During the last year, the prices of precious metals (gold and silver) have been trending to the upside and are trading at levels not seen in years. As governments across the globe continue to print money to limit the impact that COVID-19 will have on the global economy, precious metals should continue to appreciate due to the expected inflation that happens as a result of printing trillions of dollars.
The appreciation of gold and silver prices has proven to be a major catalyst for companies that are levered to the precious metals industry. The mining market is a vertical that we have become very bullish on and have been working to identify businesses that are expected to be beneficiaries of the rise in precious metal prices.
Trillium Gold Mines (TSX.V:TGM) (OTC:TGLDF) is an opportunity that is highly levered to the precious metals market and has an attractive operating structure. The business owns several mining deposits that are located near areas where there have been a number of gold deposits and discoveries and is led by a management team that has a proven track record of success in the mining sector.
We believe that Trillium is an opportunity that has been flying under the radar and want to highlight the properties that are owned (fully or partly) by the business:
- Newman Todd (83.5% owned) is the flagship property of Trillium and cover 198 hectares. The next steps for the property include the following: complete a ground magnetic survey to better understand structural controls and continuation of mineralized features; design and execute a drill program; further step out drill testing of targets; conduct advanced studies; and more
- Rivard Property (100% owned) is the southwest extension of the Newman Todd Zone property that is characterized by extensive silica carbonate fuchsite altered metavolcanics and metasedimentary rocks that are cut by high grade veins
- Gold Centre (80% owned) is adjacent to and on strike with Evolution Mining’s Campbell-Red Lake Mine which has produced 23.8 M ounces of gold at an average grade of greater than ½ ounce gold per ton.
- The Leo Property (100% owned) is a greenfield exploration project with favorable rock types and structures for hosting gold mineralization. The next steps are applying artificial intelligence technology to highlight exploration targeting through data integration and pattern recognition and field work.
- Shining Tree (100% owned) is located in the Matachewan-Kirkland Lake mining camp on highly prolific Cadillac-Larder Break. On the property that is owned by Trillium, teams have found multiple gold occurrences and have identified several highly prospective targets.
- Western Bear and Sydney Lake (100% owned) is located on the Sydney Lake Fault Zone and has the same geographical trend as other successful extension properties. The next steps for Trillium is reconnaissance mapping and sampling as well as ground or drone mapping
An Execution Story in the Making
A few weeks ago, Trillium reported a major development and identified multiple continuous gold bearing quartz veins on its 100% owned Rivard property in Red Lake, Ontario. In early August, the company acquired the property, and this is a transaction that is expected to quickly prove to be accretive.
The Rivard property is adjacent to Trillium’s flagship Newman Todd Property and represents a significant opportunity as the company continues to delineate gold mineralization with the potential of adding to the current strike length of Newman Todd. We believe that the results of the drill program of Rivard’s high grade gold bearing veins could prove to be a substantial catalyst for growth and is a development that we continue to follow.
The management team of Trillium was excited to report that the Rivard property has similar geological characteristics to the model of the legendary Campbell and Red Lake Gold Mines. If the project can prove to be as successful as these gold mines, then Trillium will have substantial upside potential.
The development comes a week after Trillium reported to have hired Windfall Geotek (WIN.V: TSX Venture) to deploy their proprietary CARDS artificial intelligence (AI) system to identify high-grade gold targets on its Leo Property. The CARDS analysis identifies areas of high exploration potential by using several best-in-class techniques. The platform uses algorithms to analyze each layer of information for every drill hole/rock/soil sample and data site to create a unique signature for the mineralization that the company is looking for (gold, copper, etc.)
Windfall is a leader in technology-based exploration targeting and has developed the CARDS analysis as well as proprietary data mining techniques. The platform combines all available public and in-house data sets including geologic, geophysical, geochemical, drill hole and surface data. The algorithms are designed to highlight areas of interest that have the potential to be geologically similar to gold deposits and mineralization in the Red Lake region.
Led by a Management Team with a Proven Track Record
Russell Starr is the President and CEO of Trillium and brings a lot of valuable expertise to the operation. For more than 20 years, he gained significant experience in corporate finance, mergers and acquisitions (M&A), as well and in investment and business development experience. Starr held senior positions and advisory roles with financial institutions including RBC Capital Markets, Scotia Capital, Orion Securities, Blackmont, Lawrence and Company, where he helped raise over a billion dollars for junior and mid-tier companies.
Previously, Starr also held executive positions at Cayden Resources and Auryn resources. As Senior VP of Cayden Resources, he played a key role in the marketing, financing, development and ultimate sale of Cayden for CAD$205 million to Agnico Eagle. We are impressed with the success that he has had in the sector and the experience that he brings to Trillium.
Another important member of the Trillium team is Bob Schafer, P.GEO, MSc., Ph.D., who serves as the chairman of the board. He is a Registered Professional Geologist with more than 35 years of international experience exploring for mineral deposits and identifying, evaluating and structuring business transactions. Previously, Schafer served as an executive with Hunter Dickinson, Kinross Gold and BHP Minerals. He has worked in more than 80 countries and we are favorable on the relationships and expertise that he adds to the team.
Another key player on the team is Bill Paterson who is Vice President of Exploration and we are favorable on the experience that he adds to the organization. Bill Paterson is a professional geologist and has extensive experience in both surface and underground exploration in Red Lake, including managing the ultra-deep surface drilling program at the Cochenour Mine that progressed to underground development, bulk sampling and starter mine status. Bill started in Red Lake as the Senior Regional Geologist for Goldcorp and has extensive knowledge of the Red Lake and Confederation Greenstone Belts. Bill’s expertise will allow Trillium’s exploration team to quickly and efficiently progress as exploration activities accelerate and we will monitor how he helps drive the business forward.
A Unique Growth Story with Attractive Economics
We are favorable on the risk-reward profile that is associated with the properties that are owned by Trillium as well as the direction that the management team is bringing the business. When we analyze any company, the management team is the first part of the story to be scrutinized. Trillium excels in this area and we believe that it is led by a management team with strong and proven leadership, a tight share structure, and high quality gold assets.
Trillium’s flagship project, Newman Todd, lies within the highly prospective Red Lake Mining district with historic grades as high as 681 grams per ton gold intercepted in drill core. The company recently made several key additions to the management team that are expected to play an important role in its success on the flagship property and we will monitor how the story advances from here. In 2013 the Newman Todd project had a valuation of 200 mln. TGM now owns 83.5% of Newman Todd which would translate into a 2013 valuation of TGM at 167 mln, with the current market cap being 45 mln.
At current levels, we believe that Trillium has a compelling valuation, visible catalyst for growth, and a management team with a proven track record. We are of the opinion that Trillium possesses the traits that are needed to be successful in mining and exploration and is an opportunity that we will be closely following.
Pursuant to an agreement between StoneBridge Partners LLC and Trillium Gold Mines (TGM) we have been hired for a period of 90 days beginning September 21st, 2020 and ending March 21st, 2020 to publicly disseminate information about (TGM) including on the Website and other media including Facebook and Twitter. We are being paid $6,000 per month (TGM) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero shares of (TGM), which we purchased in the open market. We plan to sell the “ZERO” shares of (TGM) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (TGM) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.