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Friday, 21 December 2012
Tamaka Gold readies for IPO with eye on boosting resources at its bulk tonnage play in Ontario
Tamaka Gold is busy preparing for the launch of its anticipated IPO, with an eye on increasing the size of its resources and driving shareholder value. The company is preparing to continue drilling its Goldlund deposit in northwestern Ontario, with the aim of realizing its multi-million ounce potential.
Indeed, it’s been a busy 2012 for the junior gold explorer. The company has completed an extensive exploration program at its Goldlund property, including geophysical surveys, geological mapping, trenching and sampling – setting the stage for an aggressive drill campaign next year. The expectations are that Tamaka will increase the size of the resource at the deposit to roughly 2 million ounces in 2013.
“Our short term objective is to reach 2 million ounces. But that is just a milestone in reaching our greater goal of visibility on the 4 to 5 million ounce mark and we are confident that we are on track,” Tamaka’s President and CEO, Howard Katz, tells Proactive Investors.
Currently, Tamaka has an NI 43-101 compliant resource at the Goldlund deposit consisting of 263,000 ounces of measured gold resources, 143,300 ounces of indicated gold resources, and 624,800 ounces of inferred gold resources for a total resource of over 1 million ounces, using a 0.5 gram per tonne (g/t) cut–off.
The Canadian gold explorer holds a 100 percent interest in the property, which is in excess of 470 square kilometres. The property is not just large, but is mineralized with a pervasive gold-hosting system that covers over an 18 kilometre strike length, including the Goldlund deposit, where the historic Goldlund mine was situated.
With such a large property, the company’s exploration team felt it was “imperative” to run magnetic and induced polarization (IP) surveys on the entire property to assist in better understanding its geological composition.
The surveys, combined with the summer exploration campaign, also analyzed the structural controls to improve the orientation of future drill holes, with the goal of maximizing grade and widths, and looked to identify more gold-bearing structures along the 18km strike length of geology to the northeast of Goldlund.
According to Katz, the summer exploration campaign was a success. “We believe that we substantially increased the size of our resource during the last year, and we have a far better understanding of our property with a solid plan of attack.
“The junior markets remain challenging, but we believe the right type of project will attract capital and we are committed to listing the company on the Toronto Stock Exchange in Q1 2013.” The funds raised from the offering are being allocated almost exclusively toward exploration on the Goldlund property.
Tamaka’s CEO says that many Bay Street mining professionals feel the Goldlund deposit is the “right type” of project, as it is a large, bulk tonnage property, and is situated in Ontario - next to “excellent infrastructure”.
“The Goldlund deposit is very analogous to Trelawney’s Cote Lake property and Prodigy Gold’s Magino project – both of which were recently acquired at significant premiums. Investors understand that if there is a way to make money in the markets, it is with a project like ours.”
Prodigy Gold, which owns the Magino project in Ontario, was acquired by Argonaut Gold (TSE:AR) in a $341 million deal, at an over 56 per cent premium, while Trelawney and, its Cote Lake Deposit, was snagged by Iamgold (TSE:IMG) (NYSE:IAG) for $585 million at an over 42 per cent premium.
In today’s mining environment, where cost overruns resulting from capital expenditures to establish and operate the mine site are increasingly troubling, Katz says that Tamaka is the counter-balance.
The Goldlund property boasts “excellent inherent” infrastructure such as being intersected by an Ontario Provincial Highway, and being flanked by two towns with commercial airports, hotels and support amenities. It also has power and rail lines in close proximity.
“Over the last couple of years we have seen major mining companies profess that jurisdiction trumps all- and let’s face it, Canada and Ontario in particular, could be the top geopolitically stable mining environment in the globe.”
With a strong treasury, and more funds on the way, Tamaka has a busy 2013 planned as it looks to increase the size of its resources. And the plan seems to be pretty clear.
“The bottom line is that we strongly believe this project will get much larger and robust and it will become more attractive to strategic buyers.”
Aside from Katz, who prior to Tamaka was the head of mining investment banking at a national investment dealer, the company has assembled an experienced management team and board of directors.
The board includes industry heavyweights such as the former CEO of Northgate Minerals, Ken Stowe, the former CFO of Inco, Farokh Hakimi, and Abraham Drost, the CEO of Premier Royalty Corp. “These individuals significantly add to our capital markets, financial governance and geological experience, and of course, leadership and credibility, as they have a track record of delivering shareholder value.”
With 2013 just around the corner, the Tamaka office is buzzing with activity to ensure that it is fully prepared for the upcoming IPO. “We have the right people in place, we have the right property and now it is time to get our story out to the public markets,” Katz concludes.