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

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 his 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.

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 the company find the next few million ounces of gold at its prized Red Lake mine.

At a time when pessimism reigned supreme in the gold mining industry amid severely depressed commodity prices, mining capitalists Wayne Beach and Hugh Snyder approached O’Dea and asked 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. 

Through the all-cash agreement, Fronteer spun off 14 of its other properties into Pilot Gold (PLG-T), and transfered over most of its management team. O’Dea gave up his post as president and CEO in the new company and became chairman instead. Geologist Matt Lennox-King is now in charge of the company’s daily operations.

In early July, a shell company named Drexel Resources announced O’Dea was investing $1.07 million for a 32% interest. More than 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, the head of brokerage firm Canaccord Genuity, who purchased 400,000 shares; and John Tognetti, the head of Haywood Securities, who bought 200,000 shares. Noelle Tognetti 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 in mid-August, four experienced mining industry executives are set to join O’Dea on the board shortly. 

Those expected to join Blue Gold’s board 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 PwC’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 financing news. The company has 33.1 million shares outstanding, and a 52-week share price range of 10¢-$1.50.