“The real wealth in mining is made by finding something,” billionaire mining legend Robert Friedland said.
Most geologists aren’t lucky enough to find a mine in their careers. Those who do increase their odds of finding another.
Royal Road Minerals (TSX-V:RYR) is an interesting micro cap metal exploration company led by Dr. Tim Coughlin, a geologist who discovered the multi million ounce Amulsar gold mine in Armenia, currently in construction.
Royal Road has been focused on its la Golondrina gold project and regional license package in the Llanada district of Colombia and has recently proposed to acquire several exploration licenses in Nicaragua through a friendly business combination with Caza Gold (TSX-V: CZY), pending legal and regulatory approvals. The acquisition diversifies Royal Road’s potential by adding new districts in prospective areas and copper to its gold focused portfolio.
Royal Road is offering 22,608,321 shares to acquire 100% of the shares in Caza Gold Inc in a friendly deal, which represents about 34 per cent of Royal Roads outstanding shares. Royal Road is paying about $2.25 million in stock for the company. The deal has brought in Polygon Mining Opportunity Master Fund as a partner through its stake in 82.3 per cent of the shares of Caza.
According to Reuters, Polygon Mining Opportunity Fund was quietly launched in the summer of 2012 with internal seed capital to make bets on the rising and falling of shares in mining companies. Polygon’s website states that its mining strategy uses a "bottom-up" approach to try and spot "misunderstood and mis-valued companies". The fund was started as an effort for Polygon to rebuild its business after high profile losses during the credit crisis. The fund is managed by Polygon Global Partners LLC based in London, which in turn is wholly owned by Tetragon Financial Group Ltd. which is listed on the EuroNext Amsterdam N.V. exchange and the London Stock Exchange. According to October 2016 financials of Tetragon, the Polygon Mining Opportunity Fund has a fair market value of $44 million while Tetragon has approximately $18.6 billion under management.
With this acquisition, Royal Road acquires a 100% interest in Caza’s concessions in Nicaragua. Assuming the deal goes through, it will hold exploration licenses throughout the Southern Chortis Gold Belt: Los Andes District, Piedra Iman, La Palma, El Diamante and Cerro Pedernal, totalling in approximately in 120,000 hectares. There are three large deposits in the Southern Chortis Gold Belt; B2Gold’s El Limon and La Libertad mines, and the La India Gold Mine which processed an estimated 1.7Mt at 13.4g/t for 576,000oz Au between 1938 and 1956, the majority of the production under the ownership of Noranda Inc. and is currently owned by Condor Resources (AIM: CNR).
Royal Road is still committed to Colombia and in the words of Tim Coughlin it is “business as usual” there. Royal Road has finished its scout drilling program at Golondrina and is awaiting results from the lab. The company has submitted applications for approximately 160,000 hectares in a gold prospective area in southern Colombia, leading south to the border with Ecuador. In the future, Royal Road hopes to form a public private partnership to do a magnetic survey of the area and look into other partnerships to explore the potential for the area.
In an email, Coughlin said he is committed to Colombia because of it’s “incredible prospectivity.” However, making progress there can be slow at times, and the Nicaraguan assets add another potential front for the company to generate results.
The goal for Royal Road over the next two years is to deliver an exciting new discovery to the market, Coughlin said in a video. The commodities downturn has made good exploration projects and personnel available in improving jurisdictions like Colombia. The aim is to secure large projects in socially sustainable areas with potential to discover economic copper and gold deposits. Key challenges are of course being able to find something, while keeping overheads down and effectively communicating with stakeholders and shareholders.
Royal Road, Three Minutes, Three Questions; Nicaragua Acquisition
Royal Road Minerals Ltd. (TSX-V: RYR)
Website: http://www.royalroadminerals.com/
Corporate Presentation:
Shares issued: 66,645,951
Market Cap: ~ $5.9 million
Cash Position: unknown
Year High: 0.18
Year Low: 0.45
Sector: Gold
The author does own a position in Royal Road Minerals and was paid to write this investor update. This investor update may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur and include statements regarding the Offering and the use of proceeds therefrom. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the hiring and retention of directors and officers, exploration and development of mineral properties, mine site planning and development, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, permitting and licensing and other factors described above and in the Company's most recent annual information form under the heading "Risk Factors", which has been filed electronically by means of the Canadian Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
