Refresher:
1) Collin Kettell is the newly-appointed CEO of NFG. He and the BOD (of which Sprott is not a member) decide when they do equity raises and/or with whom they do private placements.
2) Collin Kettell is also the CEO of Palisades, a Resource Merchant Bank which combined, currently control over 30% of the company. To this day, the homepage of their website states that larger investments like they have in NFG:
".......are selected on the basis that they will be of interest to larger companies, providing the potential to realize change of control premiums in addition to value appreciation."
3) When KL acquired Newmarket Gold in 2016, Newmarket already had an underground operating mine at Fosterville, That's why KL was able to produce high margin ounces so quickly after the acquistion closed. Coversely (as we all know), NFG is still in the exploration stage at Queensway.
So, where NFG goes from here?
If you want to get an idea as to how long the process could drag out before any completed mine at Queensway will start pouring gold, take a look at what Marathon Gold has went through to date re. their Valentine Gold Project, also located in the province of Newfoundland:
- April 2020 Pre-Feasibility Study
- Sept 2020 Environmental Impact Statement
- March 2021 Feasibility Study
- April 2021 43-101 Technical Report
- May 2021 Agreement with Qalipu Mi’kmaq First Nation
- May 2021 Agreement with Miawpukek First Nation
- July 2021 Project Financing Facility announced
- Oct 2021 Minister of Environment and Climate Change for Newfoundland and Labrador has notified the Company that the Environmental Assessment Committee for the Valentine Gold Project (the “Project”) has completed its review of the Environmental Impact Study (“EIS”) for the Valentine Gold Project (the “Project”), and that additional information is being requested. - Jan 2022 Files an amendment to the Environmental Impact Statement for the Valentine Gold Project. The amended-EIS has been filed with the Environmental Assessment Division of the NL Department of Environment and Climate Change pursuant to the Project’s ongoing Environmental Assessment, and is the second such amendment filed.
- March 2022 Impact Assessment Agency of Canada completed its technical review of the Environment Impact Statement, an important milestone in the federal Environmental Assessment (“EA”) process as the Projectadvances towards EA Release. On March 16, Marathon received formal notification that IAAC has received the necessary information to complete the technical review and prepare the draft EA Report and potential conditions of release. IAAC will issue the draft EA Report for the Project for public comment for 30 days. On the completion of this period, the Minister of Environment and Climate Change Canada will be in a position to make a determination on the acceptability of the Project for development.
A parallel provincial EA for the Project is ongoing. Under this provincial process, a 70-day period of public and technical review of the EIS is nearing completion. At that time, Marathon expects to be notified by the Newfoundland and Labrador Minister of Environment and Climate Change, as to whether the provincial EIS review has also been completed. Successful release from both federal and provincial EA is a pre-condition for the completion of mine permitting and the commencement of mine construction. - April 2022 Providing guidance on remaining regulatory approvals and permitting, the Project’s execution strategy and schedule, mineral resources and mine planning, capital and operating cost outlook, and project financing. "Subject to this regulatory schedule, site early works to commence in the third quarter, supporting full site mobilization by the end of the year and first gold pour in late 2024."
Interestingly, the "Project" section of Marathon's website still states the following:
"Marathon currently contemplates completion of the project’s EA process in the second half of 2021, breaking ground for construction in early 2022, and a production start in the second half of 2023."
So, it appears they are already over a year behind their original schedule in terms of their gold production target date, and that's provided no further delays occur re. their remaining regulatory approvals and permitting, mine building, etc., which is unlikely in my view as further unforseen snags will probably occur and, combined with the current (and future?) inflationary environment, I'd be very surprised if the project came in on budget.
Now, i realize many of you feel it's worth it to spend the time and money it will take to build a mine at Queensway, and that's fine. Just wanted to point out the above. Palisades/Kettell with their 30%+ stake may decide to do one of the following (among other options / strategies):
1) View NFG as a "special case", break their stated objective of owning "control positions" in companies so they can sell to a larger company at a premium, hang on to their 30%+ position and see NFG build a mine through to completion and operation.
2) Decide they will stick with their stated intentions and sell their shares to Sprott at what they consider an acceptable premium to whatever the average share price is at the time so Sprott can possibly take the company private. If this becomes the case, would everyone in here be OK with parting with their shares at whatever price Sprott and Palisades agreed upon? As an example, if the shares eventually rise in price to a 30 day or 60 day average of say, $16 and Palisades/Kettell are willing to sell at a 50% premium to that price, would everyone in here be content with receving $24 per NFG share you own? Once Sprott has the power to take NFG private at an agreed-upon price, that's the price retail shareholders will get for their shares, and there will be no acquirer's shares to invest in if you wanted to continue to own interest in the future of Queensway.
Bottom line, much like a suspense novel, we don't know how things will transpire. Very interesting to watch from the sidelines though.