Sector NewswireTM

Sector: Mining - Metals and Minerals   :

 

News Release -  April 17, 2015 4:02 PM ET 

 

 

Alexandria Minerals' Net Smelter Gold Royalty -- Update

  • Agnico-Eagle Affirms West Zone Deposit (on which AZX.V holds 2% NSR) as Part of Plan to Feed and Extend the Life of Goldex.

  • Alexandria's current market cap (<CDN$13 million) relative to intrinsic value appears disproportionate and presents an exceptional risk-reward scenario; entering Q2-2015 AZX.V's has ~CDN$2 million in current assets (that includes cash and refunds coming from the Quebec government), has nearly 2.5 million ounces of gold and gold equivalent on projects approaching marketability/monetization, and possesses a significant 2% NSR set to kick-in from the 'West Zone' gold asset sale to Agnico Eagle.

NEW YORK, NY, April 17, 2015 /Sector Newswire/ - Alexandria Minerals Corporation (TSX-V: AZX) (US Listing: ALXDF) (Frankfurt: A9D) has a significant 2% NSR set to kick-in from the 'West Zone' gold asset it sold to Agnico Eagle. The West Zone deposit is being fast-tracked to mine production; AEM has applied for environmental permits and it is anticipated a ~3,000 TPD operation (feeding its nearby Goldex mill) will occur from the West Zone beginning in 2016 (or possibly sooner) at which time AZX.V is entitled to the 2% NSR on material after 210K oz of gold has been mined. We estimate that at ~3 years in (as the NSR kicks in) Agnico Eagle will buyout 1% of the NSR for ~$7M and the remaining 1% NSR will provide AZX.V with ~$500,000/year. The West Zone deposit was recently the subject, in part, of a corporate presentation at the Metals & Natural Resource Conference at the Westin New York Grand Central this March 30, 2015. In the presentation management of Agnico Eagle affirmed that the West Zone Deposit is part of its plan to feed and extend the life of Goldex.

 

This affirmation sheds new light on the upside share price revaluation potential of Alexandria based on market cap value relative to intrinsic value and the fact the royalty appears increasingly a reality on the near-term horizon. Put another way, the discounted future value of the potential West Zone royalty alone totals close to the current market cap of AZX.V, ignoring the nearly 2.5 million ounces of gold and gold equivalent on projects approaching marketability/monetization, also ignoring the apparent resource growth potential, and ignoring the large new discovery potential along the largest contiguous land package in the prolific Val d-Or region. 

 

Alexandria Minerals now possesses an impressive portfolio of advanced-stage projects with serious intrinsic resource value in Quebec, Ontario, and Manitoba.

In Quebec: AZX.V is focused on exploring, developing, and monetizing its Cadillac Break group of precious metal properties which contiguously stretch 35 km along the prolific Cadillac Trend. AZX.V currently has global resources in Quebec totaling 1,583,882 ounces gold (695,524 ounces Measured & Indicated and 888,358 ounces Inferred) on three 100% owned projects proximal to infrastructure-rich Val d'Or where 4 gold mills with excess capacity are within 15 km.

In Manitoba: AZX.V has two advanced-stage Cu-Au-Ag-Zn projects with ~800,000 of gold equivalent ounces. These two Manitoba projects were considered the flagship assets of Murgor (now 100% owned by Alexandria Minerals) and have serious intrinsic high-grade copper-gold resource value and blue-sky potential.

 

All of AZX.V's flagship deposits are within close proximity to mills hungry for feed, giving it an advantage over other juniors explorers (which are absent local mill/infrastructure), comparatively all of AZX.V's established deposits are apt to superior demand/returns as they are do not necessarily require large capex of building a mill. [See research URLs at bottom of this page for further information on Alexandria Minerals]

  

The following are excerpts that mention Alexandria Minerals, the West Zone deposit, and Goldex, sourced from management of Agnico Eagle's corporate update presentation at the Metals & Natural Resources Conference, presented at the Westin New York Grand Central, March 30, 2015:

 

"At Goldex, things have gone extremely well, and we've proven that the decision to restart the operations was the right one, as the cost structure and the mining method works. So now we're looking at subsequent cases that we knew existed when we laid out the base case for the restart. We can process and mine a tonne of ore at Goldex in the mid-$30's Canadian, we have a plant that can process 8,000 Tonnes Per Day and we have potential feed for the mill from a satellite deposit that we had purchased from Alexandria Minerals about a year ago, called Akasaba West, which could help fill the excess capacity at the mill." (Source: 5:43 mark http://www.wsw.com/webcast/vir14/aem/)

 

"With the satellite zones and the combination of Akasaba West deposit, which is an open-pit scenario 30 km away down the road, we could probably extend the life of this mine by another 8 to 10 years, and increase the output by another 20 to 30%." (Source: 12:40 mark http://www.wsw.com/webcast/vir14/aem/)

 

"A lot of our competitors have had to deconstruct their businesses here, so it's interesting to see these people selling projects in an environment where I don't think there are a lot of bidders, certainly the junior market can't bid on these projects. What we're thinking here is now is the time to be upgrading your platform  -- and I would say we've been pretty lucky that -- at one point Goldex looked like it was potentially something we might sell, now we're looking at that asset probably has a 7 to 10 year mine life." (Source: 34 min mark, in the Q & A section, in response to a question about AEM's strategy of acquiring assets in tough times http://www.wsw.com/webcast/vir14/aem/)

 

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Sector Newswire has identified the following research links for additional DD on Alexandria Minerals Corporation:

 

  • Alexandria Minerals Corporation corporate website: http://www.azx.ca
  •
SEDAR Filings for Alexandria Minerals Corporation.: http://sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00021583

  • Recent Mining Journal review of Alexandria Minerals: http://miningmarketwatch.net/azx.htm

  • 'Buy' recommendation of Chris Temple of National Investor: http://sectornewswire.com/AnalystReportNIFeb-2015.pdf "...Alexandria Minerals has among the best risk/reward profiles of any junior exploration company I have ever covered."

 

 

This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Au equivalents are using using US$1,100 gold, US$2.60 copper, and US$0.85 Zn. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned.

 

 

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