Co. Sees Silver Lining in Colombia
Research Capital Corp. Mining Analyst Stuart McDougall commented in a Nov. 25 research note that Vancouver-based metals explorer “Outcrop Silver & Gold Corp. (OCG:TSX.V; OCGSF:OTCQX; MRG1:DE) is quickly advancing its Santa Ana project as one of Colombia’s newest high-grade precious metals plays.”
The analyst claimed that the “the Santa Ana project offers district scale potential in Colombia’s richest historic silver camp.”
The research firm advised that it commenced its coverage of Outcrop Silver & Gold as the company has now successfully completed three phases of drilling and has identified seven high-grade shoots. Analyst McDougall stated that Outcrop is actively preparing to test five other prospective areas in H1/22.
Research Capital indicated that it initiated its coverage on the company with a “Speculative Buy” rating and a CA$0.75/share target price. The firm qualified its estimate noting that the target price is based on the assumption that Outcrop will eventually be able to grow the resource to 50 Moz Ag eq or higher.
The report from Research Capital stated that results from drilling at the property to extend and confirm the property’s high-grade vein system. McDougall advised that assay results from 111 piece points across 84 holes showed grades exceeding an internal benchmark of 200 g/t Ag eq.
McDougall commented, “Although the veins are thin, we think the grades have so far proven rich enough to work under a narrow-vein mining scenario, having averaged 1,345 g/t Ag eq, and even adjusting for dilution, the intercepts average nearly 650 g/t Ag eq.”
The company is presently conducting an 18,000 meter drill program, its fourth such planned program. The firm has succeeded in expanding the boundary of the Megapozo shoot. The analyst wrote that Outcrop’s management believes this area may offer the potential to increase the resource area by 60%.
The 36,000 ha Santa Ana property holds the potential for a much larger mineral system. Other mines in the vicinity were historically reported to have produced 7.8 Moz Ag.
The company has made investments in four additional “non-core” legacy exploration projects in Columbia which are presently inactive. Research Capital does not consider these investments in its valuation, but noted that they could be explored or sold at a later date and might possibly reduce the need for future dilutive external funding.
Outcrop Silver & Gold Corp. shares trade on the TSX Venture Exchange under the symbol “OCG” and last closed for trading at CA$0.25 on Wednesday, Feb. 2, 2022. In addition, the company’s shares trade under the ticker “OCGSF ” on the OTCQX market.
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DISCLOSURES for Research Capital Corp., Outcrop Silver & Gold Corp., Nov. 25, 2021
1. The issuer has generated investment banking revenue for RCC.
2. RCC has holdings of this issuer.
ANALYST CERTIFICATION: I, Stuart McDougall, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and
accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report.
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