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Back from Vacation: Switching Off Autopilot
Wingman
December 19, 2023
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
If ever compensated for an article, it will be mentioned here.
After a nice week with family, Wingman is back in the pilot seat and ready to resume a regular cadence.
For a Monday, there were only a few noteworthy press releases. So, let’s get into it.
As a result of the Transaction, DPM will acquire a 100% interest in Osino’s advanced stage, multi-million ounce Twin Hills gold project (“Twin Hills”) located in Namibia, a mining-friendly jurisdiction where DPM has successfully operated since 2010. A June 2023 feasibility study (“FS”) completed by Osino outlined an open-pit project with a 13-year mine life and average annual production of 175,000 ounces of gold over the first five years, with first production targeted in the second half of 2026.
Dundee Precious Metals (the acquirer) closed 8.8% on the news, while Osino Resources (the acquiree) finished Monday with a gain of 26.6%.
Pursuant to the terms of the Arrangement Agreement, DPM will acquire all of the issued and outstanding common shares of Osino (“Osino Shares”) for a consideration consisting of C$0.775 in cash per Osino Share and 0.0801 of a DPM common share per Osino Share (the “Consideration”). The Consideration implies a value of C$1.553 per Osino Share and a total equity value of C$287 million on a fully-diluted in-the-money basis. This Consideration represents a premium of 37.2% and 44.3% based on the closing price and 30-day volume weighted average price (“VWAP”) of Osino Shares as of December 15, 2023, on the TSX Venture Exchange, respectively.
Based on Osino’s ceo.ca chat board, it appears that the premium offered was not sufficient to satisfy some shareholders. Everyone aims for their investments to mirror their fair value. Nonetheless, it marks a positive conclusion to the year for $OSI shareholders, and $DPM is acquiring valuable assets and near-term catalysts.
The press release cites the following rationale for the announced acquisition.
Strategic Rationale & Benefits for DPM’s Shareholders
Adds a near-term producing asset in a mining friendly jurisdiction
Further positions DPM as a leading intermediate gold producer with exceptional assets and growth profile
Compelling exploration upside in Namibia’s highly prospective Damara Gold Belt and Karibib Gold District
Leverages DPM’s balance sheet strength and free cash flow generation to internally fund development and maintain attractive dividend
Complements DPM’s core strengths and unique capabilities to unlock value
The statement at the bottom of the graphic holds significance.
True width refers to the actual thickness or width of the mineralized zone or deposit, and ideally, hitting the target mineralization at true width is preferred.
However, the wide range of 50 to 95% makes it challenging to accurately assess the quality of these results. While the headline hole appears impressive on paper due to its length and grade, it is worth noting that it is ~240 metres deep. Not exactly at surface.
It is also worth noting what $RPX is trying to accomplish with this drilling.
The potential of discovering significant mineralization in the gaps of the 2019 resource envelope have been proven not only with the results presented within this press release but with additional intersections of:
9.57 g/t gold over 10.95 m including 83.71 g/t gold over 1.00 m in SD-23-457 (press release of November 15, 2023)
8.01 g/t Au over 32.95 m including 171.0 g/t gold over 1.19 m in SD-23-451 (press release of October 24, 2023)
10.92 g/t gold over 28.05 m that includes 209.1 g/t gold over 1.00 m in SD-23-442 (press release of September 14, 2023)
They are aiming for a revised resource in Q3 of 2024.
We are pleased to be able to now provide the final assay results from the Semna RC drilling programme. It is quite apparent to us, even at this early stage, that Semna is shaping up as a very significant new drill discovery. We plan to fast-track the exploration at Semna as soon as the mining licence has been issued at Abu Marawat, which we anticipate will be very soon now. Preparations are already well advanced to start a second phase of diamond drilling, and if all goes according to plan we expect to be back drilling again at Semna in January 2024.
Aton Resources released the final RC drill results from Semna and closed Monday with a gain of 33.3%. This increase occurred on low volume as $AAN is a thinly traded company with a market cap of approximately C$78.75M.
Significant high grade mineralised intersections from the Semna Main Vein zone ("SMV") include:
- 50.07 g/t Au over a 6m interval, from 75m downhole depth (hole SMP-016), including 222 g/t Au over 1m, from 80m;
- 28.36 g/t Au, 28.4 g/t Ag and 1.15% Cu over a 4m interval, from 136m downhole depth (hole SMP-003), including 94.8 g/t Au, 88.2 g/t Ag and 3.47% Cu over 1m, from 137m;
- 11.98 g/t Au over a 16m interval, from 61m downhole depth (hole SMP-018), including 36.03 g/t Au over 4m, from 61m;
- 10.61 g/t Au, 24.0 g/t Ag and 1.20% Cu over a 9m interval, from 130m downhole depth (hole SMP-019), including 37.00 g/t Au, 145.0 g/t Ag and 8.72% Cu over 1m, from 133m. SMP-019 also returned intersections of 5.82 g/t Au over a 3m interval from 102m, and 9.10 g/t Au over a 2m interval from 111m.
- 5.73 g/t Au over a 14m interval, from 56m downhole depth (hole SMP-017), including 14.85 g/t Au over 3m from 60m, and 8.67 g/t Au over 3m from 66m.
So that was a quick flyby for Monday.
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