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The other day, with most metals equities neutralized, I said to our Ticker Trax audience: what’s working?
As it turns out, mostly themes I rarely key into: silver in Slovakia for example. That’s working. I was talking today to a Vancouver broker who flashed Global Minerals (TSX: V.CTG, Stock Forum) at me 13 months ago.
David Kearnes at Canaccord scores again. I remember learning about the Vancouver broker’s 14-cent “deal” more than a year ago.
Mr. Kearnes, a39, pined me in early 2010 on CTG, saying that Global Minerals was something he “liked” for clients. At the time, he said he liked the company’s small number of shares, 9.7 million outstanding. Also the fact that Global Minerals was a near-term silver producer … and that pre-credit crisis, Investec had approved CTG for debt financing.
Canaccord Wealth Management policy frowns on brokers and bankers who are quoted in the press. Mr. Kearnes arranged all of the approximately $1 million financing at 14-cent units for Global Minerals. The shares 14 or 15 months later are above $1 Canadian. (Chart ishere.)
I met David at some gold conference or other years ago, when times were not as lush as they are now for resource investors. I don’t have an account with Mr. Kearnes. I don’t have any accounts in Canada. (I rarely do these private placements, as they are rarely available to our Ticker Trax audience of affluent but sometimes un-connected subscribers.)
I didn’t “do” CTG. I know lots of folks who did. Global Minerals’ Strieborná silver-copper project in Slovakia is said to be the only European Union silver mine that could be producing within 18 months or so. It was discovered in 1981.
Mr. Kearnes, an avid fisherman with whom I once shared a boat way up north, could cast himself into a steady stream of Canada natural resources brokers who made their clients a load of dough, then switched into asset managing, investment banking or rolling more dice as profitable brokers.
Frank Holmes of U.S. Global, the Texas investment manager, got his start as a Toronto broker. Nash Jiwa at Haywood Securities in Vancouver has been distributing potent resource stocks, some of them allied with financier Lukas Lundin, for well more than a decade. West Vancouver’s Frank Giustra, a billionaire merchant banker and philanthropist, got his start as a Merrill Lynch stockbroker. There are many examples.
David Kearnes is said to be keen on a few themes in the resources equity market these days. One is short-form offerings. See: No Bull For Small Fry.
Small companies coming out of the equity gate use short-forms in Canada to boost their shareholder count. It is called short-form because the prospectus is much shorter than those required for other public offerings of equity in Canada. Batero Gold Corp. (TSX: V.BAT, Stock Forum), a Colombia prospector, used it to excellent advantage, boosting its shareholder count by the hundreds and giving ordinary investors (and institutions) spectacular short-term gains: 50 cents to $5-plus Canadian.
Blue Cove Capital Corp. (TSX: V.BCV.H, Stock Forum) is a recent short form that Mr. Kearnes is working. Blue Cove will get 400 shareholders investing $5,000 each from the short form part of its financing. Blue Cove essentially is a cash-pool corporation raising about $10 million to purchase the Santa Elena Copper & Gold Project in Colombia.
I’ve heard David tell folks “there isn’t an IR guy or gal on the planet who can get you 400 new shareholders in one blow.”
Short forms usually let investors trade straight away with their newfound stock. No four-month holds. (A bit like Australia’s placements. Or a traditional North America IPO.) Companies often put a lid on the amount that folks can invest, say $5,000 or $10,000 a pop. Short-form investors need not be “accredited” as knowledgeable and having six-figure incomes and $1 million worth of assets under their belts.
David Kearnes went long on short-forms years ago. So far, in a rising commodities market, the companies, the investors and the brokers all are making money on them.
British Guyana is an area of interest for Mr. Kearnes. He always has been a fan of Sandspring Resources’ Toroparu gold and copper project there. Sandspring’s (TSX: V.SSP, Stock Forum) early investors have seen their paper rise eightfold.
The one DK is looking at now is GMV Minerals (TSX: V.GMV, Stock Forum), whose CEO, Ian Klassen, once a government official in Canada, tells me its prime prospect is about a four-hour drive from Toroparu. I have seen SSP’s Toroparu, founded by John Adams of Colorado.
GMV sold 15 million units at 45 cents in October 2010. Very little of its raises have gone to small or “retail” shareholders, I understand. The shares are at 60 cents today.
After chatting with Mr. Klassen, I think I understand DK’s interest in this now-$40 million company. 1. GMV has about 1,000 square miles of property in the thick of British Guyana. 2. Its properties touch both Toroparu on one side and Guyana Goldfields (TSX: T.GUY, Stock Forum) land on the other. 3. A 10,000-meter diamond drill program starts in another week or so.
GMV’s descriptions of drilling targets, drill deliveries, augur holes, truck and methodologies are about as detailed as ever I have read. In part, that’s because British Guyana is a government-friendly place to mine gold and copper but a challenge when it comes to theft and hanky-panky. The GMV release details that drill core “will be stored in locked 20-foot containers. The samples will then be sent out in locked containers using tamper proof sealing and accompanied by GMV staff to Acme Labs in Georgetown, Guyana.”
The stakes rise when we are talking $1,500 gold. I hear security companies are thriving these days. (I don’t own any of the stocks in this report.)
Coming: Join Stockhouse later this month as we size up how record-high gold prices and new technologies are re-invigorating fabled North American camps in Nevada, Yukon, Red Lake and more. Plus: the companies that are leading the charge to find new discoveries.
SKED: I plan to attend a Boca Raton, Florida, metals conference in late April. It is the Casey Research Conference. I am told the three-day confab already is sold out.
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