Northstar Gold Corp IPO
One of the greatest opportunities for investors is to participate in Initial Public Offerings. The vast majority of people will never get the opportunity to participate at this round. The days of brokers calling retail clients about unique IPO opportunities is limited for a host of reasons partly as companies shifted to wealth management. Most investors focus on managed money and hope that a fund manager will beat the market with a diversified basket of stocks. The managed product approach is much more conservative for the banks as it spreads the risk around with all the other players in the market. The few people who do get into IPO opportunities are accredited investors; typically sophisticate and by the very definition wealthy. These can be potentially big wins for people and having access to impressive deals at opportune times is how success is achieved. Northstar Gold Corp is a Canadian exploration company focused on the historic Abitibi Greenstone Belt; specifically the Miller Gold Property which is an advanced stage project 18 km southeast of Kirkland Lake. This region which crosses the Ontario-Quebec border is historic.
I was fortunate to come across this opportunity and when I heard that it was focused on gold exploration and development in Kirkland Lake, Ontario, Canada I was interested. This is a world class area for gold production and the story of the Kirkland Lake area and mines is outstanding: the Kirkland mining camp has produced in excess of 24 million ounces of gold from 7 mines. Let that sink in….24,000,000 ounces with gold averaging about USD$1,500!
Right away a couple boxes were checked: looking for gold in a safe jurisdiction. The outlook for gold is outstanding and it is finally getting attention on MSM. This opens up a lot of projects, opportunities and drives explorers to find ounces. A restructured board that is impressive to say the least and it is private, going public and entering a mining sector bull market. This company has been advancing over the past 10 years and has picked an outstanding time to go public.
The management and board of the company know the Abitibi. They have specific expertise, experience and knowledge of this area, capital markets and negotiation with First Nations. Brian Fowler is Director, President and CEO with over 38 years experience with various executive positions, analyst work, and exploration management and as a consulting geologist. Mr. Fowler spent over 13 years with Placer Dome.
Greg McKnight is a Director and co–Chairman of the Board with Dr. John W.Pollock. Mr.McKnight has 25 years focused on investment banking in the mining sector including a Director with Canaccord Capital Corporation. Most recently he was Executive VP Business development for Yamana Gold. Dr. Pollock has 40 years of archaeological and cultural heritage resources services work. He has collaborated extensively throughout Ontario on mining, forestry and Hydro projects. A key focus is his First Nation background with locating and mapping traditional sites.
Joining the board is also Charles Main with over 30 years of mining experience holding positions like Executive VP Finance and CEO of Yamana Gold; as well, as sitting on the Board of Wesdome Gold Mines Ltd. The final mention is Tony Lesiak who has 20 years of equity research in mining with senior positions at UBS (Toronto) and HSBC in New York and Toronto. He is currently a senior advisor investment banking at Canaccord, and previously held the position of Managing Director and Global Head of Mining.
What I cannot leave out is Mike Sutton who is a Special Advisor to the company, and what a fantastic way to conclude the management team section. Mike Sutton won the Prospector of the Year for Ontario in 2006 for the discovery of the Macassa South Mine Complex at Kirkland Lake. He has over 30 years experience as an exploration geologist at major gold camps including Timmins and Kirkland Lake, and as CFO at Kirkland Lake and his input will be outstanding. This is the Special Forces team for this region!
The Same Rocks you can see at Kirkland Lake
Of key note is that the Miller Gold Property hosts similar age, nature and style of gold found at Kirkland Lake. The geology is similar with: abundant vertical and flat high-grade gold-telluride veins in an underexplored 3km by 2km intrusive centered gold mineralization and alteration zone. This is not a guarantee or a promise but as far as good indicators go this holds great potential. I mentioned that the Miller property is the flagship project but it is not the only one. The company also has Bryce, a 100% owned intrusive porphyry hosted gold project covering 5,090 hectares. More work is needed on two target areas: Sunday Creek and Pike Lake; however, Sunday Creek has high grade bulk tonnage potential and Pike Lake is a gold rich VMS similar to Horne (Falco Resources) and Laronde (Agnico Eagle) VMS deposits.
The illustration below illustrates some of the major fault lines and the triangles (headframes) represent mines that have been constructed. You can see the massive clusters around Timmins and Kirkland Lake but also along the fault lines that run through Miller Gold and the Bryce Gold property. If you want the quick pitch it is that the Abitibi Belt, the most prolific gold and base metal producing greenstone belt in the world.
The combined areas of Kirkland Lake and Timmins mining camps have produced over 119 million ounces of gold from over 100 mines!
Miller Gold Project
I want to reiterate that the Property hosts similar age, nature and style of gold mineralization as the nearby Macassa South Mine Complex. It has potential for near surface open pit, as well as deeper higher-grade systems for an underground mine. The key here is that it could have massive potential for intrusive-hosted bulk tonnage system similar to Sigma / Lamaque, which hosted significant gold. Another key milestone already met with this advanced exploration play is the geophysical 3D IP survey and recent drilling indicates the Vein #1 zone is laterally extensive and open in all directions; a First Nations Agreement in place and upgraded road access to within 100m of main mineralized zones.
Bryce Gold Property
This property could be a standalone project on its own, if it were not for some of the key features of the Miller project. This property is 100% owned by Northstar and it represents 260 contiguous cell claims over 5,090 hectares. Some of the notable results to date are at Sunday Creek 1.08 g/t gold over 56 meters and at Pike Lake 2.36 g/t gold 3.37 g/t silver and 1.87% zinc over 15.9 m. This company has a number of projects with an incredible amount of data, and yet another property named Milestone which we can explore at a later date.
One of the key considerations with this Initial Public Offering is that there was no ‘Founders Shares’ round, or Seed round in which investors came in before the IPO as in many financing’s. In fact, any money that had been previously raised has been rolled back when they cleaned up the share structure. You can come into this deal with a lot of data, a lot of advanced stage exploration, and an incredible gold market and at a great metric. It is an IPO so the structure of the company is strong and valuation fair with help from Haywood Securities and Canaccord Genuity who are underwriters of the deal. There are 25.3 million shares outstanding and 4.6 million options/warrants out for a share price of $0.30. There is a healthy mix of skin in the game from management, as well as reputational risk but also a structure for an investor to make money.
This is open and available to any investor, not just accredited ones! That makes a big difference. I am not offering this so be sure to call Brian Fowler or Derek Wood if you have interest. They can walk you through how to participate.
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Securities Disclosure: I, Andrew O’Donnell, was not paid for this article.
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