Tracy Salcedo of The Gold Report - Thu, Jul 14, 2016

Gold and Base Metals Top Picks from Paradigm Capital

Paradigm Capital's top picks for Q3/16 include gold and zinc mining companies with upcoming catalysts worthy of investors' attention.


On the base metals side, the companies that Paradigm analysts have selected to include in the July 5 Quarterly Top Picks Q3 2016 report include Heron Resources Ltd. (HER:TSX; HRLDF:OTC; HRR:ASX), Nevsun Resources Ltd. (NSU:TSX; NSU:NYSE.MKT), Sherritt International Corp. (S:TSX; SHERF:OTC) and Trevali Mining Corp. (TV:TSX; TV:BVL; TREVF:OTCQX).

Heron, Nevsun and Trevali are all have exposure to zinc which, the report notes, "has been the best-performing base metal YTD owing to mine depletions pushing the market into a production deficit."

The Q3 catalyst for Trevali is the expectation that the Caribou mine will enter production in 2017, which should "more than double Trevali's zinc-lead production" and enable the company to become free cash flow positive. "Achieving commercial production at Caribou is a major derisking (and growth) event that should dispel any lingering skepticism of the technical viability of this past-producing mine," the report states.

Heron Resources, like Trevali, is one of the "few primary zinc producers through which investors can gain exposure to this market." The company's Woodlawn zinc/copper project in Australia is fully permitted and has a "very positive bankable feasibility study." Paradigm expects the mine to go into production in 2018.

Canada-based Nevsun is the third zinc producer mentioned in the report. The company's Bisha mine is expected to commence zinc production, which should result in "a significant improvement in 2017 as zinc production should exceed 230Mlb." The company also recently completed acquisition of Reservoir Minerals, acquiring the Timok asset in Serbia.

The catalysts for Sherritt International, which is a nickel producer with operations in Canada, Madagascar and Cuba, include a restructuring of debt. Prices in the nickel market are stable, but "potential supply shocks" could prompt an increase in those prices, according to the report.

On the gold and precious metals side, Paradigm's top picks include Alamos Gold Inc. (AGI:TSX; AGI:NYSE), Integra Gold Corp. (ICG:TSX.V; ICGQF:OTCQX), Klondex Mines Ltd. (KDX:TSX; KLDX:NYSE.MKT) and SEMAFO Inc. (SMF:TSX; SEMFF:OTC; SMF:OMX).

Alamos Gold's mines became "free cash flow neutral" in the first quarter, and the company should "handily beat 2016 guidance," the report notes, adding that "exploration sizzle from the La Yaqui and Cerro Pelon deposits is also possible."

SEMAFO, according to Paradigm, "has a great base and lower-risk growth pipeline." The Q3 catalyst "is an inaugural resource at the Yama deposit will add to the overall resources at Mana," the company's project in Burkina Faso.

Klondex Mines has several catalysts in the second half of 2016, including new resources for True North, "an official production decision before year-end" and the revision of analyst forecasts "to reflect this new operation." The company's shares are "poised to regain a portion of their ~18% underperformance versus peers over past three months," the report states.

Paradigm notes that Integra Gold's project is "unique" given that it is undeveloped, capable of producing 100 Koz annually for more than 10 years, and has a fully permitted mill. The Quebec, Canada-based company is focused on development of Lamaque South. "In H2/16, an updated PEA and resource are expected," the report notes.

1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this article: None.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: Klondex Mines Ltd., Trevali Mining Corp., Integra Gold Corp. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) During the past 12 months Paradigm Capital has assumed an underwriting liability for and/or provided financial advice for consideration to the following companies mentioned in this article: Intregra Gold Corp. Paradigm expects to receive or intends to seek compensation for investment banking services during the next 3 months from the following companies mentioned in this article: Intregra Gold Corp. Klondex Mines, Heron Resources, Sherritt International Corp., Alamos Gold and SEMAFO Inc. Paradigm owns greater than 1% ownership position in the following companies mentioned in this article: None.
4) The analyst who prepared comments on the companies mentioned in this article own shares in the following companies mentioned in this article: None. The analyst has a family relationship with an Officer/Director of the following companies mentioned in this article: None.
5) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes. publishes interesting contributor articles in addition to its own content. We have not verified any of the above details.

Sign-up at (or for our Small Cap Stock Observer newsletter, and to set-up your own My Portfolio, My Watchlist & Alerts and News by Email preferences, or to post at our Bulletin Boards. Free!

Please note that nothing in this report should be taken as a recommendation in any way, and that everything from is subject to the terms of our Privacy Policy and Disclaimer.

comments powered by Disqus

Detailed Quote Portal

symbol lookup | (TSX add :ca)

Membership Privileges

  • Investors Guru Small Cap Stock Observer - newsletter emailed monthly!
  • Featured Stock Profiles - emailed on occasion!
  • News by Email - as it's released, according to your My Preferences!
  • My Portfolio - login to view or update your holdings, or have it emailed daily!
  • My Watchlist & Alerts - login to view or update your stock radar list, and set price triggers for email alerts!
  • Bulletin Boards - no need to request boards, just Quote it! Social Sign-on & Share your ideas, observations & trends!
  • Find it all! Find it Fast! Comprehensive stock research webpages. No more endless clicking!

Email: (see Privacy Policy)
Password: (4-15 characters)
Username: (4-15, BB posts etc)

unsubscribe anytime

Bookmark and Share

 Subscribe in a reader

Our Mobile Site