Val-d'Or Mining’s Prospect Generation Model Powers $36.5M Eldorado Partnership

• Val-d'Or Mining employs a prospect generation model: staking properties 100%, conducting minimal exploration ($300,000 annually), then partnering with larger companies to fund drilling and development work
• Eldorado Gold partnership represents $36.5 million in committed exploration spending across 12 properties, with Val-d'Or earning 10% management fees on Ontario properties plus option payments
• Revenue streams include option payments (~$200,000/year from Eldorado), 10% management fees on operated properties, advance royalty payments, and office building lease income
• Company owns 50+ properties across Quebec and Ontario, targeting 2% NSR royalties as partners vest, with minimal shareholder dilution through non-equity exploration funding model

In an environment where gold prices continue reaching new highs and junior mining companies struggle with dilutive financing, Val-d'Or Mining Corporation has positioned itself with an alternative approach to resource exploration. Led by President and CEO Glenn Mullan, the company operates a prospect generation model focused on creating grassroots royalties while avoiding the capital-intensive burdens typical of traditional exploration companies. With major partner Eldorado Gold committing $36.5 million across multiple properties and a track record of successful exits totaling over half a billion dollars in previous ventures, Val-d'Or represents a distinctive investment case in the Canadian mining sector.

The Prospect Generation Model

Val-d'Or Mining's business model centers on acquiring properties at 100% ownership, conducting minimal initial work, and then securing partners to fund substantial exploration programs. As Mullan explains, 

"We stake properties, we acquire properties under the mining act in Quebec and Ontario. Typically we own 100% on day one. We follow that with minimal work funded from our own treasury."

The company's exploration budget from its own treasury is remarkably modest at $300,000 annually, distributed across approximately 10 properties at roughly $30,000 per property. This minimal spending covers geophysics, geology, prospecting, sampling, and verification work sufficient to advance properties to a point where they become attractive to potential partners. "We only spend money on properties we expect to vend to someone else," Mullan states, emphasising the focused nature of the company's capital deployment.

This approach contrasts sharply with traditional junior exploration companies that must raise and deploy tens of millions of dollars to adequately test property portfolios, resulting in significant shareholder dilution. By bringing in partners early, Val-d'Or transfers the expensive drilling and development costs while retaining royalty interests.

The Eldorado Gold Partnership

The cornerstone of Val-d'Or's current operations is its partnership with Eldorado Gold, a substantial producer with approximately $5 billion market capitalization. The relationship encompasses five separate agreements covering 12 properties, two in Quebec and 10 in Ontario with Eldorado committed to spending $36.5 million Canadian to earn their interests.

The partnership structure provides Val-d'Or with multiple revenue streams beyond eventual royalties. On the Quebec properties, Eldorado operates the exploration programs, which is logical given their Sigma Lac complex infrastructure in Val-d'Or. However, on the 10 Ontario properties, Val-d'Or serves as operator and receives a 10% management fee on expenditures. With the majority of the $36.5 million expected to be spent on Ontario properties, this represents substantial near-term revenue.

Additionally, the company receives annual option payments totaling approximately $200,000 across the Eldorado joint ventures. "Our agreements with other junior companies are similar. There's always option payments," Mullan notes, highlighting the consistency of this revenue model across partners.

The Eldorado partnership didn't begin with raw grassroots properties. Val-d'Or Mining inherited a portfolio from Golden Valley Mines that had already seen $10 million in exploration spending over the previous decade. As Mullan recalls pitching to Eldorado: 

"This is what $10 million that we've spent over the past 10 years looks like on a group of properties. We actually have good results including drill intercepts. We actually have spectacular untested geophysical anomalies."

Track Record of Successful Exits

Mullan's prospect generation approach has produced three notable exits over his career, providing validation for the current Val-d'Or strategy. The first was Canadian Royalties Inc., which focused on nickel, copper, and platinum group elements in northern Quebec. That company had 122 grassroots royalties, each generating $10,000 annually in advance royalty payments, providing over $1 million in annual revenue. Canadian Royalties grew to a $500 million market capitalization before being acquired by Chinese metals company Jilin Jien. The operation continues today with 1,200 employees and recently extended its mine life another decade.

Following Canadian Royalties, Mullan formed Golden Valley Mines, which executed a triple spin-out on the venture exchange, creating three public companies including the current Val-d'Or Mining Corp. Golden Valley Mines reached $12.65 per share before being acquired by Gold Royalty Corp. Simultaneously, Abitibi Royalties, another spin-out climbed from $0.30 to $25.50 per share before also being acquired by Gold Royalty Corp.

The Abitibi Royalties exit proved particularly lucrative, as it held a 3% NSR on what became the Odyssey mine, now owned and operated by Agnico Eagle. When combined with Osisko's retained 5% NSR, the property carried an 8% total royalty burden. 

"An 8% NSR over different parts of the ore body. There were a lot of questions when the price of gold was $1,500-1600 US." 

The Odyssey mine ultimately developed over 10 million ounces in measured and indicated resources by the time the Abitibi Royalties transaction closed a single asset that justified the entire royalty company structure.

Interview with Glenn Mullan, President & CEO of Val-d'Or Mining Corporation

Building a Strategic Property Portfolio

Val-d'Or Mining maintains a portfolio exceeding 50 properties across Quebec and Ontario, concentrated in proven geological terranes including the Abitibi greenstone belt and the Cadillac fault zone. The company deliberately operates in areas accessible by road, avoiding helicopter-dependent exploration that dramatically increases costs.

Property selection focuses on favorable geology in areas where major companies have consolidated land positions. As Mullan observes: 

"If you looked at a map of title holders, mining property owners in Quebec and Ontario, you would be left with the impression, Agnico Eagle owns it all... they've probably acquired 60% of most of the favorable geology."

This consolidation creates opportunities for companies like Val-d'Or that consistently stake and explore in gaps between major holdings. The company has worked both sides of the provincial boundary for over 20 years, providing flexibility to capitalize on whichever jurisdiction offers better fiscal terms, regulations, or political climate at any given time.

Current exploration activities with Eldorado Gold exemplify the methodical approach. Over three and a half years, the partnership collected 6,000 soil samples across the 12 properties, unglamorous work that doesn't generate market excitement but provides essential targeting data. 

Structuring Partnerships Across Market Tiers

With a portfolio of 50+ properties and limited internal capital, Val-d'Or must continually seek partners across a spectrum from major producers to junior explorers. The company's approach to vetting and structuring these relationships reflects hard-won experience.

For smaller junior partners, Val-d'Or emphasises protective mechanisms. "The trigger for us is an advance on royalties payment," Mullan explains, noting this serves dual purposes: generating revenue and providing a default mechanism to reclaim properties if partners fail to meet obligations. Annual payment milestones and staged expenditure requirements ensure properties don't languish with undercapitalised partners.

The recent Kirkland Lake Discoveries partnership illustrates opportunistic deal-making. When certain properties faced upcoming assessment work requirements under the mining act, Kirkland Lake Discoveries approached Val-d'Or about testing for critical and strategic minerals. The resulting agreement provided Val-d'Or with 1.7 million Kirkland Lake Discoveries shares, a drilling commitment, and a royalty avoiding the cost of maintaining the properties while creating potential value.

"We would have lost the properties if we wouldn't have done a transaction, that's part of the motivation to talk to everybody. Of course, you want Agnico Eagle to be your partner on all the gold projects or Eldorado Gold or IAMGold, but if they're not interested in the grassroots, we just keep making the phone calls."

Creating Royalties as the Primary Exit Path

Unlike traditional junior mining companies seeking to advance properties toward production, Val-d'Or's explicit goal is creating a portfolio of royalties for eventual sale to a royalty aggregator. 

"What we're trying to do is to create a royalties company. Those agreements or exit strategies, selling to Gold Royalty Corp, Abitibi Royalties, Golden Valley Mines, Canadian Royalties... selling the companies as royalty entities tends to be better for shareholders than conventional mining deals."

The royalty structure typically targets 2% net smelter returns (NSR), though this varies based on legacy interests and negotiations. Mullan notes that conventional royalties historically ranged above 3%, but current agreements typically fall between 1.5% and 2%. The rising gold price has reduced operator resistance to these royalties.

As each agreement with a partner reaches full vesting meaning all required expenditures and milestones are completed the royalty crystallises. Val-d'Or retains this perpetual interest regardless of future ownership changes to the underlying property. The company doesn't need to wait for production revenue; royalty companies acquire portfolios based on resource estimates and production probabilities.

Concentrated Ownership Drives Alignment

Val-d'Or Mining maintains an unusual capital structure with four 10% shareholders: Mullan himself, his original Golden Valley Mines backer, Gold Royalty Corp, and SIDEX (the Quebec government financial institution). These concentrated holdings represent 40% of the company, with retail shareholders comprising the remaining 60%.

This structure reflects the "fan club of sorts" Mullan references investors who have profited from previous ventures and maintain long-term positions. However, the retail shareholder base has been "belaboured, flattened over the past 3-4 years" as the company conducted unglamorous soil sampling and preparatory work without generating exciting news flow.

The concentrated insider ownership provides alignment and stability, while the prospect generation model specifically aims to avoid the dilution that typically destroys junior mining shareholder value. 

"What hurts junior mining companies is dilution. You have to raise a lot of money to test these ideas... we've tried to build a better mousetrap."

Capitalising on Market Momentum

Val-d'Or operates in what Mullan describes as "the perfect storm for gold producers" gold touching new highs almost daily, with Canadian producers earning USD revenue while paying CAD expenses. This environment drives major and intermediate producers to expand their exploration pipelines, creating demand for properties like those Val-d'Or offers.

"The top down hasn't touched the smallest of the juniors yet, but it's definitely apparent for the developers."

The company deliberately concentrates on gold given current market conditions. 

"There's really no point to getting cute with lithium projects and so on. They've had their moment. They no doubt will again. Today is not that moment."

With drilling now underway on multiple properties, Val-d'Or anticipates increased news flow as a catalyst for market recognition. The company expects its next Ontario drill program to commence within 10 days of the interview, with 11 additional properties in the Eldorado partnership queue awaiting their turn.

The Investment Thesis for Val-d'Or Mining

• Non-Dilutive Growth Model: $36.5 million in committed partner spending (primarily Eldorado Gold) eliminates need for equity raises while advancing 12 properties toward royalty creation; company spends only $300,000 annually from treasury
• Multiple Near-Term Revenue Streams: ~$200,000 annual option payments, 10% management fees on ~$30+ million in Ontario expenditures, advance royalty payments, and commercial real estate lease income provide cash flow independent of commodity production
• Proven Exit Strategy: Three successful prior exits (Canadian Royalties, Golden Valley Mines, Abitibi Royalties) totaling over $500 million in value creation; model explicitly targets sale to royalty aggregators rather than mine development
• Strategic Asset Base: 50+ properties in tier-one Quebec and Ontario jurisdictions (Abitibi greenstone belt, Cadillac fault zone) with $10 million in historical work already completed; road-accessible properties minimise ongoing carrying costs
• Favorable Market Timing: Record gold prices and major producer appetite for exploration pipeline expansion creates optimal environment for deal-making and royalty monetization; company positioned as consolidator of fragmented land positions
• De-Risked Partnership Model: Technical committee structure with Eldorado Gold ensures disciplined capital deployment; advance royalty payment mechanisms and annual milestones protect against partner default while maintaining property recovery rights

Macro Thematic Analysis

As gold prices touch successive all-time highs in 2025, major and intermediate producers face intense pressure to replenish reserves and expand production pipelines yet grassroots exploration remains capital-intensive and dilutive for junior companies. This dynamic creates a structural opportunity for prospect generators like Val-d'Or Mining that can aggregate quality properties without deploying shareholder capital. The model effectively arbitrages the resource sector's inefficiency: major companies possess capital but lack land positions, while juniors control properties but lack funding. By positioning as the intermediary, Val-d'Or captures value through royalty creation while partners bear exploration risk. As Mullan notes: 

"If you think about it, with the price of gold touching new highs almost daily and Val-d'Orbeing a classic Canadian gold mining town, what better business is there for a gold miner than to be paying your expenses in Canadian dollars, getting your revenue in US dollars in a commodity that's increasing from day to day."

TL;DR:

Val-d'Or Mining operates a prospect generation model with $36.5 million committed by partner Eldorado Gold across 12 properties, creating multiple revenue streams (option payments, management fees, royalties) while spending just $300,000 annually from treasury. CEO Glenn Mullan has executed three prior successful exits totaling $500+ million, selling royalty portfolios rather than developing mines. With 50+ properties in tier-one Quebec/Ontario jurisdictions and drilling now underway, the company targets 2% NSR royalty creation across its portfolio for eventual sale to royalty aggregators, providing non-dilutive exposure to discovery upside in a record gold price environment.

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