Radisson Mining Resources (TSXV:RDS) announced positive drill results from two additional holes at its O’Brien gold project in Quebec. Exploration results from the volcanics, in our view, are likely to expand the existing resource, along the western edge. As well, the company announced plans to start a second drill later this week, testing recently identified targets in the Pontiac sediments. We view the progress positively, as the company continues to expand resources in the volcanics and exploration success in the Pontiac sediments have the potential to be game changing for the company. Radisson currently trades at a discount to peers, C$48/oz vs. peers at C$64/oz, which we believe fails to reflect the exploration potential at O’Brien.
Step-out drilling in volcanics continues to suggest resource growth is likely. Hole OB-17-22 intersected 10.3 g/t Au over 3.0m while lower down on the same section, hole OB-17-23 intersected 11.9 g/t Au over 3.0m. This combined with hole OB-16-14 intersected 20.2 g/t Au over 1.5m, also on the same section suggesting continuity to depth. While early days, these holes suggest the resource is expanding west in the area between the 36E zone and the Old O’Brien mine.
Valuation not reflective of Radisson’s growth potential. At C$48/oz, Radisson continues to trade at a discount to peers at C$64/oz. When taking into account the nearby infrastructure, higher grades and the potential for resource expansion that is demonstrated with ongoing drill results, we believe that a company like Radisson ultimately could trade at a premium to peers. In our view, the current drill program, together with the re-logging and selective re-assaying of historic drill core and the digitization of historic data, should provide positive catalysts for the stock and close the valuation gap to peers.
Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
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Radisson Mining Resources Inc. – TSXV:RDS – 1,2,3,4
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