Research #2

To get funding for project acquisitions and capital expenditures (CAPEX) in order to go into production are one of the biggest hurdles for juniors. Yesterday,  Golden Dawn Mining Inc. has taken a big step in leaving both hurdles behind, advancing to a potentially highly profitable gold producer in British Columbia within the next few months. According to yesterday’s announcement, San Francisco based private equity fund RIVI Capital intends to pay Golden Dawn $4 million USD in 2 tranches, which will fund CAPEX to resume mining, processing and purchase of the Greenwood Project consisting of a modern 220/400 t/day flotation mill as well as the Lexington-Grenoble and Golden Crown Mines, located 500 km east of Vancouver B.C. near the City of Greenwood on TransCanada Highway #3. Once gold is being produced, RIVI shall be entitled to 12% of the production for the first 15,000 oz at a cost of $400 USD/oz (whereafter the metal stream reduces to 6% at $650 USD/oz) from the Lexington-Grenoble and Golden Crown Mines (excluding the May Mac Mine and any other property). The company appears exceptionally well on track as it is considered a ground floor opportunity (those who get in on the ground floor might well make a fortune). On top of that, it looks like perfect timing.

Since initiating coverage on Golden Dawn last week at $0,16 CAD (see report with further details and pictures of the project here), the opportunity has been well received, yet the company still has a market capitalization of less than $20 million CAD. Exploration and infrastructure investments by previous operators exceeded $40 million CAD.

Considering that the impact of yesterday’s announced funding on the economics calculated in the recent PEA is minimal, yesterday’s news is considered to be one the most vital milestones in the history of the company, potentially a “company-making” event as Golden Dawn is getting into the enviable position to breathe new life into a past producing mine that ran into financial trouble when gold was trading at $750 USD/oz some 8 years ago (June 2016 PEA states all-in sustaining costs of $820/oz).

With gold trading almost twice as much today, the time for Golden Dawn to prove the profitability of the Greenwood Project has come, however CEO Wolf Wiese plans to this time put both the Lexington-Grenoble and May Mac Mines into dual production (both as early as September/October).

As soon as the company has received a blasting permit (expected any day), underground drilling at its 100% owned May Mac Mine is set to commence shortly thereafter. Up to 400 holes with up to 2 rigs have been scheduled to be completed in just 6 weeks. A highly increased newsflow, likely on a weekly basis, is expected to put this junior on the radar of many. Previous drilling from surface scratched a new high-grade gold vein (up to 9 g/t gold and 525 g/t silver) and as such the upcoming underground drilling may delineate a signifcantly increased resource estimate update before mining will start to build up a stockpile for the mill to be put into operation approximately 2-3 months thereafter.

Rockstone is excited about the upcoming weeks following and covering the corporate developments. Bottom-line: A success-story in the making, and just getting started, as Rockstone believes.

Golden Dawn‘s state-of-the-art floatation mill can produce such gold doré bars

Excerpts of yesterday’s press-release:

VANCOUVER, BC / July 21, 2016 / Wolf Wiese, CEO of Golden Dawn Minerals Inc. (TSXV: GOM) (FSE: 3G8A) (the "Company" or "Golden Dawn") announces signing (LOI) Letter of Intent, for a Metal Purchase Agreement (MPA) With RIVI Capital of San Francisco. The MPA is a part of the overall financing strategy consisting of Debt, Equity, and the Metal Purchase Agreement (MPA) described below. This will fund the capital expenditures to resume mining, processing and purchase of the Greenwood Project consisting of the 220/400 t/d Mill, the Lexington and Golden Crown Mines, AKA the Greenwood Project; Located 500 km, East of Vancouver B.C. near the City of Greenwood on Trans Canada Hwy # 3.

The terms of the agreement are as follows: RIVI shall be entitled to twelve percent (12%) of the total combined gross production of gold ("Au") ounces limited to the Lexington and Golden Crown Mines, at a gold-equivalent ("GEO") price per ounce of four hundred dollars US $400 for the life of the Project. RIVI will purchase the Metal Stream for a total of US $4,000,000 in two tranches; US$3,000,000 upon signing the Final Agreement, and the second tranche of US $1,000,000 four months post reaching 85% production levels of the Greenwood project. The company will pay 10% interest per annum on the first US $3,000,000 advanced until 85% of 200 t/d production is achieved. The MPA includes the Lexington and Golden Crown Gold/ Copper Mines. The 100% company owned May Mac Silver/Gold Mine with its ancillary Mill and tailings pond located 15 Km from the Greenwood Projects Mill is excluded from this Metal Purchase Agreement (MPA). The Lexington and Golden Crown Mines do not have a permanent NSR (net smelter return) obligation, except for a fraction of the Golden Crown Mine Claims. Thus the impact of the MPA on the economics calculated in the recent PEA (JUNE 2016) is minimal.

Stream Reduction. Upon delivery of a minimum of 15,000 ounces of gold from the two Mines (Lexington and Golden Crown), and providing the one year average price of gold is above US $1200 per ounce, the Company shall have the option to reduce the Metal Stream from 12% of gross production to 6%, and increase the per-ounce payment from US $400 to US $650.

RIVI shall have the right to nominate and maintain one board member to the board of directors for the term of the MPA. Such director will not be compensated by the Company. The board member must meet the TSX Venture Exchange requirements and approval as well as the approval of the Company´s Board of Directors. The RIVI director will be instated upon the signing of the Final Agreement...This transaction will close the earlier of 60 days, or in a maximum of 60 days from the execution of this LOI.



Company Details

Golden Dawn Minerals Inc.
Suite 900 - 525 Seymour Street
Vancouver, B.C. V6B 3H7 Canada
Phone: +1 604 221 8936

Shares Issued & Outstanding: 64,495,547

Canadian Symbol (TSX.V): GOM
Current Price: $0.30 CAD (July 21, 2016)
Market Capitalization: $19 million CAD

German Symbol / WKN (Frankfurt): 3G8A / A1XBWD
Current Price: €0.21 EUR (July 21, 2016)
Market Capitalization: €14 million EUR

Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist.

Write a comment

26.07.2016 20:14:36
So if processing by flotation rather than gravity I gather the gold is fine rather than course?
Glenn Windsor
24.07.2016 19:19:32
This project hopefully one of many to go into production.
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Name: Golden Dawn Minerals Inc.
Canada Symbol: GOM
Germany Symbol / WKN: 3G8A / A1XBWD
Shares Issued & Outstanding: 64,495,547
Phone: +1 604 221 8936

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