By James Kwantes
Published first at Patreon

The peculiar math of junior mining dictates that additions of good people and complementary projects to a junior mining company can create a multiplier effect.

A good example is CanEx Metals (CANX-V).

CanEx's flagship is the Gold Basin project in northern Arizona, acquired when Gold Basin Resources (formerly GXX-V) got swallowed up by CanEx, which held the neighbouring Gold Range project. That followed a battle for control of Gold Basin that pitted Discovery Group principals John Robins and Jim Paterson against Australians Michael Povey and Charles Straw.

Straw, Gold Basin's CEO, was fired with cause along the way for "serious misconduct, breach of his duties and obligations, conflicts of interest and repeated lack of judgment, care and diligence causing financial loss to Gold Basin," according to a Gold Basin news release.

Robins and Paterson prevailed and the neighbouring properties were consolidated. Now Canex can explore the combined property without the constraints of property boundaries.

1 + 1 = 3.

Landing Gold Basin gave Canex a district-scale oxide gold project with notable high-grade results at its Cyclopic, Stealth and Red Cloud zones, including:

  • 2.9 g/t Au over 38.1m

  • 2.4 g/t over 42.7m

  • 1.8 g/t Au over 57.9m

  • 1.0 g/t Au over 115.9m

Those are high grades and impressive lengths for a heap-leachable gold deposit about a 1.5-hour drive away from Las Vegas.

People Math

The people math at CanEx Resources also adds up. On Tuesday pre-market, the company announced that entrepreneur Eric Fier, already the largest shareholder, would invest $3 million as the lead order in a $6.5-million financing of 35-cent common shares and 54-cent flow-through shares. The financing was subsequently upsized to $9 million.

I wrote about Fier's track record of shareholder value creation here: Quietly Creating Billions in Shareholder Value | Oct. 4, 2024.

Other CanEx backers include Discovery Group principals Robins and Paterson, prolific investor Michael Gentile and Altius Minerals (ALS-T). CanEx is earning in to an option on Altius's Gibson gold prospect in north-central B.C.; Altius has an option to acquire a 1.5% NSR.

A piece on Altius: One Stock | Feb. 17, 2023

CanEx's CEO, Shane Ebert, is an experienced operator with a track record of discoveries in North and South America, Australia and Europe.

CanEx plans to use the proceeds to aggressively explore and begin pre-development work on the consolidated Gold Basin/Gold Range property. The flow-through money will be used to advance and drill new geophysical targets at the company's Louise copper-gold porphyry project in northern British Columbia.

The stock, which has doubled since early August, saw a 2-cent increase on the news Tuesday, to 42 cents.

CanEx Metals (CANX-V)
Price: 0.42
Shares outstanding (pre-financing): 247.1 million (255.4M fully diluted)
Market cap: $104 million

Disclosure: I own shares in Altius Minerals. No business relationship with any company mentioned in this article. This article is presented for information purposes only and all investors need to do their own due diligence.