Sunday, January 31, 2016

Sprott Breaks Through to Gold Trust Holders

John Wilson, CEO of Sprott Asset Management, joins Bloomberg TV Canada’s Pamela Ritchie to break down the asset giant’s deal to purchase Central Gold Trust. (Source: Bloomberg)

Friday, January 15, 2016

Precious Metals and Black Gold

Not to put a number on it, but I believe for the last 15 years the demand for gold has been well above supply and central banks have superficially provided the extra supply. The physical gold market may overwhelm the paper market, if or when it does you can imagine a recession or depression or even a currency crisis which is happening throughout the world.

For oil, when you ask questions about markets that are dominated by paper and the influence of central planners it is difficult to give an answer that makes much sense. Ultimately, oil should be going back up; very few entities can produce at $30/barrel. Sooner or later we will see shutdowns, and once that happens it will be highly unlikely for a restart until prices are at a profitable amount.

Saturday, January 9, 2016

Barkerville drills up out of a hole

Just one year ago, the hole that Barkerville Gold Mines Ltd. (TSX-V:BGM) had dug in the Cariboo mining district was starting to look less like a mine and more like a grave.
The company was deep in debt, its shares were in a downward spiral and its credibility was in tatters, following a year long cease-trade order imposed by the BC Securities Commission in 2013 over a dubious resource estimate made by company founder and former CEO Frank Callaghan.

What a difference a year can make.

The company is now debt-free, has raised $39 million in new investment, has been running three mill operations around the clock, and plans to restart its Bonanza Ledge mine in 2016.

“We were mired in debt and we had a $19 million debt obligation,” said Barkerville’s new CEO, Tom Obradovich, who was brought on board in January 2015 following Callaghan’s resignation. “We subsequently cleaned up the mining that was being done from a losing venture to a cash-positive venture.”

Thanks to a lifeline, in the form of a $15 million loan, thrown by legendary Canadian investor and gold bug Eric Sprott, the company was able to stay afloat long enough to get its finances in order.

In January, Obradovich, a key player in Aurelian Resources Inc., which was acquired by Kinross Gold Corp. (TSX:K), was brought on board, and other mining executives with proven track records are also being brought in.

One of the first things Obradovich did was shut down Barkerville’s small underground mining operation at Bonanza Ledge and sell off all the gold that had been mined there – about $22 million worth.

The company converted the Sprott debt to equity, giving Sprott a 41% stake. In June, the company was able to attract another key investor – Osisko Gold Royalties Ltd. (TSX:OR).

Osisko did a $6.9 million financing in June for a 7% stake, followed more recently by agreement for another $10.2 million to bring its position to 19.9%. Osisko also recently signed a $25 million royalty agreement for 1.5% of Barkerville’s future gold production. The company also recently announced another $3.5 million in a private placement with Sprott.

Monday, January 4, 2016

Here's How To Ask Sprott Global For Money

The document came about as a consequence of me watching many of our clients make mistakes investing. I watched our clients interviewing issuers (companies) at investment conferences and saw that the process they were going through in terms of accessing information to make investment decisions was faulty. What I tried to do was put together a guide that somebody could understand in an hour or less that would simplify and codify the process.

An issuer or an issuer’s agent who reads that same guide will be able to understand what is important to Sprott in 20 minutes or less. They will also be able to understand how to answer our questions efficiently.

If they don’t have the ability to answer those questions efficiently, they’ll know not to begin the process because it would be a waste of their time and ours.