TSXV analyst sees Tocvan stock at at least $ 1.50

TSXV Research analyzes and evaluates the Pilar gold project against other success stories

The first top Canadian analyst, Ghalib Gilani, is on Tocvan Ventures Corp. (CSE: TOC; WKN: A2PE64) became aware!

The highly respected Ontario-based TSXV Research released an analyst report today, which is available as a PDF on the Rockstone Research website. The following is a short version of the 18-page analyst report, in which a price target of at least $ 1.53 / share (approx. 0.98 euros) is detailed and justified in a conservative manner:


• After extensive analysis and conservative calculations, the Tocvan share should currently be at $ 1.53 traded what 3.83 times as much as the current share price ($ 0.40) is.

• Tocvan stock trades at a very large discount to comparable gold projects (in terms of geophysics, location and drilling results).

• Tocvan has a project with Pilar which has very attractive geophysical anomalies known for their bonanza ore grades (i.e. greater than 1 ounce of gold per tonne).

• Tocvan wants to go into production quickly – a strategy reminiscent of a neighboring and geologically similar project that received production funding in Q1 2020.


• Projects of the same geology and metals are located near Tocvan’s Pilar Project in Mexico’s Sonora Mining District, with these similar projects either in production or with mine funding with relatively little technical work.

• Example: That Santana project from Minera Alamos Inc. (TSX.V: MAY), which has received production funding from Osisko and started mining earlier this year. Typically, companies have to research extensively for many years and conclude detailed profitability reports in order to get financing for the start of the mine. This was not the case with Santana, because the “powerhouse” Osisko had sufficient confidence to provide capital.

• The discount to the intrinsic value of the share is included 383%. Conservative estimates show that comparable projects that are slightly more advanced than Pilar are average $ 149.31 million are worth (including a 20% discount rate).

• Share price accelerators (“catalysts”) in the next 12 months: completion of further exploration such as drilling and bulk sampling.

• Tocvan took advantage of the weak gold price in recent years and bought the Pilar project by option at a favorable time (up to 100%).

• Since the gold-silver price ratio is still very high, it can be expected that the silver price will from now on perform better than gold. Since the Pilar project is a gold-silver deposit, Tocvan shares can benefit from a gold-silver bull market.

• Mexico is the largest silver producer in the world and Pilar is located in the middle of the Sonora Mining District, where most of the country’s mines are located. Most Mexican precious metal mines are profitable at current gold-silver prices.

• Pilar occurs close to infrastructure and there is easy access to the property (1 hour drive to the town of Hermosillo).

• Most explorers take more than 10 years to drill down a project and complete profitability reports, if they get that far. It is different with Tocvan and other similar projects in Sonora, as a production decision is made much faster.

• The latest exploration results from Tocvan are very encouraging. A vertical structure could be identified which is assumed to be one Breccia feeder pipe which is responsible for epithermal mineralization. This is significant because such pipes typically host bonanza gold grades greater than 31 g / t. These feeder pipes have enormous expansions in the depth, so that a quick production decision with several million ounces is possible.

Tocvan on the home exchange in Canada

• Tocvan has only 25 million shares issued in the market, which is very little compared to the average for TSXV companies (103 million shares issued).

• Keep insiders 15.11% of the shares issued, indicating that they have great confidence in the company.

• Since a quick start of production is planned, exploration is to be financed by cash flow, since a dilution of the shareholder structure is to be avoided. Production financing can also be carried out in a non-dilutive manner (i.e. without issuing new shares) (e.g. royalty sales, streaming).

• Due to the many wells that have already been completed on Pilar (Total length: 17,700 m) and the 3D reservoir models, an initial resource estimate should be published much faster than for other projects. This also means that a production decision can be made much earlier.

• In addition to the excellent expansion possibilities (by means of further drilling) of the known deposit, there is great potential for additional enlargement through the discovery of high-grade feeder pipes, so that a very large deposit can be proven overall.

• A good drilling program would mean that the share would rise sharply, so that the calculated target price would also have to be adjusted further upwards (since the ore body is larger than what has been proven with drilling to date).

Comparable projects

Santana (Minera Alamos) and Fire Creek (Hecla)as both projects have the same geology and occur near Pilar.

• Santana: Open pit heap leach mine development project with low CAPEX (upfront capital expenditures) and successful large-scale sample (50,000 tons of ore averaging 0.65 g / t gold). The results from this test mine operation were so good that Minera Alamos received production funding without publishing a technical report. The results of the large-scale rehearsal and production financing became known in the 1st quarter of 2020, whereupon the share has risen by 100% so far.

• With a current stock market valuation of $ 304 million Minera Alamos owns 3 projects, the analyst conservatively assigning only 70% of the company’s value to Santana, giving Santana a value of $ 213 million gets. According to information from Haywood analysts, Santana 33,000 ounces of gold per year produce (at least 9 years), with CAPEX of $ 10 million. for mining and Production cost of $ 785 / ounce gold (AISC).

• Fire Creek: Hecla bought the project from Klondex. Even if the project is a bit further away than Santana, the geological similarities are decisive here. Fire Creek went into production in late 2014 and has Measured & Indicated resources with an average grade of 0, 71 g / t gold and 0.7 g / t silver. According to the data available, the project has one NAV of $ 123 million

Evaluation & course objectives

• “The stock is still extremely undervalued at the current share price of $ 0.40,” said the analyst.

• To get a value comparable to Santana and Fire Creek, Tocvan stock has to go up $ 1.53 increase (assuming a 20% discount rate and $ 10 million in future stock issuance). At a discount of 5% and $ 5 million in future stock financing, this results in a Target price of $ 3.25.

Conclusion (full length)

“This property offers all the makings of a phenomenal long-term investment for those willing to take the small risk that comes with a junior, low-dilution mine explorer, cash in the bank, and the intention of proceeding with a bulk sample. The exploration potential is very high, with numerous expansion zones to drill in. The stock structure is very tight on the TSXV with only 25% of the shares outstanding compared to the average mining company and there is a high likelihood it will be Early production minimizes stock dilution as the company can fund the exploration in-house, and directly comparable projects are in production, the best comparison being a company producing without the Cost of a resource estimate / Having to accept an economic study. This confirms the value of the geophysical anomalies identified here.

With the price of gold hitting new highs and the quality of a project being of paramount importance to the long-term success of a publicly traded company, Tocvan is an extremely undervalued stock with an intrinsic value of $ 1.53 / share. This stock is only trading at $ 0.40 and is on the verge of becoming an investment that can produce over 380% returns. ”Company details

Tocvan Ventures Corp.
Suite 1150 Iveagh House,
707 – 7th Avenue S.W.
Calgary, Alberta, Canada T2P 3H6

ISIN: CA88900N1050

Shares in the market: 24,447,537

Canada Symbol (CSE): TOC
Current Price: $ 0.415 CAD (10/21/2020)
Market Personal-Financial.comization: $ 10M CAD

Germany Symbol / WKN (Frankfurt): TV3 / A2PE64
Current Price: € 0.262 EUR (10/21/2020)
Market capitalization: € 6 million

Rockstone Research
Stephan Bogner (Dipl. Kfm.)
8260 Stein am Rhein, Switzerland

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Rockstone Disclaimer: Full Equity Guru Disclosure: Tocvan is an Equity Guru Marketing Client. Please read the full disclaimer in the full research report as a PDF on the Rockstone Research website, as fundamental risks and conflicts of interest prevail. The author, Stephan Bogner, owns shares in Tocvan Ventures Corp. and is paid for the local execution and distribution. Although the author is not commissioned and paid directly by the company, payment is made by third parties, so that there is a clear conflict of interest.

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