The new CEO of Klondike Gold Corp. So far, he’s doing all the right things.

Klondikers buying mining licenses at Custom House, Victoria, British Columbia in 1898.

As a young man, Peter Tallman fell in love . . . with rocks. It happened with the help of an unwitting 80 year old mentor named Harold, who was given the job of teaching young Peter how to build a stone fireplace. After struggling unsuccessfully to break the first boulder for the job (an effort that included blood and no small amount of exasperation), Peter was shown by the older stone worker just how to go about making a cut. The seasoned geologist and CEO of Klondike Gold still recalls the story with a chuckle. “Harold didn’t think I was that bright”, he admits.

But with that first simple cut of a boulder, the dye was cast for Peter Tallman’s lifetime relationship with rocks. And beyond seeing the pursuit of geology as a great way to travel the world, Tallman has made a successful career, and a lot of money as a result of his passion for mining and his no – nonsense approach to running a company.

[Editor’s Note: We are not independent of Klondike Gold. We helped recruit Mr. Tallman for the position of Klondike CEO and we own shares in the company. Needless to say, we like the story.]

Tallman has extensive experience, both as a geologist and a businessman. He talks (with a little wonder in his voice) of the time he was hired by Murray Pezim and given the position, “Vice-President of Everything”. Tallman was a key player in the latter part of Pezim’s activities on Howe Street, overseeing some 80 odd companies for the crusty old promoter. When asked what his role was, he explains: “My job was to keep them all straight”. Prodded as to whether he was successful at that, Tallman replies with a twinkle in his eye: “As much as you could be.”

In fact, Tallman learned a great deal working with Pezim. He understood at the time that geology is a young man’s game, and he wanted to learn about the corporate world. “Murray provided me with probably the best education possible on the regulatory framework, and financing, and introduction to the brokerages.” For him, it was a completely different universe.

In the years since, Tallman has had a diverse career in the mineral exploration business both as a consultant and an entrepreneur. He personally invested in a couple of large properties in Newfoundland, which he put into Messina Minerals. “It was an old belt that needed a rethink”, he explains. A couple years into the story a new discovery was made and the company became the talk of Canadian exploration. The stock went from 10 cents to $4.10, before falling back to earth. He also ran exploration programs for a number of companies including Ethos Gold, a once promising Yukon exploration play.

Messina was bought by Canadian Zinc last year, which freed Peter Tallman up for new adventures. That was when we tapped him to take a look at Klondike Gold for his Yukon experience and matter-of-fact approach to business. Happily he saw potential in what he casually describes as ‘a mess’, and since becoming CEO a year ago, he has embarked on a major clean up.

Klondike has a convoluted and even sketchy ownership history. Twice in the past thirty years investors have valued Klondike’s property over $100 million, and today it’s worth less than $5m. I won’t go into the sordid history of deals made and broken, including my own personal loss as an investor, but suffice it to say that despite all of this, Peter Tallman saw an opportunity.

So after a year of cleaning house, which included selling money draining properties in Portugal and in BC, taking over (formally) Klondike Star, so that Klondike now owns 100% of everything that was originally in the company, rolling back the stock, and paying back all the old debts, Klondike is a new company with 100% title to all their assets and a million dollars in the treasury.

But now to the exciting part: exploration. This past summer Tallman had a crew in Dawson looking at the rocks. Despite all this gold having been found in the past, nothing significant was ever discovered. Tallman and his team developed an exploration model and concentrated on Eldorado Creek, where they looked at the bedrock for evidence to see if they might be right. “There are outcrops there that can be seen”, he says, excitedly. “Everywhere we predicted there would be gold, we found it.”

To put Klondike’s exploration potential into perspective, Tallman tells us that before he got involved with the company there were 4 documented occurrences of visible gold in bedrock on the Klondike properties, after 30 years of exploration. Tallman and his team found another 40 in a couple of weeks. He says the initial results are encouraging, so now the hard work remaining is to systematically put the pieces together; figure out where to find tonnage, grade, etc.

What differentiates Klondike from other juniors is grade. Tallman explains that he is not comfortable with the grade model that has majors exploring for big deposits with low grade characteristics. His target for Klondike is super high grade quartz veins. He believes Klondike’s veins have great potential grade. “Idiotically high grade potential” is how he terms it, making for easy economics.

Exploration for Klondike in 2015 will involve more of the same. They will continue to prospect, take a look at all the placer cuts, map them, and they will also begin geophysics to determine where the structures are. Tallman is also committed to continuing to build co-operation and trust with the local placer mining community. So far, he is encouraged.

The CEO is not guaranteeing any drilling this year, as he says there’s nothing that drains the treasury faster that a wasted drill hole. One gets the distinct impression that Peter Tallman wants to be sure he’s done all he can to ensure that investors’ money is well spent.

As for his TV gig, ‘Gold Rush’ has been a bit of a ‘gold mine’ for Tallman, or Klondike, more to the point. Although he frowns at being cast as the big bad claim owner, the involvement of Discovery Channel brings money into the company, and the exposure is already showing a return.

To this wary investor, Klondike Gold looks like a whole new company with Peter Tallman at the helm. He’s believes there’s a lot of potential, he’s determined they’re going to find gold, and they’re going to have a ton of fun in the process. We’re definitely along for the ride.

This article contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward looking information. Such forward-looking information and statements are frequently identified by words such as “may,” “will,” “should,” “anticipate,” “plan,” “expect,” “believe,” “estimate,” “intend” and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of Klondike in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause Klondike’s actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon. Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management’s Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at Klondike disclaims any obligation to update or revise any forward-looking information or statements except as may be required.

Tommy Humphreys

Tommy Humphreys is a writer and web producer. He is the founder of CEO.CA and also serves as an advisor to executive search firm Odgers Berndtson.

By Tommy Humphreys

Tommy Humphreys is a writer and web producer. He is the founder of CEO.CA and also serves as an advisor to executive search firm Odgers Berndtson.

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