Deadly Lode (Trace Brandon Book 1)

by Randall Reneau

  “Sorry to hear about your wife, Malcolm,” I replied, ignoring his assumption.

  “Thank you. It was a long time ago, but I still miss her.”

  “I can imagine. Listen, your experience is top shelf. But to be frank, we haven’t discussed bringing on any new directors at this time. I will, however, discuss your proposal with the other board members.”

  “Thank you, Trace. Please be assured we have nothing but the best interests of Montana Creek Mining at heart. I’ll look forward to hearing from you.”

  “I’m glad to hear it, Malcolm,” I said. “I’ll get back to you.”

  I managed to get Will and Wally on a conference call and briefed them on my conversation with Malcolm.

  “He hasn’t got the shares to elect him to the board,” Wally said. “Even if he managed to get enough votes to call a special shareholders' meeting, we’ve more than enough votes among us to keep him off the board.”

  “Of course, the flip side,” Will added, “is the fact Twisp River and Carib International, do own seven percent of our company. A fact not to be taken too lightly.”

  “Duly noted, Will,” I said. “Here’s my suggestion, fellows. At some point Montana Creek Mining will qualify for listing on the Toronto Stock Exchange. And at that point we’ll need a majority of independent directors. Let’s turn Malcolm down for now, but suggest the possibility of a directorship down the road.”

  Will and Wally both agreed.

  “In the interim,” I said, “we need to find out a hell of a lot more about Twisp River Resources. And more importantly, find out who controls Carib International.”

  “I can put the word out around Vancouver,” Wally replied. “I’ll find out all there is to know about Twisp River. Carib International, however, is a horse of a different color. A privately held Cayman Island Corporation will be tough. However, I may know someone on the island who could help. It will cost a few bucks for her time, but she gets results.”

  “She?” Will asked.

  “Yes, her name is Dominic Rinquet," Wally replied. “She’s a French-Canadian ex-pat living in George Town on Grand Cayman. She does corporate development work and knows everybody on the island. And did I mention she’s a knock-out?”

  “Even better. Put her on it, Wally,” I said. “I would really like to know who the hell we’re dealing with.”

  “You got it,” Wally replied.

  “Okay, fellows,” I said, “I’ll call Trueblood in the morning and give him the bad news. Afterwards, I’ll head back up to the mine and check on the coring.”

  The next morning I packed my gear in the Bronco and then called Trueblood.

  “Malcolm, Trace Brandon here.”

  “Good morning, Trace.”

  “Listen, Malcolm, I did talk to the other two directors, and we all feel you’re highly qualified to sit on our board. However, for now, we’ve decided to keep the board as is."

  “I see. Well, I am disappointed, Trace.”

  “Malcolm, we feel it would be more appropriate to bring on independent directors, such as yourself, once we’ve qualified for a listing on a major exchange. We would like to re-consider your offer a little further down the road.”

  “I understand, Trace. And, yes, you will need a majority of independent directors on your board for a major exchange listing. Well, good luck with the drilling, and I look forward to renewing this conversation at a later date.”

  “Thanks, Malcolm. We’ll be putting out news releases to keep all the shareholders up to speed. Thanks again you for your support.”

  I arrived at the drill site a little after lunch. The high-country air now contained a hint of fall. It wouldn’t be too long before the snows came.

  “Howdy, Red,” I said, with a wave. “How’s it going?”

  “Good, Trace. We’re three hundred fifty feet down on a sixty-degree angle. We’ll start coring at three ninety-five. According to your cross sections, we should hit the vein around four hundred feet. You’re just in time.”

  Bill Thornton and Cyrus McSweeny sat in the Columbia Resources board-room in Spokane. Malcolm Trueblood was on the speaker-phone.

  “Mr. McSweeny, I didn’t have much luck with Brandon, or his board members.”

  “Well, fellows,” Cyrus replied, “we had to start somewhere. At least we’ve planted the seed, and it looks like we’ll have a shot at getting you on the board when they go for a Toronto listing. Here’s how I would like this to play out, until then. First, Malcolm, I want Twisp River to continue accumulating shares in the open market. Carib International will do likewise. Up to ten percent each, if we can get it. As Twisp is one hundred percent owned by Carib, we may have to report our joint ownership if it exceeds ten percent. I’ll run it by our legal eagles.”

  “In any case, we’ll shoot for just under twenty percent ownership of Montana Creek Mining between our two entities. If the cores continue to be high grade, we hold our positions. I suspect at some point one of the big mining companies will propose a joint venture or will tender for control of Montana Creek Mining.”

  “If, on the other hand, the ore grades drop a bit, we can either dump our shares or short the stock. In either case, we profit.”

  “What we really need, Cyrus,” Thorny added, “is someone on the inside. Someone to tell us how the cores and assays look before it’s public knowledge.”

  “I believe that’s called inside information,” Malcolm replied, coldly.

  “If you have a problem with the concept, Malcolm,” Cyrus said, “now would be the time to bow out.”

  Malcolm hesitated, knowing he was about to cross the line.

  “No, sir. No problem. I came on your team because I knew you played hard-ball. I am merely pointing out a possible legal issue.”

  “Duly noted, Malcolm,” Cyrus replied. “Now, if there are no further issues, does anyone have an idea on how we could get on the inside?”

  “We could bribe one of the driller’s helpers, or better yet, someone at the lab,” Thorny suggested.

  “I like someone at the lab,” Malcolm said. “They would have access to the assay data, not just a look at the core. And they are a bit removed, less likely to be suspected.”

  “I agree,” Cyrus said. “Thorny, find out which lab is running their assays. It’ll be in their Vancouver Stock Exchange filings. Hell, it’s probably listed on their website along with the assay results. Check out the lab employees. Find out who’s got a mistress, is behind on child support, is an alcoholic or on drugs. You know the drill. Find somebody with a weakness we can exploit, and hammer them.”

  Red hit the vein at 403 feet.

  “She’s cutting smooth and easy, Trace,” Red said, adjusting the pull-down weight on the drill string.

  “Steady as she goes, Red,” I replied. “I need as close to one hundred percent recovery as you can get.”

  “Third run coming up,” Red yelled. “This one should be all ore.”

  And it was. Five feet of dark, black pitchblende banded with brassy chalcopyrite copper. Solid pay rock.

  “Holy moly, Red,” I yelled, looking at the high-grade ore, “it’s the mother lode.”

  “And a deadly lode at that,” Red replied, looking down at the pitchblende ore.

  I looked up at Red and nodded. “All in all, we cut fifty-one feet of mineralized vein, nearly ten feet thicker than the first cores. Of course, that’s apparent thickness. I’ll have to calculate the true thickness, but it’s still damn good.”

  I pulled out my pocket calculator and ran some numbers. Length times width, times thickness, times tons per cubic yard, times 8 percent uranium. It was going to be a very, very, big number.

  Chapter 8

  The assay results from core hole number three were published on our website, and the price of our shares rose to a dollar and a half.

  At 9:00 a.m., Tuesday morning, I was back in my office in E-Burg, working on ore reserve ‘what-if’s’ when the phone rang.

  “Montana Creek Mining, Trac
e speaking.”

  “Trace, this is James Lee with International Uranium Corp., in Sydney, Australia.”

  “Damn, must be awfully late at night down under, sir.”

  “You’re right, mate. But I am in Los Angeles for meetings. So, no worries.”

  “Okay, glad to hear it,” I said, with a chuckle. “What can I do for you, sir?”

  “Well, Trace, we’re hearing a lot about your uranium discovery in North Central Washington. I’d like to come up, meet you, and, if possible, have a look at the operation. And of course, the cores.”

  “Your timing is perfect. No snow yet, and we’re drilling away.”

  “Good, I hate snow,” James said, with a laugh.

  “Okay, book a flight into Spokane, let me know when you’ll arrive and I’ll pick you up. It’s about a three-hour run to the mine.”

  “Bloody good, mate. I look forward to meeting up. How’s the beer up your way?”

  “We have a very good local micro-brewery. They brew a beer I think you’ll like. It’s called Tumbleweed Ale.”

  Cyrus and Thorny met at the Mallard Lounge in the historic Ponderosa Hotel in downtown Spokane. They sat at the bar under an inlaid glass ceiling that depicted a flock of Mallards, and ordered cocktails.

  “Cyrus, they’re using Mineral Valley Labs over in Coeur d’Alene for their assays. I had an old PI buddy do some checking, and I think we found the perfect insider.”

  “Go on,” Cyrus replied, taking a healthy pull on his Crown and water.

  “Her name is Mary Johnson, a single mom. Husband’s whereabouts unknown. She has an eleven-year-old daughter with brain cancer. It takes every dime she can earn, plus her insurance to keep the kid in treatment.”

  “Perfect. We get to help a kid with cancer, and we’ll get the info we need. Kind of a win-win, I’d say,” Cyrus declared, with a grin.

  “Yes, sir.”

  “Have you approached her?”

  “Yes. I had my PI friend make the contact. He told her all he needed were copies of the assay results, as soon as they were available. He told her one of his clients owned shares in Montana Creek Mining, and just wanted to be sure the assays published by Montana Creek Mining matched the actual lab assays.”

  “Nice touch.”

  “Yeah, makes it seem quite harmless. Simply an investor trying to protect his investment from all the crooks out there.”

  Cyrus laughed. “Hell, I love it. And?”

  “And, for ten grand, she’s on board.”

  “Excellent. Each time Brandon gets core assays, it’ll take him a couple of days to prepare a news release for the Vancouver Stock Exchange. We, on the other hand, only need a couple of minutes to evaluate the results. By the time the assays are public, we’ll have already bought or sold short.”

  “It’s all about information, isn’t it, sir?”

  “Information and timing, Thorny.”

  I drove over to the Spokane airport to meet with James Lee. I knew of his company, but did some online research to get fully up to speed.

  I spotted him easily as I entered the airport lobby. He was wearing khakis, with a hand lens around his neck and a backpack. The universal geological garb.

  “Mr. Lee, I presume?” I said, extending my hand. “I’m Trace Brandon, Montana Creek Mining.”

  “Hi, Trace,” Lee replied, shaking my hand with a firm grip. “Good to meet you, and thanks for picking me up.”

  International Uranium Corporation’s website listed Lee’s age at fifty-two, but he didn’t look it. He was about my height, around six feet, and I guessed about 180 pounds. Lee wore his salt-and-pepper hair short and was well tanned from the Australian sun.

  “So, Trace, I see you’ve just released the assays from your third core hole?”

  “Yes, sir, and they’re the best to date.”

  “Please call me, Jim.”

  “Okay, Jim. Thanks.”

  “Best so far, eh?”

  “Yep. About the same grades, but the vein appears to be thickening up at depth.”

  “Calculated any tonnages yet?”

  “With just the three holes, it’s pretty early. But if the vein and grades continue for, say, half a mile, we’re well into the millions of tons of ore.”

  “And at eight or so percent uranium per ton, you could be upwards of half a billion pounds of uranium,” Jim said, with a whistle.

  “Yeah, it could be a whopper. And don’t forget the gold and copper values. The uranium’s going to be the cream.”

  “So, Trace, what are your plans to finance this beast?”

  “Well, we’ll probably do another private placement when the stock price gets around two dollars. And raise enough capital to keep us drilling out reserves.”

  “Any thoughts toward a possible joint venture?”

  “Right now, we’re more inclined to keep drilling in-house.”

  “That’s a bit risky, isn’t it? What if the vein pinches out or the grade drops. You’ll be risking one hundred percent of your capital. Might be wiser to share the risk and the return.”

  “True enough. But from what we’ve seen so far, it appears to be worth the risk.”

  “What’s your control position at the moment, Trace?”

  “I own three and a half million shares. Will Coffee, my attorney and a director, owns half a million shares, and our other director, Walter Wilkins, owns half a million shares.”

  “So, out of seven million, issued shares, your group controls four and a half million shares.”

  “Correct. Fully diluted, the directors will have about fifty-six percent control.”

  Jim crunched the numbers on his pocket calculator.

  “Exactly right.”

  “And,” I added, “with the additional seven hundred and fifty thousand cash from the warrants, we’ll be able to keep the drills turning to the right.”

  I could see a bit of disappointment in Jim’s eyes. Even fully diluted, International Uranium Corp. had no chance of obtaining control through a hostile takeover.

  I’d reserved two rooms at the W in Winthrop before I left E-Burg. We stowed some of our gear, grabbed a quick lunch, and headed up to the Sullivan Mine.

  Red and the day shift were coring on the fourth hole when we arrived. Jim and I walked over to the rig.

  “Red,” I yelled, above the rig noise, “this is Jim Lee with International Uranium Corp., down in Australia.”

  “Nice to meet you,” Red shouted back. “You came a hell of a long way to look at some damned rocks.”

  “Indeed I have,” Jim replied, glancing down at the neat rows of core.

  I laid out some cross-sections and showed Jim where this hole had intersected the vein.

  “This is the first of two holes at this location. We’re at a forty-five degree angle on this one. We’ll drill at sixty degrees on the second hole.”

  Jim picked up a small section of very high-grade ore and inspected it with his ten-power hand lens.

  “Damn, Trace,” Jim said, turning the core over and over in his hand, “it’s the best-looking uranium ore I’ve ever seen. And I’ve seen some damned good ore.”

  “Yeah, it’s amazing. The old-timers here were after the gold and copper. The uranium was probably just a headache for them.”

  “Yeah, likely in more ways than one. With this kind of grade, you wouldn’t want to be exposed underground for too long.”

  I showed Jim our claim layout and took him part way into the original adit.

  “We’ll have to dewater the second level at some point,” I said as we came up to the area of the flooded winze. “I took a pretty cold dip, right about here.”

  “A winze?”

  “Yeah, connects with level two.”

  “Jesus, you were lucky to get out.”

  I laughed. “Yep, I looked just like Indiana Jones, but without the vine.”

  We spent the rest of the day watching the coring operation. I could tell Jim was more than just a little interested. Just before shi
ft change, we headed back to the W.

  “Cold beer, Jim?”

  “Grab us a table and order me a, what was it?, Tumble Down . . . ?”

  “Tumbleweed Ale.”

  “Make it a big one. I’ll be down in a second. Just need to check in with my office. Should be business hours tomorrow, about now.”

  I was sipping on my Ale and perusing the menu when Jim came in and sat down.

  “So, this is the Tumbleweed, eh?,” Jim said, taking a frothy gulp. “Damn, mate, that’s good brew. And we Aussies know a thing or two about beer.”

  “I thought you’d like it. Besides the Ale, how’d you like the mine?”

  “I won’t bullshit you, Trace. I think the Sullivan Mine could be a world-class deposit, and we’d love to work out a deal to be Montana Creek Mining’s partner. This mine’s going to attract a lot of interest from other majors, Trace. But I think, if you’ll check around, you find all of our partners are glad they teamed with International Uranium Corp.”

  “I did a fair amount of research on your company, and I’ve got to admit I liked what I saw. Let me throw this out to you. We’d prefer selling a minority interest in Montana Creek Mining, rather than participating in a joint venture. Along with purchasing a minority interest, we’d like your technical help in bringing the project to production.

  “What kind of interest are we talking about?”

  “No more than twenty percent, Jim. Also, as the additional shares would dilute our control to less than fifty percent, I would need a standstill agreement, whereby I could vote IUC’s shares in the event of a hostile takeover attempt.

  “I see. What kind of price per share have you got in mind, Trace?”

  “It would have to be at a premium to the share price at the time of the sale. So, it’ll likely be north of two dollars per share.”

  “I know we’d like a bigger piece, Trace, but let me run it by my board. I’ll let you know something in a week or so.”