Shareholders First, Tocvan Ventures
There is always something romantic to revisiting historic sites, mines and towns that bring us back to the past and remind us of the struggles and obstacles of the past. The story of Tocvan is not unlike the deep, rich history of the province of Sonora and, more notably the city of Sonora.
Sonora was established by Irish, German and English miners who not unlike the Motherlodes Mine in California where drawn to the area in search of riches. There is no individual associated with the discovery of the first mine in 1849 but its city came about around the decision to build a hospital. On May 1, 1851, Sonora was incorporated as a city and Mayor Charles F. Dodge presided over the first town meeting on May 26th. For our specific purposes One of the largest open-pit copper mines in the world, the Cananea mine produced over 164,000 tonnes of copper in 2006.
Tocvan Venture is more than this though: it is also the story of southern BC. Both locations are renowned for mining and offer a lot of opportunity for tough analysts, exploration geologist and venture financiers to turn potential into possibility.
Rogers Creek, BC
Tocvan was able to position itself into this property seeing potential in a cash strapped company. This Rogers Creek property holds potential for the company and Brian Fowler provided the 2018 Technical Summary report on Rogers Creek. The company was able to take advantage of tough markets to option 80% of this project. The past years have been hard on juniors and seniors alike and we know it is difficult to raise capital. Some companies have a deep strength in technical exploration but not as strong in financing or promoting projects: raising the necessary funds to continue searching for a resource. A project may have huge prospects, but the drill program does not hit and coupled with tough sector markets a company may have to part with a strong, potential asset.
The flagship property in Sonora is the Pillar project an advanced stage, possibly near-term economic resources play. The company entered into an option agreement with Colibri Resource Corp. on September 22, 2019. The company has 17,700 of drilling data going from surface to 125 meters…there is still length and depth to build upon with drilling with this the historic data. This is a unique strategy to amplify the value of past data with strong gold market support in a strong, historic mining district is attractive. This is a good company to follow milestones. They have a plan with a whole lot of milestones to hit and if successful will offer unique value. This is truly an historic gold district within the Sierra Madre Occidental (SMO) geological province some 140km south-east of the city of Hermosillo. In 2018, Mexico was reported as 1 of the top 10 gold producing countries in the world. In 2018, the state of Sonora was reported as the top gold producing state in Mexico with almost 37% of total gold production for that year.
The company looks for cash poor but resource rich potential projects or as President and CEO Derek Wood calls them ‘cash poor and property rich’. Mr. Wood was on Proactive Investors and spoke to Steve Darling not only about the new projects but the new approach. What is unique about this venture is that attention to detail and committing to a plan that assumes success and wishes to translate that success to shareholders. A big concern for this project was not only sifting through the vast number of potential areas, properties and projects to quantify economic potential but also how that would optimally translate for shareholder profit. This is a main concern for the company. I spent some time with Mr. Wood and was impressed by their concern that not only the share structure be tight and have growth potential for the investor but that this project be a catalyst for more success in the future. I am impressed by the desire to ‘do right by shareholders. Many shareholders in the past 8 years have suffered under a hard sector cycle and they are committed to bring value.
Another key individual is founder Mark Smethurst, a level three CFA candidate, geologist, analyst and qualified person. Mr. Smethurst has 25-year career vetting properties as investable assets, and in building and developing mineral resources. His unique education and work experience with not only the financial investment side of mining and but the mineral development side makes him a key asset. I spoke with Mr. Smethurst at the Stockhouse CEO party in October, 2019 and was impressed by the volume of data, number of projects and analysis he put in to finding the flagship Pillar project.The direct quote from prior release echoes the sentiment:“after reviewing over 150 projects globally we’ve identified the Pilar project as an attractive opportunity to add value to Tocvan share holders and is a favorable property for development. Building on progress made by Colibri and previous ownership, I am confident that the property can be brought quickly towards proven economic merit, while exploring the very real possibility of a world class multi million-ounce discovery.” So, when we talk about structure the company has roughly 17 million shares outstanding fully diluted. This tight share structure not only allows future capital raising but keeps the potential upside for investors without too much dilution. This is a new shell, a new team with a lot of experience who are strong in the markets and the technical geological exploration aspects of the business. It is going to be a lot of fun watching Tocvan and the team meet milestones.
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Securities Disclosure: I, Andrew O’Donnell, hold no direct investment interest in any company mentioned in this article. Also, I was not paid for this article
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