here - Rockstone Research

July 29, 2016
Research #1
Zinc/Copper and Uranium
in Canada
Company Details
Pistol Bay Mining Inc.
Suite 205 - 1717 Haro Street
Vancouver, B.C. V6E 4T1 Canada
Phone: +1 604 369 8973
Email: [email protected]
www.pistolbaymininginc.com
Shares Issued & Outstanding: 13,520,757
Early Bird Special Report
Pistol Bay with Zinc like a Phoenix from the Ashes?
When initiating coverage on Golden Dawn Minerals Inc. 2 weeks ago, the stock
traded at $0.16 CAD (today at $0.39 CAD). When initiating coverage on Aurvista
Gold Corp. in May, the stock traded at $0.23 CAD (today at $0.30 CAD). Obviously,
the early bird catches the worm. Pistol Bay Mining Inc. has nearly 14 million shares
issued and outstanding, and a current market capitalization of less than $750,000
CAD. According to the company, other worthwile projects are presently seeked to
create shareholder value. Once the ongoing financing has been closed, some of the
proceeds are expected to be invested into its 100% owned Dixie Zinc-Copper Project
in the prolific Red Lake Mining District of Ontario. This project was acquired already
last year, when the commodity markets were culminating in its depressed state,
hence it may turn out as a superb bargain (especially when exploration starts and
succeeds). Of all commodities, zinc enjoys one of the most positive fundamentals
for higher prices going forward and appreciated by almost 50% so far in 2016. On
top of that, Pistol Bay owns the 3 uranium projects C4, C5 and C6 in the Athabasca
Basin of Saskatchewan, located adjacent to the Wheeler River / Phoenix Deposits
of Denison Mines Corp. and Cameco Corp. Pistol Bay optioned this project to Rio
Tinto Exploration Canada Uranium Corp., who informed the company that they will
continue exploration on this property in 2016. Rio Tinto previously announced its
intention to exercise its option to acquire 100% interest by paying $5 million CAD
within the next 3.5 years and granting a 5% net profits interest to Pistol Bay.
Chart
Canada (TSX.V)
Canadian Symbol (TSX.V): PST
Current Price: $0.055 CAD (July 29, 2016)
Market Capitalization: $0.7 million CAD
Chart
Germany (Frankfurt)
German Symbol / WKN: 0QS2 / A12DZH
Current Price: €0.034 EUR (July 28, 2016)
Market Capitalization: €0.5 million EUR
2
O
nce the ongoing financing has
been closed, Pistol Bay Mining
Inc. will be in a position to start
working actively on its Dixie Zinc-Copper
Project. A systematic program of exploration will be developed, including drilling after having defined precise targets.
Previous operators demonstrated significant zinc-copper mineralization with
drilling on some of the claims (caution:
historic results which need to get confirmed with new drilling):
Dixie 17: 7.34% zinc and 1.4% copper
over 9.5 m.
Dixie 19: 6.33% zinc and 1.5% copper
over 3.55 m, as well as 9.71% zinc
over 1.25 m. These intersections were
at vertical depths of 262 and 350 m
respectively. No deeper drilling was done
on this target, despite the interpretation
that the top of the conductor was at 375
m below surface.
Research #1 | Pistol Bay Mining Inc.
Hence the potential exists for the
discovery of a high-grade zone with the
upcoming drill program.
Dixie 20: A bit north of Dixie a second,
much larger, and much deeper conductive body was identified. The conductive
body, a resistivity low interpreted from
inversion modelling of magneto-telluric
data, has an irregular shape, but extends
over a length of 1,800 m.
Noranda drilled 7 holes on the property
and calculated a (historic) resource
estimate of approximately 135,000
t at an average grade of 14% zinc. A
historic hole (0.98% zinc and 1.13%
copper) may have only scratched the
upper part of this zone. Down-hole
electromagnetic surveying indicates that
this hole had penetrated a large (up to
800 × 800 m) conductive body close to
its edge. Follow-up drilling may discover
a significant new zone.
The western two-thirds of the property,
including the Dixie 17 and 18 zones, has
not been covered by deep-penetrating
geophysical surveys. The principal zinc
mineral, sphalerite, is not electrically
conductive, and the absence of strong
electromagnetic conductors should not
be taken to mean that zinc is absent.
The 3 known VMS zones (Dixie 17-19)
have not been fully closed off by drilling
and are partly open at depth, especially
the Dixie 19 zone with the geophysically
interpreted deep zone below the
historical drill holes.
Rockstone is excited to have initiated
coverage on Pistol Bay as early as today
because, in light of its current market
valuation,
significant
shareholder
value could be produced, especially
after closing the ongoing financing and
starting to work on the Dixie Project.
An opportunity with scarcity value, as
Rockstone believes.
The Confederation Lake Belt in the Red Lake Mining District is home to numerous VMS (“Volcanogenic Massive Sulphide”)
deposits and showings. The largest VMS deposit to date in this region is the South Bay Mine, which produced between 19711981 approximately 354 million pounds of zinc, 58 million pounds of copper and 3.7 million ounces of silver (with average grades
of approximately 11% zinc, 1.8% copper and 73 g/t silver).
The geophysical anomalies identified on the Dixie properties should be
followed up with a new drilling campaign
4
Disclaimer and Information on
Forward Looking Statements:
All statements in this report, other than
statements of historical fact should be considered forward-looking statements. Much
of this report is comprised of statements of
projection. Statements in this report that are
forward looking include that Pistol Bay Mining Inc. or any other company or market will
perform as expected; that Pistol Bay Mining
Inc. will complete the recently announced
financing; that Pistol Bay Mining Inc. or its
partner(s) can and will start exploring or
working on its projects; that the company
can raise sufficient funds for a transaction,
exploration and corporate matters; that any
of the mentioned plans, comparisons with
other companies, regions or numbers are
valid or economic. Such statements involve
known and unknown risks, uncertainties and
other factors that may cause actual results
or events to differ materially from those
anticipated in these forward-looking statements. Risks and uncertainties respecting
lithium and resource companies are generally disclosed in the annual financial or
other filing documents of Pistol Bay Mining
Inc. and similar companies as filed with the
relevant securities commissions, and should
be reviewed by any reader of this report. In
addition, with respect to Pistol Bay Mining
Inc., a number of risks relate to any statement of projection or forward statements,
including among other risks: the receipt of
all necessary approvals and permits; the
ability to conclude a transaction to start or
continue exploration; uncertainty of future
market regulations, capital expenditures and
other costs; financings and additional capital
requirements for exploration, development,
construction, and operating of a facility; the
receipt in a timely fashion of further permitting for its legislative, political, social or economic developments in the jurisdictions in
which Pistol Bay Mining Inc.. carries on business; operating or technical difficulties in
connection with production or development
activities; the ability to keep key employees,
joint-venture partner(s), and operations
financed. There can be no assurance that
such statements will prove to be accurate, as
actual results and future events could differ
materially from those anticipated in such
statements. Accordingly, readers should not
place undue reliance on forward-looking information. Rockstone and the author of this
report do not undertake any obligation to
update any statements made in this report.
Research #1 | Pistol Bay Mining Inc.
Disclosure of Interest and
Advisory Cautions:
Nothing in this report should be construed
as a solicitation to buy or sell any securities
mentioned. Rockstone, its owners and the
author of this report are not registered
broker-dealers or financial advisors. Before
investing in any securities, you should consult
with your financial advisor and a registered
broker-dealer. Never make an investment
based solely on what you read in an online
or printed report, including Rockstone’s
report, especially if the investment involves
a small, thinly-traded company that isn’t
well known. The author of this report is
paid by Zimtu Capital Corp., a TSX Venture
Exchange listed investment company. Part
of the author’s responsibilities at Zimtu is
to research and report on companies in
which Zimtu has an investment. So while the
author of this report is not paid directly by
Pistol Bay Mining Inc. , the author’s employer
Zimtu will benefit from appreciation of Pistol
Bay Mining Inc.’s stock price. The author
does NOT own equity or any other interests
in Pistol Bay Mining Inc. but may buy shares
soon. However, the authour owns shares
of Zimtu Capital Corp., and thus would also
benefit from volume and price appreciation
of its stocks. Hence, multiple conflicts of
interests exist. Therefore, the information
provided herewithin should not be construed
as a financial analysis or recommendation
but as advertisement. The author’s views
and opinions regarding the companies
featured in reports are his own views and are
based on information that he has researched
independently and has received, which the
author assumes to be reliable. Rockstone
and the author of this report do not
guarantee the accuracy, completeness, or
usefulness of any content of this report, nor
its fitness for any particular purpose. Pistol
Bay Mining Inc. has not reviewed the content
of this report prior to publication. Lastly, the
author does not guarantee that any of the
companies mentioned in the reports will
perform as expected, and any comparisons
made to other companies may not be valid
or come into effect. Please read the entire
Disclaimer carefully. If you do not agree to all
of the Disclaimer, do not access this website
or any of its pages including this report in
form of a PDF. By using this website and/
or report, and whether or not you actually
read the Disclaimer, you are deemed to
have accepted it. Information provided is
educational and general in nature.
Analyst Profile and Contact
Stephan Bogner (Dipl. Kfm. FH)
Mining Analyst
Rockstone Research
8050 Zurich, Switzerland
+41-44-5862323
[email protected]
Stephan Bogner
studied at the
International School
of Management
(Dortmund,
Germany), the
European Business
School (London)
and the University of Queensland
(Brisbane, Australia). Under supervision
of Prof. Dr. Hans J. Bocker, Stephan
completed his diploma thesis (“Gold In
A Macroeconomic Context With Special
Consideration Of The Price Formation
Process”) in 2002. A year later, he
marketed and translated into German
Ferdinand Lips‘ bestseller („Gold Wars“).
After working in Dubai for 5 years, he
now lives in Switzerland and is the CEO of
Elementum International AG specialized
in duty-free storage of gold and silver
bullion in a high-security vaulting facility
within the St. Gotthard Mountain Massif
in central Switzerland.
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