First Berlin – Klondike Gold Corp. Research Update (02/10/2018)

First Berlin Equity Research on 02/10/2018 initiated coverage on Klondike Gold Corp. (ISIN: CA4989033010/ Bloomberg: KG CN). Analyst Ellis Acklin placed a BUY rating on the stock, with a CAD 0.70 price target.

Over 20 Moz of gold have been recovered from Klondike gravels (placer mining) since the region's first gold rush in 1896. Exploration for hard rock deposits was very limited until 2007. Since then over seven Moz have been discovered in the region sparking C$1bn of investment. Klondike Gold's (KG) exploration of its hard rock Klondike District Project supports a model with direct similarities to the nearby the Golden Saddle and Coffee projects. Kaminak's Coffee project was acquired by Goldcorp Inc. in 2016 for C$520m confirming interest in the region's gold-bearing potential generated by Kinross' purchase of Underworld's Golden Saddle deposit for CAD139m in 2010 and joint ventures by Newmont, Barrick, and Agnico Eagle with nearby junior explorers. Results of exploration work carried out by KG's current management since 2015 show promise. Up to C$2.5m is budgeted for exploration next year. Property infrastructure is excellent, while gold mineralisation is at or near surface and likely to be amenable to low cost gravity separation. We initiate coverage with a Buy rating and C$0.70 price target.