Why This Institution Owns Over 50% Of Co. With Possible Major Gold Asset

Marceau Schlumberger is an accomplished figure in the world of finance and investment, best known as the founder and managing partner of Coral Reef Capital. 

Having amassed a wealth of experience over the years, Marceau Schlumberger has established himself as a seasoned investor and strategic thinker. His expertise spans various sectors, including technology, healthcare, energy, and real estate. With a keen eye for emerging trends and disruptive innovations, he has successfully guided Coral Reef Capital in making shrewd investment decisions.

Schlumberger sat down with our team here at Streetwise to tell us a little bit about himself, his strategy, and one company that has excited him this year.

Endurance and Stability

Schlumberger founded Coral Reef Capital 15 years ago, investing US$150 million into the company in various companies across a plethora of industries. 

Currently, Coral Reef is a private investment firm that specializes in lower middle market private equity investments, with a particular emphasis on the mining and energy sectors. 

"When it runs, you make three to ten times a return. It's a question of having your chips on the table when it runs," he said.

The company currently has US$150 million under management. It mainly invests in private companies but has some personal accounts in public entities. 

When it comes to the companies Marceau Schlumberger is interested in, his primary focus lies in endurance and stability rather than a specific sector.

"My area of focus is longevity," he said. Rather than being constrained by industry boundaries, Schlumberger prioritizes businesses with long-term potential and sustainable growth prospects. His investment decisions are driven by a forward-looking approach, aiming to identify companies that can thrive and adapt to changing market dynamics over an extended period, regardless of the industry they operate in.

Still, certain sectors have done him well. Typically, institutions shy away from the mining industry as it is considered too volatile, but Schlumberger believes the sector is essential. 

"We have private land, which is very unique," Schlumberger commented on Wex. "Everything is lining up. We know we are going to grow; the question is how much."

"On the gold side, we have generated positive returns. Precious metals have been a very good investment area for us. Since we were private, we did not get hammered as the public funds did. Our stock price is way undervalued as well," Schlumberger said. 

While other institutions don't want to risk it, "When it runs, you make three to ten times a return. It's a question of having your chips on the table when it runs," he said.

And one of the exploration companies that caught Schlumberger's eye was Western Exploration, in which he is now a director. 

Western Exploration

Western Exploration Inc. (WEX:TSX.V;WEXPF:OTC) is an exploration company that is dedicated to unlocking the potential of natural resources through responsible and strategic exploration activities. With a strong focus on the mining and energy sectors, Western Exploration actively seeks out new opportunities to discover and develop valuable mineral and energy reserves. 

Schlumberger told Streetwise that he first discovered Western Exploration when it was a private company in 2013. He was impressed by both the company's prospects and its team.

"Coral Reef started investing in mining assets in the United States in 2010," he said. "Then they acquired the Rawhide mine that has produced 2 million ounces of gold to date, which is what initially got them into Nevada." One of the largest family office landowners in Nevada had been the previous owners of Western Exploration, and the company was being guided by Brian Kennedy. 

For over four decades, Brian Kennedy held various leadership roles, serving as a director, president, chief operating officer, and chairman in several resource management companies. These companies include Meridian Gold, FMC Gold, Argonaut LLC, and NV Energy. Throughout his extensive career, he has provided strategic guidance and played a crucial role in overseeing the operations and management of these organizations.

"We were interested as he had a producing mine in Nevada, and we knew Brian Kennedy," Schlumberger noted as to why his team liked Western Exploration before it went public.

Strong Management and a Possible Major Asset

Now that the company is public, Schlumberger is just as excited about Western Exploration's management team. "The most exciting and fun part of WEX is working with the management team.

They have all been and are major successes, and they've found mines producing 20 million ounces gold so far."

"Everything points to us having a major asset in Nevada which is found only every decade or three decades," he said.

He called them "Tier One professionals," saying they "have worked at the majors, and they wanted to get involved in this project because it had the highest grade results in the state of Nevada, and they saw the potential on the properties at Wex. 

Aside from the team, the companies' properties are also promising. 

"Dolby George is a beautiful asset. You can start mining and make money right away. Drill holes were all spectacular and exceeded our expectations," he told Streetwise. "We have very high-grade assays here."

Highlights of this include:

• Near Surface, Oxide Deposit Indicated: 407k ozs  at 0.98 g/t gold
• Inferred: 118k ozs at  0.73 g/t gold

"We have private land, which is very unique," Schlumberger commented. "Everything is lining up. We know we are going to grow; the question is how much."

Catalyst

The company has a number of catalysts planned for Dolby George. A metallurgy program is currently ongoing and should be completed by the end of the year, and the company will also release a technical report on the property.

Other catalysts include:

• Early Q3 – Commence Geophysics and Drilling Program 
• Late Q3 – Doby George Column Test Results 
• Q4 – Gravel Creek drill results (usually multiple releases) 2024
• Q1 – Gravel Creek Resource Update 
• Q3 – Gravel Creek and Doby George Drilling 
• Doby George PFS

All in all, Schlumberger has an optimistic view of the company. 

"Everything points to us having a major asset in Nevada which is found only every decade or three decades," he said. 

Ownership and Stock Structure

According to Reuters, about 84% of the company is owned by strategic investors.

This includes Golkonda LLC, a syndicate of dozens of high-net-worth investors, which owns about 66% of the company, and Agnico, which owns 18%. Schlumberger has 1.91% of the stock, with 660,000 shares.

Management and directors own about 3%, and other institutions own about 6%, the company said.

The rest is retail.

According to the company, Western Exploration has a market cap of CA$44.1 million and that it trades in the 52-week range between CA$0.96 and CA$2.40. There are currently 34.4 million shares outstanding.