David Grondin had taken up position at his lucky table 25 in the InterContinental’s Azure restaurant, pitching his latest dream at the world’s biggest gathering of miners.
“We may be small, but we think big,” Grondin, 36, said during a break in the proceedings in Toronto. “All the world comes to PDAC and now they are coming to meet with me.”
Thousands of other entrepreneurs like Grondin, chief executive officer of TomaGold Corp. (LOT), were touting their projects with similar enthusiasm at the Prospectors & Developers Association of Canada convention.
This is how promoters of mine-exploration companies try to get projects off the ground: one plausible, or sometimes implausible, sales job at a time.
That task has only gotten tougher since gold fell last year by the most in more than three decades, reducing the chances that so-called juniors would get funding from, or be bought by, larger miners. After years of expansion, gold producers were forced to cut budgets and sell mines instead of aggressively looking for smaller projects to invest in.
“When the glass is half full, every legitimate junior is deemed to be a success until proven otherwise,” John Kaiser, editor and publisher of Kaiser Research Online, said in a March 3 interview. “When the glass is half empty, every exploration play is deemed to be a failure until proven otherwise.”
Stoking Demand
At PDAC, which was attended by more than 25,000 people for a fourth straight year, Grondin is looking for investors to buy as much as C$3 million ($2.7 million) of convertible bonds so he can make mining acquisitions. At the same time, he is trying to stoke demand for shares of Montreal-based TomaGold. The first part of the plan wasn’t exactly sitting well with at least one potential investor.
Douwe van Hees, 27, a Netherlands-based money manager with the Plethora Precious Metals Fund, tells Grondin he only invests in companies that exclusively explore for metal.
“I don’t want to be exposed to a production story,” Van Hees tells Grondin.
To highlight the notion he can be trusted to make money, Grondin, a former financial analyst who lives in Montreal, plays up his track record at TomaGold, which has a market value of C$11.6 million. In November, the company announced that Iamgold Corp. (IMG), Canada’s sixth-largest gold producer by revenue, agreed to spend at least C$16 million on exploration drilling and make C$1.58 million in payments to earn a 50 percent stake in TomaGold properties in Quebec.
‘Good Momentum’
With Toronto-based Iamgold drilling TomaGold’s Monster Lake property this week, Grondin feels like he’s on a roll. And he wants to keep it that way.
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