In a June 8 research note, Andrew Mikitchook relayed that BMO Capital Markets initiated coverage on Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) with an Outperform rating and a CA$3 per share price target "based on a conceptual-stage mine development plan and our expectation for exploration upside." With the stock currently trading at around CA$1.61 per share, the target implies more than an 80% return.
Mikitchook outlined what's attractive about Gold Standard Ventures from an investing perspective.
First, through exploration on its Railroad property situated on the Carlin Trend, the Nevada company has defined two gold discoveries, Dark Star and Pinion, which appear to be economic. North Dark Star, for example, shows "grades above peer heap-leach projects," Mikitchook noted, and should be amenable to open-pit mining.
Second, "the Carlin's rising star" has demonstrated "visibility on transitioning to development for over 100 thousand ounces per year of production," the analyst wrote, with high grades from (North) Dark Star driving production initially. A preliminary economic assessment for Dark Star and Pinion is due out in the second half of 2018. The study could also incorporate Jasperoid Wash, depending on results from drilling currently taking place there.
Third, Gold Standard also boasts "significant exploration upside," with its high probability of making additional discoveries, particularly since initial indications of such already exist. Additional discoveries could potentially be of "grade and/or scale similar to those driving significant gold production to the north for Barrick and Newmont," said Mikitchook.
The company has ample room to explore on its 12-kilometer Railroad land package, the second largest in the mineralized Carlin Trend.
Additionally, the members of Gold Standard's exploration team collectively have had great success specifically in the Carlin. Today, they're concentrating on the Jasperoid Wash.
As for funding, the company has sufficient cash, CA$40 million, to cover its US$28.8 million 2018 exploration budget, Mikitchook reported.
Fourth, Gold Standard is an attractive takeover target based on its "exploration success combined with a proven technical exploration team in one of the top mining jurisdictions and in proximity to substantial Barrick and Newmont mines," explained Mikitchook. In fact, two companies already have invested in the company, OceanaGold with a 15.5% interest and Goldcorp with a 9.9% stake.
The analyst opined that one of two events would likely catalyze a takeover. The first is the company making one or more additional high-grade or large-scale discoveries. The second is the company advancing the project toward a development decision by reaching permitting and engineering milestones.
In the interim, Gold Standard is expected to keep releasing drill results from Jasperoid Wash and Dixie along with infill/delineation drill results from Dark Star and Pinion.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from BMO Capital Markets, Gold Standard Ventures, June 8, 2018
I, Andrew Mikitchook, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Company Specific Disclosures
Disclosure 1: BMO Capital Markets has undertaken an underwriting liability with respect to Gold Standard Ventures within the past 12 months.
Disclosure 2: BMO Capital Markets has provided investment banking services with respect to Gold Standard Ventures within the past 12 months.
Disclosure 3: BMO Capital Markets has managed or co-managed a public offering of securities with respect to Gold Standard Ventures within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from Gold Standard Ventures within the past 12 months.
Disclosure 6A: Gold Standard Ventures is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services
For Important Disclosures on the stocks discussed in this report, please click here.