GSN

Faces of GSN

DAVID CALDWELL, G.S.N. BOARD OF DIRECTORS CHAIRMAN 2014-2015 (Published in August 2014 GSN Newsletter)

The request for a contribution to the “Faces” series comes just as I start my service as the 2014-2015 Chair of the GSN Board. Many of you know me from my tenure as the Elko GSN President at a time before this Board existed, and when the winds of change began blowing an incipient “Jolly Roger” that flew over that group. The resulting actions, initiated by several of the founders and early members of the organization, were dynamic and far reaching, and we now find ourselves with a stronger and more coherent group of professionals spanning not just Nevada, but with field offices all over the world!

First Outcrop
In the spring of 1980 I took an intro to Geology course just for fun. Early in the class our profes-sor, a geophysicist named George Shaw was showing typical panoramic slides of spectacular mountain scenery and explaining geologic features to us, when he suddenly turned into the class exclaimed with all the energy of a four year old on his birthday that the best thing about geology is that “they pay you to do this!”

Later that spring Mount St. Helens erupted in a totally unexpected and dramatic way. This event galvanized our class into what would be remembered by George as the single best group of students in his career, and provided an adrenaline push that eventually compelled me to pursue the study of earth sciences as my true passion.

Run Away!
During the summer of 1983, my field partner Melisa Fry and I were fortunate to take top honors in our field camp. We were both awarded NAGT scholarships to institutions of our choice; I was granted an internship at the David A. Johnston Cascades Volcano Observatory. That summer was truly magical, and I was assigned to the crater deformation team which allowed me to fly into the breached crater of St. Helens every day weather allowed. By the end of the summer I came to view the Bell Jet Ranger as just a bus ride to work, but the volcano itself was always fresh, metastable and never routine!

The crater was a truly dynamic environment with constant rock falls off the sheer cliff high-walls. These became increasingly frequent as the day warmed and the ice “glue” holding the walls together melted back. The biggest of these falls would actually hit the crater floor and divert to flow toward and lap up onto the dome itself. This was cool, except that several of our survey stations were exposed to this hazard, which made the process of setting up the theodolite and turning the angles to the retro reflectors mounted on the dome all the more exciting. In the end the mountain taught you that only the biggest reverberating CRACK from the walls above was worth paying attention to.

I fell in love with volcanology at St. Helens. It is geology that “you might have to run away from”, and it adds a unique dimension to the concept of geologic time that we sometimes forget about while focusing on reading fossilized events in a static pile of rocks that are millions to billions of years old.

It took five years for me to complete my two undergraduate degrees, and I accepted a full ride Master’s position at New Mexico Tech. I spent two seasons on Mt. Erebus, which forms the central peak on Ross Island and provides an idyllic back drop for McMurdo Base which meets the sea ice on the frozen coast. Once we put into the field after prepping in McMurdo, we camped in Scott tents on the summit plateau where the ambient temperatures hovered around -25 and the sun never quite set. Due to the high altitude there was an intermediate camp set up on the Fang Glacier. Here we acclimatized and put-in to the upper camp using snowmobiles to transport our gear. With the very steep approach to the summit plateau this annual ritual became its own form of extreme sport.

We also enjoyed evening trips to the “sauna caves” that lie below great towering 30-40 foot chimneys of ice that condense when the warm vapor from the caves rises to meet the frigid air of the mountain. Chop a hole into the base of one of these, rappel down ~30 feet to a skylight in the underlying lava tube, strip off all of your gear and walk uphill in the cave until the temperature becomes ideal for sitting and sweating.

The geographic happenstance of my birthplace and subsequent University education would turn out to be my union card into the minerals industry when I was inducted by “Brother” Don Kohls into what was known as his Minnesota Mafia at Gold Fields Mining Corporation, a wholly owned sub of the London based Consolidated Gold Fields PLC. I became a one-man field office supporting an off-topic exploration program that Mike Thomsen had managed to sell to Don Kohls.

Although Gold Fields was clearly focused on gold and silver, Don’s core philosophy held that we are not actually in the business of mining gold, but that we are in the business of making money. I spent three years working out of Roswell and then Carlsbad before the sulfur market crashed with the discovery of a giant deposit hosted in a salt dome on an offshore lease called Main Pass 299. Jim Bob Moffett and the geologists at Freeport effectively shut us down, and I transferred out to Mule Canyon to work with Andy Schumaker and Kent Thompson as that project accelerated on to a fast track development trajectory.

Conquistador or Indian? Know your History
Over the last 25 years most of us in the minerals industry have experienced numerous takeover/consolidation waves. My first experience came within 6 weeks of signing on with. The year prior to my joining Gold Fields, its parent Cons Gold had come to Newmont’s rescue to help thwart an attempt by T. Boone Pickens to take them over. Within six weeks of joining Minorco made a pass at Cons Gold. As this dust settled Hanson industries (think Tony Armour golf clubs, clothing and Cessna spare parts) swooped in and took us out.

As profits tailed off over the next year and a half, Hanson grew tired of the gold business and they sold Gold Fields off to Santa Fe in a Coal for Gold swap that involved their newly acquired holdings in Peabody. After joining Santa Fe my focus moved more towards geologic and ore reserve modeling, and I worked on several projects in the K-‘stans. I also had the opportunity to roll my sleeves up and get close to the volcanic hosted Rosebud and the fast tracked Golden Eagle project in Republic.

The Evil Empire’s Golden Parachute
Newmont swooped in and merged with Santa Fe a few short years later. In contrast to the Gold Fields/Santa Fe merger, only about 15% of our geologists took Newmont up on their offer of positions, and nearly all of these were laid off from those positions within 6 months!

Several of us split away from this merge with financial aid from Newmont (contractually obligated under the terms of the deal). With full salary for a couple of years Curt Everson and I travelled to Vancouver during Round-Up in 1997. I became involved with two new junior explorers; Vancouver based Nevada Pacific Gold with Curt Everson, Steve Brown, David Hottman and Joe Kajszo, and OTC BB based Golden Phoenix Minerals where I was a founding Director along with Mike Fitzsimonds, Don McDowell and later Steve Craig.

My primary focus was with NPG which started out as a grass roots explorer, but eventually moved into active production in an attempt to access the only sweet spot in that distressed financial market by purchasing the Magistral Mine in Sinaloa Mexico. Shortly after greatly expanding our land position in Mexico NPG was engulfed by the Mega Merge (Tone, White Knight and Coral Gold were also targeted, but Coral’s deal did not consummate) orchestrated by US Gold and Rob McEwen.

Naming Your New Junior Company
Note to self: When naming a company pay close attention to any legacy that may be attached by reference. Since inception in 1997 Golden Phoenix has crashed and burned four times, and much as its mythical namesake I have been there to help it rise from the ashes for the first three. The other part of this name-legacy business is that our receptionist often got calls for take-out orders…

As the proposed US Gold merger gained traction I was asked to join Golden Phoenix in a management position and to help them bring the Ashdown moly property into production. I accepted officer positions first as its President and then CEO, and was there as we set the company on the path towards its first cash flow positive quarter 13 years from the day it opened its doors for business. I left Golden Phoenix in early 2010 to pursue my own private mining ventures in Latin America.

Into the Black
My current professional focus is centered in Chibougamau, Quebec. The BlackRock Project is my third junior start-up. With a vanadium/titanium/magnetite deposit as its core asset it seems way off topic for most of us, myself included. But the Lac Dore layered intrusive complex had almost unlimited tonnage potential and very strong grades in V, Ti and Fe. In keeping with Brother Kohl’s mantra that we are in the business of making money and not to overthink the basics, the tons and grade added up to potential world class status.

Since that time BlackRock has been operating as a private company and has deployed about $70MM in delineation and development work. BlackRock has essentially taken this project from having no three dimensional reality to full Feasibility, ~400MM tonnes of reserve and an IRR of 24% in just four years. We have currently developed only about 7km of the 17km of strike that we control, so the upside is huge as we plan to bring the company public on the big board in Toronto this fall.

I am looking forward to the next year as the Chairman of GSN, and to Symposium which will bring us all together one more time to reminisce and see old friends, and hopefully to make new ones.

David Caldwell