Pan Terra heads to southern Africa in search of gold, copper

From the ashes of a high-flying hydrogen fuel cell promotion and later a construction-site preparation and excavation business, Pan Terra Industries (PNT-V) has re-emerged as a mineral explorer. 

The company had been sitting quietly as a shell these past four years until April, when Pan Terra’s caretakers closed a deal with 44-year-old Howe Street promoter Mitchell Adam, who became its president and CEO. 

Shareholders have had little reason to look back since. Shares of the company have shot up from 5¢ before the arrangement to an intraday high of 97¢ on May 20, following an announcement stating Pan Terra is headed to southern Africa to explore for gold and copper.

The company has signed a letter of intent to acquire 80% of a Namibian company with rights to five copper prospects in Namibia, a 51% interest in a gold project in Angola and a 50% interest in a gold project in Zimbabwe. It also says it has “secured the management and consulting services of African mining, exploration and financing executives,” including Duane Parnham, Andre Neethling and Arno Gunzel.

Pan Terra will pay for the acquisition mostly with stock. For three million shares, three million warrants, $300,000 and options to buy 500,000 shares exercisable at 73¢ for five years, Pan Terra will get access to mineral prospects across three countries and a few people already on the ground to help with exploration.

So far, none of the projects has a resource estimate compliant with Canada’s National Instrument 43-101 requirements.

While president Adam was unavailable for comment regarding more details of the transaction, another of Pan Terra’s new directors, former NHL hockey player and Toronto Maple Leafs captain Rick Vaive, might have assisted in setting up the deal. Vaive and Parnham are both former directors of Toronto-based Forsys Metals (FSY-T), an advanced-stage uranium explorer focused on Namibia.

Vaive and Adam, in turn, made their way to Pan Terra earlier this year through a reverse takeover of 2152508 Ontario Inc., for which Pan Terra paid 8 million shares at a deemed value of 20¢ each. 

Documents from the transaction disclosed a 35-year-old Burlington, Ont., man named Sean Felker as the sole director of the numbered company, however the documents also disclosed he “will not be an insider or control person of the resulting entity.” Who controls the 8 million newly issued shares remains unclear, as neither Vaive nor Adam own any shares according to recently filed insider trading reports, nor do any other Pan Terra board members.

As for Felker, he too has a connection to Forsys: he spent at least three years doing investor relations for the company around the same time as Vaive and Parnham were directors. He now acts as chief financial officer and a director of TouchDown Resources (TDW-V), a Vancouver-based company exploring gold in Ontario.

A closer look at Pan Terra’s new management suggests Parnham to be the most experienced of the group. Last month his Namibia-focused oil and gas explorer UNX Energy was taken over by Brazilian firm HRT Participacoes em Petroleo for $730 million, while his South Africa-focused gold explorer Giyani Gold (WDG-V) surged to an all-time high of $3.63 in March from as low as 10¢ last year, when it was a shell called 99 Capital.

Adam, meanwhile, is president of three other companies: Yukon and Mexico explorer Weststar Resources (WER-V), which recently rolled back its shares on a 1-for-12 basis; MGA Capital, his private management company that also provides investor relations work; and Quebec-focused gold explorer BonTerra Resources (BTR-V), lately the most noteworthy of the trio.  

In the first three weeks of November 2010, shares of BonTerra jumped from 15¢ to 71¢ as the company heavily promoted its Eastern Extension gold property near Val d’Or, Que. It had released pleasing high-grade assays from two drill holes at the property – drilled near the best historical holes completed by another operator in the 1990s – though assays from a highly anticipated third hole apparently failed to live up to expectations and the stock dropped 20¢ upon their release. Investors seem to have had similar feelings about the next few rounds of assays, as BonTerra’s shares have since declined steadily to their present level of around 25¢.

Shares of Pan Terra closed up 10¢ to 83¢ on May 20, on 1.1 million shares traded.