It’s been a boring few years for gold miners in general and junior gold miners in particular. The metal has been in a trading range, capital has been relatively scarce, and major deals even scarcer.
But under the surface things are bubbling, as a handful of emerging players put up good numbers and make their investors rich, while a somewhat bigger handful of explorers find notable deposits. The result is a lot of wheeling, dealing and empire building that gets little press but is fascinating for the tiny subset of investors who care about this sector.
One event that might end up being notable is Eric Sprott’s decision to leave the board of Kirkland Lake Gold:
Kirkland Lake Gold announced today that Eric Sprott, Chairman of the Company’s Board of Directors will retire as Chairman and a member of the Board following the Company’s 2019 Annual General Meeting of Shareholders on May 7, 2019. Mr Sprott has served as the Chairman of the Board since November 2016.
Eric Sprott, Chairman of the Board said, “During the past five years, we have succeeded in creating a truly unique gold company which continues to have significant upside potential. While I have decided that now is the right time for my retirement, I fully expect to remain a very interested and engaged shareholder of the Company.”
Now, this might be nothing. Eric Sprott is, like so many of us, no longer young, and he’s got a lot of irons in the fire. So maybe he’s just lightening his load a bit. But Kirkland is one of the gold mining world’s recent success stories…
… so why would a player like Sprott leave its board just as things are getting good? Perhaps, speculates a poster on another miner’s online forum, because Sprott has found an even better horse to ride – Novo Resources – in which both he and Kirkland are major investors:
I have long viewed Eric Sprott’s simultaneous Kirkland Lake and Novo Resources [NVO] board memberships as so inherently conflicting for him such that at some point he would naturally choose one over the other. Logically, the point in time by which his choice would need to be made was at such time as it might become clear in ES’s mind that [Novo CEO] QH and his team had in all likelihood succeeded in establishing the validity and economic viability of their exploration model, but before public disclosures confirmed it. And certainly before investment opportunities that might pit the interests of miner Kirkland against those of prospective miner Novo might arise. (For example, as presented by a hypothetical buy out by either KL or NVO of Kairos or DeGrey or Pacton or portions of their respective [Pilbara region, Australia] gold related tenement holdings/mineral rights.
It has also been my view that ES’s election would evidence which “horse” (as between KL and NVO) he preferred to “ride” (predominantly see his own Pilbara conglomerate gold wealth accumulate in). In addition, like many others here, my analysis has been that ES would personally benefit (profit) to a much greater degree if Novo rather than KL were to be the primary Pilbara wealth creation entity. Given that, it is my present view that ES’s resignation from the KL board effective after the KL annual meeting on May 7, 2019 is a strong positive indicator that NVO will remain independent and that it (and its shareholders) will be among the handful of entities that will most benefit and profit from what I view to be the coming massive development of highly profitable conglomerate gold mining in Australia’s Pilbara region.
It will not surprise any here, then, that I continue to acquire stock in Novo and was a buyer on this news.
Good luck to all, and keep an eye on the news. I believe the QH & NVO RR train is about to leave the station, and I hope everyone else who’s on it will join me in the dining car soon for a rousing round of Waltzing Matilda — I’ll have the champagne plus as assortment of local malt beverages and South Coast vineyard products on ice for you.
This is, of course, the kind of speculation that’s rife in the low-information world of junior miners. But the Pilbara/Kirkland/Novo story has been hot for a while, and just might turn out to be a big deal. So – again for the tiny group of people who care about such things – it bears watching.
Full disclosure: Several members of the DollarCollapse family are happily long some of the miners mentioned here.
Later addition: Robert Moriarty, publisher of 321gold.com and Novo Resources insider, dismissed this scenario as “Too complicated. 85% chance it’s nothing more than health issues. You can’t take it with you. ES has been spending a lot more time with his family. He doesn’t need KL or Novo to be successful.”