The Godmother of Gold Stocks

Written by Luke Burgess
Posted February 23, 2022

This 69-year-old grandmother went to war with Vancouver’s most cunning con men ...

mrsmackayeskay

… And she WON!

She had something every stock promoter in Vancouver wanted…

They promised her stock…

They promised her cash…

But she told them to hit the road…

That’s when she cashed in on her stock worth $27 Million!

The Godmother of Gold Stocks

Mrs. MacKay was one tough old gal.

Of course her husband, Mr. MacKay, was no cream puff himself.

Tom MacKay was a gold miner and prospector, bush pilot, bomber pilot in WWII, and was successful in the cut-throat world of Vancouver’s junior mining business.

But Mrs. MacKay…

Well, if Mrs. MacKay had balls, they were made of solid brass.

In 1990, a newspaper reporter called Mrs. MacKay. He wanted to interview her about the $27 million she had just made in the gold market.

The interview was going just fine… until the reporter asked Mrs. MacKay her age.

That’s when she abruptly hung up on him.

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Apparently, it wasn't the first time something like this had happened.

Canada’s National Post wrote, That reporter was only the latest in a long list of people to discover just how gritty MacKay is.”

That’s how much moxie ole’ Mrs. MacKay had in her — a national newspaper reported on it!

And it was Mrs. MacKay’s own grit, her own tenacity, that led her to a $27 million pay day.

Making Gold Out of Grit

Our story begins six decades earlier.

It was 1931.

Mr. MacKay (Tom) was flying a single-engine bush plane over the remote mountains of Northern British Columbia when he spotted something quite unusual.

From the cockpit of his plane Mr. MacKay saw a curious rock outcrop.

It was stained with a reddish color. Exactly like this…

tommackayeskay

MacKay knew this was very special.

He knew this red coloring meant the rock likely contained lots of valuable minerals.

So MacKay staked the property for himself and assayed the unusual red rock for gold.

What he found was nothing short of incredible.

One boulder from MacKay’s new claim reportedly assayed an amazingly high-grade 142 grams of gold per tonne.

To put that into perspective, the highest-grade gold mine in the world right now has an average head grade of about 40 grams of gold per tonne.

So MacKay’s boulder was more than 3.5X richer in gold than the highest gold mine in the world today.

tommackayeskay1

No doubt, MacKay was thrilled.

In fact, as soon as he saw the assay report he declared, “This will become one of the greatest mines in the province.”

He was right.

What MacKay had discovered would eventually become what’s known as the Eskay Creek Mine — which, when it was all said and done, would eventually produce over $10 BILLION worth of gold and silver.

MacKay found a $10 billion gold mine that day.

But the treasure would have to stay buried for decades…

Mr. MacKay Goes to War

When Tom MacKay first made the Eskay Creek discovery, it was 1931. And in the first few years, he put a lot of effort into developing the property.

But then WWII broke out.

MacKay, who already had pilot experience, joined the Royal Canadian Air Force. 

MacKay was with the RCAF No. 6 Group, a heavy bomber squadron. He is seen in the photo below with part of his group in front of Allerton Castle. MacKay is standing on the far right of the center row, standing next to “Tiny” Smith.

tommackayeskayrcaf

It's likely MacKay would have flown on a Vickers Wellington or Handley Page Halifax, which must have been one of the most terrifying positions to be in during WWII. Due to their weight and limited ceiling, both of these bombers had to fly low and slow to drop their payload. That meant both were juicy targets for the Axis forces.

bomberwwiiVickers Wellington manufactured by Vickers-Armstrongs

MacKay quickly excelled in the Air Force.

In the four years he served bombing Nazis, MacKay had risen to the rank of a Wing Commander and became the RCAF’s Chief of Intelligence.

I told you: Tom MacKay was no snowflake.

After the war, he went to work for a Vancouver brokerage firm that mainly dealt in bonds.

But in 1960, MacKay took over the brokerage firm and refocused it on his true passion: gold exploration.

Throughout all this, MacKay maintained rights to the Eskay Creek property.

It was optioned to other companies several times. But Tom MacKay never sold the Eskay Creek property outright.

And he never sold it because he knew it was very special.

Mrs. MacKay knew it was special, too.

That’s why, even after Tom MacKay died in 1982, Mrs. MacKay held onto the Eskay property.

eskayminemackayThe Eskay Gold Mine today

Throughout the 1980s, almost no exploration work was done at Eskay Creek.

And that’s because the market for gold and gold stocks was mostly dead.

The price of gold crashed after the inflation-driven super bull market of the late 1970s — and gold prices sat depressed for years after.

Gold Price Corrects in 1980,
Ranges Between $300–$400 for 10+
Years
eskayminemackay

No one was interested in gold at the time.

Not even the stock promoters.

But they did very much want something Mrs. MacKay had.

Mrs. MacKay Goes to War

The Eskay Creek property was owned by a company called Consolidated Stikine Silver Ltd. — of which Mrs. MacKay was the controlling shareholder and president.

But the promoters weren’t interested in the Eskay Creek property. No one was.

They were interested, however, in owning Consolidated Stikine as a “shell” company.

You may have heard of criminals using shell companies to launder money. But in this regard, a shell company is a legally-structured corporation in good standing with no meaningful business or assets that is used as a means to take a business public faster than the IPO process — it's an empty public company to put a business into.

The promoters didn’t think the Eskay Creek property was meaningful. They just wanted Stikine to put some other business into it.

Mrs. MacKay recalled in an interview that one of them even wanted to turn Stikine into a cosmetics company.

She said, “I think every con artist in Vancouver was in to see me.”

But she hadn’t met the BIGGEST con artist in Vancouver…

… yet.

Little did Mrs. MacKay know she would soon go head-to-head with the king of them all.

Mrs. MacKay vs. “The Pez”

As I mentioned, the market for gold was mostly dead throughout the 1980s.

But there was some investor interest in gold in the late 1980s.

That’s because on October 19, 1987, stock markets around the world crashed, completely altering global volatility patterns.

Now known as “Black Monday,” the Dow Jones fell 508 points, posting a 22.6% daily loss.

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To this day, Black Monday remains the day of the largest daily decline in Dow Jones history by a wide margin.

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The stock market crash of 1987 sent investors fleeing to gold.

And that allowed Mrs. MacKay to find financing to continue exploration on her husband’s Eskay Creek project.

In May 1988, Mrs. MacKay and Stikine entered into an option agreement whereby another company, Calpine Resources, would earn a 50% interest in the property upon spending several hundred thousand dollars to explore Eskay Creek.

And that’s where “The Pez” got involved.

thepezMurray Pezim in 1989

Before the “Wolf of Wall Street,” there was “the Legend of Howe Street” Murray “The Pez” Pezim.

He’s been called “the ultimate promoter” and “the greatest promoter in Canadian stock market history.”

Murray Pezim has been called a lot of things…

“Flamboyant”… “wild”… “kooky”… “a nut case”…

And those are all Pezim’s own words about himself.

He’s been called a “womanizer” and “a son of a bitch”…

Again, those are his own descriptions.

Murray Pezim was a wild guy whose life could be a Hollywood film.

As a child Pezim saw two older boys fighting in the street. Most children would have avoided the fight. But Pezim approached them with an offer: Instead of fighting in the street for free, the young Pezim convinced them to fight in his backyard where they could sell tickets and split the profits. It was good because everyone wins. But it was better for Pezim. He wasn't taking any of the punches.

That's pretty much how Pezim lived his whole life.

When he was 37 years old, Pezim did a swan dive into an empty pool to impress a group of female flight attendants. After that he spent four days in a coma and eight months in a body cast. Later Pezim said of the incident, "I impressed 'em. It was worth it."

Pezim loved women. It's one of the first things you learn about him in his biography — which has an entire chapter titled "Booze, Broads, and Baloney." Most of Pezim's girlfriends, and he had many, were former (or current) drug addicts. And they were always decades younger.

thepezim

He bought the B.C. Lions Canadian Football League team because "it seemed like a good idea at the time."

He hung out with B-list actresses and washed-out sports celebrities. Here's Pezim with Rocky IV actress Brigitte Nielsen and New York Jets defensive end Mark Gastineau:

thepezerf

Pezim endorsed "Vita Pez," which were some kind of caffeine pills.

He built a three-wheeled "Pezmobile."

He produced his own "Pez" chocolate bars and audio cassette greetings from minor celebrities.

And he did all this through Pezzaz Productions, a subsidiary of Pezamerica.

thepezerGreetings From the Stars audio cassettes produced by Pezamerica

It's incredible Murray Pezim's life hasn't been put on the silver screen.

A 1990 issue of The Globe and Mail's Report on Business magazine describes Pezim as “a cross between Gordon Gekko and Rodney Dangerfield. In his presence, you don’t know whether to be intimidated or amused.

James Kwantes of World of Mining says, “He was like a character out of a Tim Burton movie or a Bob Dylan song. And had The Pez caught wind of such a character, he likely would have upped the ante.

My favorite quote about The Pez, however, comes from Douglas S. Looney of Sports Illustrated, who wrote:

Murray Pezim lives somewhere beyond Outrageous. To get there, drive to Crazed, keep going toward Bonkers via Berserk, then slow at Around the Bend and look for signs.

I recently finished reading Pezim’s biography, The Pez: The Manic Life of the Ultimate Promoter, by Jennifer Wells.

The Pez Autobiography

The book is kind of hard to find. I had to buy my copy from eBay. But if you can find a copy, I highly recommend reading it. 

Murray Pezim was a lot of things.

Yet for all of his antics, The Pez made a lot of money for a lot of people.

A 1989 market journal claimed Pezim was personally involved in 65 companies listed on the Vancouver Stock Exchange (today the TSX Venture). His biographer claims:

The previous summer [1989], the Vancouver Stock Exchange had repeatedly hit record volumes because of Pezim’s stable of companies. In one week alone $250 million worth of shares had been bought and sold. When the numbers were tallied at the end of 1989, the three most actively traded companies were Pezim’s.

Pezim was a powerful guy. And in the late 1980s, he was the guy to go to for financing gold exploration.

And Calpine needed money to drill Mrs. MacKay’s Eskay Creek project.

onethingontheirmindrule

So shortly after Calpine optioned Eskay Creek in the spring of 1988, it brought in Pezim’s Prime Resources Group as project operator.

By May 1989, Prime had drilled 69 holes and was beginning to see very encouraging results. One drill hole returned more than 32 meters grading over 21 grams of gold and 32 grams of silver.

Pezim was getting excited.

And that’s when he decided to strike.

The Showdown

Shortly after Prime Resources completed drilling in the spring of 1989, Pezim made a takeover bid for Mrs. MacKay’s Consolidated Stikine.

But Mrs. MacKay wasn’t having it.

A 1990 article says Mrs. MacKay thought the terms for Pezim’s takeover were “ridiculous.”

And despite all the power that Pezim had, Mrs. MacKay told him to hit the bricks as well.

exitsign

For years Mrs. MacKay had fought and defeated Vancouver’s lesser con men in their bids to take over Stikine.

And when she faced the king of them all, Murray “The Pez” Pezim, Mrs. MacKay had no problem wiping the floor with him either.

It was a good thing Mrs. MacKay turned down The Pez.

Because only a few months later, history would be made. And Mrs. MacKay would be sitting on $30 million worth of stock.

The Legend of Drill Hole 89-109

On August 14, 1989, Calpine Resources and Mrs. MacKay’s Consolidated Stikine made gold stock history.

It was on this day these companies announced the results of the legendary drill hole 89-109.

But how “legendary” can a drill hole really be?

Well, hole 89-109's importance really can't be overstated. It was (and still is) one of the best gold exploration drill holes ever. But it’s more than that.

Hole 89-109 returned about 208 meters grading about 24.8 grams of gold and 27.5 grams of silver.

Just think — 208 meters… that's 682 feet of super high-grade gold!

That’s more than 2X the height of the Statue of Liberty (including the base) of super high grade gold… in a market hungry for the yellow metal.

The news was so big, it created record-breaking volume for the Vancouver Stock Exchange.

Moreover, it kicked off an entire gold rush to the Eskay Creek region that lasted for years.

Additionally, it’s arguable that drill hole 89-109 was so big, it created an entirely new generation of gold and mining investors that make up the TSX Venture Exchange today.

Here is a short excerpt from a 1990 investment journal on gold stocks:

Vancouver Gold stock Investment journal 1990

Drill hole 89-109 was big!

Real big.

And shares of Calpine Resources and Mrs. MacKay’s Consolidated Stikine absolutely skyrocketed.

Calpine’s stock soared from about $1 to over $10… a 900% increase.

And Mrs. MacKay’s Consolidated Stikine…

By the time it was all said and done, her shares went from about $1… 

… to $67!

… a 6,600+% increase!

As a result, Mrs. MacKay’s stock was worth more than $14 million… or about $27 million, inflation-adjusted.

Mrs. MacKay had finally done it.

She won.

Her grit, her tenacity, her commitment in her husband, and her faith in the Eskay project gave her strength and weapons to go to war with, and defeat, the slickest con man in Vancouver.

And as her reward — $27 million.

In the end, Tom MacKay was right. The Eskay property would “become one of the greatest mines in the province.”

When it was in production, the Eskay Creek Mine was the highest-grade gold mine in the world with average grades of 45 g/t gold and 2,224 g/t silver. Today the highest-grade gold mine is the Fosterville Mine in Australia, which has an average head grade of about 40 g/t gold.

In total the Eskay Creek project produced more than 3.3 million ounces of gold and 160 million ounces of silver between 1994 and 2008.

Today that’s worth more than $10 billion dollars.

Sometimes success is easy.

Other times you have to wait six decades and struggle to fight off con men and scam artists to win.

Epilogue

After Mrs. MacKay finally did sell Consolidated Stikine, her story drops off the map. I was unable to learn what Mrs. MacKay did after she made her millions, or even if she's still alive today.

If Mrs. MacKay is still alive, she must be at least…

… Well, maybe it's better not to speculate on Mrs. MacKay's age.

But wherever you are, Mrs. MacKay, I tip my hat to you.

Until next time,
Luke Burgess Signature
Luke Burgess

Luke’s analysis and market research reach hundreds of thousands of investors every day. Through his work with the Outsider Club and Junior Mining Trader, Luke helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.

Editor's Note: I purposely did not use Mrs. MacKay's first name in this article out of respect. Maybe I have an outdated sense of etiquette, but I don't think it's always appropriate to use a person's first name without their permission or some personal familiarity. But for journalist purposes, her first name is (or maybe was) Marguerite.

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