In conversation: Funding strength takes fortitude

In a wide-ranging interview, we talked with Eclipse Gold Mining Chair and Pathway Capital Co-founder Marcel de Groot about his first big win, the essential ingredient for any successful company in the mining space, building a reputation with investors, and the launch of Eclipse’s flagship Hercules gold project. Pathway, founded in 2004, is a Vancouver based privately held venture capital firm focused on value creation. To date, companies supported by Pathway have raised over $2 billion in equity financing and have been involved in several billion dollars in M&A transaction.

The period of 2012 through to today has been a tough market to raise funds in the mineral exploration and development space. How has Pathway stayed resilient and been able to raise capital to advance assets and unlock significant shareholder value?

Marcel: We hold a long-term view with conviction. We write cheques every round and that resonates with investors. Birds of a feather stick together, so our network tends be investors with a similar long-term view who know first-hand that meaningful value creation is sometimes realized over time. We start with writing the first cheque ourselves so investors know we are aligned. They also are aware we will stick with things through thick and thin and keep writing cheques until success is acheived, by whatever it takes. Some of our successes have happened quickly, while others have taken years and had some hiccups along the way. The key is investors look at the risk/reward equation and know the downside is protected by the fact we will work very hard to work through any obstacles that may arise to create value. We’ve had situations where companies have been down tremendously in market value but been able to pull out significant returns in the end for all investors.

Which brings us to the launch of Eclipse Gold Mining (TSX-V/EGLD) and its flagship Hercules Gold Project in Nevada. How does that fit in with Pathway’s model.

First, we have a great team that includes Mike as President & CEO, who knows Nevada’s Walker Lane Trend very well after his previous company Northern Empire advanced the Sterling gold project to its acquisition by Coeur Mining for $117 million in 2018. The team also includes Warwick Board as VP of Exploration, who helped advance Pretium’s (TSX:PVG) Brucejack from discovery through to producer and knows epithermal systems very well. What’s attractive about Hercules as a project is its location and untapped opportunity at a time when gold continues to gain momentum. Nevada is a fantastic gold mining jurisdiction with extensive supporting services and infrastructure; and Hercules is only a one-hour drive from Reno. Finding a project, so close to services, that appears to be a larger intact system is incredible. Similar to my exposure to Toromocho and Peru Copper, Hercules was a project that was largely ignored and undervalued. Hercules has had limited testing owing to fragmented ownership, a dearth of modern exploration methods and a generally poor understanding of the project from a systemperspective. It has the potential to be a very significant project from where it is now in a very bullish gold market. I don’t think in gold’s history there’s been a better dynamic for the precious metal to take off in value than right now. Fiscal and monetary policies are creating more cash than ever before. Globally, the printing press for money is on. I think it’s the perfect storm for gold to hit and go well past its previous highs.