perspective october 13, 2015 antioquia gold inc. · 2015. 10. 16. · antioquia gold inc....

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Perspective October 13, 2015

ANTIOQUIA GOLD INC.

PROFILE: Antioquia Gold explores for precious metals in Colombia. The Company is currently focused on

its Cisneros gold property, which comprises 5,630 hectares near Medellín in the Department of Antioquia.

Initial Construction; and

Strategic Acquisition of Two Key Mining Concessions

And They’re Off …

Antioquia Gold Inc. (“Antioquia Gold” or the “Company”) announced today that construction at its Cisneros Project

in Colombia begins tomorrow (Wednesday, October 14, 2015).

The primary work will focus on completing the Guaico Tunnel (see next page), anticipated to be achieved some

time in February, 2016 at a cost of approximately C$1.5 million, and which will permit the initial extraction of ore

some time in 2016.

COMMENT: The stock has taken off! We reproduce on Page 5 of this report, our “Upfront” section from our July 28, 2015 Update Report, which we believe is still relevant. As shown above, we have share price targets of $0.14

and $0.33. If the Company can realize on its objectives, we believe these lofty targets are achievable.

Antioquia Gold Inc. Perspective

eResearch Corporation ~ 2 ~ www.eresearch.ca

Guaico Tunnel

Below and on the next page, we provide Schematics 1 and 2, Plan View and Section View respectively, which

illustrate how Antioquia Gold intends to access and extract the ore from its mine.

The Plan View shows a horizontal tunnel will extend about 150 meters from the gold vein structures to the surface

along the side of the mountain. It also shows a future extended tunnel into another targeted deposit.

The Section View, next page, shows the initial horizontal more clearly, and it also shows a future production ramp.

Schematic 1: Guaico Tunnel – Plan View

Source: Company

<continued>



Schematic 2: Guaico Tunnel – Section View

Source: Company

Filling in the Gaps

Antioquia Gold also announced that it has acquired two key mining concessions which, essentially, fills in some

gaps in its land ownership around its Guayabito, Guaico, Santo Domingo, La Manuela, and Pacho Luis properties.

See Figures 1 and 2 below, beginning on the next page.

The total land area is 164 hectares and will cost the Company US$140,000 and also be subject to a Net Smelter

Royalty of 1.75% of any minerals extracted from these concessions.

The concessions are being acquired from a joint venture company owned by B2Gold Corp. and AngloGold Ashanti

Limited.

COMMENT: Since these concessions are contiguous to its Guayabito property, Antioquia Gold is in a better

position to enhance overall mine development at Guayabito.

<continued>



Figure 1: Overview: Existing Company Lands in GREEN; Acquisition Lands in YELLOW

Figure 2 on the next page shows a closer view of the acquisition lands.



Figure 2: Close-Up: Existing Company Lands in GREEN; Acquisition Lands in YELLOW

UPFRONT from the Update Report

eResearch issued an Update Report on Antioquia Gold on July 28, 2015. Our opening statement (UPFRONT),

which remains as relevant today as then, is set out below. A link to the Update Report is provided subsequent.

UPFRONT A not well known, substantially undervalued, junior gold Explorer will soon be a Producer. As this transformation

progresses, the market should, correspondingly, re-rate the company’s shares: upwards!



The commodities market is “in the dumpster”. Investors are shying away, in droves, from most companies involved in the mining sector. The economic slow-down in China is billed as the main culprit. But, steeled away, in another

part of the world, in Colombia, a small gold exploration company is about to bring a gold deposit into production.

Backed by a large and influential Peruvian mining concern with its 57% interest (now 62%), Antioquia Gold is

within a year of stepping out onto the world’s mining stage with a new producing gold mine.

From Explorer to Producer.

The Company’s stock is currently trading at 5 cents a share (now 10 cents), reflecting its current status as a

junior Explorer. As detailed in this report, when it becomes a Producer, we expect the shares of Antioquia Gold to be re-rated and trade upwards of 33 cents per share. Its small public float, share price, and market capitalization

excludes it for most financial institutions, thus making the shares predominately suitable for retail speculators.

We recommend those risk-takers who are still interested in the junior mining sector to take a look at this relatively

unknown company. Given its favourable prospects immediately ahead, we consider the shares currently to be substantially under-valued, and are rated as a Speculative Buy.

LINK to Update Report: http://www.eresearch.ca/wp-content/uploads/2015/07/AGD_072815-U.pdf

The Company

Antioquia Gold Inc. is a mineral exploration company focused on exploring for precious metals and other minerals

in Colombia.

Its strategic asset is the Cisneros Property, which hosts a significant, prospective gold-producing deposit.

Location of Cisneros Project

Source: Company

http://www.eresearch.ca/wp-content/uploads/2015/07/AGD_072815-U.pdf



Cisneros Project

Antioquia Gold is moving forward with developing and constructing an underground mine capable of supporting

output of 500 tons per day at its Cisneros Project located about 55 kilometers northeast of Medellín in Colombia.

The Cisneros Project has been ongoing since 2007 with 209 holes drilled to date, comprising some 45,400 meters.

Capex is currently estimated to be $40-$42 million. Of this, half is anticipated to come via a loan from its Strategic

Partner (identified below), and the other half from the project’s cash flow from operations.

The loan is unsecured and sports a coupon of 7.13%. Management expects that the Company will be able to repay

the loan, out of cash flow, in less than two years.

With construction work now to get underway on October 14, 2015, Antioquia’s management still expects the mine

will be commissioned by July 2016.

COMMENT: Even allowing for some time slippage (it always does!), Antioquia should be in production some time in 2016. As the Company edges ever closer to achieving this goal, its shares should receive an upwards re-rating. It

looks like this re-rating is already underway, with the stock rising 67% last Friday!

Strategic Partner

Antioquia Gold’s strategic partner is Infinita Prosperidad Minera S.A.C. (“Infinita”) of Peru. Infinita, which owns

147,868,346 shares of Antioquia Gold, and representing a controlling 61.68% interest in the Company, is engaged

in mining and exploration of minerals such as gold and silver. Infinita operates as a subsidiary of Consorcio Minero

Horizonte S.A. (“CMH”).

Consorcio Minero Horizonte S.A., which is headquartered in San Borja, Peru, explores, extracts, develops, and

produces gold mineral resources. The company, which was founded in 1978 and is privately held, is also engaged in

hydro-electric power generation.

CMH is Peru’s second-largest underground gold producer, and has more than 30 years of underground mining

experience. CMH produces more than 200,000 ounces of gold from its Parcoy Mine, which has a similar geological

make-up as Cisneros.

COMMENT: Having a large and influential controlling shareholder that is a major gold producer is a significant plus for Antioquia Gold. One advantage is that its Strategic Partner may be able to facilitate the sale of Antioquia’s

gold production.

<continued>



STOCK CHARTS

1. SEVEN YEARS

Observations: The 7-year chart shows that, as the Company started to report impressive drilling results in 2009-

2010, its shares responded accordingly, reaching an all-time high of $0.70 a share at the beginning of 2010 on

sustained increased trading volume. We expect a similar degree of investor interest as the Company approaches and

comes into production, and anticipate improved share price appreciation performance as a consequence. It has

already started! In 2015, the low-high range in the share price is 1 cent to 10 cents.

The next chart is for 2015 year-to-date.

<continued>



2. 2015 YEAR-TO-DATE

Observations: As shown by the increased share trading in June and July, once Antioquia Gold announced that it

was going to proceed to production, the shares garnered increasing investor interest. This has accelerated with the

Company’s latest announcement that construction is starting. One step closer to reality.

We have one more chart to show you: 3 months.

<continued>



3. THREE MONTHS

Observations: Look at the increase in volume on Thursday, October 8! That day the stock went from 5 cents to 6

cents. Friday’s volume, when the stock rose from 6 cents to 10 cents was quite subdued. Astute investors were

already in! There was not much trading volume today, either.

It will be interesting to see what price and volume statistics occur tomorrow (Wednesday) now that the Company’s

Press Release is out.

CONCLUSION:

Trying to anticipate where the stock will trade from here in the short-term is well-nigh impossible. Usually when a

stock rockets upwards, like AGD has done, it needs time to consolidate the impressive gains and, consequently, it

falls back before making another run higher. An upwards-trending share price requires constant news to keep the

momentum going. Also, open gaps like AGD’s between 6 cents and 6 ½ cents, often get filled, meaning the shares

will drop back to trade down to 6 cents before resuming their uptrend.

All conjecture!

However, suffice to say that, looking ahead over the next 9-12 months, we certainly expect the shares of Antioquia

Gold to be substantially higher than where they trade now.



eRESEARCH CORPORATION

eResearch Analyst on this Report:

Bob Weir, B.Sc., B.Comm, CFA Analyst Affirmation: I, Bob Weir, hereby state that, at the time of issuance of this research report, I own, directly,

shares of Antioquia Gold Inc. I also have been granted by the Company five-year options, expiring in 2020, to

purchase common shares of Antioquia Gold Inc. at $0.10 per share.

NOTE: eResearch reports on Antioquia Gold Inc. and other companies are available FREE on our website at

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Antioquia Gold Inc. paid eResearch a fee to have it conduct research on the Company on an Annual Continuous

Basis.

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report, including any determination of a 12-month Target Price or selection of a Recommendation (Buy-Hold-

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perspective october 13, 2015 antioquia gold inc. · 2015. 10. 16. · antioquia gold inc....

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