RE:RE:BIV-BGMhttps://www.biv.com/article/2015/7/lucky-strike-eludes-colourful-bc-promoter/
By Nelson Bennett
July 25, 2015, noon
..."The seed of Barkerville Gold was Dawson Range Mines, which Callaghan had invested in and later become a director of in 1991. Its Wayside mine project was too small to attract any investment, so management decided to fold the company.
They werent going to pay the sustaining fees, Callaghan said. I actually bought it on Visa. I actually paid the sustaining fees on Visa and took control of the company.
With money left to him when his father died, Callaghan bought drilling equipment and used it on the properties he optioned over the years.
The Barkerville district is renowned for its mineral riches and was the heart of the Cariboo gold rush. But all of the deposits Callaghan identified as having potential in the region were too small to raise much interest.
So he set about assembling a number of claims and tenures into one large 60-kilometre-long belt containing three main zones: Bonanza Ledge, Cow Mountain and Island Mountain.
One thing I really give Frank a lot of credit for and I dont think people do enough is the way he consolidated that land district, Termuende said. Not many people or many companies would have been able to put that package together.
When Callaghan drilled into Bonanza Ledge, he found a type of mineralization that had not been identified before, which caused a stir. In 2004, Sprott took a 9.9% share in Wayside, and an equal amount in Golden Cariboo and Lions Gate Energy.
But on two occasions, Wayside/Barkerville has been the subject of cease-trade orders, after Callaghan published resource estimates that were called into question by the BC Securities Commission in 2000 and again in 2012.
The second trade halt lasted 14 months, while the company went back to the drawing board to come up with a new technical report, which ended with a resource estimate that was a fraction of the 10.6 million ounces of gold that Callaghan had projected in 2012.
When Barkerville shares began trading again, it was well into a bear market, and shares plummeted. Sprott rescued the company with a $15 million loan, which he recently converted to a 41% equity position.
Despite Barkervilles troubles, Callaghan had managed to put Bonanza Ledge into production and was on hand for the pouring of the first gold bar on July 24, 2014.
However, five days later, Callaghan announced his resignation as CEO. Earlier this year he resigned as a director, and the new management shut the Bonanza Ledge mine down. The company is conducting a new drilling program to get a better idea of how to mine Bonanza Ledge.
Callaghan said he and Sprott had agreed that, once Barkerville had poured first gold, he would step aside and bring in an experienced mining CEO.
Callaghan is now focusing on reviving some of his mothballed projects, including Lions Gate Energy. On July 24, the company announced a name change and six-to-one share consolidation.
The newly renamed company, Starr Peak Exploration Ltd. (TSX-V:STE), is focused on the El Toro copper-molybdenum-silver property in the Smithers, B.C., region.
Callaghan did not stand for re-election to the board of directors but still owns 19.9% of the company.
nbennett@biv.com
@nbennett_biv