WA8 (ASX) AWV Research

Just finished my research and thought it would be a good idea to summarise Anova Metals projects, potential and value proposition and share with all. In my opinion AWV is much undervalued at these levels given the company’s current operations, growth potential, and the sector strength of late.

Shares Summary
Shares on Issue: 1,247 million
Market Cap: $19.90 million
Current Share Price: 0.016
52 weeks high: 0.02
52 weeks low: 0.004

Unlisted options
4.5 million Options exercisable at $0.043 and expiring by 19/06/20
1.38 million Options exercisable at $0.20 and expiring by 28/11/21
$0.52 million Options exercisable at $0.08 and expiring by 25/10/20
50 million Options exercisable at $0.045 and expiring by 30/06/20

Financials
Cash in bank (31/3/20): $618K
March quarter cash burn: $308K
Company debt of $2.82m

** Xinhu to re-finance debt of $2.0m with repayment date extended until 31 March 2023

Recent changes to Board
14 May 2020 - Appointment of Chairman ( Mr Rigg)
8 May 2020 - Departure of 2 Directors ( Alasdair Cooke and Gregory Fry)
4 May 2020 - Appointment of Joint Co. Sec ( David Palumbo)
4 March 2020 - Appointment of MD ( Mingyan Wang)
Company Projects:
1- Big Springs Gold Project, Nevada, USA
North Sammy shoots extension and parallel shoot discovery
Beadles Creek mineralisation extension
South Sammy high grade lode extension
Mac Ridge/Mac Ridge East
Beadles Creek to South Sammy
Golden Dome
2- Linden Gold Project, Western Australia
3- Malcolm Gold Project, Western Australia

1- Big Springs Gold Project, Nevada, USA
The Big Springs Gold Project is a Carlin style gold deposit located 80km north of Elko in NE Nevada, USA and produced 386,000 oz’s of gold between 1987 and 1993, ceasing production due to low gold prices. It is close to multiple other +10 Moz resource Carlin style gold projects in the region.

The project currently has Measured, Indicated and Inferred Resources of 16 Mt at 2.0 g/t Au for 1.03 Moz’s of gold (refer table 1 and AWV ASX release 26 June 2014), over 50sq km of highly prospective ground. Increasing cut-off grade to 2.5 g/t gold, the high grade component has JORC2012 resource of 3.1 Mt @4.2 g/t for 415 Koz of gold. Big Springs is fully permitted for Stage 1 mining operations.

The Jerritt Canyon gold mine (Jerritt Canyon Gold LLC, currently in production), is located 20km to the south of Big Springs and is a potential processing option for Big Springs ore. The +30 years continuous and successful exploration at Jerritt Canyon has discovered a total gold resource of 11 Moz, including 8 Moz of gold produced since 1981. In contrast, limited exploration has been conducted at Big Springs since 1993.

Anova is currently carrying out a data review to determine the focus of the next exploration phase at Big Springs. A summary and plan will be announced on completion of this review.

The main areas for the focus of this review and on-going exploration are following

North Sammy shoots extension and parallel shoot discovery
Beadles Creek mineralisation extension

South Sammy high grade lode extension

Mac Ridge/Mac Ridge East

Beadles Creek to South Sammy

Golden Dome
2- Linden Gold Project, Western Australia
High grade second fortune gold mine

3- Malcolm Gold Project, Western Australia
Approaches have been received from groups with respect to outright acquisition or joint venture of the Malcolm project. Discussions will be progressed.

Support from Strategic Investor (Cornerstone)

In addition to above 17% shareholding in Notice of initial substantial shareholding, Anova has entered into revised Loan Facility Term Sheet with Xingao for $2 million (Xingao Loan), replacing the proposed loan announced 28 February 2020 and repayment is extended until 31 March 2023.

Following was announced on 24 April 20
“Anova is pleased to announce that it has received a conditional firm commitment to conduct a placement to the Cornerstone Investor of the number of New Shares required to give the Cornerstone Investor a relevant interest of 30% of the Company’s shares on issue (Follow-On Placement). The Follow-On Placement will be conducted at the issue price of $0.01 per share and is subject to completion of the Entitlement Offer and the receipt of necessary regulatory (including FIRB) and shareholder approvals. It is expected that the Follow-On Placement will raise approximately $1.7 million. It is intended that funds from the Follow-On Placement will be used to reduce down the balance of the Twynam Loan to $2 million with the balance for advancing the Company’s resource projects and general working capital.”

Company Strategy according to March quarterly cash flow report
Due to the upward movement of the gold price over recent months (US$1,694/oz, A$2,689/oz as at 21 April 2020), indications of a strong future for the gold sector, and the opportunity to source investment funds into Anova, it was deemed in the best interests of shareholders to re-focus on gaining value out of Anova’s gold assets. The investor interest confirms the value to the Company of its gold assets at Big Springs in Nevada, USA and the Linden Gold Project in Western Australia.

Disclosure: I hold some shares, bought at 1.4 cents

All in my opinion, As always please do your own research..