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Forest Gate Resources Inc. (FGT) |
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CEOCFO Current
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This is a printer friendly page! Forest Gate’s diamond
exploration focuses on finding large kimberlite bodies in Saskatchewan, Canada BIO: Michael Judson Mr. Judson holds a Bachelor of Arts from Concordia
University. Mr. Judson has been the President of Judson Woods Inc., a corporate
development consultancy, since 1987 and the President and Chief Executive Officer of the
Company since its inception in 1999. Judson Woods Inc. works extensively with junior
mineral exploration companies at all stages of development, and as a result, Mr. Judson
has extensive experience in the marketing and financing of junior mineral exploration
companies. A highly experienced small company manager, Mr. Judson has a broad base of
contacts in the investment community and in the mineral exploration and mining industry. Forest Gate is currently exploring a diamond property in Saskatchewan, Canada. The company also owns a 100% interest in two intermediate stage explorations properties in the Bathurst Mining Camp in New Brunswick, Canada. These are the California Lake Silver Property and the Canoe Landing Lake Property. All of Forest Gate’s properties are at intermediate stages in their exploration and all hold the potential of becoming major discoveries. CEOCFOinterviews: Mr.
Judson, please give us an overview of Forest Gate Resources. Mr. Judson: “Forest Gate is a mineral exploration company, which began as a diamond exploration company. The recent five-year bear market in the resource sector provided us with some property acquisition opportunities that we simply could not pass up. Also, when we acquired the diamond properties in 1998 they weren’t as valuable as they are now. De Beers, Kensington Resources and Shore Gold had not yet developed their kimberlite pipes on the properties contiguous with ours. The whole play was much less developed then. And prior to our IPO we wanted to put into the company as much value as we could. At the time this was more easily achieved by acquiring intermediate-stage precious and base metal properties. The company has a diamond property in central Saskatchewan, Canada. It also has a silver property in New Brunswick, Canada, which is just north of Maine. We also have a precious and base metal deposit in New Brunswick not far from where the silver property is located. This is the company’s current line up of properties." CEOCFOinterviews: Why did you choose these particular properties? Mr. Judson: “Our diamond property is a four square mile property in central Saskatchewan. It is highly attractive because it is tied onto the De Beers-Kensignton Resources property in the area. De Beers, of course, is synonymous with diamonds. We are right beside the De Beers-Kensington Resources Ltd. diamond property, one of the largest kimberlite bodies in the world. Kimberlite is the host rock for diamonds. However, just because you find kimberlite does not mean you will find diamonds, but the chances are greatly enhanced. We are situated at the periphery of the huge kimberlite field in central Saskatchewan with a property that has a magnetic anomaly possibly indicative of a kimberlite body. It is an exciting place to be right now. The Canadian and American investing public is not very aware of what is going on in Saskatchewan. If they know anything about this business, they may have heard that there are producing diamond mines in Canada’s Northwest Territories. If they build a diamond mine or diamond mines in Saskatchewan, and I think they will someday, they probably will be very large open-pit mines. The mining operations there would be on a scale similar to the oil sands or tar sands project in northern Alberta. We got lucky when we picked up this property because very little was going on in the camp at the time in this area. Over the last couple of years, we maintained ownership of the property by making payments to the government and, lo and behold, two kilometers due west of us and a couple of kilometers due south, we have these other companies making major discoveries. We got lucky. It has been hard in Canada, even through the bear market, to acquire good diamond properties. The terms have always been stiff and the prices high. The land owners know there is demand.” CEOCFOinterviews: What are your current plans for these properties? Mr. Judson: “In the next couple of weeks, we will have a magnetic survey underway on the diamond property that will enable us to better delineate the target we have there. We want to drill as close to the center of the target as possible to enhance our chances of success. We are scheduled to do some work on our silver property near New Brunswick sometime in the summer. The silver property is highly promising; the previous owners drilled some fantastic holes there. They pulled grades of one hundred ounces of silver per ton and two hundred ounces of silver per ton. It has the potential of becoming an open pit silver mine. We have no interest in becoming silver miners; our business is the exploration business. We want to explore and develop a deposit and then sell it to a mining company. It is a breccia-vein system. We think the silver property may also host a volcanogenic massive sulphide deposit beneath the vein system. If that is the case then we could have ourselves a very compelling story there. Typically, if you find a deposit of that type in that camp it is very large. Noranda, one of the largest mining companies in the world, operates the Brunswick No. 12 mine in this camp. It is a world-class silver-lead- zinc mine. The other property we have is a property called Canoe Landing Lake, which is not far from our silver property, which is called the California Lake Silver property. Canoe Landing Lake is a known deposit; there are about fifty holes drilled into it already. The previous owners found some interesting mineralization, and this is a gold/silver/copper/zinc property, but we think we now have a better understanding of the property’s geology. It will take about five million dollars of additional financing to properly develop this property. It is a company in and of itself. We really wanted a property of this type in the stable from the get-go because it is the kind that will allow us to raise substantial sums of money when the market is right: when the metal supply situation is tighter, and when this sector is on fire.” CEOCFOinterviews: Why was this the right time to go public? Mr. Judson: “We really did not have much choice about going public. We executed a private placement special warrants last spring and had to get this thing up and running as a public vehicle as soon as possible. A successful exploration business is tied intimately to the equity markets and it is easier to raise equity when the equity market is in better condition. We plan to take advantage of that. Lately it has been a tough time to raise money. We were happy and proud to have raised what we did. And we now have a company that is really ready and positioned to take advantage of an improvement in equity markets. There was a bit of a false rally last spring with the rise of the price of gold but it trailed off during the summer and got difficult during the fall. But I think the sector is just beginning to enter a phase of growth.” CEOCFOinterviews: There is a lot of competition for dollars in this business; what is it about Forest Gate that makes it attractive? Mr. Judson: “I have been running small companies for sixteen years. I have done nothing else but run small companies since I was twenty-five; I’m forty-one now. We know how to land on our feet and make money. And we know a lot about this business. The business really depends on quick-footed entrepreneurs who can wear several hats at once to be successful. One has to be first and foremost a financier, then a geologist and a public relations expert and a variety of other things. We also have a top-class Board of Directors. We have highly experienced people who are still active in the industry. We have great properties which provide as much upside as possible for shareholders.” CEOCFOinterviews: Do you have 100% interest in all of these properties? Is the ownership percentage an important part of your corporate strategy? Mr. Judson: “We have an 85% interest in the diamond property and Leader Mining International of Calgary has a carried 15% interest. We have a 100% interest in both New Brunswick properties. The key thing is to have control, particularly of your key properties. If one is successful with one’s exploration program, one wants to be in a position to be able to sit down with a major company and hold all of the cards pertaining to the property. In this situation, the only card you don’t have is the cash; that is why you and they are sitting at the table together. If you are beholden to other partners or a major company as a joint venture partner, you have far less control over the project. That is not where we want to be.” CEOCFOinterviews: Does that set you apart from many others in your category? Mr. Judson: “I think so. I have very strong views on what I think is going to work in this business and the future will prove me out. I have watched the more successful people in this business and I am out to steal a page out of their playbook. The players I admire try to maintain most of the property if not all of it, and are independently able to develop it and sell it off. The main reason you see major partners coming in with the juniors is because the junior partners are more experienced in exploration than they are in business. My interest and experience is first in business and secondarily in exploration. We create value for our shareholders thanks to our business experience as much as through our exploration efforts. You also have to have the confidence and acumen to be able to deal with much larger companies, and with people that have much deeper pockets and significantly greater resources than you do." CEOCFOinterviews: Is there anything else that potential shareholder and investors should know about Forest Gate? Mr. Judson: “I think we have an above average understanding of the capital markets side of this business and we have good connections on the science as well. We have a good group of tactical people around us and we will continue to improve that. As our resources grow, we will staff up on the science and exploration side of the business. You have to work with what you have. We will expand its personnel, as we need to. The exploration business was never intended to be a big company business. This business is for the fleet-footed and for the true entrepreneurs. We are frontier-people."
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