Issue link: http://resourceworld.uberflip.com/i/119004
MINI NG JUNIOR OUTLOOK– A CASE STUDY An interview with Miranda Gold's President, Kenneth Cunningham by Kathrine Moore At this year's PDAC, cautiously optimistic was the mantra. Several attendees told me that they believed that many of the exhibiting companies, with $200,000 or less in their treasuries, might not make it to next year's PDAC. Running on fumes was an often heard phrase when the topic of tough markets and junior exploration companies was raised. It is true that exploration companies are struggling to survive in this market; however, there are success stories. I met with Kenneth D. Cunningham, P Geo, President and CEO, of Miranda . Gold at PDAC to talk about what it takes to survive as an exploration company. Miranda Gold Corp. [MAD-TSXV] is a successful gold project generator. Quite an accomplishment given the fact that today's market favours producers and projects in the very late stages of development, not those looking for new gold deposits. When I asked Cunningham what the Venture Exchange might look like next year, he predicted that maybe 30% of exploration companies will fail. He said this happens whenever there is a bubble in commodities. A lot of money was poured into exploration in 2011. Miranda's stated strategy is to mitigate the risk of exploration by preserving its treasury while executing a unique joint venture model using a technical approach to exploration. Miranda's focus is on the discovery of new gold deposits from its property portfolio and on the building of solid partnerships with several mining companies. Six of Miranda's properties are being advanced through exploration funding agreements. The company's portfolio comprises 16 projects: 13 in Nevada and 46 www.resourceworld.com Kenneth D. Cunningham, P. Geo, President and CEO, of Miranda Gold three in Colombia. What does the execution of this business model look like? Treasury Preservation: Miranda has proven its ability to preserve its treasury. Cunningham said, "We went into the fourth quarter of last year with something like $3.5 million in the treasury which covered more than a year of expenditures. But I talked to the board in October and told them that I thought we are in for a really hard time in 2013. Everybody I talked to said they were going to wait and would try to finance in 2013. I thought they were kidding themselves. Even though the stock was not at the share price at which I wanted to finance, the board suggested that I see if there was an appetite for a financing. We talked about adding $2 to $2.5 million to the treasury." Cunningham called Sprott Global, Rick Rule's office in southern California, and Rick said he'd absolutely do a financing. "I probably made five more phone calls in the course of three days and we had less than a dozen people lined up to do a $5 million financing. We closed that financing in December and topped up our treasury at $8.6 million. That is a three and half year treasury for us. We have positioned ourselves to weather this storm." It wasn't exactly easy for companies to raise money at the time, but Cunningham said he had some really strong backing. "I have people who like our business model and they trust me. We brought in some people that I had wanted to bring in for some time. So, even though the financing was dilutive, we brought in some Miranda's stated strategy is to mitigate the risk of exploration by preserving its treasury while executing a unique joint venture model using a technical approach to exploration. APRIL 2013