Breaking: New Chairman Ignites Confidence in Cabaçal Project
Breaking: New Chairman Ignites Confidence in Cabaçal Project
Bruce McLeod just sold Sabina to B2Gold for $1.2 billion. Today, he joins Meridian Mining ($76.4M market cap) as Chairman, confident Meridian's Cabaçal deposit can “thrive as a copper gold producer.”
Canada’s mining industry is a tight-knit fraternity.
When a London-based firm, with an Australian CEO residing in France and a seemingly too-good-to-be-true Brazilian asset, enters the Canadian market, curiosity sparks:
Is this real? Who are these people?
Today, Meridian Mining (TSX:MNO) partially answers that question by welcoming Bruce McLeod, 60, as Independent Chairman.
Just six months ago, McLeod completed a $1.2 billion sale of his last gold venture. He's a respected mining engineer and business builder with roots in a prominent mining family.
During his leadership at Sabina Gold & Silver, McLeod achieved a remarkable 411.63% stock market return and raised over $1 billion in eight years. Sabina, valued at $80 million when he assumed control in 2015, progressed through exploration, feasibility, permitting, and financing to a successful sale in April 2023.
With Meridian Mining, currently valued at $76.4 million (all figures CAD$), there's potential for a similar trajectory. McLeod has been through this process before and can guide Meridian on how to deliver a project that appeals to the market.
Meridian's 2023 PEA study for its Cabaçal copper and gold deposit in Brazil revealed a robust after-tax NPV5 of USD $573 million, a 58.4% IRR, and a 10.6-month payback period. These exceptional returns stem from a shallow deposit with simple metallurgy. The mine’s expected life is over 22 years, with management hinting it could grow significantly, thanks to many exploration opportunities along a 50 km mineralized belt.
In a 2014 interview, former Teck Resources ($26B market cap) CEO Don Lindsay, shared why miners covet long-life, low-cost assets. Mining is “cyclical business,” Lindsay stated. He continued, “and you know that you're going to get all of your money back in 2 or 3 good years. What you don't know is when those 2 or 3 good years [will] be. However, if you have 50 years, you're going to have those 2 or 3 good years 5 or 6 times." Lindsay's words resonated with me and draw me to Meridian's Cabaçal project.
McLeod’s career has focused on North American mine developments, including Kaminak’s $520 million sale to Goldcorp in 2016. With prior experience in Brazil as well, McLeod served as a director during Luna Gold's construction phase, now under Ross Beaty’s Equinox Gold ($2B market cap).
Notably, he's the son of Don McLeod, a Canadian Mining Hall of Famer whose autobiography, "The McLeod Luck," chronicles their mining legacy. Bruce’s sister, Catherine, chairs major producer Kinross ($9.07B market cap), while cousin Rob is an accomplished explorer.
Meridian sought a reputable Canadian chairman to guide the board and champion asset quality at an institutional level.
As one of mining’s leading developers, McLeod's appointment could mark a turning point in the company's journey. As a biased shareholder and advisor, his presence signals a significant step forward in our narrative.
Meridian published working capital of $11.5M at June 30, '23. Its last three financings were well above the current $0.315 market price: $18.4M at $0.50 May '23, $5.86M at $0.35 Dec '22, and $10.38M at $0.70 Oct '21.
MNO’s stock chart has tumbled amid global market turmoil, but with McLeod's involvement, it might be stirring back to life.
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Disclaimer
See Meridian Mining’s SEDAR+ profile for the PEA report (filed Mar 31, ‘23) and important risk disclosures. Author reserves the right to buy or sell any security without further notice. Tommy Humphreys and TheBigScore.com are not licensed financial advisors and are not qualified to provide personal financial advice.
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