What Lies Behind Mexico's Precious Metals Success?By Cas Biekmann | Thu, 02/11/2021 - 13:03
Mexico Mining Forum’s second panel of the day, moderated by Isabel Adame, Communication Specialist of Mexico Business, analyzed what led to the success of precious metal companies in the country. The panelists, all leaders of some of Mexico’s most successful mining projects, initiated an intimate conversation regarding their personal backgrounds and what drives their success.
Kenneth MacLeod, CEO of Sonoro Gold Corp, shared his background in mechanical engineering for the oil and gas sector, which eventually led him to mining. “Without vision, you will not get to the destination you want as a mining CEO,” he explained. Having a clear vision will help a project through financing into development, construction and effective operation. Having a team that also shares this vision is of the utmost importance, MacLeod explained.
Jason Simpson, CEO of Orla Mining, said he moved around the world due to his parents’ involvement in the oil and gas industry. He found his calling as an operational leader in mining. “Mentorship is incredibly important,” Simpson said about his personal development. What currently influences his personal philosophy as a CEO is a focus on people. “My decision-making is influenced by people, including shareholders, communities and staff.”
A mining geologist by degree, Doug Ramshaw, CEO of Minera Alamos, believes that finding the right environment is essential to thrive. “A key attribute in terms of success and leadership is surrounding yourself with the right people,” he said. Ramshaw noted that working with a motivated group is not just a measure for success; it also makes work enjoyable. Furthermore, he believes in truly becoming a part of the communities surrounding projects.
CFO of Kootenay Silver Raj Kang talked about his background in corporate finance. After his move from the UK, he became fully focused on mining. To become a successful leader “people need to know what resources they have and how they can best use them,” Kang noted. “We want to make sure that we have an effective risk-reward system in place for the utilization of our fund,” he added. Despite his focus on capital markets, Kang noted that good teams are crucial for a successful mine.
So how did this philosophy help foster their success stories? For Macleod, having a secure vision helped him foster strong bonds with local authorities and communities, despite the strong challenges he faced in this regard in Congo and the Philippines. “You have to wear many hats as a CEO in the resources sector. Unless you demonstrate that you value them, you will not go very far,” he said in regards to the versatility that one must have to tackle different problems miners encounter.
When it comes to caring for people, Simpson highlighted how developing local resources can really change people’s lives. In the case of Mexican Camino Rojo project, Simpson said that it was especially rewarding to learn about the community’s culture and the company can contribute to its development. “The success of these developments will last far longer than my tenure there.” Ramshaw concurred, noting that Minera Alamos’ mines have had a beneficial impact on their surroundings. “We can change lives of our communities by developing national resources rather than only creating a good impact for shareholders,” he pointed out.
For Kang, utilizing one’s resources effectively is also key for every aspect of the company. “I feel like it has been more of a team effort, rather than something one person has done,” Kang said about the company’s trajectory from a grassroots private company to a publicly listed one with a great resource discovery under its belt.
Regarding good and bad decisions made in 2020, MacLeod noted that financing was a prominent issue. "Raising capital was a major challenge at the beginning of 2020. Financers in New York and Toronto thought we were too early," he said. As a result, MacLeod had to guide the company through rough times. Not long after, the company raised US$8 million, which confirmed the company’s value. Even though more money could have been raised, MacLeod decided that the risk of share dilution was not worth it, especially since the amount raised met the expectations. “Our metallurgical testing is on the way as part of our PEA. Our objective is to secure full project financing through PEA,” MacLeod said.
For Simpson, staying on course proved beneficial as well. “Orla’s decision to continue advancing our projects through a challenging year was the best decision we have made.” Simpson said company members had to trust that their EPC investments in Mexico would blossom in 2020 and ultimately, they did, once permits arrived. When asked whether higher gold prices would have made the development process go faster, Simpson pointed out that the company had good margins already and was moving swiftly without working too hurriedly. However, with production coming near, the company will face a new situation. “As we transition from construction to production in 2021, we can assume stakeholder expectations will change,” Simpson said.
Ramshaw said he already had both permitting and financing in place. “Permitting is great in Mexico,” he added. By getting these crucial benchmarks ready in early 2020, construction of the Alamos mine was possible, thanks to the technical team’s focused efforts. “We counted a number of business interruptions and delays that impacted our exploration program, as did everyone else,” noted Kang. Despite these delays, a calm approach allowed the company to still meet its exploration program in 2020.