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TNR Gold Corp analyst call – working towards securing its next strategic partner

Proactive's mining analyst, Dr Ryan Long takes a look at TNR’s royalty portfolio and Shotgun Gold Project.

TNR Gold Corp -

TNR Gold Corp (CVE:TNR) is an exploration company focused on advancing projects to the resource stage before farming them out to strategic partners.

Kirill Klip is executive chairman of the company; he has more than twenty-five years of entrepreneurial experience, with extensive expertise in the banking, transportation, mining, telecommunications and internet industries. He was formerly a founder and director of International Lithium Corp, and an adviser to the board of Canada Zinc Metals.

TNR currently owns two royalties, both of which are located in Argentina. One is on the Mariana Lithium Project and one on the Los Azules Copper Project. TNR also owns a 90%-interest in the Shotgun Gold Project, located in Alaska, where the company is seeking a strategic partner (Figure1).

Figure 1: Location of TNR’s Projects

Source TNR Gold Corp

TNR currently holds a 1.8% net smelter royalty (NSR) in the Mariana Lithium project, located in the Salta Province of Argentina. The Mariana Project is owned by Ganfeng Lithium Co Ltd (82.754%) and International Lithium Corp (CVE:ILC), which has 17.246%. A preliminary economic assessment (PEA) of the project, completed in November 2018, demonstrated a post-tax net present value of C$192mln and a post-tax internal rate of return (IRR) of 20% using a 10% discount rate (NPV10).

While International Lithium Corp has the right to repurchase 0.9% of the NSR for US$900,000, there is no buy-back provision on the remaining 0.9%. The PEA highlighting average annual revenue of US$143mln over the 25-year mine life for the project and the 0.9% NSR being not subject to buy-back provisions could potentially yield over US$1mln per annum to TNR over 25 years.

TNR also holds a 0.36% NSR on the Los Azules Copper Project, located in San Juan Province of Argentina. The Los Azules Project is owned 100% by McEwen Mining Inc (NYSE:MUX) and is expected to be the 26th largest copper mine in the world once it reaches production.

A PEA at the project completed in September 2017, demonstrated a post-tax NPV8 of US$2.2bn with a post-tax IRR of 20.1%. Based on the PEA figures the mine is expected to generate average revenue per annum of U$953mln, which could generate around US$3.5mln a year to TNR over 37 years.

The Shotgun Gold Project is located in Southwestern Alaska. The project has an NI 43-101 compliant mineral resource estimate of 705,960 ounces of gold at a grade of 1.06 grams per tonne (g/t) gold. The deposit remains open at depth, below 150m, and along strike, so there is the potential to expand the size of the deposit through the exploration of the immediate area.

There are also many regional geochemical and geophysical targets within the area that have the potential to expand the scale of the project with additional work, making the project attractive to an incoming party.

During 2020 TNR expects to see a feasibility study published at the Los Azules project with a feasibility study at the Mariana project expected imminently. TNR is also continuing to seek a partner for its Shotgun Gold Project, so it promises to be an interesting year for the company.

Quick facts: TNR Gold Corp

Price: 0.055 CAD

Market: TSX-V
Market Cap: $9.63 m

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TNR Gold Corp analyst call – working towards securing its next strategic partner

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