With the launch of Abitibi Royalty Search, Abitibi Royalities CEO Ian Ball is looking to gain exposure to a large number of exploration prospects, with the idea that one or two might pay off in a big way.
You became the president of McEwen Mining at 31 and the CEO of Abitibi Royalties at 34. Can you describe your journey to where you are now and whether the mining industry is an attractive career choice for the upwardly mobile?
Mining isn’t for everyone. For all the success stories you hear about, there are many more failures that fly under the radar. When you look at the students that went through university during the resource boom, they are finding it very difficult to get a job and experience now. Why did I get into mining? I grew up with it. My parents had me investing in junior mining companies at the age of 5. Although a lot more fail than hit home runs, when you knock one out of the park the results can be astonishing. Just look at University Avenue in Toronto. We have the McEwen Centre for Regenerative Medicine, the Peter Munk Cardiac Centre, the Lassonde School of Engineering, the Rotman School of Management and up the street the Schulich School of Business. Each one of those institutions was the result of a significant discovery that offered the opportunity to give back to Canada in a very meaningful way. All except one derived a large portion of their wealth from the Goldstrike discovery in Nevada. One discovery! There are many examples like this in Canada.
About Abitibi Royalties
Abitibi Royalties’ stated objective is to capture the upside potential in the various stages of the mining sector, while limiting the risks related to the difficulties in assessing the rate of success accurately predicting the costs for exploration, development and mine operation.
Your stated goal is for Abitibi Royalties to be “the best gold company in the world”. What are the necessary steps to make that happen?
First, we need to look after the shareholders. This is about share price. It is not about growing the market capitalization. Second, we need a superior business model. Third, it’s important to protect the downside with cash flow and the upside through a world-class discovery. Fourth, study the history of the previous great gold companies when they started – American Barrick, Goldcorp and Franco-Nevada. What did they do differently? What was their competitive advantage? If you do the same as everyone else, don’t expect to get a different result.
Abitibi Royalties launched its Royalty Search in the summer of 2015. Can you discuss it and who it’s targeted to help?
The Abitibi Royalty Search is designed to help smaller exploration companies and prospectors. It is an online platform where people can upload their data in order for us to perform our review. We promise to come back within 48 hours with a yes or no answer. In this down market, many people are having a hard time finding capital to keep their properties in good standing. It was part of the market not being served by the larger royalty companies, because these types of deals don’t move the needle for them. However, it is part of the market where we wanted to focus, because exploration success is what drives growth, and we want exposure to that. We view these royalties as perpetual lottery tickets. The idea was to build a large portfolio of them – 25 to 30 initially – with the idea that one or two might be successful. Any new royalty we purchase either has to be early stage but with good geology, with prior exploration results and near an operating mine, or on an actual operating mine..
About Ian Ball
Title: CEO Abitibi Royalties
Family: Mother who lives just outside of Toronto and a sister in Vancouver.
Hobbies: Reading history or biographies (John F Kennedy and Howard Hughes, for example), staying active (gym, running, swimming), learning a little about architecture, the odd trip to somewhere new, but mostly focusing on building Abitibi Royalties.