Barksdale Capital Strikes Gold in Copper
An old friend of mine from Gold Standard, Ltd, named Jonathan Awde contacted me recently and wanted me to look into a company he had helped form named Barksdale Capital (BRO-V) with a Tier 1 copper project in the south of Arizona. That sorta rolls off your tongue, doesn’t it? And sounds pretty rich.
Readers may be familiar with South32, a billion dollar mining company based in Perth, Australia. South32 took over Arizona Mining in an all cash deal in June of 2018 worth $2.1 billion CAD. Arizona Mining had a base metals deposit they called the Taylor project with about a 100 million ton 43-101 resource worth about $28.5 billion USD in the ground.
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Think of a very big pie filled with juicy lovely fruit being a Tier 1 copper project where half of it contains $28.5 billion in metals. That’s the half that South32 bought when they took over Arizona Mining.
Barksdale Capital recently did a deal to pick up 67.5% of the other half of the pie. And according to the leading Carbonate Replacement Deposit expert in the world, Barksdale and their partner Regal US, own the other richer and juicier half of the pie.
Many years ago I was in Mexico visiting Endeavour Silver. Another company with Mexican projects found out I was down there and contacted me to see if I could give them a few days to look at what they had. I made the time and their geologist picked me up in Mexico City and we were off for a three-day adventure.
That geologist was Peter Megaw. I’ve met probably a thousand or so geos before and since that time. I am not sure if he is the best geologist in the world or not. I know David Lowell and Quinton Hennigh and I write my books staying with Keith Barron. All of them are in the top five spots of the people I have met. You can learn more from them in fifteen minutes of chatting than you can in two semesters at the Colorado School of Mines.
If I were a young man today wanting to make a career in resources, especially Mexican resources, I would scrape together ten or twenty thousand dollars and bribe Peter to drive me around Mexico for a week pointing and telling stories. He knew more about Mexico than the Mexicans back in the days when a Canadian company wouldn’t dream of dropping a dime in the country. And it’s paid off. He knows more about the country and the mineral projects in the country than anyone I have ever heard of.
And luckily for me, he is fluent in Swedish. We got to chat for days about all sorts of interesting things as we visited one project after another. Few people know this but I delivered small planes all over the world for fifteen years. The guy I worked for insisted we learn a few words of the local language before we took a plane there. So he assigned me a small plane destined for Stockholm and I picked up a language book to study.
I delivered the plane, removed all the ferry fuel tanks and fittings and as their secretary opened the door for me to stagger through carrying all my luggage as she was going to drive me to the train station, I started using my Swedish. “Tak” I said when she opened the door.
She gave me a bright ear-to-ear grin and said, “Oh, choo speek Sweedish.”
I smiled and told her that actually saying “tak” for thanks was the only Swedish I know. But I did get some points with her for trying.
Peter Megaw happens to be the world’s leading expert in two areas. One is crystals. He is one of the driving forces behind the Tucson Gem Show and is THE expert on crystals of all sorts including down to those you need a microscope to see. And he happens as well to be the top Carbonate Replacement Deposit guy in the world. (CRD) Peter Megaw just happens to be the Senior Consultant to Barksdale. And he believes they have the juicy part of the system at Sunnyside, not South32/Arizona Mining.
Jonathan Awde was well aware of the initial investment by South32 in Arizona Mining and he knew the company that held the other half of the pie, the western part of the project. He put together a company and financing to do an option with the owner, Regal US for a total of 67.5% of the project.
At first glance the deal looks expensive, it calls for a $3.5 million dollar payment to Regal and an additional $12 million in exploration. That’s on top of issuing 15 million shares to Regal.
This is a big project, potentially worth billions so $12 million in exploration is really chump change. No, I’m sorry, for something with this potential $12 million is far too small to be called chump change. And Barksdale will need to raise money and that involves printing a lot of new share certificates.
Since doing the deal with Regal in 2017 Barksdale has been doing the required ground exploration in preparation for drilling. In a recent press release they talked about doing over 1,900 chip samples over the Sunnyside project and the completion of a project wide detailed mapping. Assays from the chip samples revealed copper as high as 15.75%, 19.5 g/t Au and 440 g/t Ag along with lead and zinc.
One fly in the ointment is the fact the project is on Forest Service ground. Arizona was founded based on a rich endowment of copper, gold, and silver but the economy now rests on the uneasy shoulders of old people and military bases. Arizona needs to return to its base.
To be kind, the Forest Service is methodical in approving drill permits. That means they are very slow. Barksdale began the project of submitting a Plan of Operations in 2018 and hopes to be drilling in Q4 of 2019. I wish it were faster but life happens.
As I get old and senile I am forced to make things simple. When you are a young sprout, you have all the time in the world to make things complex because eventually you will realize simple is better. I don’t have that luxury. I need simple solutions and answers.
I love getting out in front of the locomotive dragging carloads of $100 bills. Sometimes I am many years ahead of the market. I was stuttering on and on about Novo Resources back in 2012 and they didn’t blast higher until 2017. But I saw what was coming and made my bets and reaped the rewards for my vision in time.
I was visiting Mag Silver with Peter Megaw when it was a tiny and cheap company fifteen years ago. He pointed and talked and I listened. And he was right. We visited another CRD deposit at Excellon called the LaPlatosa deposit when they were just blasting the portal. The company had rotten management back then and still went up 1000%. If Peter Megaw tells you that you have a valuable and rich CRD, you can write it down on a piece of paper and take it to any bank in the world and cash it. He is that good.
Peter is not the only person who sees what Barksdale has put together. Eric Sprott owns a fair size piece. Osisko Royalties just dropped in $3.5 million with no warrants and above market. Medalist Capital owns 6%. U.S. Global is in for 5%; management owns 5%, Jonathan Awde and his family own 12%. All in all, insiders and close investors hold almost 70% of the float. I liked it enough that I went into the open market and now own over 2%.
In life and mining time is always the enemy. I wish I could say they will be starting a 10,000 meter drill program next week but it ain’t gonna happen. Permits take time and investors will need patience. But with a $17 million market cap in CAD there is only one direction this company is going to go. I like being able to throw a rock onto a $2.1 billion dollar piece of ground right next door and to realize that Peter Megaw thinks Sunnyside is better.
I released another book last week called Basic Investing in Resource Stocks and it shot to #1 in commodities on Amazon. In it I list many of the mistakes I have made in investing. Number 1 is not taking a profit when I could. Barksdale is going to go up a lot. It is also going to go down a lot. Life runs in cycles and shares are the same. If you buy some shares at a good price and you can sell at a nice profit, do consider taking some money off the table.
I am thrilled to say that Barksdale is an advertiser. I love the idea of working with Jonathan and Peter again. This is one of the best stories I have heard in the last twenty years. It will take time but it has money in the bank, a world-class technical consultant and a district scale project with a twin next door where we know the size of the dowry.
I own shares, and I am biased. They have a great presentation, read it and do your own due diligence.
Barksdale Capital Corp.