When Scott McLean packed up and left Xstrata (XTA-L) after a long and illustrious career with Falconbridge, he knew exactly what he wanted to do with his time: Find another world class mine.
During his 23 years at Falconbridge — much of it spent as head of the exploration team in Sudbury — McLean managed to win the PDAC’s prospector of the year award in 2004 for the Nickel Rim South discovery, and he wanted more.
“You get addicted to finding world class mines,” McLean says. “When you’ve found them before you want to do it again.”
So he teamed up with his former partner in crime at Falconbridge, Kevin Stevens, and established the privately held HTX Minerals in 2008. The company continues to hold a portfolio of nickel, copper and PGE projects throughout Ontario and Quebec.
But the public side to the former Falconbridge execs story only got going with the spin out of Transition Metals (XTM-V), which completed its initial public offering in August of this year.
Another former Falconbridge colleague, Greg Collins, joined up with McLean to launch Transition and Collins now serves as Chief Operating office. Outside of his time at Falconbridge Collins also served as VP of Exploration for Crowflight Minerals, now CaNickel Mining (CML-T) and helped to develop the Bucko Lake nickel deposit in Manitoba.
One of the key motivators for launching Transition was to bring liquidity to HTX shareholders, McLean says, however, unlike HTX, Transition has a gold focus with its six projects in Ontario and BC.
The company is following the project generator model with the properties, as it has already completed two joint ventures and will look to do more.
McLean believes the model offers the best way to ensure that investors don’t get diluted out of their positions by continued equity raises, and it minimizes risk by bringing in other companies to help share the load and what is an inherently risky venture.
The two projects that Transition has already farmed out are Pipestone and Jumping Moose, both of which are in Northern Ontario. At Pipestone the company signed a deal with Gowest Gold (GWA-V) that gives it a 40% stake in the project for $100,000 in cash, 400,000 shares and $1 million in expenditures.
At Jumping Moose the company teamed up with Spiral Exploration, which also gained a 40% stake this time for $90,000 in cash, 500,000 shares and $1 million in expenditures.
With those two projects being tended to by Transition’s partners, the company is focusing on the Haultain project in the southern Abitibi Belt along the western extension of the Rideout Fault, which hosts such recent discoveries as Trelawney Mining’s (TRR-V) Côté Lake deposit.
The eastern flank of the Rideout Fault is less explored mainly because of a large Proterozoic sedimentary cover that overlies the fault zone. Haultain, however, is situated within a window of prospective rock poking through the Proterozoic rock just south of the Round Lake Batholith.
Thus far the company has drilled 1,800 metres in 21 holes and says it has hit upon a feeder zone of syenite dykes, similar, McLean says, to those found at AuRico Gold’s (GAM-T, AUQ-N) Young Davidson project.
Highlight intercepts from the program include 3.07 metres grading 4.72 grams gold; 7.06 metres grading 2.37 grams gold; 11.69 metres grading 1.57 grams gold and 0.36 metres grading 82.5 grams.
McLean explains that the company is focusing the bulk of its exploration efforts on three key areas at the property: the Swain Swarm, the South Dyke Swarm and the North Dyke Swarm.
At Swaine Zone Transition has outlined a strike length of roughly 1.2 km and assayed gold mineralization in all 6 trenches cut along the strike, but also found visible gold in all of them six trenches as well.
At the North Swarm Transition cut two trenches and at the South Swarm it cut one.
The most recent drilling at the project was done with the aim of going deeper at Swaine and getting some core on the South Swarm.
The company is waiting for results from those holes and McLean says that based on the results it will decide whether to actively look for a partner or issue equity to raise capital so that it can aggressively explore the project on its own.
Transition currently has roughly $2.2 million in cash and the company is 25% held by HTX, with Transition management holding another 14%
In Toronto on Dec. 22 the company’s shares were trading for 36¢. Over the last 52-week period they have fluctuated between 35¢ and 45¢ and the company has 22.1 million shares outstanding. 29.6 million on a fully diluted basis.
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