Investing in Undervalued Stocks

San Gold Corporation - Key Management Evaluation

San Gold Corporation - Key Management Evaluation

Key Management Evaluation as of July 14, 2014

To find out which positions I have qualified as Key Management, please read my article titled: Key Management Positions - What Competencies to Look for in Your Stock's Management.

Key Management  Title(s)  Name  Biography  Disciplined Person1 
Board of Directors  Chairman of the Board  Bob Brennan, FCA  Mr. Brennan is a Chartered Accountant with a distinguished 47-year career with Manitoba Hydro until his retirement in February, 2012. While at Manitoba Hydro, Mr. Brennan served in various positions culminating in his position as President and Chief Executive Officer from 1990 until his retirement. Mr. Brennan currently serves as Chairman of the Riverview Health Centre Foundation and as a director of Stars Aviation, First Peoples Economic Growth Fund and the Canadian National Institute for the Blind.  No 
  Vice-Chairman  Dale Ginn, B.Sc., P.Geol.  Mr. Ginn is a geologist with over 25 years of geological, mines management and executive experience with gold and base metal companies throughout North America. Mr. Ginn is currently President and CEO of SGX Resources and Executive Vice Chairman for San Gold Corporation, and is a co-founder of each. Previously, Mr. Ginn worked at Hudson Bay Mining and Smelting, GoldCorp, Granges, Westmin and was General Manager of Harmony Gold (Canada) before initiating the start-up of operations for San Gold at the Rice Lake Gold Project.  No 
Management Team  President  Gestur Kristjansson, MBA, CA  Mr. Kristjansson has extensive previous public company experience and has held executive management positions with real estate investment funds and capital corporations. Mr. Kristjansson has a Bachelor of Arts (Hon) degree in Applied Economics from the University of Manitoba, an MBA in Finance from the University of British Columbia and is a designated Chartered Accountant (CA).  No 
  CEO  Greg Gibson  Mr. Gibson has more than 30 years of mining industry experience in Canada, the USA and Australia. He was President and CEO of Trelawney Mining and Exploration during the discovery and advancement of the Cote Lake South gold deposit near Timmins, Ontario and the subsequent acquisition of the company by IAMGOLD Corporation in June 2012. Mr. Gibson is most recently President and CEO of Kerr Mines, Chairman of Temex Resources Corp., a director of Mag Copper Ltd. and a director of SGX Resources. He previously held the position of President and CEO of Northern Gold, which raised $28 million since mid-2012 during tight market conditions. During his career, Mr. Gibson was mine manager at Yilgarn Star Gold Mine in Australia, Copper Mines of Tasmania and the Chester Gold Project in Timmins, Ontario. He has been a contract manager, foreman and miner at various contractor mining companies including JS Redpath and Dynatec Mining Ltd.  No 
  CFO  Mandeep Rai, CA  Mr. Rai is a Chartered Accountant with significant accounting, finance and audit experience working with large public corporations. He started his career at Deloitte & Touche LLP where he worked in the Assurance & Advisory practice focusing on publicly listed companies. Prior to joining San Gold, he worked in the manufacturing industry for a public company headquartered in Winnipeg, Manitoba. Mr. Rai has a Bachelor of Commerce (Honours) degree in Finance and Accounting from the University of Manitoba, and is a designated Chartered Accountant (CA).  No 
  Vice President, Exploration  Michaud, Michael Julien  Mr. Michaud is a professional geologist with over 25 years of experience in mineral deposit exploration and mining. He recently held the position of Vice President of Exploration for St. Andrew Goldfields Ltd. Prior to this, he was President and CEO of two junior mining and exploration companies, J-Pacific Gold Inc., and China Diamond Corp. Mr. Michaud also previously held executive positions with SRK Consulting Inc. and North American Palladium Inc. Mr. Michaud holds an Honors Earth Sciences degree from the University of Waterloo and a Master of Science degree from Lakehead University.  No 

My Commentary and Conclusion Regarding this Key Management Evaluation

I especially like the involvement of Mr. Dale Ginn. Next to having extensive experience at the larger gold producers as Goldcorp and Harmony Gold, he is also a co-founder of the company, which I believe is a very positive trait.

I am a bit sceptical about the recent appointment of Mr. Gibson as CEO as he has multiple directorships: President and CEO of Kerr Mines, Chairman of Temex Resources Corp., director of Mag Copper Ltd. and a director of SGX Resources. As of the date of this evaluation, he has control over the following amount of common shares - directly or indirectly registered to his name, according to the information found on SEDI.ca:

Company Name  Shares Held  Share Price  Ownership Value  Total Shares Outstanding2
(in millions) 
Ownership %
Kerr Mines  800,000  0.03  $24,000  1,323.58 million  0.0% 
Temex Resources  630,500  0.08  $50,440  185.74 million 0.0% 
Mag Copper  2,369,500  0.015  $35,542.50  78.27 million 3.0% 
SGX Resources  0.025  134.09 million 0.0% 

The data in the table above has not convinced me that Mr. Gibsons interest are aligned with those of the common shareholders. Perhaps Mr. Gibson is willing to explain why he holds several directorships without investing more serious amounts of his own money in these companies.

Based on the biography's of the company's key management, I believe key management consists of a team which complements each other's quality's, which I consider a positive sign.

Ultimately, the company must become a profitable gold producer and I am not sure the current management team will be able to manage the company through this transition.


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1 For more information about how to use the disciplined persons list as a management evaluation tool, please visit the following page: Management Evaluation - 11 Questions to Ask Yourself When Assessing Your Stock's Management.

2 The total shares outstanding were provided by the fundamental content supplier of my stock broker.

About Jeroen Snoeks

Jeroen Snoeks - UndervaluedEquity.com

Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for investors passionate about investing in undervalued stocks. Through UndervaluedEquity.com, he shares his experience and knowledge and will soon reveal his personal stock portfolio.

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