Mark O'Dea. — Submitted photo
Mark O’Dea is hoping for some good Karma.
The Newfoundlander who sold exploration company Fronteer Gold for $2.3 billion 2 1/2 years ago is now the chairman of two gold companies — True Gold Mining (for which he’s executive chairman) and Pilot Gold, seeded with some of the money earned from the Fronteer sale.
Last week, True Gold announced it had raised $23.5 million from Liberty Metals and Mining, a subsidiary of Liberty Mutual Assurance Company of Boston, bringing its working capital to $38 million and no debt as it develops the Karma project in Burkina Faso. O’Dea told The Telegram that the investment speaks to Liberty Metals managing director Noel Dunn’s confidence in True Gold’s management and potential.
“Noel’s been looking for opportunities to deploy some of that capital over the last couple of years, and his mandate is to back management teams that have a proven track record and are associated with projects that look exceptional, in the scheme of things,” said O’Dea, on the phone from a fishing boat from his base of operations in British Columbia. “So he’s kind of cherry-picking his opportunities right now, and it’s a great time to do that if you’re a fund with some money to deploy.”
True Gold is actually the result of a merger last year between Blue Gold (started by O’Dea) and Riverstone Resources, which brought the Karma project to the table.
“It had just finished scoping out a heap leach project, a heap leach mining scenario, that I found really interesting and I thought was well-suited to what was looking like to be a fairly major headwind in the capital market, and being attached to projects that were financeable and relatively low-risk seemed like a fairly good strategy to go,” said O’Dea. Heap leaching is a mining process that extracts compounds from ore using chemical reactions to absorb and separate them.
The $38 million is earmarked for the project’s feasibility study and to move it right into the project financing stage.
“It’s certainly enough to get us through those key milestones, and then ultimately, within the next
12 months, we’ll be trying to raise a significant portion of project debt to get the project fully built.”
O’Dea estimates Karma will enter commercial production by the end of 2015.