TomaGold Corporation (TSXV: LOT / OTC: TOGOF) is a mineral exploration company that has recently caught my eye. The company is situated quite nicely with some prime real estate. With a head office based in Montreal, it holds interest in five gold properties in Northern Quebec near the Chibougamau mining camp. In addition, the company also has a joint venture agreement with Evolution Mining Ltd. and New Gold, Inc, through which it holds a 24.5% interest in the Baird properties, located near the Red Lake mining camp in Ontario.(1)
Chibougamau has a history of gold and copper discoveries as far back as the early 1900’s. From 1953 to 2008, active mining produced 1.6 billion pounds of copper and 3.2 million ounces of gold along with significant finds of zinc and silver. More recently, exploration activities have revealed the potential for the discovery of ‘lode gold’ deposits in addition to the copper-gold vein deposits that have been historically mined.(2)
The Red Lake district was discovered in 1897, with the region’s first gold rush beginning in 1925. Today, it is one of the largest and highest-grade gold camps in North America with historical production totaling more than 30 million ounces.(3)
While TomaGold has generally been overlooked by the market, they have had a busy 2020, including three major deals.
On January 31, 2020, the company announced the sale of a 39.5% interest in the Sidace Lake property to Pacton Gold Inc. (TSXV: PAC, OTC: PACXF). This resulted in TomaGold owning 950,000 shares of PAC with PAC paying $250,000 and another $800,000 worth of shares and $250,000 in cash six months after the closing date. If an NI43-101 report on the property shows a gold resource estimate of at least 750,000 ounces, PAC will issue 416,666 common shares or pay $500,000 to LOT. With PAC being at $0.92, the market value of this deal excluding the payment pending for the NI43-101 would be $1.9 million.(4)
On July 9, 2020, the company announced the sale of up to 80% of its interest in the Lac Doda property to Goliath Resources Limited (TSXV: GOT, OTC: GOTRF). Following is a summary of the terms for the acquisition by Goliath of a 65% undivided interest:
- Upon receipt of the approval of the TSX Venture Exchange or at the latest on July 31, 2020, Goliath would issue 625,000 common shares and 625,000 warrants, each warrant entitling the holder to acquire one common share of Goliath at a price of $0.24 over a 36-month period.
- On or before August 31, 2020, Goliath would pay TomaGold an amount of $25,000.
- On or before August 31, 2021, Goliath would pay an additional amount of $25,000 to TomaGold.(5)
In order to acquire an additional 15% undivided interest, Goliath would have to complete a NI 43-101 compliant resource estimate (the “Minimum Resources Estimate”) confirming a minimum indicated resource of 250,000 ounces of gold on the Lac Doda property by August 31, 2025 and make an additional payment of $500,000 (the “Resources Estimate Payment”) to TomaGold, 30 days after this information is disclosed.(5)
In November of 2020, the Company closed a deal to sell its 25% undivided interest in the Monster Lake project and the related mineral rights to IAMGOLD (TSX: IMG, NYSE: IAG). It received $500,000 and was issued 1,464,377 common shares of IMG.(6)
The combined market value of the guaranteed portion of these three deals is approximately $10,000,000. In my opinion, this is definitely something to take notice of.
November 2020 was also a month in which TomaGold made significant changes to its’ Board of Directors enhancing already its astute leadership. According to President and CEO David Grondin, “This is a new beginning for TomaGold, which now has a renewed Board of Directors and technical team, a solid financial position, with over $10 million in cash and short-term investments, and properties with strong exploration potential in major mining camps. Our geologists are in the process of preparing the exploration strategy for our projects, which we will announce shortly. We are looking forward to starting work and implementing our strategy for creating long-term value for our shareholders.”(7)
An initial drill on the company’s Obalski project (100% owned stake in the property comprising 345 hectares), announced in December 2020 consisted of a seven-hole, 2,500 metre drilling program, with the main purpose being to verify historical results and mineralization for future drills. Between 1964 to 1972, the area produced 100,273 tonnes at grades of 1.14% Cu, 2.08 g/t Au and 6.04 g/t Ag and around 9,000 tonnes at a reported grade of 8.5 g/t Au in 1984. (8) Given the area’s past history, it is possible that there is substantial economic potential left to unearth.
As per David Grondin, “Our data compilation of Obalski’s 60,000 metres of drill results, which has enabled us to produce a preliminary 3D model based on Obalski’s historical results seems to show that the property holds strong gold, copper and silver exploration potential. Previously known largely for its unique copper veins, the Chibougamau-Chapais mining camp now has a new vocation, with significant exploration targeting typical massive sulphide (VMS) mineralization and gold deposits typical of the Abitibi Volcanic Belt in Quebec and Ontario. Our technical team is very knowledgeable about the area and has designed an exploration program aimed at finding additional gold-copper-silver mineralization at this former producer”(9)
In December, the company closed on two phases of a private placement which raised in excess of $1,000,000. The proceeds will be used to incur exploration expenses on the mining properties in Quebec and for working capital expenses. (10)(11)
With the latest cash injection through private placement adding to their existing equity, the new team of Directors, solid expertise and the excellent locations boasting considerable previous finds, 2021 could prove to be an interesting year for TomaGold.
The stock is currently hovering between $.08-$.09, up from its’ 52 week low of .055 and nearing its’ high of .10. I am looking forward to following this company. Feel free to add to your watchlist.
Dr. Kal Kotecha
Disclosure (please read full disclaimer below): I (Junior Gold Report – JGR) has been paid by Toma Gold for advertising services including market awareness. JGR has participated in Toma Gold’s recent private placement at $.08 The information is not intended to be construed as a recommendation to buy, hold or sell any specific Securities, or otherwise invest in any specific Securities. The information derived to create the article is taken at the time of creation. I am biased, conduct your own due diligence and consult a registered broker/advisor. Any statements expressed are subject to change without notice. Please read the full disclaimer below.
- TomaGold Corporation : http://www.tomagoldcorp.com/en/#.html
- Chibougamau Independent Mines, Inc. : Be part of CBG’s journey toward production : http://www.chibougamaumines.com/chibougamau.htm
- Melissa Pistilli (March 2, 2020) : Red Lake Mining District a Hotbed for Ontario Resource Exploration : https://investingnews.com/innspired/resource-exploration-red-lake-district-ontario/
- TomaGold (January 31, 2020). TomaGold announces binding LOI for the sale of its stake in the Sidace Lake property to Pacton Gold, http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-announces-binding-loi-for-the-sale-of-its-stake-in-the-sidace-lake-property-to-pacton-gold-2020-01-31.html
- TomaGold (July 9, 2020) : TomaGold Announces the Sale of Up to an 80% Interest in the Lac Doda Property to Goliath Resources : http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-announces-the-sale-of-up-to-an-80-interest-in-the-lac-doda-property-to-goliath-resources-2020-08-17.html
- Financial Post (Nov 11, 2020) : TomaGold announces the closing of the transaction with IAMGOLD : https://financialpost.com/pmn/press-releases-pmn/globe-newswire-releases/tomagold-announces-the-closing-of-the-transaction-with-iamgold
- TomaGold Corporation (Nov 6, 2020) : TomaGold Reports the Outcome of its Annual Meeting : http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-reports-the-outcome-of-its-annual-meeting-2020-11-06.html
- TomaGold Corporation : Obalski : http://www.tomagoldcorp.com/en/projects/obalski.html
- TomaGold Corporation (Dec 8, 2020) : TomaGold Announces the Start of Drilling at Obaski : http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-announces-the-start-of-drilling-at-obalski-2020-12-08.html
- TomaGold Corporation (Dec 24, 2020) : TomaGold Announces Closing of $869,500 Private Placement : http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-announces-closing-of-869500-private-placement-2020-12-24.html
- TomaGold Corporation (Dec 31, 2020) : TomaGold Announces a Second Closing of its’ Private Placement for an Amount of $239,784: http://www.tomagoldcorp.com/en/investors/news-releases/tomagold-announces-a-second-closing-of-its-private-placement-for-an-amount-of-239784-2020-12-31.html
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