TRU Precious Metals (TRU) - Newfoundland Explorer Set for Success

TRU Precious Metals has assembled a portfolio of five gold exploration properties in the highly prospective Central Newfoundland Gold Belt. These properties are in prime locations beside some prominent neighbours. They are well financed and the company is looking to get the story out to the market.

We spoke recently with Joel Freudman, co-founder and CEO of TRU Precious Metals, a Canadian junior gold explorer active in the Newfoundland Gold Belt. He shared with us some of the recent activities at his company.

Company Overview

TRU has assembled a district-scale portfolio of five gold exploration properties in the highly prospective and mining-friendly Central Newfoundland Gold Belt. The company has a strong cash position and its assets are well positioned geographically within the heart of the ore-bearing trend.

TRU has amassed a large, strategically located set of landholdings. Golden Rose, located along the Valentine structural corridor in central Newfoundland, is TRU’s flagship project. They also own the Twilite Project and other assets within the gold belt.

The company boasts a diverse shareholder base and is listed on the TSX Venture Exchange. It also trades on the OTC and Frankfurt exchanges

Management and Direction

Freudman is joined at the management level by Robert Harrison, CFO; Barry Greene, Vice President Property Development; and Pierce Bradley, Exploration Manager. Damian Lopez, David Hladky, and Colin Sutherland are the company directors.

Joel Freudman: Lawyer and Company Creator

Fruedman has run TRU in its current form since September of 2020. As a former practicing securities and M & A and corporate lawyer with focus on mining clients, Freudman sees himself in an excellent position to run a junior gold miner. He told us the following: His background influences how he runs the TRU and how his team approaches the game. He started his career in private practice with a junior securities and corporate law boutique firm in Toronto that focused on junior mining issuers. He had been engaged in restructuring inactive shell companies, taking companies public by IPO, and taking in firms public via reverse takeover. He has been active in the deal space for the last 5-years, especially in the micro-cap sector of the transactional public company environment.

We asked him for more details. He replied that there are several facets from his experience portfolio that are particularly pertinent.

1. From a legal and compliance perspective, he has a very good handle on all the rules of being a publicly listed mining company in terms of how government regulatory disclosure looks.

2. His experience with small companies has cued him in to the keys for success. He believes that he knows what not to do, or how things can go wrong if you're not keeping a close eye on managing the company, operations, and execution.

3. His experience on the transaction front, including reverse takeover, buyouts by private equity firms, corporate finance, and routine disclosure, has given him a really good handle on running a public company. 

We noted that he is tuned into running a “clean game” at TRU. We bought up the fact that with a lot of junior miners there is a bit of misconduct. How are you going to run a clean ship, we asked?

He responded by saying that indeed that there is quite a lot of misconduct, especially in the junior mining community. He went on: The company just went through a major regulatory process in connection with the transformational deal to acquire our flagship property, Golden Rose. They got it from Altius Minerals and this change of business process is almost akin to a new listing, so the regulators put you through almost an IPO-like process. 

TRU wants to build a good relationship with our regulators, he told us. His team is careful, he said. They know how to respond to the regulators without being too QT or saying something that's going to get the company in trouble, or even something TRU can't deliver on. They were able to do all of that expeditiously; they shaved 1-2 months off the process of what it would have otherwise taken. 

The TRU Team

In order to do these things correctly, you need a good team, we prompted. Fruedman agreed, saying that with his legal background he’s very pleased to be part of the team. It wasn't originally in his career plan, but now that he is in it, he recognizes the opportunity it presents. He has become much more opportunistic in his new role, particularly regarding funding options.

It’s not a one-man show, he said. Our CFO, Robert Harrison is a great nuts-and-bolts accountant, not conservative, not a capital market guy, just a rock-solid CFO. We have great people heading up property development, communications, M&A and accounting, he told us.

In fact, our property development VP is leading the exploration effort, he told us. Fruedman said that they didn’t want to give him the tile of exploration manager because they wanted a person with a broader mindset than “All the money must go in the ground.” He oversees the exploration team, but he also looks for ways how they might acquire or divest company properties for shareholder benefit.

How TRU Explores

TRU also recruited Pearce Bradley as exploration manager.  He was working for Maritime Resources at their Newfoundland Hammerdown deposit, which is being developed as a mine. He has thirty-plus years of exploration experience. He brings knowledge and connections to our corporate table.

TRU has two guys on the ground who head up the exploration efforts in the field and a whole field crew of about 10 people, a mix of contractors and employees, some of whom are professional geologists.

The company has five properties that they are going to explore. One of them is a property called Rolling Pond, which borders Newfound Gold acreage. They have completed a significant soil-sampling program across that property. They also are in the midst of a 1,200 m program at the Twilite asset. At Golden Rose, the flagship property, a 2,500 m drilling program is underway. The Golden Rose acreage is sandwiched between a 4 M oz. gold deposit on one side and an 840,000 oz. lode on the other.

Financial Situation at TRU

Next, we spoke about the financial situation at TRU. Fruedman told us that they are very well financed to run the program.  They started with USD $1.5 M. They raised an additional US $3.5 M in March on the back of the option transaction to get the Golden Rose Project from Altius. They were quite pleased in that it was way oversubscribed relative to their USD $1-2 M target. The lead order was from Palisades Goldcorp.

They realized it would be prudent to raise more money to explore their properties, so they recently closed another USD $3.5M financing deal, this time led by Eric Sprott, with Sprott becoming a major shareholder.

Indeed, he said, they now have USD $7M-8 M in the bank, half of it is hard dollars for running the company: staffing, marketing, M&A, etc., and another USD $3.5 M purely for exploration. Their budget was USD $2.1 M for the year, so their limitation is not money, it’s getting enough good personnel to execute the program because there's definitely a competition for human resources in Newfoundland.

Did you take on too much too fast, we asked?  Good question, he responded. He indicated that they are not trying to be crazy. They are trying to stage their activities, especially drilling, in a systematic manner. They are not going to get ahead of themselves and just “go drill, drill, drill” and waste money. Instead, they intend to be prudent spenders. 

TRU Assets: The Details

We asked for a deeper dive into TRU’s main assets.  Given his background from the legal side rather than the geological side, Fruedman realized that they need good geology to ultimately be the foundation of the company. He started us off with Golden Rose. The reason why they like it so much, he said, is that it's located along the auriferous Cape Ray Valentine Lake Shear Zone. For a guy who is not a lawyer, “Where else would one want to be”, he went on. There's a lot of historical work done including some historical drill programs to delineate their initial target. Most of the work was done from 2010 to 2018 when there was less excitement about mining, he shared. They have a 43-101 technical report published as well on this project. They are currently doing a lot of operations there, he said.

At Twitilte, there was a drill program in 1999 by Fort Knox. Altius was involved as well, he said. As at Golden Rose, they are not drilling blindly, he maintained. They are piggybacking on what's already been done.

Eric Sprott has put in USD$2 M in the financing that they just closed. It’s awesome to have him in the shareholder base, Fruedman said. 

Marketing and Media

You're not just a random bet and you’ve got the team to succeed, but how are you going to market that, we asked. He started off by saying that by being listed on the OTC, they are getting more exposure in the US. He also recognizes that TRU has to embark on a mix of traditional road shows and virtual marketing.

Therefore, they have also hired Winning Media for an up-front sum of US$100,000 to handle stateside marketing. Winning Media is in charge of things like ad buying, copy design, to build an online presence for TRU that hopefully will excite the US investor community about their company.

TRU has also hired Venture Liquidity Partners to do additional marketing. They paid USD $50,000 for their services. They are a market maker and their job is to help foster liquidity in their securities and ensure an orderly market. They can post bids and asks, as well as reduce the spread.

How do you answer people who say that you should not be spending so much on marketing and that it’s better to put it into direct exploration, we asked? They complement each other, he said.

Market Guidance

TRU believes in providing numerous press releases, Fruedman told us. It’s a way of providing guidance and expectations. The company is doing things fairly differently, he said, and maybe people are wondering, should I follow the stock? What better way than to say: Here's how the company is going to be run and then deliver on the guidance as best as humanly possible.

No matter what, he said, the company must be discovery-oriented and deliver on their public statements.

The Newfoundland Gold Rush and TRU’s Role

There's a new game in gold afoot and the magic word is Newfoundland, we told Fruedman. There's real froth and excitement, and some companies will be able to deliver but others will not, we said. What’s TRU’s role in all of this, we asked?

Fruedman believes that his properties and the work they are doing are both top-notch. When the tide goes out, he believes that they are well enough capitalized and have the right properties that will allow them to ride out any downturns. The Newfoundland gold rush story is still early in its development, he believes. Their job is to do the things to keep the company moving, advancing, and being a successful business that will ride out any fluctuations in the market conditions.

TRU’s role might be to emerge as a consolidator, Fruedman said, but that is one of many potential outcomes. If someone approached the company to take it out, is that a bad outcome for shareholders, mused Fruedman? Maybe not, he answered himself. Eventually there will be a consolidation and they will be ready for that when it comes, he went on.

Fruedman ‘s Closing Thoughts

TRU has millions of dollars in the bank, but so do many other companies. There are many “cashed-up” players who for the time being can stand independently, but eventually, there'll be a consolidation. TRU will be positioned for that, if and when it happens. In the meantime, TRU wants to be able to continue doing business, exploring what they have, financing a good team and a good corporate structure, and getting the job done.

To find out more, go to the TRU Precious Metals website