Re-Discovered Gold
Kerr Mines (OTC:KERMF / TSX:KER) already boasts a sizeable, high-grade gold resource.
Now the drills are turning in search of even more.
Fellow Investor,
It was just announced a few days ago: Underground drilling has begun at a “rediscovered” gold mine in Arizona.
So why was this news so important?
Because Kerr Mines (OTC:KERMF / TSX:KER) already boasts a sizeable, high-grade gold resource.
Because it’s already moving toward near-term production, with extensive infrastructure sitting in place.
And because the upcoming drill program could soon add to its impressive, high-grade gold resources.
If all that sounds exciting, you’re not alone: Noted precious metals guru Eric Sprott looked at what this company has to offer...and he bought a 9.4% position.
If there's one thing you can say about Sprott, it's this: He's a savvy gold stock investor.
So what did he see in Kerr?
A Bonanza Opportunity Arises
In Arizona Gold Country
Simply put, Kerr Mines is advancing the fully-permitted, past-producing Copperstone Mine project.
A high-grade gold project located along the Walker Lane mineral belt in mining-friendly Arizona, the Copperstone project demonstrates significant upside exploration potential within a 12,000-acre land package that historically produced 500,000 ounces of gold.
The focus for the Company is to define and expand the current resources,
and to strengthen the mine's economics en route to a production
decision.
The Copperstone property is fully permitted with extensive infrastructure in place, meaning Kerr Mines has a 450 ton-per-day mill already onsite and the tunnels going down to the high-grade gold ore are already there.
Electricity and water are there too. In other words, the infrastructure which can cost many millions of dollars to setup already exists at the site, so the cost to get Kerr Mines to production is relatively low — much, much lower than a greenfield project.
So how much gold is there you ask? There are 942,000 tonnes of Measured and Indicated historic gold resources with a truly impressive grade of 10.3 grams of gold per tonne.
On the Inferred side, there are another 335,000 tonnes of historic gold resource with a grade of 12.2 grams per tonne. Importantly, that's in the soon-to-be further explored "South Zone," which has great potential in itself.
In the Proven and Probable category, Kerr has 910,000 tonnes with an average grade of 8.8 grams per tonne. With grades that high, you can see why billionaire Eric Sprott was attracted to this remarkable project.
Underappreciated Value
In Kerr Mines
There are many factors that determine the value of a mine. The grade of gold is obviously high on the list in evaluating an investment into a gold stock like Kerr Mines. But with such high grades of gold, from Proven, Measured and Indicated to Inferred, the numbers are quite remarkable for Kerr.
But when you add in factors like a mill in place and tunnels already opened up to access the three previously untouched zones...plus the significant hit Kerr recently discovered in the South Zone...you see why the company expects to move into production next year. In fact, the feasibility study needed to go into production is expected in the fourth quarter of this year.
Based on the market cap and share price of other peer gold mining companies, you can see why many people consider Kerr Mines to be extremely undervalued at these levels.
Let's look closer at an apple-to-apple comparison between KERMF and another peer company...
Wesdome Gold Mines (WDOFF) is trading at around $2.35, with a market cap of some $240 million. The production estimates per their website are between 52,000-58,000 gold-equivalent ounces per year.
Kerr Mines has similar production projections at 40,000-50,000 gold-equivalent ounces annually...but is only trading at $0.135, with a market cap of just $26 million.
And that's not even taking into consideration Kerr Mines' other assets. Per their website, they have significant interests in three more large properties.
With considerable, high-grade resources already in the ground — plus the very real potential of significant new discoveries — Kerr Mines looks to be an extraordinary relative value.
Kerr Investment Highlights
• Past producer, fully permitted
• Advanced-stage development company
• Existing resource with significant exploration upside
• Safe, mine-friendly jurisdiction
• Strengthened board and management team
• Restructured debt into friendly hands
• Supportive shareholder group
• On track to complete Pre-Feasibility Study in Q4 2017
Existing Infrastructure:
• Underground mine development in place, access and utilities
• Processing facility and 450 tpd mill
• Tailings storage facility with capacity for planned re-start
• Power and water distribution systems
• Surface buildings including assay lab
• Roads and access to surface exploration sites
What To Do Now:
Considering the peer comparables with Kerr Mines — and the significant news coming up for the company — serious investors need to consider joining Eric Sprott as shareholders.
To learn more, you can click on the Investor Presentation below, where you’ll discover not only why this company appears undervalued with its current high-grade resources...but also why it offers the potential to expand its rich resources both underground and on surface.
But the drills are turning right now.
So act soon, before the company can discover more high-grade gold...before it can go into production...and before its share price can move out of reach.
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