With a gun held to his head
I have watched some incredible, no lose, projects get destroyed over the last 13 years due to incompetence and mismanagement. As far as I’m concerned now, when a company starts drilling “The Next Great Project” someone should hold a gun to the head of the president.
Canaco run by Andy Smith blew $100 million drilling in Tanzania only to come up with less than 1 million ounces. Six months later they were selling for $.60 on the dollar.
Concentric Energy managed to raise about $21 million from the most qualified high net worth investors in Canada only to blow about $18 million on administration. And they raised the money as a private company. I sat and watched Ralph Kettell run around the industry for years telling everyone how stupid they were and how smart he was. Well, he took a company that he used to brag was worth $1 billion and ran it into bankruptcy because he wouldn’t listen to anyone else. In ten years he managed one 2500-meter drill program. But who cares? He wasn’t mining uranium, he was mining investors.
Henk van Alphen of Cardero managed to sell an iron project in Southern Peru for $200 million to the Chinese in early 2009. He let them play him for a fool and ended up taking $100 million for the project. Then he blew right through the $100 million and is now sitting on a $.07 stock in a company with a negative net worth. He literally has nothing at all to show for the $100 million dollar sale except a lot of options in the company he got for doing such a wonderful job of management. And the $100 million he blew away is on top of all the tens of millions he managed to raise over the last 13 years.
It’s time for management of junior mining companies to put up or shut up. I’m pleased to see so many mining companies switch horses and jump into the marijuana growing business. They should stick to something they know something about.
In May of this year I wrote about an interesting company that controls what was a $108 million dollar gold project in Wyoming. The company is inappropriately named NV Gold. They have no gold in Nevada but it looks like they may have a bunch in Wyoming.
Company president John Watson is a geologist. Quinton Hennigh is on the board of directors as is Odie Christensen. These guys are about as serous as you can get in the junior exploration business.
John Watson completed a drill program in mid-August of 15 holes. He is drilling two new targets untested by either Evolving Gold or Agnico Eagle. While the entire project has seen over 85,000 meters of drilling to date in a 58 square kilometer land package, Watson understands that literally he has a gun held to his head. He needs to come up with something good. And that’s fairly absurd considering that prior drilling showed intercepts of 405 meters at 1.31-g/t gold and 67 meters of 10.8 g/t.
This market is bored silly and it’s either put up or shut up time. Discovering a pair of new zones of mineralization would add a lot to John’s credibility. Discovering even one would be a very big deal.
All of the samples from the 15-hole program are at the assay labs now. I would expect results to be released around mid-September. With just over an $12.5 million market cap today, before the results come out, this is an interesting speculation. But watch carefully for the results to come out, the stock is extremely tightly held and could explode.
There are other factors besides the project and management that I really like. John Watson is being paid $100,000 a year for his service as President and CEO. Except he isn’t taking a cent of it, the company owes him. He is putting every dime into productive work in the ground. How often do you hear of that? And he personally owns about 21 million of the shares. I highly suspect the needs of shareholders are very much on his mind. He has the opportunity to make a great fortune for his shareholders, including himself. I like that a lot.
NV Gold is an advertiser. I have participated in three private placements in the last six months and bought shares in the open market. I could not possibly be any more biased than I am. If you want to roll the dice, you can buy shares prior to the results being released. If you want to pick up $100 bills, wait and see if the results show them all over the sidewalk, just waiting to be picked up by anyone who understands assays.
As always, do your own due diligence. Even I lose money on a lot more companies than I make money on. At best, I hope to hit a home run now and again.
NV Gold Corporation