Ridgeline Minerals: Capital Structure

  • Basic Shares 55.7MM (Fully diluted 69.9MM)
  • 9.9MM warrants at prices ranging from 0.45 -0.75 expiring in 2023.
  • Cash ~$1.7MM
  • Ticker $RDG (TSX-V: RDG | OTCQB: RDGMF | FRA: OGC0)

Success in the Junior mining space can often seem obvious in hindsight, but rarely so in the early days. So, finding companies that are being legitimately set up for success with a good pipeline of projects can, at least, tip the scales in your favour in getting into a company before a discovery run. Ridgeline Minerals has four main gold projects in mining friendly Nevada and Idaho (Selena, Swift, Robber Gulch and Bell Creek+Carlin-East ). It is led by Chad Peters with Mike Harp as VP Exploration. Both of these individuals have +10 years of demonstrated experience and success in Nevada yet are still young enough that they are out to prove and make a name for themselves in the industry. 

Selena Project - An evolving puzzle with the potential of a big prize

Selena started out as an oxide gold project but drilling last season about 1KM away ran into good levels oxide silver.  This lead to the theory that Ridgeline may actually be on the road to a much much more interesting prize: a CRD system (silver, gold, lead, zinc). In February, a high resolution mag survey was completed to help provide further evidence to support this thesis and to assist with drill target selection.

Why is there the potential of a big prize?

Any talk of CRDs will generally follow up with a mention of the Arizona Gold’s Taylor CRD deposit which sold for $1.8B. So, while it is all still theory at this point, there is enough science to suggest they may be onto one of these systems. The 2021 drill program intersected the outer margins of a CRD zone (4.6m @ 421 g/t Ag, 0.6 g/t Au, 4.4% Pb, 3.7% Zn) so should further drilling confirm higher levels to support their thesis, look for Ridgeline to do a decent raise (at much higher levels) and start aggressively putting a lot more holes into the ground. 

Latest Developments:

Drilling started in April with an 8-hole campaign. Investors should be on the lookout for any signs that the drills are hitting the right kind of mineralogy.

Net Takeaway:

Ridgeline is demonstrating with Selena that they aren’t tied to a particular rigid perspective and will let the science guide and modify their thinking. Given Ridgeline’s sub-$20MM market cap, if the current drilling campaign can provide any level of evidence to support the potential of a CRD system, things will get very exciting for Ridgeline’s...very fast. 

Swift - Smart Deal Making

Swift is a big district-sized project that will require years of expensive long hole drilling, so it is the kind of project that can literally kill a junior.  So, getting a major (and neighbour) NGM (Barrick/Newmont Joint venture) to do a JV on Swift not only allows them to participate in a good portion of the upside with essentially a free carry, but given NGM's multi-million dollar work commitment, it also validates the project as well as the abilities of management to structure such a deal with such a large player in the region. NGM's Cortez Complex has a historical resource of 35MM ounces of gold and currently has a AISC of about $1200, so NGM's commitment to the future of the area is undeniable 

Why is it smart deal making?

  • Attracting such a large entity like NDM validates the management team as credible explorers.
  • Ridgeline got reimbursed for the $325,000 spent on the project.
  • NGM needs to spend US$20MM over 5 years to earn 60% which is more than the current market cap of the company.
  • Option for NGM to spend another $10MM to earn an additional 10%.
  • Ridgeline is fully-carried right until debt financing at which point they will have a 25% interest.
  • Importantly, Ridgeline structured the deal where they can issue news releases on the drill results which mitigates the news absence that often comes about with a large JV partner that is not required to put out news that is not considered material to them, but is extraordinarily material to a Junior.

Latest Developments:

On April 28th, the first (968m) hole was released which found some low grade near surface gold which will help guide the follow-up drill holes into the potential of deeper gold. NDM plans followup drilling of 3-4 more deep holes in June which demonstrates their continued commitment.

Net Takeaway:

Swift is low risk/free ride way to participate in a district scale project that could be a company maker on its own. Given the size of the potential, NDM will not be taking short cuts and will explore Swift methodically, so while a good hole will generate excitement, it may take time as new information is gathered in each hole.

Carlin East and Bell Creek - On trend from other Major discoveries and big lessons learned

Two close but separate projects in Carlin district in Nevada in proximity and directly on trend to other major discoveries (Barrick’s North Leeville and NGM’s REN deposit )

So what's the lesson learned?

You can often see companies in the junior space attempt to bury their blunders quietly, so seeing how a company responds to failure can really give you insight into the mindset of the management team. In 2121, Ridgeline had a very difficult drill program that targeted 3 holes but was only able to complete one on their Carlin East Target. The news release pulled no punches “The hole did not intersect significant gold values or the intended Lower Plate carbonate rock package.” nor did the president Chad Peters shy away from providing an honest assessment of the program in an interview on the Mining Stock Daily https://anchor.fm/mining-stock-daily/episodes/Ridgeline-Minerals-Update-from-Swift--Carlin-East-and-more-e1bb42v The project is not dead by any means, but Ridgeline learned a $750,000 lesson about the what can happen when you swing for the fences and drilling challenges don't allow you even reach your target depth.

Latest Developments:

No immediate activity planned  

Net Takeaway:

Since they didn't hit the target depth in their drilling program, the exploration thesis has not changed at all, so the project is still as interesting as it ever was. Any continued exploration success from the neighbouring the big player's Ren and North Leeville projects could reignite interest. 

Robber Gulch - Shallow Oxide Potential

Robber Gulch was a project Ridgeline was offered prior to going public and but they didn’t feel they had the capacity at the time to take it on. Fast forward 2 years and Gold Line let the project go to focus on another asset which allowed Ridgeline another opportunity to pick up the project from the holder EMX Royalty. Work commitments are very low with only $150k required in the first 2 years followed by $1.4MM over 5 years to earn 100%

This shallow oxide property fits right into the wheel house of VP-X Mike Harp that is very familiar with the host rock and mineralization from his previous work in the area. Ridgeline believes the project has the potential to become a 1MM ounce deposit and came complete with an extensive geological database of previous work including soil sampling, rock chips, trenching and 19 drill holes. Given the ease of mining shallow oxide projects, a 1MM ounce deposit could be very attractive and profitable operation. The only missing prep work is Geophysics to see where the mineralised fluids were likely distributing the gold which will assist with final drill targeting. An interesting tidbit is that Gold Line gave up the project right in the middle of their drill program and stopped the hole only after 6 meters yet they drilled 1.46 g/t over that distance. Finding that amount of oxide gold right at surface with a drill hole all cased and ready to continue makes for a very compelling head start when Ridgeline moves the project forward

Latest Developments:

Geophysical survey to assist final targeting 

Net Takeaway:

Given the low cost of acquiring the project ($40k),  the reasonable work commitments, the advanced nature of the property and shallow oxide potential, expected fall drill program (pending further funding) Robber Gulch, with any success could turn into a quick win for Ridgeline.


Final Thoughts: 

Good dealmaking, nibble thinking, and a series of very interesting projects makes Ridgeline set up for the potential of a serious discovery with multiple opportunities. Two projects offer company-maker potential (Selena and Swift) with Robber Gulch's almost 'ready to drill' status and shallow oxide potential make it a potential dark horse surprise. Given the sub $20 million market cap, it won't require much to generate positive share price movement and the drills are turning right now.



Disclosure: I have a beneficial long position in the shares of one or more of the companies discussed in this article, either through stock ownership, options, or other derivatives. I wrote this article without external assistance, and it expresses my personal opinions. I was not compensated for this article, and I have no business relationship with any company whose stock is mentioned in this article.

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