It’s not often that a new company comes across my radar and the opportunity is so compelling that I can’t find a good reason not to own it. The three major categories that an investor in the junior mining sector should focus on when researching a company are:
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Management: Track record, expertise, background, etc.
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Project(s): Jurisdiction/location, project history, what the company is looking for and what makes the project(s) compelling?
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Share Structure: Management ownership percentage, who owns the shares? What is their time frame and exit strategy? What are the share prices at which capital was raised in the past?
It’s unusual to find an early stage junior miner without some flaws in at least one of these three categories. If you have great management and project(s), then maybe you have a loose share structure with a ton of founder’s shares and pre-IPO shares at low prices. Or maybe you have a tight share structure and management is buying their stock right alongside us, however, the management team doesn’t have an extensive track record of success.
When all three major categories align it usually means I’ve found a winner.
This morning I introduce Angold Resources (TSX-V:AAU), a company that will begin trading on the TSX-Venture today. Angold is a gold explorer with an impressive portfolio of projects, one of the best management teams I’ve ever come across in the junior resource sector, and a relatively tight share structure with nearly 20% insider ownership.
Angold shares represent a unique opportunity to invest alongside some of the sharpest minds in the junior mining sector while diversifying project risk across a portfolio of four projects (Cordillera, Dorado, Iron Butte, Uchi) that span three major mining jurisdictions (Chile, Canada, USA) including two projects that have seen significant historic exploration.
Angold Resources’ Projects
Angold Resources has four highly prospective projects, two of which are in advanced stages. Dorado is located in Maricunga Belt, Chile and Iron Butte is located in northern Nevada, USA. The other two projects in earlier stages are located in Ontario and Chile. Highlights of each project shown below:
Dorado
Dorado is a 16 square kilometer property located near the mining center city of Copiapo, Chile – with road access to Copiapo. Currently, there is approximately 10,000 meters already drilled on the deposit with some intercepts that include 261 meters at 0.91 gram/ton gold, 192 meters at 0.72 gram/ton of gold and 318 meters at 0.68 gram/ton of gold. (There are comparable deposits of more than 20 million ounces of gold in the area at similar grades.)
Angold is planning a 5,000 meter drill program scheduled to start in Q4/2020. 41 holes have been drilled to date at Dorado, and there is significant potential for expansion as the deposit is open in most directions. The maximum hole depth was 460 meters whereas comparable deposits (Caspiche) were drilled down to 1,000+ meters depth with excellent continuity. More insight on Caspiche and Dorado shown below:
The Caspiche Mine is one of the largest copper/gold mines in the world and Angold’s nearby Dorado Project matches up well to Caspiche in terms of size potential amid a 6 square kilometer alteration window.
Dorado is open at depth and there is significant potential for the mineralized footprint to be extended at depth and along strike to the south, east, and north.
Iron Butte
The 2 kilometer property is located 60 kilometers south of Battle Mountain in North-Central Nevada – with road access from Battle Mountain. The area is home to other mining deposits, as shown below:
It has a historical resource of 606,186 ounces of gold at 0.62 gram/ton of gold (half in oxides) on the Battle Mountain trend. Some highlight historical holes include 30.5 meters at 1.80 gram/ton of gold and 24.3 meters at 1.48 gram/ton of gold. The Company is planning a 5,000-10,000 meter drill program aimed at expanding the existing historical resource. More on Iron Butte’s historical drill results below:
Management Team
Management teams don’t get much better than this one. Pretty much everyone on the Angold team either has an extensive track record of creating shareholder value, or contributing to major discoveries in the last decade. Starting with the CEO and Director Adrian Rothwell who has over 25 years of experience in the industry including founding, operating and selling many junior mining ventures. Rothwell is the former executive of Goldcorp and KORE Mining, and current Chairman of Lucky Minerals.
On the Board of Directors, Galen McNamara is a geologist, entrepreneur and currently CEO and director of Summa Silver Corp. With over 15 years of experience, McNamara has won many awards including 2018 PDAC Bill Dennis ‘Prospector of the Year’ award and 2016 Mines and Money Exploration Award. Another Director Brandon Bonifacio has over 10 years of experience with expertise in M&A and project development. His past roles include being a senior member of Goldcorp’s Corporate Development team. Lastly, Director Rony Zimerman is a Natural Resources Attorney with a focus on mining projects and capital markets. Zimerman is the co-president of the Natural Resource Committee – International Section of American Bar Association.
Strategic Advisors include Craig Parry who has over 10 years of experience in the industry. Parry is the senior advisor, former and founding director of Nexgen Energy, CEO and founder of IsoEnergy, Chairman of Skeena Resources, and founding shareholder and senior advisor to EMR Capital.
Another Strategic Advisor Doug Ramshaw has over 25 years in the mineral resource sector as a former mining analyst. Ramshaw is currently a senior executive of several exploration companies, including president and director of Minera Alamos and director of Great Bear Resources. Last of the Strategic Advisors is Michael Konnert who has over 10 years of experience in mining and capital markets. He is president and CEO of Vizla Resources, partner in Inventa Capital, and former CEO and co-founder of Cobalt One Energy.
Angold In 2021
Angold launches with C$9 milliion in cash and a clear plan of action for advancing its projects. The company has begun a 5,000 meter drill program at its Dorado Project in Chile, in addition to surface sampling and mapping in new areas of alteration. While drilling is ongoing in Chile, Angold is working on its three other projects in anticipation of 2021 drill programs. At Iron Butte, Angold will commence a 5,000-10,000 meter drill program in the first half of 2021 aimed at confirming and expanding mineralization.
Angold is also following up on a surface soil sampling and prospecting program at its Uchi Project in Ontario – this is a project that has a few connections with Great Bear’s Dixie Project:
Considering Angold’s impressive and geographically diversified project portfolio, and the strength of the company’s management team I would not be surprised if AAU is well received by the market. The following table of comparables illustrates what is possible in terms of valuation:
It should also be noted that the Newmont acquisition of Exeter occurred in a bear market and a much weaker gold price environment than the one that exists today.
Angold issued 20 million shares at C$.40 as part of an C$8 million financing in a go public round. These shares are free trading on the first day of trading. In total, Angold will have 83,941,831 common shares issued and outstanding for a market cap of C$33.6 million at the C$.40 most recent financing price. However, only the $.40 go public financing shares are free trading for the first three months of trading. Much of the rest of the issued and outstanding shares are subject to escrow/pooling agreements.
In a strong gold market environment Angold can trade to multiples of the $.40 financing price in 2021 and I will be a buyer of AAU on the open market over the coming days.
Disclaimer:
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Angold Resources Ltd. is a high-risk venture stock and not suitable for most investors. Consult Angold Resources Ltd.’s SEDAR profile for important risk disclosures.
EnergyandGold has been compensated for marketing & promotional services by Angold Resources Ltd. so some of EnergyandGold.com’s coverage could be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.