Single asset Great Bear Royalties moves into the spotlight

Great Bear Royalties (TSXV: GBRR), which was spun out of Great Bear Resources (TSXV: GBR; US-OTC: GTBAF) in January 2020 and listed in April 2021, has “one of the top 20 gold royalty assets in our coverage universe,” according to Canaccord Genuity mining analyst Carey MacRury.

The precious metals royalty and streaming company has a 2% net smelter return (NSR) royalty on Great Bear Resources’ Dixie gold project in northern Ontario’s Red Lake camp, and MacRury initiated coverage of the junior this week with a speculative buy rating and a target price on the stock of $5.00 per share. The company currently trades at $3.85 per share and since listing on the TSX Venture has ranged between a low of $2.49 and $5.00 per share.

MacRury pointed out in an Aug. 23 research note that the Dixie royalty is the junior’s only asset, but that the perpetual royalty is uncapped and has no buyback options. He also noted that Great Bear Resources has completed about 283,000 metres of drilling (630 holes) since 2017 at Dixie and is in the midst of a 175,000-metre ($45 million) drill program this year.

“In our view, the market has increasingly been pricing in a significant emerging discovery,” MacRury wrote, “with Great Bear Resources’ share price up ~ 29 times in the past three years to a market cap of ~$800 million.”

Great Bear Resources is on track to complete its first resource estimate on the project in the first quarter of next year, which will be followed by a preliminary economic assessment on the project, the mining analyst noted.