Atlantic Gold Corporation (Atlantic) is a well-financed, growth-oriented gold development group with a long term strategy to create a mid-tier gold production group focused on manageable, executable projects in mining-friendly jurisdictions. Atlantic developed from a merger in August 2014 of a company called Spur Ventures Incorporated, which had previously been involved in the agriculture and phosphate mining business in China. It sold out of its interest there a few years ago and redirected the company into the precious metals mining sector.
Atlantic is a dynamic, Canadian-based gold exploration and development company and their counter cyclical strategy is to take advantage of the downturn in the mining and gold sector specifically, to acquire advanced mining development projects in the Americas.
“At the time, Atlantic was in cash position to bring in about $30 million as well as the corporate, finance and technical skills to combine that with projects unable to complete their development scenario to the construction and commissioning phase,” says Steven Dean, Chairman and CEO of Atlantic.
A native of Australia, Dean has been in the mining industry for almost 30 years. He was a founding member of management for a company called Normandy Mining, which started out in the mid 1980’s in Australia and grew to become the nation’s largest gold producer until it was part of a merger with North American gold mining giants, Newmont and Franco Nevada, which solidified a stronger global presence.
Dean left the corporation prior to the merger and started a company called PacMin Mining Corporation.
As a start-up company, it grew to 200,000-300,000 ounces of gold production in Western Australia.
Teck Corporation in North America acquired control of the company and Dean later became President of Teck. Teck merged with its subsidiary, Cominco Ltd. to create Teck Cominco Ltd. with Dean as President, and subsequently became Canada’s largest diversified mining company.
Gold Projects and Properties
In the past two and half years, Atlantic has looked into over 120 projects in the Americas. The acquisitions of Atlantic NL and Acadian now largely comprise what is known today as Atlantic Gold Corp.
Atlantic’s current projects are based in Nova Scotia. Atlantic currently holds four gold development projects in Nova Scotia with the Touquoy gold project in the most advanced stage with all major permits in place, while the Beaver Dam and Cochrane Hill projects are now at the feasibility stage. The Fifteen Mile Stream project is currently at an earlier stage of development.
Upon completion of a Preliminary Economic Assessment, Atlantic was able to communicate the vision that they saw in the consolidation of several mine deposits in the Meguma Terrane, a geological terrain located in southern Nova Scotia. “The concept was derived to construct a centralized processing facility where the production of all the deposits would be processed,” says Dean. The Touquoy facility was fully approved by federal and provincial authorities.”
Atlantic is looking to secure debt finance with senior lenders in traditional banking finance for the development of the project and believe they will able to secure a large portion of the estimated $130 million construction and pre-development costs. Atlantic intends to combine their cash position with debt and equity financing to proceed with development in the first half of next year.
“We have been focused on completing our feasibility study based on the Preliminary Economic Assessment as well as the results of the drilling we completed in December of 2014 which will be reviewed by the banks to finalize the provision of finance for the project,” says Dean.
Prices of gold have fluctuated based on global gold demand and supply (gold reached highs of $1800-$1900 per ounce in the past three to four years before retreating to prices ranging in the $1100-$1200 per ounce presently), which has proven to be a challenge for equity markets in respect of support for gold companies over the last two years.
“Atlantic has been fortunate enough to have a strong cash position to pursue our strategy,” says Dean.
“Gold has industrial uses in a wide range of applications and unlike other metals; it also has a financial role as gold is seen as another form of currency.” The level of demand for gold and its position as a financial asset will typically fluctuate in the global financial markets.
With a relatively low gold price at the moment, demand is well supported by jewellery demand out of China and India. The supply side is a function of new mines producing gold to the global market and above ground supply in the form of central bank reserves.
“I think the position for gold, based on the demand and the declining supply as gold mines become depleted and more difficult to find globally, is very positive. I think we have an exciting outlook with our projects,” says Dean.
Atlantic’s strategy is to identify deposits that have the right economics and the right technical attributes to generate strong returns given the current price of gold. Only a small number of new projects meet these criteria.
“We are deliberately pursuing a strategy in a downturn of the gold space to acquire and develop advanced gold projects and place them into production with viable economics at today’s gold price,” says Dean.
Supporting Local Communities
“We always support the communities whether it is through local charities and not-for-profit causes,” says Dean. We see that as an important part of our social responsibility in both the areas we operate in and our head office location.” Atlantic works closely with their communities such as the First Nations people. “We have an agreement with Mi’kmaq People of Nova Scotia, whereby we are committed to education for the young people in their community as well as job training and employment.”
With strong economics at today’s gold price, Atlantic’s management team has a breadth of experience in building, operating, and developing gold mines around the world. Atlantic Gold Corporation plans to become a leading gold company by pursuing its strategy of acquiring technically sound projects in mining friendly jurisdictions with economics that work at current prices.