Keith A. Laskowski, President and Director of Estrella Gold Corporation (TSX-V: EST), at the New Orleans Investment Conference
Peru has a storied past in precious metals. How does it continue to produce rich mineral finds today? Estrella Gold Corporation shows how it applies modern methods and talent to pursue new discoveries in Peru.
Keith A. Laskowski, the president and director of Estrella Gold Corporation (TSX-V: EST), spoke with us at a recent conference. When you talk to Keith, you get the strong impression that he has seen every twist in the gold industry in the last 30 years. And these days he’s bullish on Peru.
“I’ve been in the gold business since the gold business really started in North America back in 1981,” he says, “and my experience has been almost entirely in gold. I was involved with uranium during the recent uranium boom and the one in the late 70’s as well.
But nonetheless, my business focus here with Estrella is pretty simple. I’ve learned a lot over the last 30 years. I’ve learned that gold is going to be very, very important in the future as it is now. I’ve learned where the gold districts are, and I’ve learned what major mining companies are looking for in a gold deposit.
“So what Estrella Gold is trying to do – and I believe we’re succeeding – is to build a portfolio of projects that have either measured gold resources or new discoveries that can grow into measured gold resources, with the whole objective being to establish a large resource inside of our company for the least amount of money and protect shareholders’ value by minimizing dilution.”
As a mineral exploration company, Estrella Gold controls seven projects in Peru. It has built its portfolio through acquisition of projects in areas that have a rich history of mineral production. “We have two projects with resources,” says Laskowski, “and we have a portfolio of five other projects that we are advancing to either develop resources or ventures.”
Though Estrella Gold has focused on Latin America, its strategy has been shaped by a lifetime of lessons that Laskowski learned around the world. He spent 17 years learning the industry at Newmont Mining. When he resigned from Newmont in 1997, he started a string of new adventures.
He recalls, “I ended up going to work for a very high net worth individual. [He] wanted me to essentially build a mining company for him. So I spent seven years traveling around the world and building companies. That portfolio was built originally for Harrods Minerals, which became known as Gallant Minerals.
“Harrods is owned by the same man that owns Harrods Department Store in London. At any rate, we built the company in Peru and in Mongolia, and then eventually sold those companies in 2004-2005. And since 2005, my job has been working with junior companies, and again, that’s part of where my strategy comes from with Estrella.
“During that 2005 to 2008 period, I had two very successful ventures, and I’m trying to capitalize on that venture strategy in Estrella and bring both of those successful strategies to one company. One of the companies that I started was Northern Canadian Uranium and that company quickly put together uranium resources and was taken over by Bayswater Uranium. We had about a 400% premium to our shareholders’ investment, so that was a favorable transaction.”
A second bonanza followed. Laskowski launched a program in Haiti funded by Eurasian Minerals. According to him, “We went into Haiti during period of stability, just following their first democratic election, and we made some very exciting early stage discoveries. The quality of the initial results resulted in a major mining company quickly working to establish joint venture agreements with us. Newmont Mining negotiated a very favorable joint venture agreement with Eurasian Minerals on those projects. With Estrella, I’m utilizing both of those experiences to try to build a company that’s going to have a solid gold resource base, and a package or new discoveries so that we will be attractive as a takeover target, or simply to establish ventures on a project by project basis. Our goal is to obtain funding from outside sources in either case, and to build shareholder value.”
Laskowski indicates that the geology of Peru is “a very well-endowed in gold” and says that Estrella uses two main methods to find properties. First, the company has an existing portfolio and is investigating many target areas. Second, Estrella has built a sophisticated technical database that helps it identify new areas where the company might look for gold deposits. The database contains information which identifies new areas with promising indicators of gold mineralization, similar to areas with established gold reserves.
In terms of acquisition, Laskowski says that Estrella usually deals with properties that it can stake directly and acquire a mining exploration license from the government. In other cases, the company simply negotiates acquisition from a current owner.
Even though Estrella Gold’s board has long featured industry veterans, recent additions have enhanced its technical abilities, starting with Laskowski’s hiring a year ago. CEO Bernard Kraft, for instance, has anchored the board for 14 years. Gregory Harris, another veteran director and an attorney based in Calgary, has broad experience with junior markets.
But in the last six months, the addition of two more directors has strengthened the management team. Fernando Pickmann, an accomplished mining lawyer based in Lima, brings not just industry experience, but also the local familiarity which is critical to Estrella’s focus on Peru.
Don Taylor, the other new director, has 30 years international experience as an exploration and mining geologist. Taylor spent 10 years in senior management at BHP Minerals and, more recently, served as an executive at The Doe Run Company, one of the largest lead mining companies in the world.
On the topic of financials, Laskowski says, “We have just completed a private placement, issuing 2 million shares at $0.50 per share; however we only had 11.9 million shares issued and trading, so this brings our total to 13.9 million shares. I anticipate another small financing in the coming weeks. I am anticipating that we will be pretty well funded for the next 12 months, but we may need to raise additional funds if our next round of drilling is as successful as I expect it to be.”
Though the company stock is currently trading for less today than it was last year, Laskowski says that’s precisely why investors should give the stock a closer look:
“I think everybody at this convention is here because they believe [their stock is] undervalued, but in our case, I think it’s pretty easy to calculate. I’d encourage shareholders or investors to look at it themselves…
“A year ago, we didn’t have any measured ounces of gold. This year, we’ve got about 300,000 ounces measured – half in the 43-101 compliant inferred category and half in the historic resource calculations. So there’s kind of a disconnect there. Part of my mission now is to communicate this specific information to the public and make them aware that we’ve actually added ounces of gold, and our price has gone down. Potential shareholders should look into that.”
Savvy investors, Laskowski believes, should judge Estrella with the same critical eye that he used when deciding to join the company a year ago. After leading the acquisition of over 75 gold, uranium, and copper exploration properties around the world in the last 12 years, surely he had other options. Why did he join Estrella, and why should investors back the company?
“Number one, very small share structure,” he says, “which means that if I do my job properly, I can build value for those shares. So we have 13.9 million shares issued – very low dilution.
“Number two, we’re in Peru. It’s not a coincidence I’m here. If you analyze countries around the world, Peru brings the unique opportunity of gold endowment and stable government in a reasonably priced environment, so Peru is one of the best places in the world to be working.
“And number three, I have a lot of areas that I want to explore in Peru, so we have a great opportunity to identify new discoveries and increase that shareholder value through low-cost exploration.”
The Gold Report Interview with Mickey Fulp (04/28/10) "I like Canadian Shield Resources Ltd. ( now Estrella Gold) It's a company with new management and seven Peruvian-based exploration projects. Two of those projects have historic resources that should be qualified in the near future. The company is pursuing opportunities to vend those seven projects to joint venture partners.”
For more information:
Corporate Office - Toronto, Canada:
Address: 151 Bloor Street West
Canada M5S 1S4
Telephone: (416) 927-0025
Fax: (416) 927-1222
Toll Free: (888) 927-0025
Exploration Office - Lima, Peru:
Address: Calle Dos de Mayo 472
Miraflores, Lima 18
Telephone: (511) 719-6152
Fax: (511) 446-1194