Thursday, May 12, 2011

New York Times Magazine Profiles Yukon's Golden Man

That man is Sean Ryan, and he's been responsible for finding a multi-million ounce gold deposit in the Yukon. The profile of he and his partner Cathy Wood in the New York Times Magazine is long but fascianting. They were on to gold well before most people. He had settled on his pay property back around 2003, and had been involved in gold exploration off and on since 1993.

Ryan grew up in Timmins, Ontario and showed a talent for woodsmanship at an early age. What got him to western Canada wasn't gold, but mushrooms - the eating kind. Showing a habit that would get him acquring over 20,000 claims in the Yukon, he plowed his mushroom-picking profits into more equipment so as to pick more mushrooms. At times, this double-down habit got he and Ms. Wood in financial pinches. What helped them in the early years was living in an abandoned miner's cabin, without grid power, which meant no regular bills.

Like many prospectors with valuable properties, they became sophisticated with the ins and outs of junior exploration companies. Their first venture, with promoter Michael Gee, came to naught.
Every winter there is a giant mining convention in Toronto. There, in a quiet room away from the frenzied exhibit floor, the drunken parties and the aggressive lying, [Rob] McLeod [CEO of junior Full Metal Minerals] looked over the soil-sampling data from the White. The data was thorough and precise. It amazed him to see it just sitting there, as it had for a century: 5 miles by 2 miles of anomalous minerals, surrounded by creeks that had been full of placer gold. There was no way to be sure without further exploration, but McLeod wanted those claims.

“No,” Wood said when they spoke by phone. “I’m looking for a tighter shell.” For two years she had been training herself in the complexities of the junior market; buying and selling penny stocks, reading up on directors and executives; analyzing capital structures. Seeing beneath the surface of the exploration industry, with its deceptive brochures and corrupt stock analysts, became her job. She knew she didn’t want another partner like Donald Gee. Madalena Ventures had owned the right to all the gold on Ryan’s claims on the White, but Gee let it slip from his hands when he reorganized the company, let go of the claims and moved on. (Gee did not respond to questions.)

Wood told McLeod that she wanted to work with a new junior, one that hadn’t yet made any other investments and was therefore exclusively devoted to Ryan’s new discoveries. Did he know of anybody else who might be interested? He did: an Australian geologist named Adrian Fleming had just started Underworld Resources on the TSX Venture Exchange. McLeod was a director. Their plan was to pursue mineral exploration in New Zealand and Australia, but when Fleming saw the White, he changed his mind. Wood obtained a high price: in the first year of the deal, she took 500,000 shares of Underworld’s stock, a 4 percent royalty and 150,000 Canadian dollars as a cash advance. In 2008, they started to drill. At the first site they were disappointed. They moved the drill and tried again. The hollow steel tube, whose cutting edge was lined with diamond teeth, chewed through the earth. When it came up, the rocks in the tube were specked with gold. They drilled 21 holes that year and a hundred in 2009, trying to pin down exactly how big the strike was. Rumors of what was happening up north started to bounce around certain online bulletin boards, where penny-stock gamblers noticed that new companies were staking claims all around the Underworld discovery, hoping to capitalize on the excitement....
And the rest, as they say, is history. The Yukon is now one of the hottest area plays in the exploration industry.

Just goes to show you: it takes a long time for an overnight success.

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