August 10, 2022
Mawson Gold Ltd. (TSX:MAW, BUY, C$0.50 target, David A. Talbot) announced that its 60%-owned subsidiary, Southern Cross Gold (ASX:SXG, Not Rated), has intersected wide and high grade-antimony mineralization at the 100%-owned Sunday Creek project. The gold can be traced over a 100m distance above and below previously drilled hole SDDSC033, which demonstrates wide and continuous mineralization within the Apollo gold shoot, with over a dozen gold intersections grading up to 130.0 g/t Au and 25.1% Sb with abundant visible gold. We note that hole SDDSC033 is the best intercept to date, which has returned 3.9 g/t AuEq over 119.2m. These new holes returned results including: 1) 4.8 g/t AuEq over 42.0m including 13.9 g/t AuEq over 13.0m (SDDSC039); and 2) 4.2 g/t AuEq over 15.3m (SDDSC038). Hole SDDSC038 also intersected two veins drilled 70m and 100m further east than previously identified, including Vein 1 which returned 11.5 g/t AuEq over 1m and 10.0 g/t AuEq over 0.2m, while Vein 2 returned 28.3 g/t AuEq over 0.6m. These two rigs continue to drill at Sunday Creek where over 10km of strike remains undrilled. In our view, this has been a phenomenal drill program for Southern Cross. SXG and MAW are both up 41% over the past month, exceeding most gold stocks, half of which have not had positive returns. We note that Mawson owns 60% of SXG and its market capitalization is currently A$83.6M (C$74.9M), while its 60% interest in SXG is worth C$43.75M, and Mawson’s market capitalization is only C$41.1M. We believe there is potential for investors or acquirers to take control over SXG at a discount by buying Mawson and gaining exposure to its highly prospective Finnish resource base (1.04M oz at 3.0 g/t AuEq) and Swedish projects (132 g/t Au over 0.4m from 2nd hole), which are within 22km of 7M oz Au production, for free. Moving forward, we believe there are several near-term catalysts that could help drive the stock including 1) a PEA and EIA, land use and rezoning at Rajapalot, 2) initial exploration program including detailed magnetics in Finland, and 3) drilling at Skelleftea in Sweden. Read more
