The Legend of Katie McLeod and Mystery Investor's 50,000% Return
Virgin gold discovery to $1.1B takeout in 9 mos
MYSTERY investor earns $154M windfall, a 50,000% return
The incredible Arequipa Resources story:
In 1993, Katie McLeod was suddenly let go from Yorkton Securities after 8 yrs. That Christmas, she made cookies for her family to save on gifts, unaware of the incredible change of fortune awaiting her.
At a Santiago party before her dismissal, Katie, then 32, met the famed 64-year-old mining engineer, Dave Lowell. They bonded over rocks—Katie's dad was a notable Canadian miner, & she specialised in mining stocks at Yorkton.
Dave, who had discovered 11 mines already, began exploring Peru after it elected a pro-biz president in 1990. With the help of local geologists, he staked 137K ha. of land & embraced failure, knowing only a few prospects would become mines.
In an unexpected ‘92 twist, Dave partnered with an anonymous investor matching his funds. Needing more capital in ‘93, Katie and him agreed to form Arequipa Resources (AQP), giving it 50% of his Peru portfolio for $4M.
Katie leveraged her Canadian network to raise $2M in Sept '93 at $0.25/share from 106 investors, valuing AQP at $207K pre-money. AQP began trading 3 months later. More financing rounds followed between $0.75/share & $2.70/share.
In Nov '94, Dave’s group exchanged their remaining 50% in the Peru portfolio for 10.25M AQP shares. Half went to Lowell and his family, & the other half to Bickerstaff Holdings, his silent partner.
AQP's stock slumped to $0.52 in February '95 after disappointing copper drilling results. While Dave tirelessly explored Peru, Katie managed finances and corporate affairs in Canada.
AQP first mentioned the Pierina gold prospect, 300km north of Lima, in Nov '95. Dave's team explored the area on foot & horseback, collecting samples. VP of Exploration, Patrick Hilliard, found a rock outcrop with gold at the surface. Lowell proposed digging 14 pits, each 1.5m deep, to verify that the gold grade didn't diminish below the surface.
On Dec 28, '95, he got a fax with astonishing results. Seemingly too good to be true, he had his team collect more samples and dig 90 additional pits.
Dave immediately recognized AQP's exceptional discovery and funded a tunnel into the deposit before drilling, confirming gold consistency and attracting attention from mining giants. AQP shares soared to $34.75 by May '96, a 13,900% increase from Katie's initial financing.
Remarkably, AQP reached a valuation of over $1B just seven months after its geologists first stepped onto Pierina, an extraordinary rise. In comparison, Instagram spent 18 months in the app store before Facebook's US $1B acquisition, & that was 16 years later.
During AQP's annual meeting, Dave's presentation led to a brief 50% stock dip before bouncing back. In July '96, amid Placer Dome speculation, Barrick Gold initiated a hostile AQP takeover, which led to a swift $30/share ($1.09B) agreement in August '96.
Investing US $260M, Barrick opened Pierina with 11M ounces in '98. In 2000, it produced 821,614 ounces at $43/oz, compared to Barrick's current $1,270/oz. Pierina's scale and efficiency made it unique, helping Barrick become the top gold miner.
When the dust settled, Lowell family's 5.125M shares were worth $154M*, with 64% controlled by Lowell & 12% for each child. The intrepid explorer died in 2020, leaving behind a legacy of 17 discoveries & inspiring countless others.
As for Katie Macleod, “She ended up with a big house on a golf course… with her very nice husband, two sons, & a Labrador retriever,” Dave wrote in his memoir. She continues to have a remarkable career in mining & has chaired major producer Kinross since 2019.
The real mystery is Bickerstaff Holdings, the enigmatic 50,000%* gainer. Reporters found it to be a Hong Kong company, represented by Ms. Lam. Katie believed Ms. Lam was the owner, but Dave hinted at a male "mining executive" friend in his book. The true identity remains a mystery to this day.
* Bickerstaff's 500X gain is mentioned in Lowell's book (Intrepid Explorer 2014). The $154M figure assumes Bickerstaff and Lowell families held until the takeover, although some shares were sold along the way.
Special thanks to Stockwatch.com archive