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Like most would-be mining companies, Foremost Clean Energy(FMST) claims a large array of very promising prospects. A recent investor presentation touts the potentially valuable uranium and lithium deposits that the company has rights to. On January 30, 2025, this nanocap with a market cap of less than $18 million, will complete the spinoff of its gold and silver prospects as Rio Grande Resources. A presentation on those assets can be found here.
On January 30, shareholders of Foremost will receive two shares of Rio Grande for every one share owned of Foremost. Rio Grande is expected to trade on the CSE under the ticker RGR. This may present challenges for shareholders who own Foremost on the NASDAQ. This is a Canadian spinoff and the tax implications are unclear to me, the company does not suggest in its release that this will be tax free.
In a letter to investors on December 11, 2024, CEO Jason Barnard discusses the company’s acquisition of the Uranium prospects from Denison Mines(DNN). Denison is now Foremost’s largest shareholder with a 19.99% stake. Though Denison also has no performing assets, it is.well-capitalized and looks like it may begin production in the next few years.
Over the years we have seen lots of these mining prospects and most of them languish forever. Thirteen years ago, for example, we wrote about NovaGold’s(NG) spinoff of NovaCopper, remarking “perhaps one of them will actually open a mine”. Thirteen years later, neither NovaGold, nor NovaCopper, now named Trilogy Metals(TMQ), have extracted a single ounce of metal from the ground commercially. We have no ability to determine which of these miners will ultimately be successful, but our sense is that most of them will not be. Foremost CEO Jason Barnard and COO Christina Barnard are married, and the SEC noted that they also had the company pay fees to an investor relations firm that they own. This is certainly not great governance and might suggest a need for further research before investing.
We certainly hope that both companies strike gold.. or uranium… or lithium.. or whatever it is they are looking for. But both of these go into our too hard pile.
Disclosure: The author has no position in any stock mentioned