.| MEDALLION RESOURCES LTD. : http://www.medallionresources.com/ : Quick Report |
| Strategy |
Medallion Resources Ltd is a publicly traded natural-resource company incorporated in the Province of British Columbia, Canada, and listed on the TSX Venture Exchange (Trading symbol -- MDL). The business of the Company is the acquisition, exploration and development of mineral-resource projects. Medallion's head office is in Vancouver, British Columbia, Canada. The Company's present projects are in western Manitoba and Southern Labrador, Canada.
STRATEGY -- Acquire advanced, high-impact North American REE projects
Medallion Resources Ltd focuses on the acquisition and advancement of significant North American properties containing the rare-earth elements (REE's), which are required for energy conservation, storage, use and efficiency. The REE's are key to many green, 21st-Century energy technologies that are used in consumer and industrial products. Hybrid cars (in batteries, motors & generators) each use several kilograms of REE's. Modern wind generators each use about 250 kilograms of REE's. The development of new energy-efficient technologies, such as that found in already-operational magnetic heating, refrigeration and air-conditioning equipment, will further drive markets for the REE's.
Medallion will position itself, through acquisition of top-quality projects and the application of advanced exploration techniques, at the forefront of the REE exploration industry. Medallion's criteria for additional acquisitions emphasize heavy REE's and new types of REE occurrences that are amenable to large-tonnage open-pit production.
The first result of the corporate strategy is the acquisition of the Eden REE Project in western Manitoba. The Eden REE geology is a unique combination of an alkalic intrusive complex with essential REE-bearing carbonatite, a large area of multiple styles of REE mineralization and a potential for high values of the more valuable neodymium and elevated values of the heavy REE's. Eden also has the size necessary for a potential large surface REE deposit and it is one of the very few significant REE properties in Canada within practical range of roads, power and mining-friendly communities.
The Red Wine HREE Project in southern Labrador is Medallion's most recent acquisition. The project covers key areas of the Red Wine intrusions, which are a new, increasingly important heavy REE area play. As a heavy REE prospect, the Red Wine HREE Project is an important addition to the Company's portfolio.
CAPITAL STRUCTURE -- Minimize dilution and maintain control
Medallion has approximately 28.6 million shares outstanding and 38 million shares fully diluted. Over half the shares are in the hands of friendly and highly supportive holders. Insiders directly control 8% of the outstanding shares. Medallion's current capital structure, along with its program to acquire significant REE projects, has protected the market-value of its shares during the recent difficult economic times.
Medallion has assembled a team of officers and directors, who have well-regarded technical, financial, governance and public-relations skills.
Dr William H Bird's combination of business credentials and mineral-industry expertise serves him in his leadership role as an officer and director. He holds a PhD in geology from the Colorado School of Mines, is a registered professional geologist and has over 40 years of mining & corporate experience. Dr Bird's understanding, both practical and theoretical, of rare-metals geology, mineralogy, metallurgy and markets is recognized as exceptional. He is committed to using his knowledge and experience to build Medallion into a significant participant in the rare-metals exploration sector. His focuses as an executive, in addition to geology and mining technology, are corporate development, governance and communications.
Don Lay has over 25 years of experience in venture capital, public-market communications and technology startups. He has also served as a director for a number of public companies including several mineral-exploration companies such as International Taurus Resources Inc, American Bonanza Gold Corp Inc and Medallion Resources Ltd. Mr. Lay is currently Vice President, Communications and Corporate Development for Functional Technologies (TSX-V: FEB), a life-sciences company. Don was a principal at China Mobile Soft, a seed-funded, embedded-software supplier that delivered solutions to Chinese telephone handset makers. China Mobile Soft was ultimately sold to ACCESS of Japan. Before entering the venture-capital world in 1994, Mr Lay invested 13 years in enterprise-applications development and software sales and support. Don holds a Bachelor of Science degree in Computer Science from the University of British Columbia.
Janet Horbulyk has 25 years experience with securities and stock-exchange regulatory matters, including seven years with the Listings Department of the Vancouver Stock Exchange. Janet has been working with the Medallion management team for over 16 years.
Erica Bearss is a graduate of the University of Ottawa with a Bachelors degree in Modern Language and Literature with a concentration in Spanish. She is an MBA candidate at Royal Roads University in Victoria, BC. Ms Bearss has over ten years experience in public relations and communications, which includes eight years working in corporate communications for publicly traded companies.
Mr Rod McKeen is a lawyer, and a founder and principal of Axium Law Corporation in Vancouver, Canada, since January 2004. Mr. McKeen has more than 25 years experience in all facets of securities and corporate law pertaining to the mining and mineral-exploration industry. Prior to forming Axium Law Corporation, Mr McKeen was a partner in the law firm of Gowling Lafleur Henderson LLP and a partner with the law firm Montpellier McKeen Varabioff Talbot and Giuffre. McKeen's practice encompasses emerging to mid-size mineral-resource companies with projects and operations around the world and involves dealing with stock exchanges and mergers, acquisitions and financing transactions on a similarly global basis. McKeen earned a Bachelor of Laws degree from the University of British Columbia, Vancouver, Canada, and a Bachelor of Arts degree from the University of Alberta, Edmonton, Canada.
Mr David Haber serves in Vancouver as the Honorary Consul, Republic of Austria. He was educated in Austria and graduated from the Vienna Business School. In 1981, Mr Haber founded what later became Heath Benefits Consulting Inc, a major National Pension and Benefits consultancy with offices in six major Canadian centres. In 2006, he sold Heath Benefits Consulting to Morneau Sobeco, the largest Canadian employee-benefits consultancy, where he served on its Senior Executive Committee until early 2009. As a past President and Founding Member of the BC Chapter of the Certified Employee Benefits Specialists (CEBS), Mr Haber has played a key role in the development of the benefits industry in British Columbia. He is a member of the International Foundation of Employee Benefit Plans (IFEBP), the Canadian Pension and Benefits Institute (CPBI), and BC HRMA.
Mr Andrew Morden is a seasoned corporate director and executive with over 20 years of experience in operations, finance, technology, investor relations and public markets. Mr Morden is a Chartered Accountant and holds a Bachelor of Commerce (Honours) from the University of British Columbia. He is currently the Chief Executive Officer and a Director of the Internet Marketing Center, a private company providing software and business-solutions consulting. He has also worked with a mix of large and small companies including Intrinsyc Software International (TSX:ICS) and Digital Dispatch Systems (TSX:DDS) as CFO and Secretary; Intrawest Corporation(TSX and NYSE) as the Vice President, Financial Planning and Systems; KPMG as a Senior Manager in the Assurance and Corporate Finance practices; and SAP Canada as a Client Manager. He specializes in taking small companies to the next level of growth.
THE MEDALLION ADVISORY BOARD -- A pre-eminent board of experts
Medallion is creating a pre-eminent board of experts to advise it as it strives to become a new leader in the exploration for rare-earth elements. Each member is chosen for general excellence in the mining and financial industries and for significant specialties that will assist Medallion in acquiring properties, financing, technologies and recognition in the business and technical worlds. The first Advisory Board members are as follows:
David Shaw has nearly three decades of experience in the resource and finance industry, with specific emphasis on technical and financial due diligence of resource projects. Shaw is an independent geological consultant and has focused on geological analysis of structural controls of ore mineralization and on the risk and financial assessment of resource-projects investments. Dr Shaw was recently appointed Chairman of Salares Lithium Inc (TSX-V: LIT). He is also a director of First Majestic Silver Corp (TSX: FR), Pan Pacific Aggregates PLC, (LSE: PPA) and Albion Petroleum Ltd (TSX-V-NEX). He has held the position of Senior Mining Analyst, Corporate Finance, at Yorkton Securities Inc, based in Vancouver and Santiago, Chile. He attained a PhD in Structural Geology from Carleton University, Canada.
Jim Clark brings to Medallion 30 years of exploration experience in a broad cross section of commodities, including rare-earth-elements (REE's). He is the current Vice President of Exploration for Rare Element Resources Ltd (TSX-V: RES), owner of the Bear Lodge, Wyoming, REE project. Dr Clark has a strong field and laboratory orientation with extensive experience in managing exploration programs for REE's, niobium, gold, base metals, and industrial minerals. He has worked for Molycorp Inc's REE program and played a key role in Hecla Mining Company's identification of the Bear Lodge REE resource. Dr Clark is the owner and Chief Geologist of Applied Petrographics, Inc, a consulting company he formed in 1998 to provide petrographic and micro-analytical services to the mining industry. He holds a PhD from the University of Oregon and is an NI43-101 Qualified Person licensed in the State of Washington.
Mark Brown is president and director of Pacific Opportunity Capital Ltd, headquartered in Vancouver, British Columbia. Pacific Opportunity is a financial-consulting and merchant-banking firm active in North American venture-capital markets. Mr Brown is also an officer and director of a number of public and private companies, including Rare Element Resources Ltd (TSX-V: RES - owner of the Bear Lodge, Wyoming, REE project), Animas Resources Ltd (TSX-V: ANI), Pitchstone Exploration Ltd (TSX-V: PXP), and Tarsis Resources Ltd (TSX-V: TCC). His corporate activities include merger and acquisition transactions, financings and corporate financial planning. Mr Brown's past experience includes managing financial departments of two TSE 300 mining corporations: Eldorado Gold Corporation and Miramar Mining Corporation. Mr Brown has a Bachelor of Commerce from the University of British Columbia and became a Chartered Accountant while with PriceWaterhouseCoopers.
Harmen Keyser is a geologist with 30 years of mineral-exploration experience in 25 countries. He was involved in the discovery of the San Martin gold mine in Honduras, the Cerro Blanco gold mine in Guatemala, the Skukum Creek gold-silver deposit in Yukon, and several rare-earth-element occurrences in Alaska. Mr Keyser, as the Vice-President of Exploration for Ucore Uranium Inc. (TSX-V: UCU), oversees the exploration of the Bokan Mountain Rare-Earth-Element project in Alaska. He previously worked for AGIP Canada Ltd. exploring for uranium deposits in Saskatchewan and has worked as an independent consultant on mineral exploration across North America, as well as in South America, Africa, and Europe. He is a director of Precision GeoSurveys Inc and Sound Energy Inc. He obtained a Bachelor of Science degree in geology from Saint Mary's University in 1981, is a member of the Northwest Territories Association of Professional Engineers, Geologists and Geophysicists, and is a "Qualified Person" in accordance with requirements of NI43-101.
Dennis LaPoint is founder and president of Appalachian Resources LLC, a North Carolina Corporation focused on exploration project development and management. With nearly 40 years of exploration experience, Dr LaPoint has been active in a variety of commodities including gold, base metals, uranium and tin. He also has significant experience in lateritic terranes and bauxite exploration. For the last ten years, he has focused on the Guiana Shield and Suriname, where he discovered the Nassau gold deposit for Alcoa, Inc and served as Cambior Inc's exploration manager. He has also been general manager of a chemical plant in Oklahoma to recover metals from radioactive tailings. Dr LaPoint received his PhD in geology at the University of Colorado and currently is an adjunct faculty member of the University of North Carolina. He is a licensed geologist in North Carolina, South Carolina and Tennessee and was appointed by the Governor of North Carolina to the State Board, which licenses geologists.
EDEN REE PROJECT -- One of the ten most-promising North American REE projects
The Eden REE occurrence is a recent discovery and one of the ten most promising North American REE prospects. A large mineralized area, high REE sample values and multiple-mineralization styles support targets for a large surface deposit. Distribution percentages for neodymium in samples collected to date indicate a potential for high economic concentrations of this more valuable light REE. There are also elevated levels of the heavy REE's, which indicates that a significant heavy REE by-product is possible.
Option to Acquire an Interest in the Eden Project -- Medallion has an option to earn a 65% interest in a joint venture (the "Option") to explore the Eden REE property, which comprises eight crown mineral claims (1871 hectares). In order to maintain its Option, Medallion, over a five-year period, must complete the following work-commitment expenditures and payments and share issuances to Rare Element Resources Ltd, the property owner and potential joint venture partner:
Five-Year Option to earn a 65% interest |
Cash payment |
Medallion's common shares |
Work completed |
At signing of the letter of intent |
$25,000 |
|
|
At signing of the definitive agreement |
$25,000 |
|
|
Upon TSX Venture Exchange's approval |
$50,000 |
200,000 |
|
End of first year |
$50,000 |
200,000 |
$250,000 |
End of second year, an additional |
$100,000 |
200,000 |
$500,000 |
End of third year, an additional |
$200,000 |
200,000 |
$500,000 |
End of fourth year, an additional |
$500,000 |
500,000 |
$500,000 |
End of fifth year, an additional |
$500,000 |
500,000 |
$500,000 |
TOTAL |
$1,450,000 |
1,800,000 |
$2,250,000 |
Production from the claims is subject to a 3% Net Smelter Return royalty ("NSR"), which is in favour of the prospector that originally staked the claims. Half of this NSR may be purchased for $1.5 million.
Upon completion of the payments and work commitments, Medallion may exercise its Option to acquire its interest in a joint venture with RES, which will be created to explore the Claims (Medallion will hold 65% and RES will hold 35%). At that time, the Claims will be deeded to the joint venture. Medallion will be the operator of the project during the Option period and, as the majority interest holder, it will be the operator of the joint-venture project, as well.
Eden REE Exploration Program -- With the recent REE discoveries and the early stage of work at the Eden property, the opportunity for the definition of significant mineralization is exceptional. A two-phase program is needed to further this definition. The first-phase-program goal, which will be completed in 2010, is to locate drill targets throughout the eight-square-kilometre, intensely mineralized REE core area.
The previous exploration work, particularly the 2002 discovery and characterization studies and the 2006 reconnaissance drilling, provide a good basis, including known untested targets, for this first phase of a new generation of work. The following steps and budget outline the program:
Gravity Survey
600 stations, ~100 x 200 m, main grid & SE extension $ 60,000
Geological Surveys
Regional mapping 5,000
Sampling 5,000
Line cutting; NW quad, SE ext, access trails 27,000
Detailed geological mapping and sampling NW quad,
SE extension, West grid detail, Main grid re-examination Mapping 26,000
Sampling 30,000
Satellite hyperspectral and pan-chromatic imaging; 200 km2,
Eden to Foot Lake
Purchase images 9,000
Satellite lineament structural analysis 3,000
Geobotanical Surveys
NW quad, SE extension over mag anomaly, West grid infill
Samplers 21,000
Samples 10,000
Supplies, reports, publications 10,000
Travel and per diem support
Air fare to Leaf rapids 15,000
Per Diem support 16,000
Helicopter support 10,000
Truck, boat and ATV rental 15,000
Data compilation and report preparation 20,000
Project Management (on site) 30,000
Geoscience Support
Eden Lake rock property measurements:
Mag susceptibility, conductivity, chargeability, density 10,000
Hydrothermal Alteration and Mineralization Studies:
Mineralogy and mineral chemistry 10,000
Petrology and whole-rock geochemsitry 10,000
Analytical SEM and Electron Microprobe 6,600
Rare-earth expert consultants 10,000
Core examination / sampling 4,000
Phase One Exploration Total $ 362,600
The second-phase program goal is to define and expand the REE mineralization. The major component of the second phase is a significant drill program. The number of holes and resulting budget depend on the data gathered during the first-phase program. It is possible that some of this drilling can be accomplished in 2010. A second-phase drill program budget is estimated at as much as $2 million.
RED WINE HREE PROJECT -- A significant heavy REE exploration project
Medallion's Red Wine HREE Project comprises four mineral licences, which cover a total of 33.75 square kilometres in southern Labrador. The main licence (2225 hectares) is in the southern portion of the Red Wine intrusions, located about 90 kilometres northeast of Churchill Falls, Labrador and 16 kilometres east of provincial route 389.
The Red Wine intrusions, which are granitic and peralkaline in composition, occur as two major bodies, the North and South Red Wine Plutons, or stocks, and at least eight minor stocks. Peralkaline granite intrusions contain higher levels of the HREE's. Eudialyte, an HREE-bearing mineral, occurs throughout most of the Red Wine intrusions.
Option and Land Position -- Medallion has negotiated an option to purchase 100% of the four Red Wine mineral licences. In order to exercise the option and acquire the 100% interest, subject to a 3% royalty in favour of the licences vendor, Medallion first must complete on the licences a $100,000 summer 2010 exploration program (see Medallion's HREE Exploration Program below)
Upon completion of the summer 2010 exploration program and the delivery of the resulting data, or by 31 December 2010, which ever is latest, Medallion may elect to proceed with the option to acquire a 100% interest* in the licences.
To maintain the option, Medallion must pay to the vendor in installments, over a period of five years, cash payments totaling $525,000 and share issuances totaling 1.9 million. In addition, Medallion must complete $400,000-worth of exploration work commitments.
The 100% interest optioned by Medallion is subject to 3% royalty in favour of the vendor, half of which may be purchased for $1.5 million.
As a condition of Medallion funding the summer 2010 exploration program, the Red Wine licences vendor has agreed that it, or its nominee, will subscribe to a $50,000 private placement of the common shares of Medallion.
Medallion will be the operator of the project during the Option period.
Red Wine HREE Exploration Program -- Medallion, in order to earn its right to option the licences, is required to perform a first-phase basic program, which will assess the chances for locating a significant HREE occurrence. This program comprises the following:
The radiometric survey will locate, and direct the initial mapping and sampling work to the more intense areas of mineralization. Radiometric surveys are the most efficient method of locating surface REE deposits, since all REE mineralization contains at least trace amounts of radioactive minerals. The initial mapping and sampling program will begin in August, as soon as the radiometric data is in hand. Samples will be collected for assay and mineralogical studies. The mapping and sampling program will be conducted by Alex Knox, who has 25 years of field and laboratory REE experience
Medallion's Red Wine mineralogical studies will be carried out by Dr Tony Mariano, the pre-eminent REE mineralogist, and Dr Jim Clark, one of our Advisory Board members and also an REE expert. Mineralogical studies are a critical component of REE exploration. They should be among the first conducted on a new REE prospect. High assays are meaningless unless the REE's occur in minerals that can be economically produced and processed to extract the REE's
The results of the summer 2010 exploration program will be compiled as an NI43-101-style Technical Report, which will be authored by Alex Knox. The Technical Report will include Medallion's work and should be complete by early November. The total exploration budget for 2010 is estimated at $150,000.
FINANCE -- Eden REE Project and the new Red Wine HREE project
Medallion must raise additional funding to complete its aggressive exploration agenda. Funding for the first-phase Eden REE Project work program is in progress. The most expensive line item, the airborne geophysical survey, is already complete and funded. Funding to maintain the company, advance the Eden REE Project and cover the exploration costs for the new Red Wine HREE Project, will be raised by private-placement equity sales beginning the late spring of 2010. Approximately CDN$2 million in new financing eventually will be sought before the end of the year. Funding is available through flow-through-share programs and Medallion expects to make use of this source.
Cash on hand -- Medallion has approximately CDN$100,000 on hand.
Liabilities -- Medallion has a note due to one of the directors in the amount of CDN$50,000 plus interest. .
RISKS
Eden REE Project -- Previous surface sampling and geological mapping carried out by others prior to Medallion's involvement support the concept that significant REE's occur on the Eden property; however, exploration drilling, sampling and other detailed geological tests and data are required to fully confirm the occurrence. There is no assurance that such exploration will confirm the REE occurrence or that confirmation will eventually result in an economic REE ore deposit.
Red Wine HREE Project -- This is an early stage exploration project. There is no assurance that exploration will confirm HREE occurrences or that confirmation of such occurrences, if it comes to pass, will eventually result in an economic HREE ore deposit.
Acquisition Strategies -- Medallion has initiated an aggressive project-acquisition strategy to build the company. Although this strategy has shown promise, there is no assurance that any or all of the targeted projects will be acquired.
Finance -- Medallion will require additional financing to accomplish its aggressive acquisition and exploration plans. There is no assurance that Medallion will be able to raise the funding necessary to carry out these strategies, to maintain its option to acquire a 65% interest in the Eden REE exploration joint venture or to maintain its option to acquire 100% of the Red Wine HREE property.
Some of the statements contained in this Business Plan Summary are forward-looking statements, such as estimates and statements that describe the Company's future exploration and financing plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in these statements. Such risks include expectations that may be raised by discussing potential acquisitions. Also, in order to proceed with the Company's exploration plans, additional funding is necessary and, depending on market conditions, this funding may not be forthcoming on a schedule or on terms that facilitate the Company's plans.
SHARE INFORMATION
Industry: Mineral Exploration & Development
Exchange: TSX Venture Exchange
Symbol: MDL
CUSIP #: 583935 10 1
Authorized shares: Unlimited
Shares outstanding: 28.6 million common shares
Options outstanding: 1.7 million
Warrants outstanding: 9.5 million
Fully diluted: 39.8 million common shares
Current price (20 July 2010) $0.12
Market capitalization ~ $3.5 million
52 week high/low: $0.30 / $0.05
Volume, previous 3 months ~ 4 million common shares
Shareholders: ~ 300
Major shareholders: Over 50% closely held (insiders approximately 8%)
CORPORATE INFORMATION
Medallion Resources Ltd
1160 -- 595 Howe Street
Vancouver, British Columbia V6C 2B6
Phone: (604) 681-9558,
Fax: (888) 665-4615
info@medallionresources.com
www.medallionresources.com,
Directors and officers of the company
William H Bird, PhD, PGeo, President,
CEO & Director
Victoria, British Columbia
Don Lay, Director
Vancouver, British Columbia
David Haber, Director
Vancouver, British Columbia
Ron McKeen, Director
Vancouver, British Columbia
Andrew Morden, Director
Vancouver, British Columbia
Janet Horbulyk, Corporate Secretary
Burnaby, British Columbia
Erica C Bearss, Manager, Investor Relations
Vancouver, British Columbia
Solicitors
Axium Law Corporation
3350 - Four Bentall Centre
1055 Dunsmuir Street
Vancouver, BC V7X 1L2
Auditors
Lancaster & David, Chartered Accountants
510-701 West Georgia Street
Vancouver, BC V7Y 1C6
Bank
Bank of Montreal
595 Burrard Street
Vancouver, BC V7X 1L7
Transfer agent
Computershare
2nd Floor -- 510 Burrard Street
Vancouver, BC V6C 3B9
| Copyright © 2010 by Medallion Resources Ltd. All rights reserved worldwide. |