When a junior mining bear market hands you lemons …

POSTED ON December 22, 2015 BY Benjamin Cox
CATEGORY Stories,

Lemonade

Management has to be aligned with market conditions or else everything else breaks down.

I talked to a banker last week and he pointed out that I was one of the last two or three CEOs that he knew that still owed a major part of their own deal. Most CEOs are either hired guns or have been so diluted in this market that they’ve become hired guns.

I’m working on a synagogue renovation this week, and as part of that project I am running around trying to find cheap cabinets, doors, and other stuff to make it work on a budget. I am doing a $25-50,000 remodel for $10-12,000. Since I have “ownership,” I care and cannot spend money stupidly. It amazes me what I can find for 10 cents on the dollar plus a few hours of my time.

Getting business done in an industry recession when money is limited is about getting stuff done without spending loads of cash. I went to an AGM yesterday; No problem. I drove, and instead of an expensive hotel I found a $56 per night two-bedroom Airbnb that is clean and safe.

Recessions are when you hopefully clean up projects, restructure stuff, find solutions, and work on making the project work. Every step you take forward in a recession counts as 2-3 in a recovery. You can get deals done that might not get done in a bull market, and if you are working every day stuff will get done; Maybe not the stuff you wanted, but you can move a project. At the end of the year, you will be shocked what you’ve been able to accomplish.

Since I own a lot of my company, I am incentivized to run it on a budget and responsibly. I am not going to be perfect, but I am going to continue to work on doing stuff on the cheap. I am going to get work done come hell or high water. Downing tools for me as an owner-operator is not an option; I am going to get stuff done.

The fact is, in a recession people:

Open doors: Everyone has time for meetings.
Say no quickly: Lots of rejection this year, but then again there is a 100% chance of a rejection if you don’t try. If someone rejects you be respectful of their issues. Lots of time it's not "no," it is just not "now."
Really look at stuff: The number of people who have done serious due diligence on my company and given us their results has given me faith that the bigger boys in this business are not that bad, and maybe even want to help.
Respect different: I started the year as a lucky CEO went crazy finding an asset. I think I am ending it as a CEO who is seen as getting stuff done.

The recession is not going to last forever. I don’t think public junior mining is ever coming back to where it was, but there will be a viable industry here in a few years’ time and I hope that by working through this period I have a seat at that table.

Get your own seat at the discussion table by joining CEO Chat, the investment conference in your pocket.

Benjamin Cox

Prior to founding Oreninc, Mr. Cox served as a senior analyst at the D.E. Shaw Group and as a consultant with the GLG Group, where he worked directly with 15 Wall Street teams in the mining deal space. Mr. Cox is the Chief Executive Officer and a Director of Aston Bay Holdings Ltd. (TSX-V:BAY), a copper and zinc company with properties in Nunavut, Canada. Mr. Cox has researched and developed business, financial, and shipping models for every major global iron ore project. He is also an expert on mining industry market dynamics and metals, with a focus on raw materials including base metals, iron ore, platinum group metals, and industrial materials such as potash and lithium. Mr. Cox holds a B.S. from Brandeis University and an M.B.A. in Finance from Portland State University. More →

bjc@oreninc.com

Benjamin Cox

bjc@oreninc.com

Disclaimer:

Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any significant positions will be disclosed explicitly. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Thomas Humphreys, Pacific Website Company Inc., and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. We reserve the right to buy and sell such securities or commodities without notice to readers. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Thomas Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in these publications or web site.

Forward-Looking Statements: This article may include certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Always do your own due diligence. We seek safe harbor.