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New Found Gold IPO's: Leadership is Everything

When first looking at and analyzing any company, the most important things worth looking are the people. This approach tends to be threefold; 

  • Having the right management team, BOD, and advisors tends to maximize shareholder value and has a track record of success. The best people in the industry don't focus their time joining or remaining with a company with average to sub-par assets, and in the case of exploration; the best people believe they will discover a quality deposit. 
  • Strong Ownership (Backing). In the case of New Found Gold, ownership breaks down as follows (Pre-IPO):
    • 33% interest held by Palisade Gold
    • 11% interest held by Novo Resources
    • 18% interest held by Eric Sprott
    • 7% interest held by Rob McEwen
    • 4% interest held by management and insiders
    • 8% institutional ownership
    • 19% owned by others
  • Insider Ownership: It is always important for there to be moderate to significant insider ownership for a junior exploration company. 

Looking at management: 

Craig Roberts (CEO): He has significant experience as a mining engineer, preparing feasibility studies for projects worldwide. He also has experience on the banking side of things, due diligence roles for over 200 institutional financings.  

Denis Laviolette (Founder & President): He's worked as a production and exploration geologist in Timmins, Kirkland Lake, Red Lake, Noway, and Ghana. He then worked as a mining analyst with Pinetree Capital. He is also the chairman of Goldspot Discoveries and director for Xtra-Gold Resources Corp. 

Greg Matheson (COO): 12-years of managing grass roots exploration to advanced stage exploration projects. He was exploration manager of Northern Gold Mining, senior project manager for Oban Mining and Osisko Minng. He's responsible for the discovery and delineation of the more than 2m oz. at the Garrison gold project in Ontario from early stage exploration through to trial production mining. 

Ken Rattee (VP Exploration): Has over three and half decades of experience in base and precious metal exploration in various management roles; Former chief geologist for Kirkland Lake Gold's Macassa mine. He also has experience developing, supervising, and implementing exploration campaigns for Lac Minerals, Kirkland Lake Minerals, Kinross Gold, and Barrick Gold. The combination of Ken and Quinton Hennigh should lead to a high probability of success, if the gold is there.  

Collin Kettell (Founder & Chairman): Collin is one of the few young, up and coming stars in the mining industry, at least in my view. He is the founder and chairman of Palisades Goldcorp, a relatively new resource focused merchant bank, with $175m of AUM and growing in this excellent environment. He is part of a family with deep routes to the industry, which includes the co-founder of AuEx Ventures, which went on to discover the Long Canyon deposit, which was then acquired by Newmont for $2.3B. He is also the co-founder and CEO of Victory Metals and co-founder of Goldspot Discoveries. 

Of note is Quinton Hennigh on the board, who is an exceptional geologist and tends to only involve himself in best in class projects. I.e. Novo, Lion One, Irving etc. There are others worth mentioning who are either management, on the BOD, or and advisor to the company.

While this isn't the most impressive combination of management and Board, it is of quality. The interests held by other mining companies and savvy investors shows confidence (they have) in the leadership at the company. 

The company has two key projects: The Queensway Project and the Lucky Strike Project. At Queensway, New Found Gold completed the largest (ever) consolidation of property with the Central Newfoundland Gold belt. This allows for district scale exploration with excellent strike length potential.

Lucky Strike is located in Kirkland Lake Ontario, a very prospective area; today and historically speaking.  It is worth noting the Kirkland Lake camp has produced 40m oz. Au over the last century. Today Kirkland Lake Gold is expanding the Macassa mine such that it'll be producing 400k oz. Au per annum. 

The IPO consisted of an aggregate 21m common shares issued at C$1.30/share for gross proceeds of C$27.3m The common shares of the company began trading on the TSX Venture today, August 11th, under the symbol $NFG. 

This piece wasn't meant to make the case for or against the company, rather provide enough information on the leadership to encourage you (or not) to look into this company closer. 

Disclosure: I own common stock of New Found Gold ($NFG.V). 

 

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