By James Kwantes
Published first at Patreon
Chris Taylor's recent return to the junior mining sector as a CEO captured the imaginations of speculators, igniting the stock of shell company Railtown Capital Corp. (RLT-P.V).
On October 25 Railtown announced Taylor’s appointment and his purchase of 2.5 million common shares from existing shareholders, at 5 cents each. It gives Taylor a current 19.2% stake in Railtown, which is also raising $1 million through a 10-cent financing. Railtown shares rocketed as high as 65 cents (from 9 cents pre-announcement) and now trade at 30 cents.
It’s not rocket science. Entrepreneurs who create serious shareholder value, especially in bear markets, command a premium. Taylor fits the bill. He and partner Bob Singh took Great Bear Resources (GBR) from dimes to a $29/share buyout from Kinross in late 2021. Great Bear Royalties (GBRR) was spun out along the way, netting shareholders a further $200 million from Royal Gold.
Chris Taylor at a Dixie site visit, October 2021 / JAMES KWANTES
Beyond Taylor’s talents and track record, there’s another reason to believe Railtown could be his next big success. It relates to his experiences with dilution – the enemy of small-cap companies and the mortal enemy of junior mining speculators. Dilution is also one important measure of the age of a junior exploreco.
Great Bear was not a young company by late 2021. The stock had been rolled back 5-for-1 twice, in 2013 and 2016. Taylor had joined back in 2010 as senior geologist, part-time, moving to CEO over time. Neither of the posts was a lucrative gig for the young father, who went deep into debt to rebuild his position by participating in post-rollback financings.
Those share rollbacks decimated Taylor’s stake in Great Bear, he recalled in an interview about the Great Bear journey. “We were so broke as a family,” Taylor told me. He was speaking of the time period after the rollbacks but before the Dixie gold discoveries. Taylor ended up doing just fine, of course – he owned about 1.6 million Great Bear shares by the time Kinross bought the company.
Railtown: post-financing, the company will have about 23 million outstanding shares (with Taylor owning about 10.9%) and a $6.9-million market cap. That's high for a junior with no project and no website; Taylor's involvement makes Railtown a junior worth tracking. His dilution scars from the ultimately profitable Great Bear journey make it likely that preservation of Railtown’s share structure will be a top priority.
*500,000 of the Railtown shares Taylor purchased were sold to him by Claudia Tornquist, the CEO of copper play Kodiak Copper (KDK-V). Taylor is Kodiak’s chairman.
Disclosure: I own shares of Kodiak Copper and have no business relationship with any other company mentioned in this article.