https://mcusercontent.com/af629dcbbf88a5932a7e484e3/files/86b9a78d-53c5-4e84-bb97-a543f31abca1/April_12th_2021_Tudor_Gold_American_Creek_and_Teuton_Kelvin.pdf




When I did the initial write up the dark blue (Tudor Gold), looked more like a “ransom strip” between Seabridge projects (pink), but now they’ve got such a huge resource, it looks like it could stack up very nicely as a standalone project. I don’t want to get involved in valuation, but it’s worth bearing in mind that Seabridge currently has a market value of CAD$1.63 bn and Tudor Gold is $527.1m Wearing my corporate finance hat, I’m starting to lick my lips.

This is why. Initially Seabridge probably viewed Tudor Gold as a bit of a nuisance. Seabridge very much being the older brother/sister. But given Tudor Gold has now got such a large resource, they could well be attracting the interest of a major (one of the largest gold companies in the World). If I was Seabridge, I would not want to have a major as a neighbour.


 Where are you going to with this Simon? Although I think the resource is already large enough to attract the attention of a major, if this year’s drilling program delivers some good results, I would have thought that someone would want to buy Tudor Gold sooner rather than later. Which is why I also want to own American Creek and Teuton – because they both own 20% of Treaty Creek.

If I was a bidder, I would rather acquire 100% of Treaty Creek, so it may make sense for Tudor Gold to acquire American Creek and Teuton.

The main issue for a deal is probably the “free ride” that both Teuton and American Creek receive on the exploration costs….which have to be borne by Tudor Gold. So I would not expect any deal to be done whilst there are any significant exploration costs to paid….like there are at the moment. It’s pure speculation, but it would be nice to hold some American Creek and Teuton shares – because they both have a 20% stake in Treaty Creek, I think these could become worth having. You’ve already seen what’s happened to Tudor Gold’s shares…..hopefully you have a few.

I think it’s also worth mentioning that Walter Storm, the driving force behind Tudor Gold, is in his mid-80’s, so I would have thought he is looking to monetise the project rather than take it into production.
 
 
What are the catalysts?
I think there are really three catalysts that we should keep an eye on.

 1) The gold price - 19.5m ounces is a huge resource. If the gold price approaches
     US$2000 per ounce again, it may make this a particularly attractive acquisition.

 2) Good drill results from the 2021 campaign – we should know about these by
     late summer, if they suggest that the resource could be a lot larger, then a
     major may want to get involved sooner rather than later.

 3) Any merger’s or acquisitions involving Tudor Gold, American Creek and
     Teuton. It’s worth pointing out that Eric Sprott owns 17.9% of Tudor Gold
      about 19.3% of Teuton and 9.5% of American Creek. I think it’s fair to say that
      both Teuton and American Creek will probably want to wait for the drill results
      at Perfect Storm and Goldstorm before making any decisions about what their
      share in Treaty Creek might be worth.