VANCOUVER — Over the past decade Mark O’Dea has become one of the strongest members of a new generation of explorers bent on making discoveries and running public mining companies the “right” way.
O’Dea’s focus on values and recruiting and mentoring new technical talent has led to a number of industry accomplishments. On Jan. 27, O’Dea spoke at the Association for Mineral Exploration British Columbia’s annual Roundup conference to describe his exploration philosophy.
“Back in 2004 we coined the phrase the ‘science of discovery,’ and we love the feel of it because in essence it encapsulates what we’re trying to do,” O’Dea said during his address. “On one hand we wanted fresh science to drive our decisions, but on the other hand we understood science alone wasn’t going to cut it, and that we needed to integrate other disciplines to really succeed. The first thing we really needed to do was build trust, and those trusting relationships with shareholders fund our endeavours.”
O’Dea is the founder and chairman of Vancouver-based Oxygen Capital, which he describes as a “sort of mining-company incubator.”
One of his goals is to mentor talented young mining professionals and help advance their careers. O’Dea’s most recent mentoring success comes in the form of Pilot Gold (TSX: PLG; US-OTC: PLGTF) president and CEO Matthew Lennox-King.
O’Dea says that every opportunity his companies consider begins the same way: by mining data, creating structural frameworks and looking at geological controls. He says there are many ways to generate value through exploration, which range from grassroots discoveries to resurrecting overlooked, old mining districts.
O’Dea’s most notable grassroots success story is the Long Canyon deposit, which Newmont Mining (TSX: NMC, NYSE: NEM) acquired through a US$2.3-billion deal for Fronteer Gold in 2011.
Long Canyon is a sedimentary rock-hosted gold discovery in northeastern Nevada, 150 km east of the well-explored Carlin trend. The deposit is uniquely hosted in a sequence of Cambrian–Ordovician carbonate rocks in a periodically emergent, platform-to-shelf edge environment.
“When we got into the Long Canyon project back in 2007, it was really just the beginning of its development. What we created was this model that solved the mystery of the project,” O’Dea said. “Instinctively we all want to rush in and start drilling holes where the mineralization was initially found to look for some tangible results to talk about and start creating value. But is that really the right approach? It’s never been the right approach for us. In fact, it always tends to be the wrong approach.”
O’Dea also stressed his “standing on the shoulders of giants” philosophy, which involves leveraging the efforts of historic exploration and looking at a project with new technology in ways it has not been approached before.
He noted that nearly every major discovery has experienced previous work, and that it is often the “fourth or fifth company” that goes into a district and leverages existing data that achieves success.
An example of O’Dea’s strategy is evident in Paladin Energy’s (TSX: PDN; ASX: PDN; US-OTC: PALAF) US$261-million acquisition of Fronteer’s uranium assets in early 2011.
He explained that earlier on, his intent had been to search for iron–oxide–copper–gold targets when an opportunity appeared in uranium in the Central Mineral Belt of Labrador.
Using modern geophysical methods, O’Dea’s team expanded the economic potential of the Michelin uranium deposit, which was discovered in 1969 by prospector Leslie Michelin, and drilled off in the 1970s by Brinco Mining.
“I’m going to come clean here, and admit we do fail. Failure’s an important part of this business, and we can always learn from our failures,” O’Dea said. “One thing I have learned is that if you’re going to fail, fail quickly. Exploration is an expensive business, so recognizing failure and acting fast is extremely important.”
A final philosophy involves O’Dea’s risk and reward strategy. He said that despite the “critical state” of the mining industry, his team seized an opportunity in the outback of Burkina Faso via True Gold Mining (TSXV: TGM; US-OTC: RVREF) and the Karma gold project.
“What we’ve discovered is that Karma is a project perfectly suited for our investment world today,” O’Dea said. “It’s a project we can build ourselves that isn’t too technical. It’s something we can finance ourselves with low capital intensity, and has scalability and true growth potential. It’s also a project you can build a mining company on. We grabbed this opportunity while many other mining companies are in the fetal position.”
True Gold recently released a preliminary economic assessment on Karma that models a US$132-million operation to heap leach high-grade oxide material.
The company also locked up a US$23.5-million investment from $23.5-million Liberty Metals & Mining Holdings, which is a subsidiary of Boston-based Liberty Mutual Insurance.
“We’re navigating a minefield where it can sometimes be difficult to differentiate between [danger and opportunity],” O’Dea said. “Our industry has been in a crisis over the past two years. It can be scary to act on opportunity because of that danger, but it’s our job in the exploration industry to navigate those waters and find quality projects that generate value.”
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