Oddly enough, the head of a Halifax exploration company doesn’t sound particularly pleased when he talks about his share price recently soaring to a 52-week high.
Mountain Lake Resources Inc. shares shot up from 61 cents to 84 on the TSX Venture Exchange on Wednesday after the company released positive results from its Leprechaun gold deposit in Newfoundland. The shares were trading around 73 cents by late Thursday afternoon.
"I don’t like to see these big one-day pops like that," Gary Woods, president and chief executive officer of Mountain Lake, said Thursday.
"I like to see a long steady climb and I think that’s what’s in the cards, going forward."
He’s still scratching his head over why the share price rose by about 37 per cent Wednesday.
"I don’t know what happened there," Woods said.
"It was up to 80 cents again (Thursday), actually. It just seems to have been a bit of people buying into the story, finally, I guess, and some people getting a little over-anxious. But I think even 84 cents might look like a very good price in a very short period of time here."
The bump came after the company reported initial metallurgical testing on core samples from Leprechaun suggest gold recoveries in excess of 90 per cent.
The Leprechaun deposit is part of the Valentine Lake gold project in central Newfoundland, which is operated by Marathon PGM Corp. of Toronto.
"We’ve got about $3 million in the kitty right now," Woods said. "We were down to about $800,000 earlier this year, and that was getting to be a bit of a concern. But with our good results, financing was fairly available."
Marathon has been paying for all the drilling up until now, he said.
"When Marathon finishes up this year, we’re going to have to start putting in 50 per cent of the money," Woods said.
"Right now they’re putting in 100 per cent until they end up getting $3 million spent in the ground. Once that’s done, were going to be 50-50 partners, and we’ll be on the hook for 50 per cent of the funding then."
Mining at Leprechaun is still likely four years away, Woods said.
Woods seemed ready to concede Thursday that Mountain Lake was not going to succeed in taking over New Island Resources Inc.
The companies had planned to combine their assets and liabilities, with New Island becoming a wholly owned subsidiary of Mountain Lake.
But a hostile takeover bid by Anaconda Mining Inc. now appears as if it might be successful.
"I don’t think the chances are good, obviously, that we’re going to end up with the company New Island, which would have been first prize," Woods said. "It seems very slim odds now."
The directors of New Island have urged shareholders to spurn a hostile takeover bid by Anaconda Mining.
"We started a friendly merger with New Island back in about March," Woods said.
"Then as soon as we made our intentions known, Anaconda got wind of this via New Island and they put in a hostile bid for them, which started this whole competition process."
Mountain Lake will get "a few hundred thousand dollars" in a break fee if it doesn’t succeed in taking over New Island, Woods said.
He still hasn’t given up the idea of getting his hands on New Island’s Glover Island property, which lies roughly 70 kilometres from Mountain Lake’s Valentine Lake gold project. It’s a property he’s touted as a significant gold prospect.
( clambie@herald.ca)