Freeman Gold (FMAN) - New Personnel Bolster Promising Gold Junior

This has been an extremely exciting year for gold investors and mining companies. The bull environment briefly drove gold above US$2,000 for the first time in history, and it has now retreated to a still impressive position of just above US$1,900/oz.

Idahoan gold developer, Freeman Gold (CSE: FMAN), recently gained our attention when 2 notable and ambitious mining entrepreneurs, Paul Matysek and Bassam Moubarak, joined the team. Make sure you check out our interview with the company's CEO, Will Randall. Matsek came aboard as the company’s new Chief Financial Officer and Director, while Moubarak was allocated a position on the Strategic Advisory Board.

Paul Matysek

Freeman Gold’s new CFO, Matysek, is an entrepreneur, geochemist and geologist. He was in excess of 40 years’ experience in the mining industry. Gold investors will likely want to know a little bit about his track record. Since 2004 in roles as a CEO and/or Chairman, Matysek has primarily focussed on the exploration, development and sales of five public mining companies, with an aggregate worth of nearly $2.9Bn.

His most recent role was as the Executive Chairman of Lithium X Energy Corp. Matysek helped drive the company toward an eventual sale to Nextview New Energy Lion Hong Kong Limited for proceeds to the tune of $265M. Previous to this experience, he served at Goldrock Mines Corp.’s President and CEO, eventually selling the company to Fortuna Silver Mines in July 2016. His experience also stretches back to a stint as the CEO of Lithium One, which eventually merged with Galaxy Resources of Australia to create a multi-billion-dollar integrate lithium company. Matsyek was also the CEO of Potash One, a company that was eventually acquired for $434M by K+S Ag in 2011. Another impressive accomplishment was his co-founder/CEO role at Energy Metals Corp., where he helped transform the uranium player from a $10M company to a $1.8Bn company in 2007. Considering Freeman Gold is worth around $30M today, it is little surprise that some investors believe in Matysek’s ability to transform this nano-cap gold company into something more meaningful.

Bassam Moubarak

Moubarak has spent much of his career as a senior executive and has over 10-years’ experience in the mining sector. He is a chartered professional accountant and previously served as a senior manager at international accounting firm, Deloitte LLP. He was the CFO of Lithium X Energy and appears to have been at the forefront of that company’s sale to NextView New Energy Lion Hong Kong Limited for proceeds of $265M. Prior to that role, Moubarak was the CFO of Goldrock Mines Corp. Just like at Lithium X Energy, he played a major role in Goldrock’s sale to Fortuna Silver Mines for $180M. He was also the CFO of Petaquilla Minerals, raising over $120M to develop the Molejon Gold Mine and bring it into production. Moreover, he played a significant role in the sale of Petaquilla to Inmet Mining Corporation for $400M. Another major accomplishment was his role in negotiating the sale of Golden Arrow Resources’ 1% net smelter royalty (NSR) on Gualcamayo Gold Mine to Premier Royalty Inc. for $17.75M.

Freeman Gold Fundamentals

Freeman Gold has a single gold project that is ‘strategically’ located in Lemhi County Idaho: the Lemhi Gold Project. This jurisdiction is notable for a variety of reasons. According to the 2019 Fraser Institute Mining Survey, Idaho is No, 8 in the world and No.3 in North America on the Mining Attractiveness Index. In addition, it is No. 8 on the Investment Attractiveness Index and No.7 on the Policy Perception Index. Furthermore, Lemhi Gold is located in close proximity to some successful and significant mines; namely, Revival Gold’s Beartrack-Arnett Project and projects owned by Barrick Gold and Agnico Eagle.

According to Freeman Gold, a large amount of capital has been flowing into Idaho in the last year, as institutions and significant mining companies recognise the strategic potential of the region.

Investors may appreciate Idaho as a jurisdiction, but they will want to know what sort of potential the Lemhi Gold Project could have before getting overly excited. Freeman Gold’s ambition for the project is clear: to define and delineate a 1.5M-2Moz primarily oxide, open pit gold deposit in Idaho. For a $30M company, a resource of this size could spell major growth.

What do we already know about the project? Its origins stretch back to 1867, when it was discovered by Placer Gold. However, it took over a hundred years for major progress to be made when the first significant drill operation was conducted by FMC between 1984 and 1991. These 148 drill holes defined an initial resource. American Gold Resources soon took the reins, and between 1991 and 1996, the company conducted a 130-drill-hole PFS along with environmental baseline studies. Meridian Gold acquired the company in 1997, but depressed gold prices led to the project’s stagnation. It wasn’t until accretive gold prices in 2011 and beyond drove momentum back into the gold space that Northern Vertex conducted an extensive 10,531m drill programme. In 2013, Northern Vertex sold its 51% share to Idaho State Gold Company.

The last major development in the project’s history leads us to where we are today. Freeman Gold fully acquired the properties in 2019. This is the first time a group has ever owned the unpatented and patented mining claims at the same time.

Some investors may wonder why Freeman Gold will be able to make this asset work economically when several companies appear to have failed. It seems clear that Freeman Gold’s management will be pointing to their extensive and successful track record.

So, what current data and facts can investors examine to determined Lemhi Gold’s likelihood of entering economic production? With over 355 holes already drilled in deposit area, historical data indicates resources ranging from 500Koz to 1.2Moz grading between 0.84g/t and 1.3g/t gold.

Having closed an oversubscribed $10.35M bought deal public offering in late July, which was co-lead by Canaccord Genuity & Stifel GMP, Freeman Gold has around $8,500,000 in the bank and appears well financed to progress the Lemhi Gold Project in a reasonable timescale. It hopes to unlock the potential of this unexplored, consolidated >7500-acre land package via an ‘aggressive exploration programme.’ This will take the form of an initial twin, in-fill drill program to identify a 43-101 compliant resource. Operations could be made easier by the geology of the large land package: the company claims the mineralisation of the zone is open in most directions, including at depth, with an open-pit, near-surface, heap-leach, amenable historical resource.

On the permitting/licencing side of things, the company’s operation will be less complicated because most of Lemhi’s historical resource resides on patented claims. With an institutional investor already on board in the form of Yamana Gold Inc (5%), the company is hoping that 2020 is a year that will offer catalyst moment and growth for shareholders. Considering that management and insiders hold 20% of the company, they are likely to want to make this work for their benefit too.

As Freeman Gold continues with its planned drilling operations, an increased understanding the deposit’s geology could aid the accuracy of the company’s modelling. The initial target is a 43-101 compliant resource within the historical resource area of >1M oz.

Freeman Gold represents an interesting investment proposition, and at a value of just $46 per historical gold ounce, represent strong value in this encouraging gold bull environment. We will be following this story closely as it continues to develop. What do you make of Freeman Gold and these latest developments?

To find out more, got to Freeman Gold's website.