Newfoundland's golden boy

Mark O’Dea cashes in on years of gold exploration

Moira Baird mbaird@thetelegram.com
Published on February 26, 2011

Newfoundlander Mark O’Dea is back where he started 10 years ago — hunting for gold and getting a new exploration company off the ground.

This time, he’s got a leg up.

Thanks to the pending $2.3-billion sale of Fronteer Gold — the Vancouver-based exploration company started in 2001 — he’ll have more than a dozen gold prospects and a hefty financial headstart.

The friendly takeover deal will stake O’Dea’s new company, Pilot Gold, to $10 million in capital and pay Fronteer shareholders a 37 per cent premium for selling their stock to Newmont Mining, the world’s second largest gold miner.

The deal is scheduled to close April 6, pending shareholder approval.

“It’s a pretty substantial asset base right out of the gate,” said O’Dea.

He figures it will be an easier startup compared with Fronteer’s early days.

“The first three or four years were a struggle and gold prices were just coming out of an all-time low.  We were building our portfolio, building our team and … it really took three years to get the foundation right at Fronteer.

“Pilot’s kind of starting at that three- or four-year period.”

***

Twenty years after he left the province, O’Dea has strong connections to Newfoundland and Labrador.

“All the O’Deas are there,” he said.

“There’s strong family ties, I feel them even though I’ve lived in Vancouver half my life. It’s funny how time flies.”

His father, Gerard, spent the past year-and-a-half building a summer home in St. Mary’s Bay, where O’Dea, wife Victoria and their three young children plan to spend summers.

His own earlier summers were spent in Renews, where his grandfather, Michael O’Dea, owned fishing boats and a trucking business on the Southern Shore.

“He’d always be talking about hunting in the Butterpots and having come across some vein of gold or copper, and was never able to go back and find it again. But he knew it was there.”

O’Dea worked summers in his grandfather’s fishing crew when the inshore cod fishery was alive and well.

“I loved it. It was good old-fashioned hard work and I think it taught a lot of good lessons for life.”

Such as?

“Getting up 4:30 in the morning is still painful.”

***

O’Dea was a second-year geology student when Derek Wilton hired him to work in the summer of 1987.

A professor in mineral deposits with Memorial University’s earth sciences department, Wilton had two crews in Labrador’s Seal Lake area working on a project for the Geological Survey of Canada and the provincial Mines and Energy Department.

“We were doing some mapping in a very remote area in central Labrador. We could only get in there by float plane,” said Wilton.

“We were going around looking at old copper showings that had been discovered in the 1950s … mapping them, sampling them and trying to see if they were worth anything.”

Wilton recalls O’Dea as being a cut above his second-year peers.

“He was very observant. He had a really good eye for the rocks and he was intelligent enough to know what was going on.”

Wilton lost track of his former student when O’Dea’s family moved to Ontario.

Sixteen years later, O’Dea contacted Wilton to be a consultant on the Michelin uranium deposit in Labrador just west of where the pair had worked together.

It was 2003 and O’Dea was president of Fronteer.

He had completed his geology degree at Ottawa’s Carleton University in 1989 and earned a PhD from Australia’s Monash University in 1995.

In 2001, he won a $140,000 prize from Goldcorp Inc. in an international competition designed to help that company find its next six million ounces of northern Ontario gold.

That same year, O’Dea joined Fronteer.

***

When he returned to Canada in the mid-1990s, O’Dea started looking for the kind of iron-oxide-copper-gold deposits found in Australia. These are usually rich in copper, gold and uranium.

The search took him to the Great Bear magmatic zone in the Northwest Territories, the Yukon’s Wernecke Mountains and Labrador’s central mineral belt.

In Labrador, Fronteer was partnered with St. John’s-based Altius Minerals exploring old uranium deposits discovered by Brinex decades earlier. They had proved to be uneconomic as uranium prices dipped in the late 1980s.

The partners found more uranium in Labrador.

“You don’t always find what you’re looking for in this business,” said O’Dea. “But the approach worked and Labrador was the winner.”

 Uranium prices were also soaring as world supplies were shrinking and other exploration companies staked claims in Labrador.

“Then, it took off because it became a uranium play,” said Wilton.

The partners formed a new company, Aurora Energy, to find more uranium and eventually develop a mine.

Fronteer and other companies spent millions of dollars on exploration until April 2008, when the Inuit government in Nunatsiavut imposed a three-year moratorium on the mining and milling of uranium on its lands.

Earlier this year, Fronteer sold Aurora to Australian-based uranium miner Paladin Energy. It bought the company and its uranium assets in a share deal worth $261 million.

***

Elsewhere, O’Dea and his Fronteer team continued the search for gold that inevitably led to Nevada, one of the world’s most prolific gold-mining districts.

O’Dea said the company’s focus shifted primarily to gold in the past three years — starting with its $160-million purchase of Colorado-based NewWest Gold and its Nevada gold assets.

Among those assets was Long Canyon, the most likely deposit to become a gold mine.

“Nevada was really the catalyst that took Fronteer to the next level,” said O’Dea.

“With that acquisition, it was clear that we had every intention of becoming a gold company.”

Those gold assets later drew Newmont’s interest.

“They compiled a portfolio of decent gold properties … based on their geological knowledge,” said Wilton.

“Mark is a good geologist and he’s got some other really good geologists that work with him at the senior level there.”

***

Fronteer shareholders will vote March 30 on the $2.3-billion deal.

Newmont will pay Fronteer shareholders $14 for their stock.

Fronteer shares were trading at $10.25 apiece when the Newmont deal was announced earlier this month.

And Newmont will own 19.9 per cent of Pilot’s stock.

O’Dea will become chairman of the new company, handing over the day-to-day reins to Matthew Lennox-King as president and CEO of Pilot. About 15 Fronteer employees will also join Pilot’s new exploration team.

If approved, the deal will send three Fronteer gold properties in Nevada — Long Canyon, North Humberland and Sandman — to Newmont, which owns nearby gold mines.

Fronteer’s non-core assets — 11 other gold properties in Nevada and a few in Turkey — go to Pilot Gold.

“We’ve got a great platform of projects to jump right into and we’re bringing, essentially, the same core team over from Fronteer to do it again,” said O’Dea.

 

mbaird@thetelegram.com