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Deal closes Feb. 11: What’s Katusa’s “2022 Project Gold Rush?”

What's the private placement teased by Katusa Resource Opportunities?

By Travis Johnson, Stock Gumshoe, February 7, 2022

I haven’t looked at a Marin Katusa ad for a while, so this one caught my eye when a few readers asked about it. Katusa typically focuses on mining stocks, and is often particularly interested in targeting private placements in small mining companies (a private placement is just a company selling shares of itself privately, not in an IPO or on an exchange), and he apparently has such a deal in mind right now.

So what is it? Well, he’ll tell you if you sign up for Katusa Resource Opportunities for $2,500/year (nonrefundable)… but we’d rather look through the clues and see if we can identify it on our own. Who doesn’t like a puzzle?

The pitch starts with a photo of a rock, which is a pretty exotic looking mineral that’s got a very high concentrate of gold and silver… and that’s basically the story, that he has a company in mind which is finding rocks like that but that is mostly being ignored by investors. Here’s a little bit of his spiel…

“Recently, at a location I cannot reveal because of a non-disclosure agreementโ€ฆ

“My team and I took a private plane to a mining region that, for reasons I will explain in a minute, the investment community has forgotten aboutโ€ฆ

“With miles and miles of rocks underground just like this one.

“I have never seen gold grades like this in my careerโ€ฆ

“And one expert source agrees with me โ€“ calling this region ‘one of the highest-grade mines in the world.’

“I have never seen lead and zinc grades like this with my own eyes.”

And he said that the operating mine might be sitting above “one of the greatest undiscovered copper deposits”, so he’s investing in the deal and anticipates gains of 5X to 20X.

What other clues?

It’s a company that “will be listed” on the NYSE… but you can invest directly now, before it starts trading publicly.

And that the deal closes on Friday, February 11 — which, as you may have noted, is just a few days away. And there’s also a “guarantee” clause:

“If this company does not list on the NYSE by the end of June, 2022 โ€“ they do not get access to your or my money….

“All funds โ€“ 100% of your money in the deal โ€“ will be returned within a month after that deadline if this company does not list.”

And there’s a kicker of some kind…

“We will also get the most incredible financial instrument ever invented, as an added bonus to our investment.”

Given what we’ve heard over the past decade or so from Marin Katusa, that pretty well has to be a warrant — warrants are sweeteners for investors that are essentially given to you as a bonus because you agreed to tie your money up in a risky project, they give you the right to buy more shares at a set price for a period of time, usually at least 18 months but sometimes five years or longer.

So he’s talking up a private placement, done by a company that has some level of mining operations already but is sitting on vastly larger potential in the future because of their other properties, with a guarantee that you get your money back if the stock doesn’t get a NYSE listing by midyear, and the private placement includes some kind of a warrant.

And it’s not just a private placement for accredited investors…

“Deals like these are usually reserved for accredited investors. Itโ€™s the law and we donโ€™t bend the laws.

“Butโ€ฆ

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“I have figured out how non-accredited investors can also purchase shares of this exact company.”

So… who is it? One more set of clues…

“This mine is in a mining district with paved roads, infrastructure like power lines and water in place, and with almost 100 years of historical productionโ€ฆ

“Where over 300 million ounces of silver and over 2.9 million ounces of gold have been produced.”

Hoodat? Thinkolator says that Katusa is very likely talking up Osisko Development, which is indeed doing a private placement this week, with a deadline on Friday, and which last week announced a big deal to acquire Tintic Consolidated Metals and its large holdings in Utah, including the producing Trixie mine (which was just reopened about a year and a half ago).

Tintic’s assets are a solid match for Katusa’s hints — including the unusual high-grade rocks he talked about — and it’s a long-producing mining region with some high-grade silver, gold and zinc mines, and, yes, with the possibility (so the company believes) of a large copper system underneath the existing mine. There’s a video about the acquisition here that reinforces some of Katusa’s clues.

What’s Osisko Development worth? That I don’t know. It’s not a tiny company (market cap about $500 million, before this private placement and Tintic acquisition), and they have a lot of other non-producing assets, led by the flaghship Cariboo Gold project. The key assets were owned by a company called Barkerville Gold, which was bought by Osisko Gold Royalties in 2019 and then spun out a year or so later as Osisko Development, and they offer an investor presentation here if you’d like some more background. Osisko Royalties also bought royalty exposure to the Tintic properties as part of the financing for the deal, just FYI.

The portfolio is not just discoveries or potential, there are some assets with development plans, and some even have permits or are under varying degrees of development or construction (and Tintic’s Trixie mine is producing), so it’s not super early for every one of these assets… but I would imagine there’s still plenty of risk in waiting for their large projects, particularly Cariboo, to be financed, permitted and built.

The private placement, including those special “must get a NYSE listing” terms, was noted in a press release last week here, in case you’d like to see the details. I don’t know the procedure for subscribing to the private placement or requesting an allocation, you’d have to contact the company.

Could it be a different company? Perhaps, though the Thinkolator didn’t identify any better matches… and we at least know that Marin Katusa, though he clarifies in the ad that he is not an “insider” at the company, is well aware of Osisko Development, since his wife, Marina Katusa, was appointed to the Board of Directors last year.

And what to do for those who aren’t willing to lock up $5,000 or whatever the minimum is in a private placement, or who aren’t accredited or for whatever other reason can’t participate?

Well, despite the fact that Osisko Development is not yet listed in the US, it is publicly traded — it’s listed on the Venture exchange in Canada (ODV.V, RNGTF OTC in the US). It’s currently trading around US$4, so it’s a bit above the last publicized private placement price (US$3.50 per unit, with each unit including one share and one five-year warrant with a US$6 strike price), and those warrants could end up being quite valuable (five years is a long time, a lot can happen — particularly if gold prices pick up considerably), and those who buy the shares today outside the private placement wouldn’t get the warrants, but you can certainly buy the stock on the public market right now if you love the Cariboo project or the Tintic deal and want to own a piece of that.

And actually, Osisko Development has done some other private placements along the way as well, and the spinout of their assets from Osisko Gold Royalties was done through a reverse takeover with Barolo Ventures, and all of that engineering and fundraising led to a bunch of warrants — so there are some older warrants that are publicly traded, too. Don’t get confused, they’re not as good as the new private placement warrants being created with this latest private placement, but all those pre-existing warrants have been consolidated at ODV.WT on the Venture exchange, and each one gives you the right to buy a share at C$10 for almost two years (expiration date is Dec. 1, 2023). You’d need the shares to roughly double in that time for those warrants to work out, and last I saw they traded around 50 cents — so perhaps there will be warrant enthusiasts among you who like the sound of that, but I’ll watch from the sidelines.

And beyond that, dear friends, you’re on your own — I won’t be participating in the private placement or buying shares, I don’t often dabble in mine developers (they can be fun, but I’m not particularly an expert on evaluating drilling results or mine development plans, they always take longer and cost more than anticipated, and I’ve probably made more bad calls than good ones when it comes to individual mines), but many of you may well be more interested in that kind of thing. I’d be more inclined to trod the lazy financier’s path: buy the royalties, not the mines. The more richly valued but also less risky Osisko Gold Royalties (OR) is more up my alley, and it has its own challenges but does also have royalties on most of Osisko Development’s projects now, including that newly acquired Trixie mine (I’m not buying that one either, to be clear, it’s not my favorite royalty company, but I have owned it in the past).

So… sound like your kind of speculation? A mine development company with a handful of assets in development, that just made a big deal that includes an operating mine, has some private placement funding coming, and is trying to become a mid-tier miner? Let us know with a comment below.

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jbondo
jbondo
February 7, 2022 5:51 pm

Does anybody know Jeff Brown’s crypto opportunity that he is flogging?

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kazito
February 7, 2022 9:09 pm
Reply to  jbondo

Hi Jbondo:
I’m not sure if you’re looking for Jeff Brown’s latest coin recommendation (which came out on Feb 02, 2022). That recommendation is Celer Network (Ticker: CELR).
Buy up to $0.20 ; on crypto.com (for US users).For overseas users, you can buy it on Binance.
Note: Although Jeff Brown’s Byu-Up-To price is $0.20, the current price of CELR is around $0.060285. Great time to buy !
Best,
Kazito

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kazito
February 7, 2022 9:12 pm
Reply to  kazito

By the way, I forgot to inform you in my message above that Jeff Brown’s three NFT coins are:
SUSHI
ALGO
CVC

Good luck,
Kazito

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outsider
February 7, 2022 6:04 pm

The consideration that gold prices will rise seems a foregone conclusion given China and Russia shunting the dollar for the Euro to convey natural gas coupled with the mass stockpiling of gold that both have undertaken in recent years. I’ve read enough of your letters to know not to dabble in junior miners, let alone mine developers but just wanted to say this sounds akin to the Great Diamond Hoax of 1872. Thanks for the insight.

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Mike
February 8, 2022 7:58 pm

Totally, you said it there. In fact, Don Durrett is the single most knowledgeable Gold company researcher I’ve talked with and he said, essentially, if Wall Street keeps buying their own dips it can put off a gold pump in perpetuity. Oversimplication of his thesis of course. And his time horizon for anything meaningful in that regard is 6+ months out.

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nwash
nwash
February 7, 2022 6:12 pm

Travis: Have you ever read the ‘IncaKolaNews” , also known as ‘IKN’. The reports are daily and written by a guy who lambastes and lacerates any mining executive or newsletter writer who specializes in the ‘pump and dump’ style. He has attacked almost everyone even remotely connected to Casey Research. The writer (he uses the nom de plume of Otto Rock) but he knows and has contacts with every mine and mining company manager in South America. However , he is not hesitant to eviscerate any project anywhere that looks like a scam. He has a newsletter but I want to make it clear that I do not now and never have been a subscriber. I suggest you read if for nothing else his acerbic wit.

BTW, I appreciate your common sense and prudence that is on display in your writing. Obviously you are a decent man. Keep it up.

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mattremote
February 7, 2022 11:16 pm

I know Katusa is his name but whenever I see it I think of the thousands of KATUSAs in Korea – Korean soldiers serving as augmentees in US 8th Army units. Sorry, off topic . . .

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Mike
February 8, 2022 7:51 pm

Is this related to Osisko Mining? Because OBNNF is the #1 performer in my gold portfolio out of 50+ producers, juniors, majors, streaming companies. #1 in terms of % and $ gain.

I’m looking at the management team and I don’t think they’re the same people at all.
Interesting note, OBNNF has perhaps the highest amount of individual insider trades over the last 3-4 month’s I’ve ever seen. If these companies are at all related, I am extremely interested as opposed to just plain interested.
If not, why such a similar name? Is an “Osisko” a Canadian term or location?

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robb321
February 9, 2022 8:19 am

I looked up Marin Katusa and boy do they know how to charge $5k per annum, it would need to be good info and result for that. If they delivered then it’s just a cost but the 2 reviews on Trust pilot were a 5* and a 1*, so his Mum and his competition but nothing in the middle

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Mike
February 20, 2022 5:15 pm
Reply to  robb321

I actually joined this website looking for Katusa’s Carbon Credits pick(s), which was discussed in another article here. I really really think his Carbon credit thesis is on point *if* things/laws/society continues on that trajectory, its a gamble, but the writing is on the wall. But therein lies the rub, $5000 per year for early entry on his picks isn’t worth it imho. That specific purported pick OFSTF is plummeting back toward his entry point and it would have been my first play with him, though its a multiyear hold regardless. Other picks like UROY (or it may have been GROY) would have paid off immediately and you had very little time to react after his call. He’s definitely for real, and has delivered results as far as I can tell with the benefit of hindsight. But then there’s this pick here, which he is on the board of directors for, so I’m asking myself, is he just shilling? Or is he being gracious? Or a bit of both? Worth a watch I suppose.

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joe
Guest
joe
February 11, 2022 5:30 am

“…we donโ€™t bend the laws.”

No, only the truth

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