Can the team behind Richfield Ventures' $500-million sale to New Gold do it again?
Pete Bernier’s interest in mining started early. As a boy growing up on the edge of Timmins, Ontario, he used to arrive home pockets bulging with rocks after visits to nearby outcrops.
The young rockhound’s habit foreshadowed a rather successful career in mining, one that began with claim staking as a 15-year-old. In fact, the claims game proved so lucrative that Bernier quit high school to dive full-time into mining exploration.
But his biggest score, the one that filled his pockets -- as well as those of shareholders and his employees -- with cash, occurred much later. That was the 2011 sale of his Richfield Ventures and its Blackwater gold project in south-central B.C. to New Gold (NGD-T). The $500-million buyout came just two years after Richfield’s discovery hole.
“I mortgaged my house and raised a million dollars through family and friends for a drill program,” Bernier recalls. “The initial drill program was in June 2009 and we hit on 13 of the first 14 holes.”
Northern Miner article on Richfield's sale to New Gold
Richfield spent just $10 million drilling off Blackwater under the leadership of geologist Dirk Tempelman-Kluit. The property had previously been investigated as a high-grade vein system, but Tempelman-Kluit -- Richfield’s VP of Exploration -- recognized hydrothermal alteration and bulk gold potential at Blackwater.
The project, now in New Gold’s development pipeline, currently hosts 8.6 million ounces of gold and 57.5 million ounces of silver in the Measured and Indicated categories.
FROM B.C. TO ONTARIO
Bernier and Tempelman-Kluit are teaming up once again with Prosper Gold (PGX-V). And this time, the target is high-grade gold on a neglected stretch of Ontario’s Abitibi Greenstone Belt -- in Bernier’s former stomping grounds.
On Feb. 29, Prosper optioned the past-producing Ashley mine, a high-grade quartz vein mine in the southwestern Abitibi, from four prospectors. Ashley, an underground mine on the western part of the Cadillac-Larder Lake fault system, produced 50,099 ounces at average grades of .32 ounces/tonne (more than 9 g/t) between 1932 and 1936. It has seen little exploration since.
The company followed up on March 1 by optioning two land packages in the neighbourhood from Alexandria Minerals (AZX-V) -- one surrounding its newly acquired Ashley mine and the other adjacent to Alamos Gold’s Young-Davidson gold mine, about 17 kilometres away from Ashley. Prosper can earn a 75% interest in the properties by issuing 750,000 shares and spending $5 million over 5 years, and an additional 15% interest by completing an NI 43-101-compliant resource estimate of 1.5 million ounces.
Prosper plans to focus first on the target-rich properties surrounding the historic Ashley mine, which have seen no substantial exploration since the 1930s, Tempelman-Kluit says. There are numerous outcrops with visible gold, and several grab samples have returned grades in the hundreds of grams per tonne, as high as 672 g/t gold.
“It’s not unique to have gold in outcrops, it’s unique that nobody’s done anything there,” Tempelman-Kluit says of the property, which has seen only sporadic exploration over the years. It was owned by a family for the past several decades, and when they lost the property, four prospectors stepped in.
The lack of exploration is particularly unusual because Ashley is located in elephant country for high-grade gold. The Abitibi Belt has produced about 160 million ounces, more than 50 million ounces from the Cadillac Larder Fault Zone, and there are plenty of nearby headframes. In addition to Young-Davidson, operations include Lake Shore Gold’s Timmins West, the Kirkland Lake Gold complex and Goldcorp’s Porcupine.
Bernier started Prosper Gold in 2012 and took it public the following year. The company acquired and drilled Star, a copper-gold porphyry in northwestern B.C.’s Golden Triangle, but couldn’t generate much interest in a bear market.
Bernier says he and Tempelman-Kluit started looking at gold projects about 6 months ago and went through more than 300 projects. The connection to Ashley was a fortuitous one -- Bernier was contacted by some prospectors he knew from early claim staking days in Timmins.
“They said, ‘we’ve picked up this Ashley gold mine and we want you guys to look at it’,” Bernier says. “They started feeding data to Dirk and he modelled everything.”
“We’re going to pick our best targets at the end of this summer and really hit this hard,” Bernier adds.
Prosper’s plan is to use soil sampling, geochemical work and an airborne survey to define drill targets for an initial late-summer drill program.
A PRODUCTIVE PARTNERSHIP
Tempelman-Kluit and Bernier met at a Kamloops Exploration Group event in 2007, a few years after Tempelman-Kluit had left a 30-year career at the Geological Survey of Canada. Tempelman-Kluit -- accustomed to myriad meetings and the glacial pace of government -- quickly discovered Bernier’s contrasting no-nonsense approach.
“We met one evening and the next day, things were happening,” says Tempelman-Kluit, 77. “I’m thinking -- this is how the world is supposed to work!”
If Bernier is the hard-driving entrepreneur who gets the deals done, Tempelman-Kluit is the seasoned scientist guided by his research. He obtained bachelor and masters degrees in Economic Geology from the University of B.C. before getting a PhD at McGill University.
Unlike many geologists of his generation, Tempelman-Kluit is as comfortable in front of a keyboard as in the field.
“I can speak and listen to rocks like old guys and I can model the stuff on computers, because I like doing that,” Tempelman-Kluit says. “The miracle of what the digital stuff can do, I appreciate, because I’ve been through the transition.”
The geologist is excited about diving deeper into the old rocks of the Archean, especially given the lack of exploration on Prosper’s properties.
“This is a long shot, like all exploration ventures,” Tempelman-Kluit says of Prosper’s Abitibi properties. “But as long shots go, this is one that somebody’s going to make.”
The company has already had discussions with First Nations in the area, and there are some drill permits in hand for the Ashley property. Bernier and Tempelman-Kluit are heading to the property in late May to get their boots on the ground and lay the groundwork for this year’s exploration campaign leading to drilling.
Prosper Gold is a lean operation run out of Bernier’s Quesnel home base and a small Vancouver office. Bernier and Tempelman-Kluit haven’t drawn a salary in two years and are incentivized through their considerable shareholding in the company -- a combined 30% plus.
“We just want to go out and find another mine,” Bernier says. “That’s our biggest goal.”
Prosper Gold (PGX-V)
Price: .20
Shares outstanding: 35,111,042
Market cap: $7 million
Cash: $800,000
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