Disseminated on Behalf of: Lode Gold Resources Inc.
- Lode Gold to spin out properties in Yukon, New Brunswick to unlock value
- Spin Co’s (Gold Orogen) Canadian assets will see drilling in 2025
- Lode Gold’s Fremont gold project has a 2023 Mineral Resource Estimate of 1 million ounces of gold in the Measured and Indicated category, and 2 million ounces in the Inferred category, with a Net Present Value (NPV) of USD$370 million after-tax (5% DCF, US$2000/oz Au)
Clifford Asness, who played a key role in building Goldman Sachs’ Global Alpha before founding AQR and now manages over $33 billion in assets, published a whitepaper that challenges the Efficient Market Theory.It stipulates that the market for small-cap stocks is notoriously inefficient. There is often a disparity between a company’s portfolio assets and its market capitalization. This mismatch typically arises from a fragmented shareholder base, limited distribution, low awareness, and insufficient liquidity. These factors are further exacerbated by market economics, geopolitical conditions, fiscal and monetary policies, and consumer confidence. This means potential investors can turn this disadvantage into great returns if they do their homework. If capital is patient, investing in a small-cap stock may result in a higher return on investment in the long run compared to a large-cap stock. Building on this potential, Lode Gold Resources Inc. (TSXV: LOD | OTCQB: LODFF) is led by CEO and Director Wendy T. Chan and her team, who are focused on creating value and maximizing returns on investments across the short, mid, and long term.“In the short term (3 months), the company will undergo a tax-efficient spin-out where shareholders of the company will receive shares in two companies,” Chan explains. “In the mid-term (12-18 months), plans include reactivating a previous gold mine in California.”She adds, “Interestingly, it was previously mined at 10.7 g/t Au with much of the gold left behind. This asset holds a suspended mining license from World War II due to the gold prohibition and is situated on 100%-owned private land in Mariposa County on the prolific Mother Lode Belt, which has produced 50 million ounces of gold historically. Additionally, Mariposa is an Opportunity Zone designated for expedited investments under the Trump administration.”“In the Yukon, the Spin Co. (Gold Orogen) will initiate exploration work on four Reduced Intrusive Targets in the Tombstone Belt and on 445 square kilometres on the Iapetus Suture, a prolific belt containing key known deposits held by New Found Gold, Calibre Mining, and Galway Metals. In the long term (3+ years), Lode Gold will evaluate securing vested rights/mining permits in California and consider M&A opportunities. 1 million ounces of gold in the Measured and Indicated category and 2 million ounces of gold in the Inferred category will be of interest to a producer.”
Spin Co. (Gold Orogen) unlocks value for shareholders
To unlock the value for shareholders, Lode Gold is in the process of spinning out its Canadian assets into a new company called Gold Orogen. The Spin Co. (Gold Orogen) will focus on its two assets located in Yukon and New Brunswick, creating a pure-play exploration company. Under the planned arrangement, current Lode Gold shareholders will get shares of Gold Orogen post-spinout.To fund work on Gold Orogen’s projects, Lode Gold has allocated the $3 million raised in October to the new company and is in the process of raising $1.5 million more. The Lode Gold team estimates that Gold Orogen has a pre-money valuation of $9.6 million and will have a post-money valuation of $12.5 million. With this spinout, Chan says “the goal is value creation in months, not years.”
It stipulates that the market for small-cap stocks is notoriously inefficient.There is often a disparity between a company’s portfolio assets and its market capitalization. This mismatch typically arises from a fragmented shareholder base, limited distribution, low awareness, and insufficient liquidity. These factors are further exacerbated by market economics, geopolitical conditions, fiscal and monetary policies, and consumer confidence.This means potential investors can turn this disadvantage into great returns if they do their homework. If capital is patient, investing in a small-cap stock may result in a higher return on investment in the long run compared to a large-cap stock.
Building on this potential, Lode Gold Resources Inc. (TSXV: LOD | OTCQB: LODFF) is led by CEO and Director Wendy T. Chan and her team, who are focused on creating value and maximizing returns on investments across the short, mid, and long term.
“In the short term (3 months), the company will undergo a tax-efficient spin-out where shareholders of the company will receive shares in two companies,” Chan explains. “In the mid-term (12-18 months), plans include reactivating a previous gold mine in California.”
She adds, “Interestingly, it was previously mined at 10.7 g/t Au with much of the gold left behind. This asset holds a suspended mining license from World War II due to the gold prohibition and is situated on 100%-owned private land in Mariposa County on the prolific Mother Lode Belt, which has produced 50 million ounces of gold historically. Additionally, Mariposa is an Opportunity Zone designated for expedited investments under the Trump administration.”
“In the Yukon, the Spin Co. (Gold Orogen) will initiate exploration work on four Reduced Intrusive Targets in the Tombstone Belt and on 445 square kilometres on the Iapetus Suture, a prolific belt containing key known deposits held by New Found Gold, Calibre Mining, and Galway Metals. In the long term (3+ years), Lode Gold will evaluate securing vested rights/mining permits in California and consider M&A opportunities. 1 million ounces of gold in the Measured and Indicated category and 2 million ounces of gold in the Inferred category will be of interest to a producer.”
Spin Co. (Gold Orogen) unlocks value for shareholders
To unlock the value for shareholders, Lode Gold is in the process of spinning out its Canadian assets into a new company called Gold Orogen. The Spin Co. (Gold Orogen) will focus on its two assets located in Yukon and New Brunswick, creating a pure-play exploration company. Under the planned arrangement, current Lode Gold shareholders will get shares of Gold Orogen post-spinout.
To fund work on Gold Orogen’s projects, Lode Gold has allocated the $3 million raised in October to the new company and is in the process of raising $1.5 million more. The Lode Gold team estimates that Gold Orogen has a pre-money valuation of $9.6 million and will have a post-money valuation of $12.5 million.
With this spinout, Chan says “the goal is value creation in months, not years.”
Gold Orogen: Two orogenic gold projects along key gold belts
Gold Orogen will come to life with money in the bank to drill its gold projects.
Those include Golden Culvert and WIN, which cover a 27-kilometre strike and 99.5 square kilometres of ground in the Yukon’s portion of the Tombstone Gold Belt.
These projects are prospective for reduced intrusion-related gold systems (RIRGS) like that found at Snowline Gold’s Rogue project and Sitka Gold’s RC deposits, as well as sedimentary-hosted orogenic deposits like Seabridge Gold‘s adjacent 3 Aces deposit.
Gold Orogen will begin its exploration this year with mapping and sampling at the Border and Steelhead RIRGS targets on the WIN property with the goal of generating drill targets for testing in the summer of 2025.
In New Brunswick, Gold Orogen has entered into a 50/50 Joint Venture (JV) with Fancamp Exploration to form a JV company now called Acadian Gold. Through this partnership, Gold Orogen secured funding for its share of the JV and expanded its land package to 445 square kilometres with 44 kilometres of strike length, incorporating Lode Gold’s McIntyre Brook project and Fancamp’s Riley Brook project.
At the McIntyre Brook project, the area is surrounded by Puma Exploration’s Williams Brook project, which is now part of an option agreement with Kinross Gold. In this region, rhyolites of the Wapske formation host the high-grade Lynx zone and other gold discoveries. At the McIntyre prospect, Lode Gold has also identified gold-mineralized rhyolites, as confirmed through drilling and trenching. Geophysics and soil geochemistry further suggest that the volcanic units on the Puma property trend into McIntyre Brook.
The Riley Brook property was staked to cover the southern extension of the Wapske Formation. With the inclusion of both McIntyre Brook and Riley Brook, Acadian Gold now holds the majority of this highly prospective geological unit. The JV has already been highly active, completing a HELITEM2 geophysical survey, 3,247-line kilometers of trenching, and extensive soil sampling. This work has identified coincident gold-in-soil and electromagnetic (EM) anomalies.
As the remaining results from the late 2024 fieldwork are received, the JV team will interpret the data and recommend further follow-up work, with plans to mobilize a drill to test the most promising targets later this year.
Fremont: A historic California gold mine gives Lode Gold a chance at re-rating
The Fremont asset, which will remain within Lode Gold, is a past-producing underground gold mine that was previously mined at 10.7 g/t Au, located on 100%-privately owned patented land. The mine ceased operations during World War II due to a ban on gold mining.
A 2023 preliminary economic assessment on Fremont pegged its after-tax NPV at USD$370 million, discounted at 5% and based on a gold price of $2,000 per ounce. The mine has a resource of 1.16 million Indicated ounces at 1.90 g/t gold and 2.02 million Inferred ounces at 2.22 g/t gold. The project has 43,000 meters of drilling, with cores preserved, eliminating the need to twin 10% of the holes to achieve 43-101 compliance.
Lode Gold is the first to approach Fremont as an underground operation, capitalizing on the fact that only 11% of the veins have been exploited. The existing infrastructure, which includes 23 kilometers of underground workings, is valued at approximately $100 million in today’s terms.
Chan and her team are looking for a partner to help advance Fremont. “We are seeking a 50-50 joint venture partner, ideally at asset level and a higher market cap. We are in conversations with a few producers at the moment,” Chan says.
In addition, to help with the permitting process, Lode Gold has brought on Marty Stratte as an advisor. Mr. Stratte previously served on the Board of Lode Gold, and between 2018 and 2021, he was part of the permitting team at Equinox Gold’s Castle Mountain (also a California gold project). The project was acquired in 2018 and permitted in 2021.
Two ways to participate
As Lode Gold moves forward with its spin-out plan for Gold Orogen, there are two ways to participate.
Investors can buy shares of Lode Gold before the spin-out date, and they will receive shares of both Lode Gold and Gold Orogen. Alternatively, qualified investors can participate in an upcoming private placement for Lode Gold (and receive shares of both companies) or just for Gold Orogen (via subscription receipts).
Buying shares in Lode Gold and receiving shares in both companies provides investors with the potential for enhanced returns. Investors will benefit from the optionality of Gold Orogen’s exploration success in Yukon and New Brunswick, as well as the re-rating potential of the parent company, underpinned by Fremont’s 1 million ounces of gold in the Measured and Indicated category and 2 million ounces of gold in the Inferred category. Both companies will maintain tight share structures of approximately 40 million shares, with insiders, strategic investors, and institutions holding more than 60%.
To learn more about Lode Gold Resources Inc., visit their website here.
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