Robert Friedland on the Keys to Exploration Success

POSTED ON December 05, 2013 BY Travis McPherson
CATEGORY Commodities, Eric Sprott, Investing, Mining, Nickel, People, Robert Friedland,

Robert Friedland was instrumental in the Voisey's Bay nickel discovery which was sold for $4.3 billion to Inco (now Vale)

An article from Mineweb's Alex Williams this morning summarized the recent discussion Rick Rule (Chairman of Sprott US Holdings) and Robert Friedland had at this year's Mines & Money Conference in London, UK. Below are a few of the quotes from the article:

“This is very much what a bottom feels like,” said Friedland. “Most of the CEOs of the major mining companies have had their heads cut off and used as bowling balls by their chairmen, so the major companies are risk-averse and the junior companies are living in an anaerobic environment where capital is really difficult to achieve."

“This is going to result in a spectacular bull market,” Friedland said. “It could take a year or two before there's a sudden and violent turn for the better, but the school of fish will turn.”

Given that many juniors with capable teams are trading at or below cash value, Friedland says, the best exploration some of these teams can do is to buy assets on the market. “He who has an operating team and access to capital really has a chance of building something. This is actually the good part.”

On the creative nature of exploration, Friedland said, “it's like organizing a playpen. Creative people shouldn’t be punished for failure, because in the exploration process we are in the business of drilling dry holes. You can't keep drilling where you've looked.”

Major mining companies “institutionalise stupidity” he says. “It's the way they're structured. At the moment there is nobody at Rio Tinto, or BHP, or Vale who has a stock option that's in the money, so their best assets go up and down in the elevator everyday and they can leave and form a junior company.”

“The guys that run the Latin America division compete with the guys who run the Africa division while somebody in the head office, to save costs, is constantly sawing the baby in half. So they do half the programme, people move around and there's no really focused ownership."

Read: The keys to exploration success and mining the market – Friedland

I encourage you to read Jacquie McNish's: The Big Score: Robert Friedland, INCO, And The Voisey's Bay Hustle

Travis McPherson

trav@ceo.ca

Travis McPherson

trav@ceo.ca

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