by James Kwantes
Published first at Patreon.com/jameskwantes
Switch trades – dumping "garbage stocks" and adding higher-quality equities that are also in the bargain bin – is an effective strategy in bear markets. Paying attention to management switches at market bottoms can also be worthwhile. Remember, mining is a people business.
Let’s rewind: On August 12, 2019, Paul Harbridge stepped in as CEO of British Columbia gold play GT Gold Corp (GTT-V). The stock was trading at about 80 cents after having peaked at $2.60 in 2017 (the Saddle South discovery) and $1.80 in 2018. Harbridge’s prior post was senior vice-president of exploration at Goldcorp from August 2016 to April 2019, after decades of on-the-ground experience with Rio Tinto, Anglo American and Randgold. His Goldcorp exit came on the heels of Newmont’s purchase of the company.
Harbridge’s nearly three-year vantage point as Goldcorp’s point man for exploration gave him a high-level view of gold assets in the Americas – Goldcorp’s focus. Less than two years after Harbridge took the helm at GT Gold, Newmont bought the company for $3.25 a share, or $456 million (after having financed it earlier).
Back to the present: on Wednesday morning, Jason Attew took over as CEO of Liberty Gold (LGD-T), replacing Cal Everett. Everett, a veteran operator who will remain a Liberty director, became the CEO in 2016. He divested Halilaga in Turkey, built ounces and advanced Liberty’s projects through economic studies – mostly to the backdrop of a punishing bear market.
Liberty, formerly Pilot Gold, is part of Mark O’Dea’s Oxygen Group. The company has about 3.3 million ounces (all categories) of heap-leachable oxide gold at its Black Pine and Goldstrike projects in Idaho and Utah, respectively. Mr. Market doesn’t care; the share price has not been spared. Newmont owns 4.3% of the stock.
The new CEO started off on the right foot, putting $300,000 into Liberty to purchase 759,494 shares at 39.5 cents. Attew was most recently president and CEO of Gold Standard Ventures (GSV-T), acquired in August for $242 million in stock by Pierre Lassonde’s Orla Mining (OLA-T). Gold Standard’s flagship asset was the open-pittable, heap-leach South Railroad oxide gold project in Nevada.
Prior to Gold Standard, Attew was executive vice-president and CFO at Goldcorp for three years – roughly the same three years as Harbridge was exploration chief. Attew came up the capital markets side, running BMO Capital Markets for 10 years before taking on corporate development at Goldcorp. He would have been involved in Goldcorp’s sale to Newmont, familiar with projects as well as what assets will sell.
Attew is a dynamic and well-connected executive. His experience in the industry has given him deep knowledge of projects, pitfalls and potential acquisition targets. Taking the helm of Liberty Gold at what looks like a bottom in the market could be the type of switch that pays M&A dividends for shareholders later.
Is history about to repeat itself? Stay tuned.
James Kwantes is the editor and publisher of Resource Opportunities, an investment newsletter. No position in Liberty Gold at this time. His work is supported by subscribers and patrons.
