Loncor Gold
Primary ticker: TSX:LN, OTCQX:LONCF, FSE:LO51
Stage of development: Exploration, Development
Primary minerals: Gold
Project to promote: ADUMBI
Project location: D.R.C.
Website: www.loncor.com
Loncor Gold Inc. has quietly grown into one of the major new discoveries in Africa in terms of ounces, grade and future potential. It is a Canadian gold exploration company in the DRC close to Africa’s largest gold producer, Barrick’s Kibali Mine, 200 km away. Loncor has started drilling to push the current high grade 4M ozs through 5M ozs, while exploring along the adjacent 16km structure. The government has it’s 10% share; the project has a mining permit; a US$1BN PEA (US$2BN Profit After Tax at current gold prices); and Loncor has a market cap close to US$45M. Loncor controls 4M ozs of resources, focused on the 3.66M ozs at Adumbi, with a projected mineable grade of 2.17g/t, all in a pit. Underground potential continues below the resource and drilling has started to assess the deeper ground. The company sold a non-core asset for US$10M to fund ongoing drilling. Loncor’s quality, future potential and proximity to Africa’s largest gold mine have yet to be recognized as it severely lags its peers’ valuations.
Cash: CAD5M
Debt: /
Major shareholders:
Resolute Mining Ltd – 20%
Arnold Kondrat (Exec. Chair. Loncor) – 20%
Newmont Mining – 5%
Management Ownership – 22%
Financials
Management Profile
John Barker – CEO
Mr Barker has 17 years’ experience as a leading mining analyst, including with RBC DS where as Managing Director he headed up their London based Global Gold Mining initiative, focussing on African mining equities.
He was also the Chairman of The Association of UK Mining Analysts. Subsequently, he was Vice President Corporate Development for TSX-listed SouthernEra Resources, which was taken over by Lonmin, and was instrumental in the Guinor Gold sale to Crew Gold. More recently he has been involved in various copper, diamond and platinum initiatives in Southern Africa. During his career, he has been involved in numerous asset sales and equity issues raising over US$650m in Canada, Australia, Europe and RSA.
What is your rationale for taking part in 121 Mining Investment?
We are looking to spread the word on our swiftly developing, unknown gold story as we grow our world class deposits
What recent news would you like to highlight to investors attending?
Drilling has begun below the 3.66M oz high grade resource at Adumbi. The 11,000m program has the aim to push the deposit through 5M ozs, a milestone held in high esteem by investors, and mining companies alike.
What are your key goals for the next 3, 6 and 12 months?
3 Months:
Drilling below Adumbi resource with aim of attaining 5M ozs of gold resource
6 Months:
Ongoing drilling and assessment of resource based on drill results.
12 Months:
Depending on drilling results, look at underground options and potential reconfiguration of current PEA.
What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?
Our challenge is breaking through with a DRC story that sounds too good to be true! We will continue to spread the word via all appropriate mediums.
What do you think makes your company such a compelling investment?
In the last three years of exploration, Loncor’s created an emerging world-class, US$2BN valued project with a grade almost a g/t higher than virtually all its West and East African peer groups, and yet it trades at a fraction of its NAV and peer group valuation. All within 200 km of Africa’s largest gold producer, Kibali. We’re valued at an EV/oz resource of US$11/oz, a fraction of the African average valuation – the positives have yet to be recognized by the market.
What are the top 3 key investor takeaways?
The story is still to be widely recognized with many peer group projects already taken over by seniors. We have exceptional grades, one of the largest resource ounces, and we’re still growing. Peer group and PEA valuations show significant value discrepancies given the size and grade on show.