Mayfair Gold closed a LIFE financing for $40-million and gained a new strategic shareholder.
Howard Marks’ Oaktree Capital Management, a subsidiary of Brookfield Asset Management, now owns 6.7% of Mayfair. Two things can be true at the same time.
- This is not a significant position for Oaktree in the context of its $209-billion US assets under management.
- Oaktree did not have to reveal its ownership stake in Mayfair immediately. An investment firm famous for bottom fishing deciding to publicly tie itself to a junior mining company is a significant vote of confidence.
The cash from the financing gives management a two-year runway to move development of the Fenn-Gib deposit forward. But I thought this was the most significant part of the release.
This financing also gives Mayfair the financial flexibility to consider an exploration program in the southern block, located within 5 kilometres of the Fenn-Gib project site and on trend from multiple deposits and mines.
Mayfair believes there is more gold along trend1. I agree with them and don’t believe that optionality is reflected in the share price. I’ve averaged up and made this something closer to a full position.
Selling Star Royalties
Not lucky, because I believe I bought well. But I do consider myself fortunate that I’m walking away from Star Royalties with a 17% return after holding for less than a year.
This was never a large position given the lack of liquidity. With the returns on my other gold positions, STRR had become an even smaller part of the portfolio. I haven’t had any luck finding someone to take on the job of crystallizing the portfolio value by pushing management for an immediate sale of the Copperstone gold stream. At the end of the day, the money sitting in Star was better put to use elsewhere (See Eagle Plains).
