Albert Friedberg and his Friedberg Mercantile Group were listed among the top-40, highest-earning hedge fund managers in the world by Forbes magazine in 2011.
More recent rankings weren’t immediately available, but when the Toronto-based trader with billions of dollars under management invests in a junior mining company, its stock tends to take off.
That’s precisely what happened when Golden Predator Mining (TSXV: GPY) announced that an entity controlled by Friedberg and members of his immediate family at FCMI Parent Co. had bought 4 million shares and 4 million warrants as part of a larger $4.3-million private placement of 27 million units priced at 16¢ apiece, with each unit comprised of a share and a warrant entitling the holder to buy another share for 21¢ within two years..a
It gives Friedberg 6% of the junior exploration company’s shares, or a fu11y diluted 11.3%.
News of the financing sent Golden Predator’s shares rocketing 47% to 63¢.
“Friedberg typically doesn’t invest in companies with small market caps, so we’re honoured to have gained his attention,” Golden Predator’s chairman William Sheriff says.
Friedberg wasn’t the only big name to come into the financing, however. Mining mogul Rob McEwen’s McEwen Mining (TSX: MUX; NYSE: MUX) also took part, taking slightly over 3 million shares and an equal number of warrants, giving the mining company a 4.7% stake, or 8.95% upon exercise of the warrants.
Pat DiCapo, a founder of Toronto-based merchant bank PowerOne Capital Markets Ltd., took part, and now owns 3.5 million shares and 4 million warrants for a 5.3% interest, or a fully diluted 10.6%, while PowerOneCapital acquired ownership and control of 1.27 million broker warrants.
“Friedberg, McEwen and DiCapo will really help us advance our two premier projects in the Yukon,” Sheriff says. (Sheriff himself took the opportunity to increase his personal stake in the junior’s common shares, adding 1.9 million units for 17.5%.)
“We think we’ve got some pretty exciting properties,” says Sheriff, who is no stranger to successful projects, having cofounded Energy Metals Corp., which was acquired by Uranium One (TSX: UUU) in 2008 for $1.8 billion.
Golden Predator’s flagship asset is 3 Aces, an orogenic gold deposit in the southeastern Yukon, 160 km north of Watson Lake. The high-grade discovery is located along the all-season Nahanni Range Road, which leads to the Cantung tungsten mine, 40 km north.
Since 2010, the junior has drilled 11,400 metres — mainly on the Main and Sleeping Giant zones — and conducted airborne and ground geophysics, stream sediment and soil sampling, as well as prospecting and geological mapping.
Exploration results include highlights such as drill hole 3A-10-1, which intersected 30.3 metres grading 4.3 grams gold per tonne from 49 metres deep, and drill hole 3A-10-2, which returned 10.9 metres of 14.8 grams gold from 25 metres deep.
High-grade mineralized shoots are seen in outcrops, and the company has grab samples of up to 4,820 grams gold per tonne, with multiple specimens over 1,000 grams per tonne from the deposit’s Main and Sleeping Giant zones. Channel samples include 5.2 metres of 448 grams gold per tonne.
Golden Predator has identified extensive gold anomalies over 9 sq. km, and Sheriff and his team are confident there is potential for more discoveries on the 225 sq. km property.
“An anomaly of that size certainly indicates an opportunity to find a number of quartz veins, and we view this as a district-size potential opportunity,” he says. “Given the large anomaly that we know of in the soils, coupled with an even larger area with these untested stream-sediment anomalies, it’s virtually virgin territory, with these gold quartz veins outcropping.”
“Saying it’s just the tip of the iceberg is not a good analogy,” he continues. “It’s better than that. We’ve looked at maybe 1% of the property in any sort of detail, so it’s in its infancy, and the results so far have been nothing short of spectacular.”
Golden Predator has just completed a 680-tonne bulk sample of high-grade gold-quartz veining at 3 Aces, and is awaiting results. The sample, taken from the Sleeping Giant vein, was originally intended to be 500 tonnes, but the company’s geologists are expanding the program, after noting vein continuity and visible gold within the quartz vein’s down-dip continuation.
“We had to cut if off somewhere, but there was still visible gold when we left, so the mineralization continues,” Sheriff says of the bulk-sampling.
“We are early at 3 Aces and the evidence we are finding is encouraging, which makes it an awfully exciting project.”
Golden Predator also owns Brewery Creek, a past-producing, heap leach gold mine that operated from 1996 to 2002, when it closed during low gold prices.
The company completed a preliminary economic assessment on the project in the fourth quarter of 2014, and will advance it through feasibility and permitting.
At a base case of US$1,250 per oz. gold, the 2014 PEA outlined a nine-year mine life.
Since 2009, the company has spent $30 million on drilling 100,000 metres, and increasing indicated and inferred resources 400% and 200%.
Indicated resources stand at 17.6 million tonnes averaging 1.27 gram gold for 719,000 contained oz. gold. Inferred resources add 21.7 million tonnes grading 1.18 grams gold for 825,000 contained oz. gold.
Sheriff notes that the company has probably only explored 15% of the Brewery Creek property, and the company hit 80% success rates on its exploration holes before the financial crisis and capital constraints threw junior mining companies like his off balance.
“Brewery Creek’s oxide resource is a little over 1 gram gold per tonne, so it may not have the pizzazz of the high-grade visible gold in quartz veins that we have at 3 Aces,” Sheriff says. “But it is an economically important asset, as there are few oxide heap-leach projects remaining in first-world jurisdictions.”