I have been adding to my position in Marlin Gold (MLN:TSXV) over the past few months.
I expect the stock to be a huge winner in 2018.
The current price of Marlin Gold is 83 cents (when this blog post was made).
Penny Mining Stocks top pick for 2017 was Morien Resources (MOX:TSXV)
Akiba Leisman, executive chairman and interim chief executive officer, stated: “Now is a very exciting time for Marlin. We are continuously mining and processing high-grade material at La Trinidad, drilling very prospective targets at both La Trinidad and Commonwealth, and in the process of spinning off Sailfish. We are excited to be ending 2017 on a strong note and look forward to executing on growth opportunities in 2018 and beyond.” (Nov 20,2017)
Why Marlin Gold?
- Marlin owns the La Trinidad mine in Sinaloa, Mexico. The mine is one of the highest grade open pit mines in Mexico. The high grade provides Marlin with strong free cash flow at current metal prices.
- Marlin has purchased 2 development projects in the last couple years Commonwealth in Arizona and Gavilanes in Mexico.
- The biggest reason I own Marlin though is Sailfish Royalty Corp which is currently a 100% owned subsidiary of Marlin. Sailfish is expected to spun out to Marlin shareholders this month at a 5 for 1 ratio of Marlin shares. (ex if you own 5,000 Marlin shares you will own 1000 shares in Sailfish in the spin out).
- Share price 83 cents
- Shares outstanding 171.62 million (Wexford capital 82.1%)
- Market cap 142.2 million
- Marlin owns 19% of Golden Reign Resources (GRR:TSXV).
- Debt $51.9 million
Now on to the main reason why I own Marlin and the upcoming Sailfish Royalty spin out.
To get shares of Sailfsh you must own shares of Marlin before December 21 (note might be December 18th as 3 days for trades to settle).
Upon receipt of the Final Order, Marlin will announce by news release the proposed Effective Date of the Arrangement, which is expected to be on or about December 21, 2017. The record date for determining the Shareholders entitled to participate in the Arrangement will be the Effective Date.
Sailfish royalty will be an exciting low float royalty play with huge potential in my opinion.
Sailfish will own 2 key royalties.
- A 3.5% royalty (can be bought down to 1.5%) on Eldorado’s Tocantinzinho gold project in Brazil.
The mining concession application was reviewed by the Department of Mineral Production/Para State and received a positive recommendation. The application was with the federal branch of the mining ministry for review and it has been sent back to Para State for final review. Detailed engineering was completed for the tailings dam and the permit application was submitted. Work continued on the detailed design required for the solution pond for permit application. All permit approvals are expected during the first quarter of 2018.
A total of $2.7-million was spent during the quarter. (Eldorado Q3)
2. A streaming agreement on the San Albino project of Golden Reign Resources. Marlin, through its wholly-owned subsidiary Sailfish Royalty Corp., has committed to fund US$15 million in development capital at San Albino. In exchange, Sailfish is entitled to purchase 40% of gold production at US$700 per troy ounce (1) until the first US$19.6 million is recovered (2) by Sailfish, and 20% of gold production at US$700 per troy ounce (3) thereafter. Prior to commercial production, Sailfish will be entitled to receive an 8% semi-annual coupon payment on the amount funded to Golden Reign.
Golden Reign received the environmental permit on September 12 and the next step is to finalize an EPCM contract and then begin construction. The mine is currently projected to be up and running late next year,
I expect Sailfish Royalty to be a sought after royalty play once it begins trading on the TSX Venture.
Of note is that Marlin also owns a 1.5% NSR the El Compas gold-silver project in Zacatecas, Mexico owned by Endeavour Silver.
El Compas will be in production in March.
With lots going on and the royalty spin out 2018 is looking like a fantastic year for Marlin and Sailfish shareholders.
As always due your own due diligence.