Newsletter writer Eric Coffin explains why geologists Adrian Fleming and Quinton Hennigh have picked a good time to team up at Prosperity Goldfields

Sure that two heads are better than one, geologists Adrian Fleming and Quinton Hennigh are joining forces in Prosperity Goldfields Corp. (TSX: V.PPG, Stock Forum), a company that will focus on exploration in the Canadian Yukon and Northwest Territories.

Speaking on the phone from Thunder Bay, Ont., Hennigh told Stockhouse that he has a lot on his plate and needed someone to champion Prosperity’s flagship Kiyuk Lake gold project in Nunavut.

It is why he is looking forward to working with Fleming, an Australian geologist, who is best known in recent years for launching Underworld Resources Inc., a Yukon gold explorer that was swallowed in March 2010 by Kinross Gold Corp. (TSX: T.K, Stock Forum).

Fleming followed that up with Smash Minerals Ltd. (TSX: V.SSH, Stock Forum), a Vancouver junior which aims to repeat Underworld’s success by focusing on other properties in the Yukon’s White Gold district. They include the Whiskey project, which is adjacent to Underworld’s White Gold property.

It was newsletter writer Eric Coffin who got the merger ball rolling by making the necessary introductions.

Having earned a Ph D in geology and toiled in exploration for Newmont Mining Corp. (NYSE: NEM, Stock Forum) and others, Hennigh had built up a portfolio of properties while he was recently working as President and chief geologist of Evolving Gold Corp. (TSX: T.EVG, Stock Forum).

The property package included Kiyuk Lake, which was vended into Evolving Gold’s affiliate Prosperity Goldfields.

“Quinton wanted to bring in a merger partner for Prosperity, bring in some back office management, some strong technical guys,’’ recalled Coffin, during a recent interview with Stockhouse.

Coffin suggested that he speak to Fleming, because the Smash Minerals CEO had done so much work in the Yukon and Northwest Territories.

“This is like a dream,’’ said Hennigh. On February 2, Smash and Prosperity released a statement saying they had agreed to amalgamate, creating a merged entity and a project portfolio that features Whiskey and Kiyuk Lake.

The combined entity, known as Prosperity Goldfields, is expected to have 58.5 million shares outstanding and $8 million in working capital. Fleming will be CEO and Hennigh plans to take a seat on the board.

Even before the merger is complete, Hennigh said Prosperity is planning to spend about $4.5 million this year to complete roughly 10,000 metres of drilling at Kiyuk. The target will be three discovery zones (Gold Point, Rusty, and Cobalt) plus as many as six additional targets.

“You are going to see a lot of good news coming out of Kiyuk,’’ said Hennigh. He believes the project has geological similarities to Centerra Gold Inc.’s (TSX: T.CG, Stock Forum) Kumtor gold mine in the Kyrgyz Republic, which produced 567,802 ounces of gold in 2010, making it one of the largest gold producers in Central Asia.

Coffin said the two geologists have picked a good time to unite. Trading volumes on the TSX Venture Exchange have been on the rise this year, a move that Coffin attributes to the strong gold price and signs that the European Central Bank is resolving some of the liquidity issues facing eurozone banks.

“All the base metals have had a pretty good run in the past month,’’ said Coffin who co-edits the Hard Rock Analyst newsletter with his brother David Coffin. http://www.hraadvisory.com/summit_2012.html

“That is what is generating some of the buying,’’ he said. Coffin is hoping to see the TSX Venture Exchange index tack on another 10 or 20% by the end of the 2012 first quarter.

For its part, Smash is trading at 47 cents, giving the company a market cap of $11.4 million, based on 24.2 million shares outstanding. Prosperity trades at 64 cents, giving the company a market cap of $27.7 million, based on 43.4 million shares outstanding.

Coffin said Hennigh and Fleming are both directors of Precipitate Gold Corp., a private company that was founded by the Coffin brothers, and is focused on exploration in the Yukon and northeastern British Columbia. It currently has a portfolio of 19 early stage mineral exploration projects.

Precipitate is expected to file a prospectus soon in connection with an initial public offering that will be led by Wolverton Securities Ltd. The shares are scheduled to trade on the TSX Venture Exchange by the second quarter of 2012.

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