Dryden Gold: Another Trey Wasser Multi-Bagger?

Dryden Gold (DRY.V) is a new public company that began trading on January 10, 2024. It has a dominant land package with significant historical drill intercepts in the underexplored Dryden District of Northwestern Ontario.

Trey Wasser, who built and sold Ely Gold Royalties, and his team believe that the Dryden Project could be similar to Great Bear Resources’ Dixie Project. With the support of strategic investors Rob McEwen, Adrian Day, Eric Sprott, Delbrook Capital and Alamos Gold, it has an early seal of approval that many junior explorers lack.   

As the market loves district scale gold discovery potential in attractive jurisdictions, Dryden Gold presents a compelling opportunity around 15 – 25 cents.

January 11, 2024

Happy New Year?

2023 was a challenging year for investors in junior gold stocks. Sentiment throughout the year was weak. In October 2023, mining conference attendees were smiling, but selling. By December 2023, folks were eager to turn the page into the new year.

A ray of optimism arrived when Fed Chairman Jerome Powell indicated that further interest rate hikes were unlikely. This has signaled to Swiss Gold Letter that we are once again in a favorable risk reward environment for gold stocks.

Dryden Gold – A New Potential High Grade Gold Story

Junior mining stock investors place a premium on new high grade gold discoveries. Dryden Gold, a company that has recently gone public through a reverse take-over, has the features that attract us to early stage exploration stories.

Proven Management and Focused Exploration Team

Dryden Gold ($DRY.V) benefits from proven management and a focused exploration team.

CEO & Director Trey Wasser transformed and sold Ely Gold Royalties to Gold Royalty ($GROY) for around $300 million, growing the company from an initial CAD $6 million market capitalization.

Geologist and Strategic Advisor Darin Wagner, formerly the co-founder of Balmoral Resources, is a seasoned expert in gold exploration and helped Wasser build the Dryden Gold exploration team.

President Maura Kolb and VP of Exploration Anna Hicken are both experienced young geologists who spent considerable time exploring for gold in the Red Lake Camp for Goldcorp.

Ms. Kolb also served as Director of Exploration for Treasury Metals and Newmont.

We like that Ms. Kolb also lives in Dryden, only 20 – 30 minutes from Dryden Gold’s projects. It is evident that the geological team is singularly focused on achieving a significant discovery for Dryden Gold. 

The Stamp of Approval from Strategic Shareholders

It is always a plus when a newly listed exploration company boasts significant institutional or smart money ownership.

Rob McEwen owns 4.02% of the shares, which is an important vote of confidence given that two of Dryden’s executives are former Goldcorp geologists.

Its two most recent capital raises were at 10 cents and 15 cents, the latter of which was closed in December 2023 concurrently with the listing of shares on the TSX Venture.

During the 15 cent round, Dryden Gold received the lead investment from Rob McEwen, as well as from Delbrook Capital (8.24%), & Peter Schiff’s EuroPac Gold Fund (8.8%), managed by Adrian Day. From previous private rounds, Eric Sprott owns 4.83% and Earthlabs holds 3.02%

The largest shareholder is Alamos Gold at 11.26%.

Currently, Dryden Gold has around 128 million shares fully diluted, of which 38 million comprises 30 cent warrants expiring on December 27, 2025.

At 15 cents, the market capitalization of the company is around C$19 million on a fully diluted basis. Dryden Gold presently has around C$4 million cash on its balance sheet.

 A Dominant Land Package in an Underexplored Area

Dryden Gold has consolidated over 480 square kilometers of land in the Northwestern Ontario Western Wabigoon Greenstone Belt. (In comparison, the Dixie Project that was explored by Great Bear Resources covered a land area of only 91 square kilometers.)

This belt has led to the discovery of around 10 million ounces of gold, including Agnico Eagle’s Hammond Reef. The Red Lake Camp is approximately two hours north of Dryden’s project and is geologically similar.

The Dryden District is heating up. In addition to Kinross and Treasury Metals being active in the area, Dynasty Gold (DYG.V) is exploring an adjacent property. 

Dryden Gold is aspiring to become Great Bear Resources 2.0 because its exploration team also sees geological similarities between the Dixie Project and its Dryden land package.

Finding another Dixie (sold to Kinross for C$1.4 billion or C$29.00 per share without having published a resource) might not be possible.

However, if Dryden Gold can show similar size and grade which could be comparable to Rainy River (4.8 million ounces of gold with early intercepts of 6.8 g/t over 24 meters, when the exploreco company’s market capitalization was under 50 million), early investors will be handsomely rewarded.

Historical High Grade Intercepts

In addition to having the right management team, Dryden Gold has captured our attention because, despite fairly limited historical drilling and minimal geological interpretation to date, there have been high grade intercepts across the Dryden property. 

The most compelling result was a bonanza intercept of 3,497 grams per ton over 8.5 meters on the Kenwest Patents of Dryden’s Gold Rock Camp. (Included in this intercept was 53,700 grams per ton over 0.55 meters in the quartz vein.)

This result is obviously an outlier that has not been replicated on the property, but previous drill results also intercepted 15.4 g/t over 6.1 meters and 12.7 g/t over 4 meters. These intercepts are all quite shallow at only 75 meters depth. Most of the historic mining and drilling in the Dryden District took place in the Gold Rock Camp, making it really a brownfield project.

Further to the south on Dryden’s property, there are also historic intercepts of 2.4 g/t over 75.1 meters and 5 g/t over 8.8 meters on the Gaffney holdings.

These are all shallow drill intercepts as the deepest holes only went to 140 meters depth.

Drill Results Anticipated early in 2024 and throughout Q1 2024

Dryden Gold is aggressively exploring its property despite the subdued sentiment in the gold space. It currently awaits assays for 14 holes averaging 100 meters depth.  If Dryden’s drill program replicates some of the results highlighted above, it could provide an early liftoff for the stock.

Dryden also plans to drill 14 more holes during the month of January, so there will be significant news flow throughout Q1 2024.

Because the historic gold drill results on this property are near surface, Dryden Gold has the possibility of putting together a resource quickly if it decides to go in that direction.

Additionally, its project sits right along the Trans-Canada Highway, which means that access to the property is not an issue.

Bottom Line: A Reasonable Speculation Around the Last Capital Raise

Yesterday was the first day of trading for Dryden Gold, so there was not much liquidity and pricing was volatile. This could continue for a few days. 

Given the likelihood of exploration success on the Dryden project, SGL believes that Dryden Gold presents a reasonable speculation around 15 to 25 cents, which is in the vicinity of Dryden Gold’s last capital raise in which leading institutions purchased shares. Thus, patient investors can aim to accumulate shares around this range on any pullbacks. 

(Dryden Gold attempted in late November 2023 to raise concurrent financing at 25 cents, but investors ultimately persuaded it to instead raise capital at 15 cents. This resulted in additional early dilution for the company. Unfortunately it remains a challenging financing environment for junior explorers, in which some companies are unable to obtain financing whatsoever.)

Trey Wasser signaled in the company’s Monday townhall that future capital raises will be more of a “strategic process”. This indicates to us that early drill success might attract support from larger mining companies that might be interested in a potential Red Lake analogue in a tier-1 jurisdiction. (Monday’s townhall is available here:  https://drydengold.com/media/)

Finally, we would like to recall that in 2019 some market participants doubted whether Ely Gold Royalties could build a royalty portfolio that would be attractive to institutional shareholders and a potential acquirer, especially in a crowded gold royalty space. These same investors sat on the sidelines as Ely Gold Royalties increased shareholder value by over 450% in a little more than two years before being acquired by Gold Royalty.

Trey Wasser and the Ely Gold team had the last laugh then and in 2024 they (as well as early investors in this company) may be laughing again.

Disclaimer: SGL does not provide investment advice and is not a registered investment advisor. Always do your own due diligence before making an investment. Investing in securities, especially junior miners, can be risky and never invest money you cannot afford to lose. SGL cannot guarantee the accuracy of the information in this post. SGL has attempted to present the information fairly, but it or its contributors may own shares of Dryden Gold so bias cannot be excluded. SGL and its contributors have no relationship with Dryden Gold. SGL or its contributors may buy or sell shares at any time.

SGL makes no representations, and specifically disclaims all warranties, express, implied, or statutory, regarding the accuracy, timeliness, or completeness of any material on this website. You should seek the advice of a securities professional regarding any stock transactions. SGL cannot guarantee in any way that it is providing all of the information that may be available. Please do your own due diligence before buying or selling any security.

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