Will there be a rush to get this gold?
Long before Dwayne Johnson and even before Alcatraz, the nickname The Rock has been used in reference to an island that’s the eastern-most part of North America. Newfoundland (The Rock) and Labrador is a province in Canada that’s been home to several large mining discoveries since its union with Canada in 1949. Investors of my vintage may recall the staking frenzy around Voisey’s Bay where Robert Friedland’s Diamond Fields Resources discovered a world class base metals deposit while looking for….ya, diamonds. If you don’t recall the story, Friedland ultimately sold Diamond Fields to Inco in 1996 for $4.3 billion which was in turn bought by Brazilian mining giant Vale who still mines nickel, copper and cobalt at this location today.
The evolution of the Voisey’s Bay play in the mid 90’s was my introduction to speculative mining trading as dozens and dozens of junior mining companies staked claims in and around Diamond Fields property. And whenever one announced a good drill result almost every stock in the near vicinity went up several multiples one day and almost all the way back down over the next few days or sometimes even the same day. All before chatboards and meme stocks!
But enough about the “good old days”, today’s mining interest in Newfoundland is coming from gold discoveries in the Central Newfoundland Gold Belt. New Found Gold Corp (TSXV: NFG) has had some amazing results at their Queensway gold project, 15km west of Gander, Newfoundland including the most recently announced intercepts of 124.4 g/t Au Over 17.7m and 131.1 g/t Au over 4.65m. These are some truly spectacular numbers and New Found Gold has announced comparable results in the past.
So along the earlier theme, let’s play the closeology game and talk about TRU Precious Metals Corp. (TSXV: TRU | OTCQB: TRUIF). Back in January, TRU announced a transformative option to purchase Altius Minerals Corporation (TSX: ALS) Golden Rose project located in the southwestern portion of the Central Newfoundland Gold Belt. The Golden Rose asset is located between Marathon Gold Corp.’s (TSX: MOZ) Valentine Gold Project to the northeast, where Marathon has reported 3.09 million ounces Measured and Indicated gold resources and Matador Mining’s (ASX: MZZ) Cape Ray Gold Project to the southwest, which also has a known gold deposit. Golden Rose immediately becomes TRU’s most advanced project and thus the flagship asset. However, there are two other properties in TRU’s portfolio that are either adjacent (Golden Pond Property) to New Found Gold’s property or less than 25 kms away (Gander West property) from NFG’s best discovery holes. Add the Twilight Gold property and the Stony Lake property and it adds up to a total of 23,000 hectares in this prolific gold region.
Source: TRU Precious Metals Website
But here’s where the story gets really interesting as an investor. Since the announcement of the Golden Rose transaction with Altius on January 7th, TRU’s stock hasn’t traded. The company had to apply to the TSX Venture Exchange for a Change of Business (as such term is defined in Exchange Policy 5.2) to a “mining issuer” from its classification as an “investment issuer”. Conditional approval was received April 30th and the Company intends to complete the Change of Business and resume trading the week of May 10, 2021.
Needless to say a fair bit has happened since the stock halted on Jan 6th. Marathon announced its first 2021 exploration drill results from the Valentine Gold project, followed by a positive feasibility study and just yesterday a project development update. Meanwhile, New Found Gold has announced 13 different drill results (yes you read that correctly) at its Queensway project. Additionally, TRU hasn’t been sitting around waiting for TSXV approval, they went out and raised $3.5 million in an oversubscribed private placement of subscription receipts. As well, the company hired an Exploration Manager and a Field Geologist in preparation for the 2021 exploration season.
So the Company is cashed up (approximately $4 million), staffed up, has a new flagship property and is ready to roll in one of the hottest gold exploration regions going right now. Post transaction the company will have 70.5 million shares outstanding (73.5 million F/D). Prior to the halt, the stock was trading at $0.26/share which would imply a market cap of roughly $18 million. However, I have no idea what the stock will open trading at next week. Get out your crystal ball and see if you can figure out what the value of the above few paragraphs are worth, and when you do — let me know.
Dean Bristow has been involved in the North American Crude Oil business for 30 years including Energy Trading, Infrastructure Development, Transportation, and Refining. During that ... <Read more about Dean Bristow>