ATAC Resources Ltd.
New potential +20moz Carlin-type gold
district (?)
(all figures in CAD unless noted)
?? We are initiating coverage on ATAC Resources, a Vancouver-based precious
metal exploration company focused on the Yukon. The ATAC management team
has over 150 years of collective exploration experience in the Yukon. Its flagship
asset is the 100%-owned, extremely large Rau gold property, in the north-eastern
Yukon, where ATAC is starting to document a potential new sediment-hosted gold
belt. ATAC is well-funded, with $30m in cash.
?? Our primary focus in this report is ATAC’s Osiris target, which we believe has
many geological similarities to Nevada’s Carlin Trend. For various reasons
discussed, our confidence in Osiris is significantly greater than would normally be
the case for a one-hole play, however, we must caution investors that Osiris
remains an early stage play, and at this stage our analysis and valuation are
inherently speculative.
Rau gold project = potential Tier One gold asset
?? The Rau project hosts the Osiris gold target, a near-surface, sediment-hosted,
“Carlin-type” gold-arsenic system being drilled for the first time. Hole 1 intersected
4.65g/t gold over 65.2m from the “Osiris horizon”. Surface rock sampling along
this 150m-thick, favourable +2.5km-long horizon locally documented 2–39g/t gold.
One hundred kilometres west, Rau also hosts the Tiger Gold zone – a carbonatehosted
deposit with over 100 drill holes and +1moz gold potential.
?? We concur with ATAC’s Carlin-type gold model for its new Osiris target. This
analogy is significant, as the prolific northern Carlin Trend in Nevada is host to
over 100moz of past production and resources. This gold deposit type analogy is
based on similarities in i) host rock types, ii) continental margin setting,
iii) alteration/mineralization, and iv) trace metal signature.
Price catalysts in 2H10
?? Drill results from the Osiris Target (Sep/Oct 2010)
?? Soil geochemical results over the Osiris Target area (2H10)
?? Regional silt geochemical results (4Q10)
?? Tiger Zone drill results (2H10)
Valuation and recommendation
?? We value ATAC based on a sum-of-parts NAV, mainly by developing various size
scenarios and using comparable transaction analysis. We estimate a preliminary

.2–3.2bn NAV range based on our four scenarios, and use a probability
weighting to derive at a 12-month valuation of $1.1bn. We rate ATAC Outperform,
with a 12-month target price of C$11.00. ATAC is highly speculative and suitable
for risk-tolerant investors only.

rare find—a potential Tier One gold deposit

The senior gold mining companies have been scouring the planet for the next Carlin-type gold

districts—Tier One gold systems containing more than 20moz (the Northern Carlin Trend itself is

host to more than 100moz of past production, and current reserves and resources). We would

suggest the seniors have had little success in this regard, despite the discovery of the “Chinese

Carlin-type” deposits, which have turned out to be both metallurgically and grade challenged.

Has ATAC discovered a bona fide Carlin-type gold system? We would argue “yes” at this early

stage, given the empirical evidence. It is really a question of how big the Osiris gold system

(Fig 2) might be and whether there will be similar gold systems discovered on this trend in the

future. The bottom line, in our view, is that gold systems of this potential size are only discovered

every other decade and, therefore, deserve early analyst attention.

Osiris is a new sediment-hosted, Carlin-type gold discovery (Fig 3)