John Kaiser Research Recommendation: Alto Ventures Ltd. (TSXV: ATV)

May 2, 2017

Kaiser Research Publisher John Kaiser confirms that Alto Ventures (TSXV: ATV) is a bottom-fish accumulation target below $0.10

John Kaiser | May 2, 2017: Alto Ventures Ltd. (TSXV: ATV) was recommended on December 31, 2015 as a bottom-fish accumulation target below $0.10 based on its 100% ownership of the Destiny gold deposit in Quebec which qualified as a gold optionality play.

There are four reasons for my renewed interest in Alto. 1) Rick Mazur and Mike Koziol have completed a decade plus apprenticeship at the helm of a resource junior pursuing a discovery exploration based wealth creation strategy that has been at odds with what the market wanted – feasibility demonstration and optionality speculation – but whose relevance is making a big comeback. 2) Management is rethinking the high grade potential of the Destiny deposit and considering a potential farmout to a well-heeled partner with the will to drill until this gold system’s potential has been fully illuminated. 3) Through the 100% owned Oxford Lake project Alto is tackling a 40 km by 10 km segment of one of the last major greenstone belt frontiers of the Superior Province. 4) Alto has attracted the support of an ambitious investment banking boutique that needs a full-blown winner rather than yet another opportunity to demonstrate clip and flip cleverness.

While Oxford Lake is the bluesky for Alto, Destiny is the bread and butter. The Destiny gold system has potential to reveal deeper high grade zones amenable to underground mining, with a consolation prize in the form of a bulk mineable 1 million ounce plus gold deposit worth mining if gold develops a sustainable real price uptrend. Currently Destiny, into which $7 million exploration work has been sunk, represents no value for the junior; a farmout to a committed partner would “create” a $5-$10 million value or $0.10-$0.20 per share based on 53.1 million shares fully diluted. Speculative value for the Oxford Lake discovery potential would stack on that base. I always regarded Destiny as bottom-fish Alto’s ace in the hole. We are a bit ahead of the curve with regard to Oxford Lake style discovery exploration, which is why I like Alto’s Destiny project as an unrecognized baseload value engine. Bottom-fishers who decide to bet on Alto Ventures Ltd absolutely must understand it as a bet on management’s discovery exploration talent hedged by the possibility that something happens which causes the price of gold to soar or Alto does secure an aggressive farmout deal for Destiny.

Perhaps recognizing that the gold bug narrative was being undermined by the success gold bugs were having with their austerity prescriptions, Mazur and Koziol decided that discovery exploration was ready for a comeback and took a fresh look at the Oxford Lake project in Manitoba on which little had been done since 2004 because of its remote location and the comparative “drive-to” appeal of Alto’s Destiny, Coldstream and Geraldton-Beardmore area projects (Miner Lake). Alto still holds several claims in the Geraldton-Beardmore area where Premier Gold and Centerra have a 50:50 JV called Greenstone Gold Mines whose purpose is to develop the Hardrock Extension and Brookbank deposits. This region has the potential to yield very flashy gold grades as Kodiak managed to do at the “Golden Mile” within its Hercules project that enabled it to raise over $50 million in December 2007 whose expenditure delivered the equivalent of Alto’s high grade Destiny.

The Oxford Lake project is already juicy with “unfinished business”, so it is unlikely the summer work will generate results which visibly expand the potential for a major discovery. However, if I am correct that we are in the second year of a 3-5 year discovery exploration bull market, there should be a much stronger market appetite for district scale frontier exploration plays such as Oxford Lake by the end of 2017 that enables Alto to raise money for the winter drill program at much better prices. The wild cards are a farmout deal that injects value into the Destiny gold project and possibly the sale of the Alcudia to an Osisko eager to mop up loose ends in the Windfall District. I am confirming that Alto Ventures Ltd is a bottom-fish accumulation target below $0.10.