To do this, Rokmaster must make a total of $ 44.2 million in cash payments over a five-year period.
In December 2020, Canenco Consulting Corp. released a constructive Preliminary Economic Assessment (PEA) on Revel Ridge. The project has an after-tax net present value (NPV) of $ 423 million based on a 5% discount rate and conservative precious metal price assumptions of US $ 1,561 per ounce of gold , US $ 20.55 per ounce of silver and US $ 1.07 per pound of zinc.
Solid balance sheet, but capital increases seem likely in the coming months
As of March 31, 2021, Rokmaster had $ 7.9 million in cash and no debt. As the company increased the pace of drilling at Revel Ridge, its quarterly operating cash deficit fell to $ 2.3 million in Q4 2020 and $ 2.1 million in Q1 2021. Based on this cash usage rate, the company will likely need to raise new capital in the coming months.
|(in thousands of Canadian dollars, except for outstanding shares)||1Q 2021||4Q 2020||3Q 2020||2Q 2020||1Q 2020|
|Operating result||($ 2,185)||($ 3,069)||($ 1,412)||($ 740)||($ 228)|
|Operating cash flow||($ 2,089)||($ 2,317)||($ 1,135)||($ 471)||($ 239)|
|Cash||$ 7,926||$ 10,177||$ 3,389||$ 3,732||$ 234|
|Debt – End of period||$ 0||$ 0||$ 0||$ 0||$ 212|
|Shares outstanding (millions)||103.9||97.3||69.4||60.1||39.7|
Like any mining company in the exploration phase, Rokmaster depends on constructive drilling results to move its projects forward. If future test readings turn out less positive than readings to date, the company could face challenges. In addition, the company appears likely to issue new shares on a regular basis over the next several years to fund its drilling budget as well as required option payments at Huakan.
Rokmaster’s Revel Ridge property appears to be a promising, high-grade resource of precious and other metals. Further exploration and development work needs to be completed, but it appears to be attractively valued. Specifically, at an enterprise value of $ 43 million, Rokmaster appears to be trading for a lower price than comparably positioned junior miners.
Rockmaster Resources Corp. last traded at $ 0.495 on the TSX Venture Exchange.
Information for this briefing was found through Sedar and the companies mentioned. The author has no title or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author does not hold any license.