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Sprott Initiates Coverage on Talisker with a “Buy” Rating and Potential 130% Price Upside

Analyst Insights

Sprott Initiates Coverage on Talisker with a “Buy” Rating and Potential 130% Price Upside

Talisker Resources - logoThe analysts at Sprott gave a “Buy” recommendation to Talisker Resources (TSX: TSK | OTC: TSKFF), and a target price of C$0.75/share (currently trading around C$0.32/share). This report came out after Talisker announced that the company had almost $42 million in cash, including the recent investment by New Gold Inc. (TSX: NGD), as well as a 50,000m drill program in progress. Talisker is targeting more than 1.5 million ounces in a maiden resource in 2022 at its Bralorne Gold Project in British Columbia (B.C.), Canada.

The report highlighted that, after going public in 2019, the company has since consolidated three key gold belts in southern B.C. Notably, the company’s flagship Bralorne Gold Complex project, a historic mine that produced 4.2 million ounces of high-grade gold, averaging 18 grams per tonne (g/t), between 1932 and 1971. Initial drilling has validated historical vein extensions as well as newly discovered veins.

Besides the potential of 1.5 million gold ounces defined by next year, what else makes Talisker a good “Buy” according to the report?

The Good Side

Infrastructure is a key point as the Bralorne project has direct highway access, grid power, and a water treatment facility as well as a permitted tailing storage facility. Another aspect of this infrastructure is the accelerated timeline to production. This is due to the existing 80km of underground development that, the analysts noted, could support a faster time to production and lower initial capital costs. Additionally, the drilling year-round without the glaciers and helicopters make for a good advantage as opposed to the company’s more remote peers in the north.

Furthermore, the company lists relevant permits and is located in a safe and top mining area in a first-world jurisdiction, besides the Bralorne historic grade and vein continuity. Considering its numbers, it has the potential means quicker conversion drilling and easier mining for lower exploration and production costs than complex assets requiring closely spaced drilling

Moreover, Talisker’s cash position (approximately C$42 million) has been consolidated with strong backing by recent investments, and warrants amounting to roughly $7.7 million, with some expiring in August 2021 and mid-2022.

The company has an experienced management team on board as well.

The “Free” Option  

The analysts also point out there is an upside with the grassroots exploration projects, including recent discoveries at Golden Hornet and Spences Bridge.

Also, the report puts risk potential as moderate to high for the company, owing to the focus on brownfield exploration versus speculative greenfield targets and possible benefits from over 50 years of historical mine data that guides the company’s exploration.

The Verdict

Talisker has been recommended a “Buy” rating with a price target of C$0.75 per share. Other catalysts include drilling at the six key targets ahead of the maiden resource scheduled for next year. Industry watchers have opined that with resources and economics better defined, they are expecting Net Asset Value (NAV) multiple to increase.

In addition, regional drilling is complete which provides a potential upside to the analysts’ valuation. Any additional discoveries in the area could potentially pave the way for satellite contribution to the main Bralorne mine & mill and showcase the district-scale potential of the project to larger companies.

Founded in 1987, Talisker is a resource and exploration company focused on gold projects in British Columbia, Canada. Talisker has its flagship Bralorne Gold Complex, which is an advanced stage project with substantial exploration potential from a historical high-grade producing gold. The company also has the Spences Bridge Project where the Talisker holds approximately 85% of the emerging Spences Bridge Gold Belt and many other early-stage greenfields projects. With 278,364 hectares over 256 claims, three leases, and 198 crown grant claims, Talisker is a key exploration company in south-central British Columbia.

For more information about the research report, contact Sprott Capital Partners’ Equity Research group.

A  Closeology Play to Bralorne

Endurance Gold logoEndurance Gold (TSXV:EDG | OTC:ENDGF | FSE :3EG) is focused on the exploration and development of precious metals mineral properties in North America and its Reliance Gold Project is located near Gold Bridge, B.C., and “next door” to the Bralorne Gold project.

The Reliance Gold property was optioned in September 2019 and expanded to over 2770 acres (1,122 hectares) in July 2020. Historic drilling and recent geophysical work illustrate the potential for a mineralized gold system over 2.5 km long and a vertical extent of at least 400 metres (m), and the gold system is open along strike in both directions.

In 2020, all nine drill holes at the Eagle Zone intersected gold mineralization within 100 feet (30m) of the surface with highlights holes hitting 14.08 grams per tonne (g/t) over 15.24m and 5.57 g/t over 22.86m.

On April 8, 2021, Endurance Gold announced plans for the upcoming exploration season and it will focus on additional drilling in the Eagle Zone to test the down-dip extension of Eagle mineralization to the southwest and along strike to the southeast and northwest. The 30 to 40 hole program is expected to take 6 weeks to complete and also includes drilling the previously unexplored near-surface gold targets at the Diplomat and Imperial Zones.

Endurance Gold and its Reliance Property could provide investors with good investment potential at a favorable cost for a district-sized project with recent positive drill results and where exploration work can proceed on a year-round basis.

For more information, a research report from eResearch can be found here: Endurance Gold – Site Visit Report on the Reliance Gold Project in B.C.

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