David closed his eyes. His head was spinning. He had spent weeks swimming in facts and figures, slowly piecing it all together. He opened his eyes again and they adjusted to the grey view of the Juan de Fuca Strait. As the view came into focus, a thought occurred to him. And then another. Within a few short seconds, he had a flash of insight into a sequence of events that stretched out before him over years and hundreds of millions of dollars.
He paused and let it all sink in. It was a good plan, but there were a lot of unknowns. The plan ended in a place that he had been to before: selling a junior mining company to a major. The starting point was familiar enough, as well. He was considering a takeover.
The takeover target had a nice exploration property in Mexico. It had been mined a century earlier by Americans and was one of the richest mines in the area at the time. Billions of dollars' worth of metal had been taken out of there at today's prices, with old-timers following narrow veins of high-grade silver through the mountainside. The old mine went down 500 meters and stretched 2 kilometers along strike. The takeover target had been drilling along the old mine, searching for another vein that could be mined.
All their drilling had not produced much excitement and they were having trouble raising additional funds to carry on. They had even looked into re-processing the tailings from the old mine as a way to generate some cash to fund further exploration work. Most people would write this project off quickly, but David looked at it differently.
David had built companies around open-pit, heap-leach mines and he was focused on the gold and silver in the rock around the veins. He didn't know what the grade of mineralization was in there because the target company had only assayed sections of their drill core that showed visible alteration associated with the high-grade veins. They had wanted to go underground and mine another high-grade vein, whereas David wanted to mine the whole mountain. He had seen firsthand how open-pit mining had brought new life to old mines like this.
David imagined what they could find by sampling the target company's core and what it would mean for the project. The target company had drilled 10,000 meters over 50 holes, which were concentrated at the mid-section of the old mine. Assaying the core from those holes would position David's company to generate a burst of information in their first months of operation. Studying the detailed database of historical production from the old mine would help guide David's company to put next 50 holes in the right places.
It would take years to replicate all the existing work at the project from scratch, but David estimated that they could complete enough new work to start a resource estimate in a year. Six months to sample the existing core and six months to drill another round of holes.
As he turned the timeline over in his mind, David thought about all the other opportunities at the property. The original gold showing was found just south of the end of old mine -- they could drill there and release the results while everyone was waiting for the resource estimate to come out. They could also release results from prospecting in new areas while waiting for the technical report. The more he thought about it, the more he liked all the possible paths forward.
The old mine followed along veins that had been traced for kilometers at surface and David's geologists were very excited after their first site visits. They saw some spots that were begging to be drilled and a whole bunch of land that had not been properly explored yet. The target company's property stretched for dozens of kilometers along these geological structures, but they had focused at the old mine site. This canvas was primed for a masterpiece.
David knew that the area around the old mine would be well-received in the market as an open-pit mine, but the other areas of the property provided the mystery that was so important to success in the junior mining business.
He went through it all one more time in his head, slowly tracing and retracing the route from here to there. From one takeover to another.