John Kaiser: Midas Gold (MAX-T) has the Golden Meadow project in Idaho, a gold-and-antimony story for which a PEA was published in September 2012 that envisions an open-pit mine producing 5 million ounces gold and 90 million pounds antimony. It recently sold a royalty on the gold to Franco-Nevada (FNV-T) for $15M, giving Midas $25M in cash. On July 2 Teck Resources Ltd. (TCK-T) bought a 9.9% equity stake for $9.8M, boosting working capital to about $35M. That puts Midas Gold in a strong position to complete a prefeasibility study during the first half of 2014.
Last year Midas Gold was a $4–5/share stock, now, it is trading $0.70–0.80/share. The company has good management. Significant exploration potential exists beyond the zones it wants to put into production as an open-pit mine. Idaho is perceived as a difficult place to permit a mine, but this is a former mining district, where tungsten was produced during World War II. That left behind a mess, which developing Golden Meadows as an open pit would clean up. Still, management estimates permitting will take three to five years.
The antimony component presents a security of supply aspect, given that 85% of global antimony supply comes from China. While antimony's main use is as a fire retardant, it has potential new applications in battery storage devices. This could become a strategic reason to accelerate development at Golden Meadows. |
