Rupert Resources (RUP) - $900M with Real Leverage to Gold

Rupert Resources is located at the epicentre of a new gold district targeting multi-million ounce gold discoveries in close proximity to a 100% owned permitted mine and mill in Northern Finland at the Pahtavaara project.

The Pahtavaara mine was bought back in 2016 by Rupert Resources and since then the company has been looking for new discoveries outside the mine area. Rupert Resources undertook a comprehensive review of historical data resulting in a new geological model showing the Pahtavaara Project to lie in a domain hosting the confluence of regional scale faults that likely link to crustal scale fracture meshes. Several orders of faulting are represented, which are necessary for crustal scale fluid flow and focusing that can result in deposit formation.

We recently spoke with James Withall, CEO at the Canadian-based company, Rupert Resources. He shared with us some of the excitement he has about the company’s activities in Northern Finland. We were interested in how he is going to allocate his time, money and efforts. 

Company Overview

Rupert Resources is a gold exploration company targeting multi-million ounce gold discoveries in Northern Finland. The company owns 451 km2 of prime acreage along major structural trends in the Central Lapland Greenstone Belt.They have made six gold discoveries during the past year. The company’s activities are proximal to a 100% owned and permitted mill. A 60,000-m drilling program is currently underway. The company program is fully funded for the next 18 months.

Leadership Team

James Withall’s background includes experience as both a gold equity fund manager and a geologist. In addition to CEO Withall, the company is led by Gunnar Nilsson, Non Executive Chairman; Jeffrey Karoly, CFO; Jukka Nieminen, Managing Director of Rupert Finland; Thomas Credland, Head of Corporate Development; and Dr Charlotte Seabrook, Group Exploration Manager. Several non-executive directors, including Michael Sutton, Michael Ouellette, Susan Milton, and George Ogilvie also serve the management team. Michael Sutton was credited with the discovery of the South Mine Complex at Kirkland Lake, Ontario, Canada.

CEO Recap

Withall reminded us that the company has a permitted mine and mill at Pahtavaara, bought back in 2016, and has been making exciting discoveries proximal to the facility. Of note, the Ikkari discovery, made about a year ago, has received quite a bit of market interest. Withall intends to announce maiden resource numbers in Autumn 2021, if not sooner.

Tell Us About Ikkari

The Ikkari deposit is a greenstone-belt-hosted, orogenic gold occurrence. The Ikkari gold is located about 50 km southeast of Agnico Eagle’s Kittila Mine, which is Europe’s largest gold mine. Recently, drilling has encountered high-grade auriferous mineralization of up to 8.9 g/t over 23 m and 4.4 g.t over 188 m in two intercepts. The continuing 2021 drilling program plans to accomplish over 60,000 m of exploratory penetrations.

Why should you be interested now?

Rupert Resources' recent stock offering was well financed at $5.30 a share, which surprised the CEO and attracted quite a bit of institutional demand.

The company is also very focus on making an exceptional discovery, or at least a discovery that is rare for the industry. The company thinks that the Ikkari discovery brings this into focus. This is the first discovery of its kind in Finland and Rupert Resources has amassed a good land position in this mineral belt. The attraction is that there is a lot of potential still to come.

Rupert’s Capital Deployment

Withall explained how the company plans to use the money on demonstrating the economic potential the Ikkari discovery, as well as exploring new discoveries.

The company has had five other discoveries over the past year or so in addition to Ikkari. 

Maiden Resource Announcement

Rupert Resources felt the need to let people know the maiden resources numbers before the program was completed, out of an obligation to keep shareholders informed.

Since the company is using it's capital in somewhat of an aggressive manner, Ruper Resources wanted to be accountable and up from about how things were progressing. If the company can get the first resource out within just over a year from discovery, it will permit them to start working on all the economic side of things such as metallurgy that de-risk their assets a lot quicker.

‍How Do You Measure Value and Performance at Rupert

Like many companies, Rupert Resources uses KPI’s (Key Performance Indicators) to measure the company's performance. The three-year KPI is simple: to demonstrate a return on shareholder equity. Withall said he’d like to return 4 to 5 times more value return than capital raised. Given the $48 M the company has just pick up, the benchmark is to generate some $250 M value for shareholders. This is especially important because, at least at the moment, the company is not cash flowing.  

Despite discovering a significant amount of ounces, not all ounces are the same. A lot of the value variation has to do with factors such as gold price, inflation, and the economic feasibility of the discovery. So, every company has a value spread for any given set of discovered ounces. Simply having discovered gold in the ground is not the end of the story. Instead, it's the value of those ounces. 

Now, a lot of companies are trying to catch the wave in gold. Some are looking simply to make discoveries. For Rupert Resources, it's about value. Withall believes that companies live and die by potential returns. The company's team see the value they are creating at Ikkari and that gives them an internal benchmark of what they need to do with the other discoveries that the company has made. The company is putting out consistent results and the de-risking of assets is taking place.

The Path Forward

With projects like Ikkari, where very long gold-bearing intercepts have already been made, you don’t have to drill too many closely spaced holes to bring them up to confidence level. So, some of their money and efforts will be placed on bringing the Ikkari value up as well as evaluating the other 5 discoveries near Ikkari, which are in the company’s Area 1.  

Withall reminded us that Area 1 is only about 10 percent of their total land package, so efforts will be made to make additional discoveries elsewhere on their property and also to extend the Ikkari asset laterally. About half of the budget will go to Ikkari, the remainder will be deployed on other endeavors. 

One of these opportunities is a new package of land that they hope to pick up later in 2021. It is very similar geologically to Area 1,. All told, the company has over twenty or more new targets identified. Rupert Resources is continuously evaluating and re-ranking the opportunity set, much like a fund manager evaluates his securities portfolio.  

The company will expedite the path to production as quickly as possible. Rupert Resources doesn't want to be pigeon holed as just an exploration company, preferring to be viewed as a resource company. At the same time, the company is looking to replace the cornerstone Ikkari asset with several new ones. And because it is a small company, things can move fairly quickly.  

The Benefits or Working in Finland

In many respects, doing business in Finland is similar to doing it in Ontario, Canada. The weather is the same, infrastructure is great and they are plugged into 100% renewable, low-cost hydropower at their projects, Withall said. As long as the company open and honest, things work fine, he continued. In actuality, it’s a very low-risk working environment.

The CEO also believes that Ikkari can become a truly modern mine with little to no carbon footprint and a credit to Finland and its people.  

Managing Expectations

As we neared the end of the interview, Withall said that one of his jobs is also managing expectations. Withall explained how Rupert Resources likes to keep people informed, especially given the top-tier results the company keeps getting.

The bottom line is to find exceptionally high-return assets in exploration and commit a higher-risk, larger amount of money early on, in order to expedite the value creation for shareholders. As far as Ikkari goes, it doesn’t matter if it gets developed or if it’s sold to another firm for development, because either way, shareholders will benefit. “It all requires good assets, doesn’t it?" he stated. 

Closing Thoughts 

We finished up the interview by asking Withall what’s next out of the block. He summarized by saying it all about demonstrating resource, people are looking for the maiden numbers report and the company will take it from there.

To find out more, go to the Rupert Resources Website