Why invest in gold

The interesting story of Douglas MacQuarrie and Canada’s Asante Gold

Ten years ago, at the Cara Whistler Conference, kaimu introduced us to Douglas MacQuarrie, CEO of Asante Gold. I think I can say for the attendees that we were all impressed by his professionalism and outstanding knowledge of Gold mining in Ghana, Africa.

MacQuarrie, an exploration geophysicist/geologist who (wiki says) now “has 40 years’ mineral exploration experience, including almost 30 years in West Africa. He has been responsible for the discovery, acquisition of gold deposits both in Canada and in Ghana.”
For the past ten years, Douglas has encountered hard-to-believe difficulties in his pursuit of an elephant mine in Africa and yet, after delisting of his company, he continued to seek capital to pursue his dream. With a listing on the junior Canadian Securities Exchange and a stock price of a few pennies, Douglas sought to raise only hundreds of thousands of dollars because he refused to dilute his share position unreasonably by issuing more stock. He persisted for a decade to the point that in 1Q2021, you could have bought shares for ten cents or better for several years. As the chart below shows, his stock (CSE:ASE) looked pretty much dead. Then in Q2, things picked up, which happened to be more than the rising Gold price at the time.

Yesterday I received this mail from a reader:

❝ Hi Bill,
Thanks for creating and maintaining the Community Blog section of your website. A while ago you mentioned a company called Asante Gold. I actually held a position in it for quite a while prior to your mentioning it. Since then it’s skyrocketed on fundraising, acquisition activity, and other news and PR. I was wanting to get your opinion if there’s still a lot more room to run on this one or if I should start ringing the register at current pricing value-wise? I can live with and manage the consequences just fine either way and would just as soon prefer to hold longer if there’s real value to stabilize the current pricing.  
What signs if any would there be to indicate it’s finally time to sell? 
Thank you, (name withheld)
P.S. – I hope you bought some too back when you were last mentioning it! ❞

So I wrote back to this reader:

Thanks for contacting me but I hold no stock and have missed a big gain.
If I asked McQuarrie, he’d just tell me the stock is going to the moon. 🙂
But as you have asked, I will call him tomorrow and do a write up.
Douglas is a super guy. He impressed the attendees at the Cara Conference Whistler in 2011. Since then he has struggled to raise capital, so I am happy he is now getting things done.
All the best,
/Bill  

I immediately wrote to MacQuarrie:

❝ Douglas,
Congrats in creating s/h value. I had a reader contact me today to say he has been invested with you for many years since I introduced you at the Cara Whistler Conference in 2011. He couldn’t be happier, so I told him I would call/email you to get the skinny on what you have going there, how big this might be, and what are your biggest hurdles in getting there.
So, hopefully you can give me some interesting content that I could write up in my blog.
All the best,
/Bill   

And I received an immediate answer:

❝ Douglas MacQuarrie
 
Hi Bill! Long time. Hope you and yours all well in this crazy COVíD world!
Thnks for the kudos. It was an opportunity that knocked at the right time. We had just completed a $7 million raise to primarily Ghanaian investors – an important part of our strategy to ‘nationalize’ ourselves! The Bibiani deal dropped in our lap – we had to move fast, and financing came thru and we got it closed. 
 
Our two new major shareholders are both Dubai/UAE based and interested to acquire the gold that the mine will produce. So make money on shares and have a friendly gold supplier down the road. Seems like a great plan! They both have very large resources and want more gold. Hence Roscan equity deal.
 
We have more than 200 contractors on site doing the mill refurbishment – for a third Qtr 2022 start up. Mill will be as good as new as every major component, control circuits etc all rebuilt or replaced.
 
Quite a bit of waste rock to move in order to get to the ore at the bottom of the old pits. So production builds up to 200 koz over two years. Basically Bibiani was a highly profitable operation for Ashanti Goldfields in 2004 at $500 gold price. They had a pit wall failure that shut it down and gold price too low to justify work to restart. Basically nothing happened as far as actual mining since then! So we start it up at $1800 gold price!
 
Current resource is 2.5 Moz from resolute historical UG feasibility study. If add in our Kubi get near 3Moz. Lots of exploration potential as well.
 
So I think market sees a one billion $ market cap once we secure funding to take us to production. We have tons of interest – looking at gold forward type deals or conventional project backed debt. Trying to stay away from equity. We’d like to wrap that financing up before year end – let’s see! There’s the risk component.
 
What part of the World are you in now?
Cheers. Douglas  

So, the decade long struggle to get into Gold mining in a big way in Ghana is getting close to fruition and the stock price reflects the success Douglas MacQuarrie has had this year. More than anything though, his mail shows that Douglas is still intent on fighting share dilution as he builds his Gold mine in Africa.

Too many promoters these days are serial distributers of stock. Then by the time they finally get into production, all the while enjoying the lifestyle afforded by their market cap and personal holdings, there is little left for the shareholders. On the other hand, MacQuarrie’s intent has always been to respect the shareholders in his quest to build value.

This is a feel-good story. I am pleased that one of you brought it to my attention. CSE:ASE is trading at C$1.40 and higher, which is a long way from ten cents a few months ago.


The original source is here - https://www.billcara.com/community/
The message was posted on October 28, 2021 at 9:17AM by Bill Cara.