Planes, Trains, Automobiles, and Gold Deposits.
Following up on the “Meeting Management in Japan” PIO from the end of September, we would like to discuss our site visit to Suriname and Guyana, an emerging gold jurisdiction in South America, and Pathfinders “boot’s on the ground” research approach. Recently, I spent almost a week staying in field camps and taking cramped charter planes, helicopters and trucks/vans to visit remote projects in the middle of the Guyanese jungle. Why go through the torture and risk of landing on uneven gravel airstrips or traveling through temperamental weather, or landing on sketchy, narrow, short, gravel airstrips (I have videos if you are interested)? We take these risks to identify opportunities in new jurisdictions that the market has overlooked due to preconceived opinions.
The Guyana Shield (includes Suriname, Guyana, and French Guiana) is an emerging underexplored gold jurisdiction that has recently attracted a lot of attention. This area has become topical due to the geological similarities as West Africa which is renowned for their multi-million-ounce gold deposits. Why is the geology similar? The earth is over 4.5 billion years old but around 250-200 million years ago, we had a supercontinent where all current day landmasses were all combined. If you look at a world map, try to visualize South America fitting with Africa, and hence the east coast of South America having the same geology of the west coast of Africa.
Despite the similar geology, Guyana and Suriname are massively underexplored unlike Africa mainly due to infrastructure challenges. There have been numerous world class deposits discovered in West Africa but not until recently was there a major discovery made in the Guiana Shield. Reunion Gold, an exploration company, was acquired for C$900 million dollars after discovering a multi-million-ounce deposit. This recent acquisition has shifted the focus to exploration in the Guiana Shield. A major part of the newfound interest in the country lies not only in the geological potential, but also the influx of foreign investment, upgrades to infrastructure, and new favourable mining codes incentivizing mining exploration in the region. Why the sudden change? Much of the foreign investment and interest in the region is driven by an offshore oil discovery by Exxon Mobile considered to be one of the largest finds in recent years off the coast of Guyana which has translated into a significant amount of foreign investment and infrastructure upgrades in the country.
“This means that” our site visit allowed us to visit four different projects which were all at different stages, from grassroots exploration to development stage. Each project showed great potential for discovery. Comparing these projects to companies that we are already invested in such as Omai Gold, gives us great confidence in the validity of our investment. Also, we highlight that this region is widely underexplored but has multi-million-ounce potential and the four companies we visited all have first mover advantage in the region, so we look to these torquey exploration projects for potentially the next major discovery.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
Changes in Leverage. We are increasing the asset ceiling to 2.0 times the market value of equity for Pathfinder International Fund and Pathfinder Conviction Fund to be consistent with Pathfinder Partners’ Fund and Pathfinder Resource Fund.
For more information, please follow the links above to review the fund term sheets.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
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