A case for the sub $10 million CAD hybrid explorer in this emerging precious metals bull market
#CEOStockResearchComp
By: CEO.CA / X (Twitter) Username: @CDNResourceInvestor
Key Details:Company Name: Ridgeline Minerals
Type: Hybrid Explorer
Jurisdiction: Nevada, US
Trades on
TSX-V: RDG.V
OTCQB: RDGMF
Frankfurt: 0GC0
Valuation: $9.58 million CAD (@ 0.105)
Float: 91 million shares (non diluted) / 115 million shares (fully diluted)
In order to make a concise and compelling case for Ridgeline Minerals – I will use 3 P’s:
People, Projects and Potential. It is my belief that after reading this investment overview, you too… will want to take a hard look at adding Ridgeline to your investment starting roster. Ridgeline has projects across the metals spectrum covering Gold, the CRD suite of Silver, Lead, Zinc, & Copper.
People:
Management:
Ridgeline is headed up by Chad Peters (CEO and Director). Chad is no stranger to success and led US exploration previously at Premier (now I-80) where he spearheaded the multi million ounce high grade CSD gap discovery in Nevada. As head of US exploration, Chad was instrumental in finding over 10 million ounces of gold – right up until he started Ridgeline in 2018.
A small but mighty team, Chad and Ridgeline are lucky to have a VP, of Exploration who himself has a Nevada discovery to his name. Mike Harp led the discovery of the North Dark Star multi-million ounce discovery for Gold Standard Ventures. Mike has over a dozen years of experience exploring various deposit types ranging from CRDs to porphyry systems.
Duane Lo, who has over 20 years in financial management and public companies rounds out the group as CFO and director. So far I would say Ridgeline’s management’s team’s credentials speak for themselves.
One characteristic that industry financier and teacher Rick Rule likes to look for is management – who have done it before, in the same metal, same deposit type and in the same jurisdiction – Check, check, check and …. check!
Inside Ownership:
If management doesn’t have meaningful ownership – one can never be sure of their true motives. Fortunately this is not an issue for Ridgeline, where the management team owns just under 10% of the outstanding stock, with Chad personally owning 4.2% of RDG.
3 Notable Investors:
EMX Royalty – EMX vended a number of projects to Ridgeline at inception, and has a knack for finding great geological properties – just look at Timok (Europe’s Largest Copper discovery owned by Zijn) or Parks Salyer (Arizona Sonoran) – where EMX identified early potential.
Paul Stephens – Billionaire Asset Manager – who has a knack for backing strong teams like EMX and Robert Friedland ventures.
Rick Rule – One of the most successful and well known figures in mining finance over the last 40 years – Rick is a go-to resource for new and experienced investors alike – with his Rule Investment Media courses and the annual Rule Investment Conference (of which Ridgeline was a hand picked attendee in 2023!).
In the people category – I would be remiss not to speak about the company’s values and ethos a bit more. In speaking with Chad Peters a few times now - over calls and email – I can comfortably say that Chad is as committed and straight forward and pragmatic as they come. When speaking about 2024 plans – he was acutely aware of keeping the share structure as tight as possible – to ensure there remains as much torque to the upside as possible. In the projects section, I will discuss their partnered projects – but understand that while partnering projects was not on the initial RDG game plan – it has proven a wise choice – and is certainly something that has impressed many in the industry – including Matt Gordon over at Crux investor. I will share a link to a recent interview below.
Projects:
RDG is best categorized of as a hybrid explorer…as they have evolved to not quite a prospect generator, but also not a full on explorer. They are somewhere in the middle and to me… the best of both worlds. Ridgeline holds a mix of JV’s and 100% owned projects. They have 2 agreements with Nevada Gold Mines (Barrick / Newmont partnership) – with earn-ins totaling $40 million USD. I like these projects as NGM is earning –in (for both) to a potential 75% and covering all costs, while Ridgeline retains 25% fully carried to first gold pour. For those new to the sector, fully carried means that Ridgeline has to invest nothing more – moving forward. Their share of the mine build expenses will come out of their profits once the mine is built, if they still hold it at that point. NGM has spent $7.5 million USD on the two projects to date, and is slated to spend a record $5.2 million USD on them in 2024. Compare NGM’s spend for 2024 – to RDG’s current market cap – not bad!
Nevada Gold Mines JV agreements
Swift
Swift should be considered Ridgelines’ flagship JV project with NGM. The earn-in on this project totals $30 million USD. The majority of spending by NGM thus far has been at Swift. Swift is the only exploration project – described as having top tier potential, JV’d with a junior included in Barrick Golds recent quarterlys.
The first 4 holes drilled at Swift in 2021-2022 had favorable intercepts of:
51.1m @ 0.19 g/t Au drill hole SW 22-002
including 1.5m @ 1.5 g/t Au
48.8 m @ 0.45 g/t Au drill hole SW 22-003
including 3.4m @1.92 Au
Good indications for sure, but these things can take time – in terms of finding the source. These are expensive holes at three quarters to over a million dollars each – better to have NGM doing the heavy lifting as it can take 10 or 12 holes or more to hit the real pay dirt. This is one of the reasons I like Ridgeline, they know when it’s better that someone else take on the heavy lifting, financing and risk, but ensure to keep meaningful upside.
NGM remains excited about Swift and with >$5million USD slated for 2024, it will be an exciting year – even if Ridgeline sits on it’s hands with everything else (and I am not assuming they will).
Black Ridge (formerly Carlin East)
For brevity – and to leave some skin on the bone for the readers due diligence – I will move on to the companies 100% projects, but mention a few key things on it. Black Ridge is subject to a $10 million USD earn-in with NGM – and is continuing in 2024, having started in the Summer of 2023. It’s early days here – but another iron in the fire.
100% owned Projects
Selena – CRD Discovery
Selena is Ridglines’ flagship 100% owned discovery they are advancing, on their own.
If it wasn’t for the awful markets… I have a feeling RDG would have a valuation in the multiples of current levels. And they likely would have drilled 10,000 – 25,000 more metres into Selena by now. In 2023 they completed a 2000 meter program – which continued to prove up the thesis, but at the rate – it will take quite a while.
Results have been impressive – and currently they have a strikelength of 3.7 km which is open along strike and at depth. Discovery Holes have included notable intercepts including:
6.1 m @ 480 g/t Ag, 6.4% Zn, 12 % PB, 0.1 g/t AU – SE22-045
4.6m @ 421 g/t Ag 3.7% Zn, 4.4% Pb, 0.6 g/t AU – SE321-24
The drill results and strike hold up favorably to notable global deposits including:
I-80’s Hilltop CRD discovery, Hermosa – Taylor (South 32), and Cinco De Mayo (Mag Silver)
What’s more, Selena has 10 of 13 key indicators for CRD systems – as published by renowned geologist Peter McGaw (Mag Silver).
What have you done for me lately?
Recently Ridgeline put out some news that had a lukewarm reception in the market… but likely was far most interesting to those for whom it was intended– the major mining companies. You see, CRDs and copper porphyry’s are usually related geologically and so form in close proximity of one another. Ridgeline flew an extensive magnetic drone survey and low and behold a nice porphryr target has come together.
While RDG does not currently have the financial war chest to pursue this on their own, I am confident that they will not do anything to blow up their share structure or the upside potential of Selena. A raise to keep the lights on is likely, but they are keenly aware of the low valuation at the moment and the tsunami of dilution a big raise would cause. RDG however is open to new partners in other metals like copper – to start a conversation on a possible JV. This is an exciting prospect as it would diversify their partners and add another fully funded program to the portfolio. If past is prologue, it could also include another carried to production interest!
Big Blue
Big Blue is a copper porphyry target that could quickly become the companies main 100% funded focus, if Selena is JV’d. Big Blue covers the former producing Delker Mine and is adjacent to Reyna Silvers CRD discovery. Remember that CRD’s and copper porphryrs occur together often. High grade trench hits are outlined above and show the potential along with magnetic surveys. If Selena gets JV’d look for Big Blue to get advanced in 2024 – and fingers crossed for drilling!
Potential:
So why does it all matter? Why have you made it this far?
Potential returns of course!
Carried interests essentially equate to a royalty and are valued as such. These can fetch 2x NPV on the open market – as royalty companies will pay premiums due to the premiums they command.
Some notable successes who have held minority interests include:
Aber Resources w/ Rio Tinto > Mcap of $3 million went to $1 billion
Abitibi Royalties w/ Osisko (this one got me hooked on the sector : ) > Mcap of $3 million went to $355 million
AuEx Ventors w/ Fronteer > Mcap $5 million went to $257 million
Greatland Gold w/ Newmont > Mcap 58 million pounds went to 1.4 billion pounds
Mariana Resources w/ Lidya > Mcap of 12 million pounds went to 134 million pounds
And have you heard of Awale Resources? The current market darling? Well they have a JV that will see them with 20% and Newmont with 80% and even so are up 5 x on the year!
The Closer:
So lets recap,
Great team, that has relevant experience and success
Smart shareholders in EMX, Paul Stephens and Rick Rule
High insider ownership and focus on preventing dilution
2 JV’d assets w/ NGM – which both retain a 25% carried to first pour interest
Pipeline of 100% owned assets including Selena (potential for high impact JV), Big Blue and others.
Multiple “at bats” for a grand slam across the metals suite in an emerging precious metals bull market
If you enjoyed this investment case for Ridgeline Minerals please like and share – and I invite you follow me on CEO.ca and X and to explore the links below for further due diligence.
Company Website:
https://www.ridgelineminerals.com/
Company Youtube:
https://www.youtube.com/@ridgelineminerals2224
Crux Investor Interview from September 2023:
https://www.youtube.com/watch?v=qhC4GfFabn0
Check out the company’s latest MD&A and filings at Sedar +
You can also find the company profiled by:
@Goldfinger AKA Robert Sinn
Mining Stock Daily w/ Trevor Hall
Disclosure: I have a beneficial long position in the shares of one or more of the companies discussed in this article, either through stock ownership, options, or other derivatives. I wrote this article without external assistance, and it expresses my personal opinions. I was not compensated for this article, and I have no business relationship with any company whose stock is mentioned in this article.
