Berkwood Resources (TSXV:BKR) Has Premium Graphite Grades to Most Projects: Ubika Research

Equity Research Battery Metals | Canadian Small Cap June 25, 2018
Chris Thompson | Head of Research | Ubika Research Chris@UbikaResearch.com | 1 (416) 574-0469
Patrick Smith | Analyst | Ubika Research Patrick@UbikaResearch.com | 1 (647) 444-5506

”Berkwood

Market Data (TSXV:BKR)

Price (June 22, 2018) $0.10

52 Week Range $0.10 – $0.55

Market Cap (M) $3.4

Current Shares Outstanding (basic, M) 33.8

Free Float 98%

Average Daily Volume (3 months) 208K

Total Debt (M)* $0.0

Last Reported Cash (M)* $2.9

Headquarters Vancouver, BC., Canada

Website berkwoodresources.com/

Top Shareholders

Luxor Capital Group 4%

Caldwell Investment Management 3%

Management and Insiders 2%

Management

Thomas Yingling President, CEO & Director

Binny Jassal, CPA CFO

Ian Graham Director

Charn Deol Director

Ed Lyons Technical Advisory

Michel Robert Technical Advisory

*As of Nov. 30, 2017 All figures in CAD unless otherwise stated. Source: Thomson Reuters

Price Performance

Figure 1: Property Map Breakdown

Source: Company Reports

Berkwood Resources Ltd (TSXV:BKR)

Company Description

Berkwood Resources Ltd. (“Berkwood”) is a battery-metals focused explorer in Quebec, advancing its flagship Lac Guéret Extensions graphite project, which borders Mason Graphite Inc. (TSXV:LLG), a $180M market-cap company developing a FeasibilityStage 52K tonne/year (25-year mine life) graphite deposit. Berkwood has three other projects: The Roscoe property (vanadium), as well as the Cobalt Ford (cobalt), and Delbreuil projects (lithium).

Investment Highlights

  • Positive high-grade graphite results to-date. The Company’s first drill results were released in late 2017. The program has been successful so far, highlighted by 40.3m true thickness grading 21.0% Cg (carbon as graphite), including an interval of 27.2m grading 37.7% Cg. Overall, the Company generated a weighted average grade of 18.0% Cg over an average true thickness of 18.3 m, with 40 intercepts released, drilled from distances ranging from ~16m-180m from surface. Berkwood’s grades are premium to most graphite projects, as the average total of all graphite companies is a mineral resource grade of 8% Cg. Importantly, to illustrate for direct comparisons in terms of grades and mine life, Mason Graphite’s 2015 Feasibility Study includes 58.1M t grading 16.3% Cg of M&I in-pit, beyond the initial 25-year mine life. A summary of the results is shown in Figure 9 on page 8.
  • All three programs completed to-date comprised 27 holes showed mineralization, comprising 4,000m of diamond drilling in total. The Phase 3 results were released on May 2, 2018, comprising ~1,500m of drilling, in nine HQ diamond drill holes. The program was developed to further define and evaluate the thicker geological structures within the Zone 1 graphite zone. Phase 3 results were highlighted by 17.37% Cg over 130.55m (true thickness 87.5m). This is the one best and highest-valued (in-situ $/ tonne) holes drilled to-date. A summary of the Phase 3 program is featured in Figure 9. The current footprint of released results reaches a strike length of ~300m.
  • On February 27, 2018, Berkwood announced it increased its Lac Guéret project area to a total of 25,181 Ha through an acquisition, making it the largest mineral rights in the region (pending approval by the TSXV). See Figure 1 for a breakdown of property ownership, the pink area belongs to Berkwood.

Financial Analysis

Cashed up for the 2018 exploration program. In Q4/2017, the Company closed $2.9M of financings ranging from $0.29-$0.31/share, which included one, two-year warrant ($0.35- $0.36 strike price range). In terms of valuation, we plan to update once an inital Resource Estimate is released, which is anticipated by Q1/2019.

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