GTA Resources: Sale, financings, investment and exploration
It’s not often you see a junior company do a lot in one or two weeks. It takes months, years, of planning for a junior to execute on a business plan. GTA Resources and Mining Inc. managed to do it in about two months.
The company (TSXV: GTA) has been on the mining scene since 2010. It made a big entrance with impressive assay results from its Northshore Gold Project in February, 2012, and like many junior miners has since had to push through the lethargy of the market. It carried on with its business and put out good results but to the market those results have been like the sound of one hand clapping.
GTA made noise in early March this year when it announced it would carry out an innovative flowthrough funding based on recent Ontario prospectus law amendments. Then it announced another financing of up to another $400,000. Then it sent a team member as part of a Canadian trade delegation to Saudi Arabia to explore mining opportunities in the Kingdom (follow GTA’s Twitter feed for some great pictures: @GTAResources). Success continued last week when it announced it had entered into an agreement to sell its interests in the Ivanhoe Gold Property, and then this morning GTA announced a closing on the first traunch, of $150,000.
That’s more meaningful news than some companies put out in a year.
The financings are important because they are both hard dollars and flowthrough. This means the company can carry out its exploration goals to create real value for the shareholders while still being able to pay its bills. It’s a credit to the BusDev people at GTA that they have been able to source, structure and close financings in this uncertain market. And with a small float (only about 36M shares out), any incremental increase in that value should flow to the shareholders.
Probe is buying the Ivanhoe Gold Project from GTA (who had the property under option) and from two others (the original prospectors), and will make an aggregate payment of $234,000 and issue 350,000 common shares of Probe to acquire the property and option interests. GTA will keep a 1% net smelter return royalty over the property, which can be purchased by Probe for $1-million. Cash and shares and a NSR add up to a good deal for everyone. Adding this cash from Probe to the financings means GTA will have the cash in its own treasury to do what it needs to do even in this lean market.
The sale of Ivanhoe is particularly interesting since the buyer is Probe Metals whose CEO is David Palmer. That’s the same David Palmer who as CEO of Probe Minerals sold the west part of the Borden Lake Gold Zone to Goldcorp Inc. in 2015 for more than half a billion dollars Canadian. In the GTA transaction this time he bought the east part of that same Borden Lake Gold Zone. He knows that part of the world and obviously sees value in Ivanhoe.
It’s noteworthy that Goldcorp is an 18% shareholder of Probe.
GTA will get good exposure from Probe’s portfolio. Ivanhoe is located proximal to, and along the same geological trend as, Probe’s West Porcupine Project. Adding Ivanhoe to West Porcupine brings the land package to over 180 square kilometres, including the recently announced acquisitions of White Metals’ West Porcupine project and the Ross Property. Probe has announced that it is planning exploration programs to encompass all of Probe’s property in the area.
David Palmer, President and CEO of Probe, stated in Probe’s press release: “The acquisition of the Ivanhoe property represents a cost-effective addition to the West Porcupine project and brings with it a significant number of historical and new gold showings. Previous work by GTA has identified numerous drill-ready targets along an extensive gold-bearing structure interpreted to be the western extension of the Destor-Porcupine Fault Zone, which is responsible for most of the 70 million ounces of gold produced in Timmins.”
It gets better for GTA’s investment in Probe. Probe has announced it is merging with Adventure Gold Inc. who is focused on mining exploration in the Abitbi Greenstone Belt. Its main project is the Val-d’Or East project, which has a resource report of 770,000 ounces of gold at 2.6 g/t Au in inferred resources. Adding Adventure’s assets to Probe’s gives an exploration portfolio of over 30 mining properties in Ontario and Quebec. There’s a good write-up on the merger in the April 18/16 edition of The Northern Miner.
While Probe will be busy drilling near Folyet, GTA will explore its 51%-owned Northshore Gold Project between Thunder Bay and Hemlo, Ontario. GTA already has a NI 43-101 resource estimate on Northshore, and will likely try to add to that by drilling on the northern end of the property near the former producing Northshore Gold Mine. It’s that property that made the noise in 2012 with the spectacular assay results. There is obviously gold in this ground – the picture above is a picture of actual samples taken from the surface in 2011.
We should expect a steady stream of corporate and technical news from GTA this summer when its technical team goes back into the field at Northshore and the company continues to further execute on its business plan.