VANCOUVER — A panel of mining executives speaking at the Association for Mineral Exploration’s latest Speaker Series event before a crowd of more than 100 in downtown Vancouver in early October offered tips to budding junior mining companies on how they can improve their communication skills and strategies.
The panelists were: consulting geologist and analyst Rosie Moore; Zara Boldt, chief financial officer of Strongbow Exploration (TSXV: SBW); Michael Gray, mining analyst at Macquarie Capital Markets; and Bart Melek, global head of commodity strategy at TD Securities.
The initial focus of conversation was the quality and content of company presentations.
“Analysts and investors love to be spoon-fed information because they’re very busy and you’re competing for their attention,” Moore said. “If you can’t tell your story and elicit the hand-to-wallet reaction in 45 seconds, you need to be more clear and concise.
“Those 12 to 15 slides in your full presentation can make or break whether someone will buy the company, so spending time making a good presentation, or getting a group to do it for you, can pay off.”
She suggested presentations should cover what she called the “six Ps”: people, paper, price, project, promotion and patience.
“People are the most important — it’s a risky industry and the people mitigate the risk,” Moore said.
Panelists Michael Gray, Bart Melek and Zara Boldt (L to R) at AME’s speaker series event in downtown Vancouver in October. Credit: AME.
Boldt agreed that a reputable team with a strong track record can overcome many challenges.
“I used to think the quality of the project was the most important, but having been around a number of great teams, I would now say people are,” Boldt said. “You can go a long way if you have people you trust.”
However, Moore cautioned that there have been instances in her career when she was approached by successful people in the industry who were in fact cashing in on their reputations to over-promote less-than-stellar projects.
“They made their money and weren’t hungry anymore, but they had three or four companies they were happy to sell me. They were taking salaries and options from these companies and I thought it was distasteful,” Moore said. “I want to see a focused person — someone who is hungry and dying to make a discovery or put a project in production.”
Regarding a company’s share structure and financing arrangements, Moore said she prefers an explanation of a company’s share structure be closer to the front of the presentation, and she wants to see a good split between institutional and retail ownership, with management holding 15–20%.
The clarity of a company’s geological model can also make an impact on investors, Boldt said, but she warned companies to not get too technical.
“Many investors don’t have a geological background, so if you have something technical to present, put it in the appendix,” Boldt suggested. “You don’t want something technical to make up the meat of the presentation — it won’t be understood.”
However, a good technical overview of a project is critical when a company is pursuing financing, she continued.
“Usually the groups doing the due diligence are given a resource model and they go back to the company with questions. But now they sit down with the company geologists so they can understand the assumptions and how the company came to their conclusions. And that’s much better than just giving someone a model,” Boldt said.
Moore recommends that a company compare its presentation with those of its competitors and “dissolve it down to the very basic and best slides.”
Gray from Macquarie added that it is important for a company to “be consistent with deliverables. Doing what you say you’re going to do sounds straightforward, but investors have a scorecard and they watch it like a hawk, so don’t make a blind spot, such as not discussing any issues with First Nations.”
TD’s Melek similarly warned companies to not overpromise and under-deliver.
“Years ago we ran some numbers and found that it was much more accretive to valuation when you promised less and delivered more,” Melek said. “Understating your objectives and beating expectations are always good.”
Moore encouraged companies to reach a broader audience of potential investors via increased analyst coverage, newsletter writers, advertisements or paid advertorials.
Boldt agreed, adding that companies that pursue only non-brokered financing arrangements may be holding themselves back from other opportunities.
“There is a concept you have to pay the street … but introducing new investors to the story and paying the finder’s fee can be a good route to take,” Boldt said.
Panelists Michael Gray, Rosie Moore and Bart Melek (L to R) at AME’s speaker series event in downtown Vancouver in October. Credit: AME.
Even in difficult markets, a company can find innovative ways to create value while being patient, Moore emphasized, whether it be merging with peers, or downsizing.
Gray offered Integra Gold — since acquired by Eldorado Gold (TSX: ELD; NYSE: EGO) — as an example of a company that “took initiative” in a bear market and gained global recognition of its Sigma-Lamaque gold property in Quebec through its Gold Rush Challenge.
“There’s always an opportunity to capture the market through innovative approaches,” Gray said.
Lastly, Gray said a management team that has a strong knowledge of capital and commodity markets and geopolitics can put a company ahead of the rest.
“A range of intelligence on a country or commentary on competitors saves me a lot of time and is very helpful,” Gray said. “You want investors to remember you and say, ‘I’d take a meeting with that CEO any day of the week.’”
AME’s Speaker Series is a networking event that takes place three times per year.
This latest event was completed in partnership with Women in Mining British Columbia.
This was outstanding advice thank you.
Shawn Perger Golden Arrow Resources