On May 24, Dataram Corp (NASDAQ: DRAM) announced the closing of its merger with gold exploration company US Gold Corp. The combined company will continue to trade on NASDAQ with the symbol DRAM, but will rename ) to US Gold Corp to reflect a shift in its focus to natural resources (and away from information technology).
Subsequent to the closing, management announced a number of new Board of Director additions. These additions combine with the company's existing operational staff and executives to create something of a dream team in the US mining space. Here's a look at the individuals that have come together to form this team, what each brings to the table and the projects on which the team will focus their efforts.
For those new to the company, US Gold Corp is a junior gold company with two projects in its portfolio – Keystone, in Nevada, and Copper King, in South East Wyoming. The company's President and CEO, Edward Karr, founded US Gold Corp with the purchase (by him and a group of investors) of the Copper King property. As mentioned, this one's located in Wyoming, around 20 miles west of Cheyenne, and it's a development stage gold and copper project. It's already been subject to an extensive drilling and exploration program, with at least nine drilling campaigns undertaken by seven companies between 1938 and 2016. Drilling campaigns by five different operators since 1970 have confirmed mineralization at the project.
Resource estimates, collected as part of a 2012 Preliminary Economic Assessment (PEA) in accordance with NI 43-101 and conducted by Mine Development Associates (MDA), put total measured and indicated resources of gold at 926,000 oz. Inferred resources add an extra 174,000 oz. to this total. For copper, the total measured and indicated resource comes in at 223 million lbs., with inferred adding an extra 62.53 million lbs. to this total.
As per the most up to date geological data, the project is underlain by Proterozoic rocks that make up the southern end of the Precambrian core of the Laramie Range. Higher-grade mineralization occurs within a central core of thin quartz veining and stockwork mineralization that is surrounded by a zone of lower-grade disseminated mineralization. Disseminated sulfides and native copper with stockwork malachite and chrysocolla are present at the surface, and chalcopyrite, pyrite, minor bornite, primary chalcocite, pyrrhotite, and native copper are present at depth. Gold occurs as free gold.
US Gold Corp is currently working to secure permitting for the project, in advance of a continued exploration program and, ultimately, a production run. The entire resource is no Wyoming state land, meaning management need only to secure support (and in turn, permits) through local agencies and not federal entities. This should serve to reduce both the time and cost associated with the permitting. As outlined in a recent interview, the state of Wyoming is eager to make up for revenues lost on the back of the dip in the price of coal (the state is a big coal mining state). This necessity to offset the coal revenue losses, and the potential for copper and gold mining activity to meet this necessity, should contribute to s simplification of the permitting process and – by proxy – speed up the pathway to production for US Gold Corp at its Wyoming location.
Having purchased Copper King, and founded the company on the project, Edward Karr turned his attention to Keystone. A respected and established geologist called Dave Mathewson (we'll look at him in a little more detail shortly – he's prominently positioned in the US Gold Corp dream team) called him up to discuss the project, a project for which Mathewson owned the claims. On the back of the discussions, US Gold Corp struck a deal with Mathewson that saw the company pick up the rights and Mathewson come on board as a full-time Head of Exploration at US Gold Corp.
The Keystone project is far less advanced than Copper King from an exploration perspective, but it's no less intriguing. It's located in right in the middle of what's deemed prime Nevada gold country, along the Cortez gold trend, one of the world’s leading gold producing regions. It's approximately 15 square miles in size and the company's initial target for the project is more than 1 million oz. Total project potential is estimated at more than 10 million oz. For those familiar with the term, this is elephant country. The word elephant here refers to a resource of more than 20 million oz., of which there have been numerous identified along above noted Cortez trend (and along which this resource is located).
While a PEA is not yet available for the project, geological reports serve to offer a degree of insight into its potential. The project is centered on a granitic intrusion that warped the local Paleozoic stratigraphy into a dome, allowing for exposure to a range of potentially highly favorable rock formations, each of which is associated with mineralization. These include the Horse Creek Formation and the Wenban limestone, as well as possible sandy clastic units of the Diamond Peak Formation. The former two of these, The Horse Canyon and Wenban rocks, are the primary host rocks at Barrick Gold Corp (USA) (NYSE:ABX)'s nearby Cortez Hills Mine and Gold Rush deposits.
As per the company's most recent update regarding the development of the Keystone project, the initial claim count has risen from 284 claims to 479.
So that's an overview of the properties; let's get to the team.
We'll kick things off with Mathewson.
Mathewson is a geologist with more than 35 years' experience in the gold exploration space, and specifically, in Nevada. He made a number of notable discoveries with gold mining giant Newmont Mining Corp (NYSE:NEM), including Tess, Northwest Rain, Saddle and South Emigrant in the Rain mining district. After Newmont, Mathewson helped transform Gold Standard Ventures Corp (NYSEMKT:GSV) from a $15 million startup to a half billion dollar producer, through his exploration and consolidation work on the Railroad and Pinion projects.
At US Gold Corp, Mathewson's role is, as noted, Head of Exploration. He's tasked with the development of the Keystone project; a task for which we believe no one is better suited. He's the one who initially pitched the project to US Gold Corp and he's going to apply the exploration techniques developed at Newmont and GSV (in what is basically the same region and geology type) to the location in an attempt to quantify the resource it holds.
His initial efforts will be focused on the drilling of several 1,500 feet deep holes, designed to establish the geological composition of the resource. At time of writing, five holes have been drilled and a sixth is set to be drilled near term, having been delayed by bad weather at the end of last year. As the company's CEO in the above linked-to interview (available here), Mathewson knows what rock type and geologic features he's looking for as indicative of a strong resource and this initial drilling program will inform later drilling targets ahead of a PEA.
Next up, James Dale Davidson.
Davidson is a Director of US Gold Corp, having come on board at merger completion and as announced by the company with this press release. He's an author and a Director of a range of companies across various industries, but what validates him as an addition to this list, and by proxy, the US Gold Corp dream team, is his work with a mining company back in the mid to late 1990s.
In 1996, Davidson teamed up with Richard 'Dick' Moores to found Anatolia Minerals. The two men started the company with an initial $800,000 in startup capital, before growing it to become an industry leading entity in gold space in Turkey. At its peak, Anatolia Minerals commanded a market capitalization of $3.5 billion, with Davidson and Moores at the helm. The company had numerous joint ventures with big name producers such as Rio Tinto plc (ADR) (NYSE:RIO) in both copper and gold and eventually teamed up with Australian miner Avoca Resources to form Alacer Gold Corp (TSE:ASR). Alacer currently trades for a market capitalization of $600 million.
As a Director, Davidson's remit at US Gold Corp isn’t as clear cut as that of Mathewson, but it's reasonable to assume that his goal is to help the company navigate a pathway similar to that which he navigated with Anatolia – from private startup to billion-dollar producer.
Next on the list is Tom Chapin.
Tom Chapin is a Senior Consulting Geologist at US Gold Corp, listed as a member of the company's Technical Advisory Team. He's essentially Mathewson's right-hand man. Chapin works for gold mining behemoth Barrick Gold Corp (USA) (NYSE:ABX) as a Senior Geologist, most notably serving as the Senior Geologist of the Cortez Gold Mine, which is located along the same trend as the Keystone project.
If there's a guy you want leading exploration at a project like Keystone, it's Mathewson. If there's a guy you want to support Mathewson in his efforts it’s the Senior Geologist at Barrick's Cortez facility. That's what we've got here.
The two are working together right now to establish the locations of the above referenced 1,500 feet deep drill holes and will combine their expertise to interpret the results of this drilling and to put together a forward exploration strategy.
The final addition to the list is one we've already mentioned, CEO Edward Karr.
Readers may already be familiar with the name – he was one of the founders of, and now serves on the Board of Directors at, Pershing Gold Corp (NASDAQ:PGLC), a NASDAQ traded gold exploration company that is working to develop the Relief Canyon project, also in Nevada. Karr's primary background is in banking, with him having founded several investment management and investment banking firms based in Geneva, Switzerland over the last twenty years. His experience isn’t limited to the finance space, however. He currently serves as a Director of Levon Resources Ltd (TSE:LVN), a Canadian gold exploration company.
His contribution to US Gold Corp is rooted in steering the company from catalyst to catalyst. He was able to facilitate, through his own network, the raising of capital to kick-start operations in 2016 and he oversaw a late 2016 capital raise that saw the company net a little over $11 million – enough to fund the company through end 2017.
He's also going to be pivotal on the permitting front. He met with the above discussed local agencies in Wyoming last year to ensure a smooth application process, a meeting that reportedly concluded favorably for the company and its efforts in the state, and his experience and connections both inside and outside of the mining sector should facilitate an effective navigation along the company's path to production at both Copper King and Keystone.