Blackwolf Copper & Gold Ltd.'s (BWCG:TSX.V) newly updated resource estimate at Niblack, its copper-gold-zinc-silver project in southeastern Alaska, "highlights significant potential," reported Couloir Capital in a May 24 research note.
"The updated mineral resource update at Niblack is a major milestone and establishes the project as a 400,000,000 pound copper equivalent deposit," Couloir wrote.
Attractive return on investment
Following release of the new resource estimate, Couloir Capital lowered its fair value per share to CA$0.59 from CA$1.28 and maintained its Buy rating on Blackwolf. Given it is currently trading at about CA$0.36 per share, this implies a potential return for investors of 65%.
New resource overview
The new Niblack resource estimate encompasses results of 2012 stepout drilling at the Trio zone and 2021 infill/stepout drilling at the Lookout zone, "thereby making it more robust" than the last one, calculated in 2011, Couloir explained.
Between 2011 and 2022, Indicated resources at Niblack increased to 5,851,000 tons (5.851 Mt) from 5.638 Mt.
The new Indicated resource boasts 0.94% copper, 1.83 grams per ton (1.83 g/t) gold, 29 g/t silver and 1.73% zinc. This equates to 120,700,000 pounds (120.7 Mlb) of copper, 345,800 (345.8 Koz) of gold, 5,500,000 ounces of silver and 222.6 Mlb of zinc.
Inferred resources decreased to 0.214 tons from 3,393 tons. The new Inferred resource contains 0.93% copper, 1.52 g/t gold, 18 g/t silver and 1.38% zinc. This equates to 4.4 Mlb of copper, 10.4 Koz of gold, 125 Koz of silver and 6.5 Mlb of zinc.
Tonnage decrease since 2011
The resource update shows a 4% increase in Indicated resources but a 33% drop in overall tonnage, compared to the 2011 version. The latter is due to an increased cutoff of US$100 per ton from US$50 per ton that led to the lower-grade Inferred blocks being removed from the estimate.
"Despite the decrease in tonnage, we view the updated mineral resource estimate positively given higher grades of the tonnage at both Lookout and Trio zones," Couloir wrote.
At Lookout, the average copper grade of the total resource is now 0.92%, up 4% over 2011, and at the Trio zone, it is 13% higher than before.
The overall lower tonnage of the updated Niblack resource, however, was a key reason for Couloir reducing its fair value on Blackwolf. Other factors were a higher share count and lower peer group multiples.
Potential stock mover
In other news, Frank Giustra bought another 10 million shares of Blackwolf during the recent CA$8.5 million private placement. This takes his total stake in the company to 13.4%.
"An increase in ownership by mining billionaire Frank Giustra is a catalytic event that could rerate the stock," Couloir wrote.
Looking ahead
Blackwolf will use the new funds to advance its exploration activities in 2023. Those include drilling the three priority targets at its Hyder properties in British Columbia's Golden Triangle, Cantoo, Solo and Doghole, all of which returned high grade gold and silver mineralization on 2022 surface sampling.
"With an updated resource estimate and sufficient funding, we believe Blackwolf will look to build on recent strength and maintain momentum going into the rest of 2023," Couloir commented.
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