I always find it interesting that, when evaluating mining companies, you have to look a lot deeper than simply what properties they have and when they’re drilling next. Small and medium explorers do so many deals with peers that any given company can sometimes have more value in the outstanding shares of other companies than in its own properties. I guess it stands to reason, in a business where you are constantly trying to raise capital to explore your best asset and maybe where you have the luxury of an extra asset or two kicking around, that you consider non-core assets or perhaps unexplorable ones under your current circumstances. At least it should be a lot easier to value the outstanding stock position in other companies than an inferred resource, to me anyway, as long as those shareholdings are publicly traded. Although, even in that situation I’ve seen a company, with no debt, trade at a discount to what it could sell all the shares in other holdings for, implying that their own asset is actually a liability. Then again, if I understood the market better, I’d probably be on a helicopter right now flying from my private island to the nearest golf course before spending the rest of the afternoon fishing.
Now where was I going with this? Oh ya, junior mining stocks with the potential to be worth a lot more than what they are currently trading for. Today we are taking a look at Gold’n Futures Mineral Corp. (CSE: FUTR), a Canadian based exploration company focused on advancing its Hercules Project. The Hercules Project is located 200 kilometers northeast of Thunder Bay, Ontario, within the Thunder Bay North Mining District in the heart of the Beardmore – Geraldton gold mining camp, the 4th largest gold camp in Canada. The Company has built an extensive drill hole database that includes historical drilling totaling 537 holes with more than 107,000 m of drill core. Highlights from the property include surface grab samples grading up 10,374 g/t gold and channel samples up to 32.9 g/t gold across 11.6 m. Sounds pretty interesting so you’d think that would be the focus of today’s article…. but it’s not.
Gold’n Futures has another asset called the Brady Gold Project, which is located in Newfoundland, one of the hottest gold jurisdictions in the world right now thanks to New Found Gold Corp.’s (TSXV: NFG | NYSE-A: NFGC) Queensway Project. As of September 30, 2021, Gold’n Futures reported a total of $861,348 invested in the Brady Property including both acquisition costs and exploration expenditures, with a further 2.5 million shares required to be issued to the vender at a deemed price of $0.075 per share to accelerate its acquisition of a 100% ownership. That puts Gold’n Futures all in price for the Brady project at just over C$1 million but they were recently able to sell 90% of the asset for 3 million shares of Beaver Gold Corp. at a value of US$1/share. Sometimes a Company has to make tough decisions but in this situation, it’s a pretty good lift for shareholders and they still have some exposure to the project should Beaver Gold have success in developing it. Additionally, it provides a future source of funding to explore the Hercules Project.
However, this is where the story gets interesting. Beaver Gold is in the process of listing its common shares on the NASDAQ with a coincident initial public offering. I’ve been told that the IPO price is US$4/share, although that doesn’t necessarily mean the stock will open at or even trade anywhere near that price. However, if it does trade at US$4/share, that is worth roughly C$15 million as compared to Gold’n Futures current market cap of just over C$8 million, following the Company’s current private placement. Even if Beaver Gold trades at only half the US$4/share price, then Gold’n Futures would be trading at cash value with upside from any exploration activity at any of its properties. The question becomes whether the market will reflect the true value of Beaver Gold in the share price of Gold’n Futures before they actual sell those shares and convert them into cold, hard cash.