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Corvus Gold Initiation report

Published in collaboration with Against All Odds Research

Corvus Gold (KOR)

High probability of receiving a takeover offer from Anglogold Ashanti (AU) by August 6.

Corvus is an explorer with two properties in Nevada – North Bullfrog and Mother Lode. North Bullfrog has an October 2020 PEA with numbers showing an after-tax NPV (5%) of $905M and after-tax IRR of 75% at $2000 gold, on initial capex of $167M. The Mother Lode project has an October 2020 PEA showing an after-tax NPV (5%) of $751M and after-tax IRR of 46% at $2000 gold, on initial capex of $406M.

Both projects have their merits but the real value is in a small strip of land Corvus owns, called the Lynnda strip, which straddles Anglo’s Silicon project and Coeur’s C-Horst project. All three companies are actively drilling the area and it is looking like a near certainty that the mineralization at Lynnda strip will boost the economics of both these majors’ projects.

On May 6, Anglo made its move. Anglo advanced Corvus $20 million as a loan, and in return was granted an exclusivity period of 90 days in which Corvus would not engage in any other M&A or asset sale discussions. Following this, Corvus published a batch of drill results, with the highlight hole at Lynnda strip assaying 0.82 g/t Au over 185m, including 3.4 g/t Au over 14.6m.

Corvus is definitely pricey for a junior, but it is also a low risk, moderate reward investment right now as we don’t have to wait long for the takeover offer. The risk is that shares correct if Anglo doesn’t bite, but we are looking at a 30-40% takeover premium so it is well worth taking that risk. Plus, there's the chance of an offer from Coeur which should put a floor under the shares if the Anglo offer doesn't materialize.

Good Trading!


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