Michael Gunning (Vimeo)

Michael Gunning (Vimeo)

Updated at 5:00pm PST.

Benjamin Franklin said there were only two things certain in life: death and taxes.

In the high stakes mineral exploration business, another sure thing is that your heros are ultimately fallible.

I first met Michael Gunning while he was CEO of Hathor Exploration (HAT) in 2011. He gave me a presentation on HAT just a few months before it was sold to Rio Tinto, and the company was one of my early successes as a natural resource blogger.

Gunning was brought on to Hathor after the company had made the initial Roughrider uranium discovery under then CEO Stephen Stanley. With plenty of connections in Saskatchewan, Gunning was considered a credible face for the company as it progressed through the development stages. And he was; HAT was sold for roughly $650 million in December 2011.

We paid very close attention when Gunning took the Chairman job at Alpha Minerals in late 2012, after the company made the Patterson Lake South (PLS) discovery. Ben Ainsworth was Alpha’s CEO, and his son Garrett Ainsworth was VP Exploration, whom personally made the company’s initial uranium boulder train discovery. Alpha was an incredible stock that soared from $0.20 to over $7 in less than 18 months.

At the time Alpha held a 50% interest in PLS and Fission Uranium held the other 50%. While Alpha had the father and son team of Ben and Garrett Ainsworth, Fission CEO Dev Randhawa was a better promoter and Fission traded more volume than Alpha.

Fission made a takeover offer for Alpha with the support of some common shareholders including Pinetree Capital’s Sheldon Inwentash, who sided with Randhawa’s leadership for liquidity purposes.

During the takeover I invited Mr. Gunning for coffee to ask him why he was not standing up to Fission’s offer to fight for Alpha’s team to control the project. I thought Gunning had been brought into the company to help with corporate affairs of this order.

Gunning provided some colour on the project during our meeting but said he would not go on the record about it. Fission ended up getting control of the PLS deposit, and Alpha shareholders did just fine.

Gunning made a few million on his stock and options in just a year, seemingly without breaking a sweat. I did pretty well on my Alpha shares too.

After the takeover, Gunning and the Ainsworths spun out a new company, Alpha Exploration, to again explore for uranium in Saskatchewan’s Athabasca Basin.

The new Alpha were optimistic about the Middle Lake property but early results showed nothing substantial.

For a moment there was some takeover discussion between Alpha and NexGen Energy, a company that had just made a discovery next door to Fission’s PLS deposit. Note NexGen are a sponsor of our conference tomorrow and this web site, but have nothing to do with this article. I also own shares.

The takeover talks stalled but Alpha VP Exploration Garrett Ainsworth was so impressed with what was happening at NexGen’s Arrow discovery, that he handed his father Ben his resignation, which Ben told me personally he immediately understood and accepted.

Finally, Mike Gunning did something at Alpha. He said the hiring of Garrett was out-of-line because of the takeover talks and decided to sue NexGen.

Although Ben Ainsworth was CEO of Alpha, he had to recuse himself from the discussion, and watch while his chosen chairman effectively sued his only son. It must have been awful for him.

Meanwhile, Garrett settled into his new job at NexGen, where the company had a phenomenal 2014 Summer Exploration program.

Today the BC Supreme Court dismissed Alpha’s application in its entirety, and said they are responsible for NexGen’s costs. In short, the frivolous suit was thrown out.

Read: Supreme Court of British Columbia dismisses Alpha Exploration Inc action against NexGen and Garrett Ainsworth, Alpha Reports Update on Legal Proceedings

Mr. Gunning was brought on board both Hathor Exploration and Alpha Minerals after great Athabasca basin uranium discoveries were made. I suspect he won’t receive a similar invitation from NexGen Energy.

 

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