Fronteer ex O’Dea raising $20M for Blue Gold Mining

Vancouver – Fresh from the $2.3-billion sale of his Nevada-focused explorer Fronteer Gold in February, Vancouver-based Mark O’Dea has announced plans to raise up to $20 million for a new company, Blue Gold Mining (BGX-V).

Blue Gold Mining did not disclose what it planned to do with the money, but said a syndicate of agents led by Cormark Securities will raise it at $1 a unit on a best-efforts basis. The units will include one common share of the company and one-half of a warrant exercisable at $1.50 for two years.

When a reporter from The Northern Miner contacted Blue Gold regarding the recent financing announcement, a spokesman for the company said neither O’Dea nor the company had any further comment on the matter. In regard to the name of the new company, Blue Gold, he confirmed it was only a coincidence that O’Dea’s dog was named Blue.

Forty-three-year-old O’Dea helped start Fronteer in 2001 after winning second place in the Goldcorp Challenge, a contest sponsored by Goldcorp (g-t, gg-n) in which geologists were asked to submit ideas to help it find the next few million ounces of gold at its prized Red Lake mines. At a time when pessimism reigned supreme in the gold mining industry amid severely depressed commodity prices, mining capitalists Wayne Beach and Hugh Snyder decided to approach O’Dea and get him to lead a venture that became Fronteer Development Group.

That idea would pay off in spades almost 10 years later, when Newmont Mining (nem-n, nmc-t) snapped up Fronteer in February 2011 for its Long Canyon gold project in Nevada, close to Newmont’s existing operations.

Though the all-cash deal allowed Fronteer to spin off 14 of its other properties into Pilot Gold (plg-t), as well as transfer over most of its experienced management team, O’Dea elected to give up his post as president and CEO in the new company and become chairman instead. Geologist Matt Lennox-King is now in charge of daily operations.

In early July, a low-profile shell named Drexel Resources announced O’Dea was investing $1.07 million for a 32% interest in the company. Over 20 brokers and mining executives also participated in the financing, in which O’Dea bought 10.7 million units at 10¢ each. Noteworthy among the participants were Peter Brown, head of brokerage firm Canaccord Genuity, who purchased 400,000 shares; and John Tognetti, head of Haywood Securities, who bought 200,000 shares (NoelleTognetti bought 200,000 as well).

O’Dea changed the company’s name to Blue Gold in August, and according to a management information circular filed on Aug. 16, four experienced industry executives are set to join O’Dea on the board shortly. They include Donald McInnes, a former director of Fronteer Gold from 2001 to 2011 and a past president of the Association for Mineral Exploration British Columbia; Scott Lamacraft, the president and CEO of Cormark Securities; Lenard Boggio, a senior member of PriceWaterHouse Coopers’s mining industry group in Vancouver; and Nolan Watson, a founder and current president of Sandstorm Gold (ssl-v), as well as the former chief financial officer of Silver Wheaton (slw-t).  

Thinly traded Blue Gold closed up 10¢ to $1.35 after the Sept. 8 news release. The company has just 33.1 million shares outstanding, and a 52-week share price range of 10¢-$1.50.