Out of the bush and into the boardroom

Vancouver – With 56 properties scattered throughout the Yukon to explore, Ryan Gold‘s (RYG-V) new president, Shawn Ryan, has his work cut out for him. Mr. Ryan sold six gold properties to the company in September, 2010, and on Feb. 16, the long-time prospector and former mushroom picker penned a deal to sell the rest of his precious-metals properties, all 50 of them, to Ryan Gold and become its president. It will be his first major position in a public company.

As the Yukon’s best-known prospector and property vendor, Mr. Ryan already wields considerable public appeal. Indeed, the announcement of his appointment and the property acquisitions pushed Ryan Gold’s stock up nearly 25% to $2. And after vending two of the most important new Yukon gold projects in the past few years, shareholders can’t help but think Mr. Ryan might be able to do it again.

Those two projects, of course, are White Gold and Coffee. In 2007, he optioned White Gold to Underworld Resources, which quickly delineated a two-million-ounce gold resource and sparked a staking rush throughout the Yukon. Kinross Gold (K-T, KGN- N) took over Underworld for $2.60 a share, or $140-million, in early 2010. Mr. Ryan did well by the deal: he received two million Underworld shares and $850,000 cash for optioning the property, along with a 4% net smelter royalty which could be bought for a series of payments totalling $10-million.

In mid-2009, with the junior exploration sector on the road to recovery, Mr. Ryan optioned the Coffee gold project to Kaminak Gold (KAM-V), when its stock could be had for just 12.5 cents a share. By late 2010, Kaminack’s stock had soared to an all-time high of $3.85 following impressive drill results from Coffee, including 35 metres of 6.3 g/t gold. Mr. Ryan is entitled to receive two million Kaminak shares and $400,000 over six years for vending the property, as well as a 2% net smelter royalty, half of which can be purchased for $2-million.

With two promising deposits under his belt, Mr. Ryan can now demand a much higher fee for his services. For putting his remaining 50 precious-metal eggs into Ryan Gold’s basket, Mr. Ryan and his wife Cathy will receive cash payments of $7.5-million over two years; 7.5 million common shares immediately, worth approximately $15-million at Ryan Gold’s current share price; $750,000 in potential bonus payments; and a 1% NSR on all the properties.

The new role as president marks a significant change for Mr. Ryan, who has spent much of the past two decades tromping around the bush. His job as a promoter will be likely be easier given Ryan Gold’s current financial state and its deep-pocketed shareholders. The company has roughly $5-million in working capital to explore its new properties, the most advanced of which is Ida Oro, about 90 kilometres east of Dawson City. Mr. Ryan’s exploration crew, Ground Truth Exploration Ltd., took 5,490 soil samples there last summer and found a strong, central gold-in-soil anomaly extending for at least four kilometres. Helicopter-borne geophysical surveys have also established a coincident magnetic low around the anomaly.

Ryan Gold’s largest shareholders are Ned Goodman and his public resource investment company Dundee Corp. (DC-T), which together own approximately 17 million Ryan Gold shares; and soon-to-be mid-tier gold producer Osisko Mining (OSK-T), which owns eight million shares. Ryan Gold has 82 million shares outstanding.