Doug Forster
Stockwatch is reporting on a shell company, Raystar Capital, with some prominent shareholders including Lukas Lundin, Randall Oliphant, Doug Forster, and Blayne Johnson, which is about to become Newmarket Gold.
Sources tell us Newmarket will be going after producing gold assets, and that Doug Forster will become the company's CEO.
Mr. Forster is an accomplished mining executive who last sold Terrane Metals to Thompson Creek Metals for $700 million in 2010.
Forster is also a director of Edgewater Exploration, which is developing the Corcoesto gold project in spain, and has yet to live up to market expectations.
Make no mistake about it, building a profitable gold miner from scratch is no easy task, even with these impressive shareholders on board. Clive Johnson's B2Gold comes to mind as a recent example, however as Mr. Johnson told us, it's all about the team. Although talent can be acquired, Newmarket will have the difficult task of building an operational team who can compete with the likes of B2Gold and others.
The company will also face tough competition for quality producing assets from within industry, private equity, and other sources of capital which are circulating the gold wagon.
Additionally, such a "dream team shell" may not be the be-all and end-all of new gold ventures. Mr. Lundin's position in the deal, for example, will be worth only approx. $950,000 based off the latest financing price. What's $950k to a man with a $10B resource empire?
But then again, this could be the Second Coming, and with freshly appointed World Gold Council Chairman Randall Oliphant on the board, access to capital should come easier to Newmarket than others.
I look forward to interviewing Mr. Forster in Vancouver ten days from now, and will write about our conversation here.
From Stockwatch:
Edward Farrauto's Raystar Capital Ltd. (RYA) expects to close its acquisition of the Point Leamington gold-silver-zinc-copper property in Newfoundland by Oct. 1. It has received TSX-V approval to complete the deal and also to change its name to Newmarket Gold Inc.
Raystar must pay $250,000 and issue one million shares to Calibre Mining Corp. (CXB: $0.06), another company managed by Mr. Farrauto and others from Raystar. This is the second time a Farrauto company has bought Point Leamington. In 2004, as president of Calibre, he arranged to acquire the property for $125,000 and 150,000 shares. In 2005, after disappointing drill results, Calibre turned its attention to a gold property in Nicaragua, which it continues to explore. It has not done any work on Point Leamington since.
Mr. Farrauto has recruited some of Canada's best-known promoters to participate in this promotion. Raystar's largest shareholders are Douglas Forster, Blayne Johnson and Lukas Lundin, each with 6.33 million shares, and Randall Oliphant, with 6.04 million shares. Each of them will be directors following this QT, with Mr. Forster as president. Raystar's Mr. Farrauto, who owns 2.04 million shares, will remain a director. We discussed him at length in the Shell Summary for June 25, 2013, concluding he sells his shells well.
Before closing this deal, Raystar plans to sell 23,333,334 shares at 15 cents through a non-brokered private placement. Following that, the company will have 51.19 million shares issued. In 2011 and 2012, speculators paid up to 90 cents for shares. Raystar's high-profile shareholders paid between seven cents and 10 cents for their shares.
