BECOMING AN ENTREPRENEUR H
appy halloween, It’s Time for a New Career
William C. Howald, CPG-11041 On October 31, 2005, I awoke to my regular routine – cof-
fee, news then check the Blackberry. At that time, I had a Blackberry, cell phone, digital camera and a MP3 player. I recall telling my assistant that someone should figure out how to bundle all this stuff into one device – if only I had known!
Halloween is a state holiday in Nevada because that’s the day Nevada became a state – October 31, 1864. It was a holiday in Nevada but not for the rest of the world. My Blackberry was vibrating wildly with red lights flashing as the news that Barrick Gold was making an unsolicited bid (hostile takeover) for Placer Dome in a deal worth US$9.2 billion - the day of doom had arrived! Placer Dome initially recommended that shareholders reject the offer. Since the company was in play, that caused a slew of potential “White Knights” to step forward and kick the tires. I spent the next several months shuttling geologists and dignitaries around to the mines, projects and offices in the Americas while managers in other parts of the world did the same. After several months, Barrick and Placer negotiated a friendly merger with an improved deal worth US$10.4 billion. I like to think that our efforts of adding sig- nificant gold ounces to the Bald Mountain resource contributed to the increased offer and friendlier terms.
Much like the news of today, mergers tend to make a lot of people redundant and that is exactly what happened at Placer. From senior management down to office personnel people were given severance, early retirement or were let go, and that is what happened to me, my staff and my regional offices. So what’s next? Poor me!? I don’t think so!
Once the takeover was finalized at the end of January 2006, I stayed on until March with my last official act to close the Reno office. From February until March, I kept in contact with a number of my friends and associates in the junior mining sector. A number of groups had completed deals with Placer Dome and myself in Nevada, Mexico, Peru and Chile, and they were interested to know what my future plans would be.
Fearing Lions, Tigers and Junior Miners These creatures are not scary. They are nimble, quick and
surgical. into being. Historically, large mining companies had extensive genera-
tive exploration departments that worked exclusively for the mining company at finding new ore deposits around the world. The exploration budget for any company is a discretionary bud- get that is limited by the company’s cash flow, capital projects, and exploration priorities. Over the last 25 years, the number of large mining companies has decreased while the remaining companies have reduced their generative exploration staffing requirements and focused funds and manpower toward near-
52 TPG •
Jul.Aug.Sep 2019 That’s why junior mining companies have come
mine explo- ration programs.
Free-
market forces allow smaller discov- ery-based companies to pick up the slack and fill the niche for new mine dis- covery. Playing the rule of large numbers, the larger mining com- panies are willing to fund, participate in, and purchase new discoveries from, the junior mining sector – roughly 2,000 companies are on the TSE (Toronto Stock Exchange). The high-risk dollars required for mineral exploration are raised on the Toronto, Sydney, London, and New York stock exchanges. However, most North American publicly-traded junior mining companies are domiciled in Canada. The reason behind this is twofold. Firstly, Canada is a commodity-based economy. In 2018, Canada’s gross domestic product was running at $2.223 trillion. According to Statistics Canada, the mining, quarrying, oil and gas extraction sector was almost 8% of Canadian GDP – approximately $151.6 billion. Because of the large role mining plays in the Canadian economy, Canadians understand the sector and the value it creates for their society. Therefore, my second point, commodity-based companies are welcomed, and establishing a new junior mining company is relatively easy.
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