Trillium Gold Mines: Striking Excellence On All Fronts

The single best way to get massively leveraged returns on your investment is to buy and hold exceptionally great assets. At some point the market will be forced to recognize them and the killer assets in the category will eventually incite a bidding war. This viewpoint is particularly relevant in the mining industry.

“Best”, by the way, doesn’t mean biggest, because you’re far more likely to hit a major strike with the smaller players than the big producers. Just consider that during the last (2008-2011) bull market in gold, shares in tiny Wheaton Precious Metals Corp. (NYSE: WPM) gained 1,536% on a run that took it from US$3.25 per share to a bull run high of US$47.60, which turned the company into a big cap gold mining name and made many of its investors exceptionally rich. 

Large-cap gold producers are facing dwindling reserves, which will inevitably limit upside in their share price. This has spurred them to aggressively seek out new claims through acquisition, especially given the ongoing excessive governmental money printing that will continue to power this bull market in gold going forward. All of this points to a big win for the smaller players in the sector who are collecting killer assets. 

One particular gold mining company is executing excellently on all of the above during this bull market. Trillium Gold Mines Inc. (TSX.V: TGM) (OTC: TGLDF) is worth investment consideration for a number of reasons, including:

  • Aggressive execution of a highly strategized business plan.
  • Historic evidence and recent research points to significant gold reserves in multiple claims. 
  • Imminent release of exploration results that could propel the share price to new highs.
  • Ongoing acquisitions to boost and solidify their holdings in the heart of the highly productive Red Lake Mining District.
  • Huge demand from industry experts in recent financing. 
  • A new top-level management team with extensive gold mining experience.
  • Extensive insider ownership and open-market buying.  The CEO has been aggressively purchasing shares on the open market at and above current prices.
  • Extremely tight share structure and low float.
  • Very undervalued.  At less that 20% of historic highs despite multiple valuable additions to its assets and claims.

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Let’s drill down deeper to see how each point makes Trillium Gold a strong buy, if not the strongest buy, in the microcap gold mining and exploration sector. 

At $1.70 share, Trillium is currently valued at less than $40M CAD which is a huge discount from previous highs and gives ZERO value to any of the other assets that the company now owns. 

Aggressive Execution of Business Plan

Trillium management is moving forward with their business plan, aggressively executing full bore with drills seeking new ore pockets, geologists conducting surveys and mineralization sampling, and executives nailing down promising new acquisitions. The company is actively exploring three of its seven claims, while conducting initial exploration, mapping, and prep work on the four other properties.  

History and New Research Signifies Plenty of Gold

The active drilling in its most promising claims is designed to quickly establish the presence of substantial gold within them. The company is furthest along with its flagship Newman Todd Structure (NTS), which had a valuation of roughly $200 million in 2013 based on historic drilling results.   

At $1.70 share, Trillium is currently valued at less than $40M CAD which is a huge discount from previous highs and gives ZERO value to any of the other assets that the company now owns. 

Gold has been identified in various amounts in every drill hole and assay conducted at NTS since 2005, with more than 20 individual high-grade zones identified along a 2.2-kilometre strike length. The historic evidence is extremely compelling AND Trillium management now has new research that suggests that there are (previously undiscovered) parallel feeder bands located along the length of the main vein of volcanic activity where previous gold was discovered in large amounts. 

Historic evidence and research is also compelling enough at its Leo and Rivard properties that TGM is aggressively conducting exploration on these claims. Additionally, the company aims to immediately commence drilling at its new Gold Centre property once the acquisition closes October 1st.    

Imminent Release of New Drilling Results

While Red Lake fires slowed the initial drilling at Newman Todd results are expected to be released any day now. Should those results prove favorable, which we believe they will, TGM’s market cap could aggressively ratchet up given the company’s tight share structure and extremely low float. 

Newman Todd alone was worth close to $200 million during the previous gold bull market. Solid evidence of new deposits could easily bring NT’s value beyond this. Add in positive findings on the other properties—Gold Centre initial results are expected within a month—and Trillium Gold’s valuation could rapidly surmount its current status as gold dust into becoming the latest “Welcome Stranger” nugget in the industry. 

Boosting Claims Through Acquisitions

Trillium management isn’t just content with finding gold out of existing claims but is leveraging its Red Lake geological expertise by actively increasing its reserves through strategic acquisitions in the highly productive gold district. Its acquisition of the Rivard property provides the company with an on-strike extension to the Newman Todd zone and adds a new exploration dimension due to high-grade gold veins that were previously mined on the surface.

Evidence supporting Trillium management’s belief that the Gold Centre property will produce a substantial strike can be found in the terms of the agreement, which commits the company to devote significant cash towards exploration efforts. Trillium management believes that historic exploration efforts failed to go deep enough to hit a high-producing ore zone.       

Recent Financing Upsized and Over-Subscribed

High levels of investor interest in Trillium Gold are further evidenced by the recent oversubscription of a private placement offering. While the company had announced a C$8 million offering on September 2nd, within hours the company expanded the offering to C$13 million. We expect the financing to close in the coming days. 

Top-Level, Highly Experienced Management Team

Trillium’s new management team includes some of the top names in the who’s who of Canadian gold mining. With executive-level and board positions with Cayden Resources, Auryn Resources (AUG.TO), Canada Nickel (CNC.V), and Gold Terra (YGT.V), Trillium’s new CEO, Russell Starr has more than 20 years of corporate finance and business development experience focused in large part on private and public mining and exploration. In addition to being co-founder and part owner of Echelon Wealth Partners, Russell has held senior level position and advisory roles with RBC Capital Markets, Scotia Capital, Orion Securities, and other financial institutions.

With all of this talent joining Trillium’s management team and putting their reputations on the line it’s very likely we are in the early stage of growth for Trillium Gold Mines. 

New chairman of the board, Robert “Bob” W. Schafer, PGeo, ICD.D, comes to Trillium with 35 years of mining experience and a world-renowned reputation in the mining industry. Not only is Bob the current president of the Society for Mining, Metallurgy and Exploration, but he is the first person to ever hold leadership roles in all of North America’s primary mining-related professional associations. A previous executive with Hunter Dickinson, Kinross Gold (K.TO : KGC.N), and BHP Minerals (BHP.N), as well as founder and CEO of Eagle Mines Management, Bob has been instrumental in exploring and discovering mineral deposits in several producing mines, including two strikes that produced in excess of one million ounces of gold.

With 17 of his 30 years devoted to mineral exploration in Ontario’s Red Lake District, Trillium may have struck gold by naming William “Bill” Patterson as the company’s vice president of exploration. A professional geologist with extensive experience in both surface and underground exploration in Red Lake, Bill previously worked with Goldcorp Inc. (NYSE: GG) and is finishing his tenure as the Ontario Ministry of Energy’s regional resident geologist for the Red Lake and Kenora Districts. 

New Trillium board member Krisztian Toth has been recognized by numerous legal publications as a leading lawyer in mining, capital markets, private equity, and mergers & acquisitions. A partner with the law firm of Fasken Martineau, Krisztian is a member of the firm’s Global Mining Group, which has been ranked first globally for the past five years in a row and 11 times overall since 2005.

And new senior advisor Christina McCarthy brings a technical background in geology as well as 10 years of resource capital market experience with her to Trillium. Prior to joining TGM, Christina served as director of corporate development for McEwen Mining and was vice president of corporate development for Oroperu Resources.   

With all of this talent joining Trillium’s management team and putting their reputations on the line it’s very likely we are in the early stage of growth for Trillium Gold Mines. 

Insiders and Mining Industry Experts Love This company

Much of Trillium’s low float is held by company insiders and industry experts. In fact, the company’s new CEO has been actively purchasing shares on the open market at prices ranging from $1.70 to $2.30. In total, it’s believed that about 75% of all shares outstanding are held by insiders, advisors and mining industry experts. 

Low Share Float

With just over 23 million shares outstanding and almost 34 million shares fully diluted, Trillium Gold has an exceptionally low share float, especially when compared to many of the other junior and microcap gold mining companies. As noted, ownership is tightly held by insiders and mining industry experts, who are not likely to readily relinquish their ownership when the shares start moving quickly to the upside. 

Favorably Priced 

At a recent price of C$1.70, the price the company is raising its financing, Trillium is sitting well below fair value. The bull market in gold is currently on pause, but we have little doubt that its price will soon move to new highs (as does former long-standing avoider of gold Warren Buffet). Not only will this help push Trillium and other gold mining stocks higher, but any number of positive news releases from Trillium could easily put the company’s share price on a tear towards new highs.

Keep up with all the latest news by following Trillium Gold on Twitter

or checking in at their Investor Centre.

UPDATE Oct. 6, 2020: Newman Todd Initial Drill Results Released – 15.41g/t over 7.05m

You can check out their most recent investor deck here.


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