A Great Deposit Isn’t Enough: What Makes a Mine Investable?

There are a lot of factors that come into play in terms of how expensive the project will be. What would be your go-to characteristics of a project that make you think, okay, yeah, that's worth pursuing?

We've talked about infrastructure. We've talked about accessibility.

You can have the most beautiful target, and if you need to spend hundreds of millions of dollars just to build your road, it's a factor.

It's not insurmountable, but it's a factor, and it impacts what level or what grade is mineable, depending on the cost of infrastructure required to get there.

If it's in the middle of an inaccessible mountain peak, access is difficult. It could impact it.

But if you look at Galore Creek as an example, they're going to be building a multi-kilometre tunnel through the mountain in order to get through to it.

So nothing is impossible.

I think a really important aspect of operating in British Columbia, in particular, is ensuring that the area of focus has the support of the First Nations.

In our particular case, we're working with the Tahltan Nation, and they're a very forward-looking group, very business-minded.

They also have a very clear, open dialogue with operators to say, "These are the zones where we are not comfortable. These are the historical heritage zones. These are the wildlife zones. These are the areas where we're not going to allow development."

And it's known up front.

So in the particular case of where we are at Trek South, we're in a very positive position because they've delineated that zone as a priority development zone.

You see areas in the Toodoggone to our north where some are in less desirable areas and some are in very positive areas.

I think investors need to take that into consideration and should be asking management about their understanding of go and no-go zones within the Golden Triangle, because not everything is going to be straightforward.

In our particular case, we know very clearly that where Trek is situated, we have the support of the Tahltan Nation to develop mining in that area.

So that might be the single most important aspect of risk mitigation when you're looking at companies as to which one to invest in.

Is it investable because it is developable?

Can you get to a point where the development of a mine can be seen?

You still need the data to support the development and all of the other components we're talking about: accessibility, whether the data makes sense, whether you have the resources, whether the grade is there.

It's a difficult business, and a lot of these factors need to line up in order for it to be successful and mineable.

But I think probably the single largest factor isn't necessarily an unknown.

It is very much known if you take the time to understand it, confidently establish those relationships, and know that you're in zones where the First Nations communities are supportive.

In our particular case, the Tahltan want you there, and that can be of massive importance.

And then if I apply that to my experience in Uganda, or Burkina Faso and Mali, or down in Brazil and Cambodia, all of those jurisdictions cover the gamut from the developed world to the developing world.

The local community has the ability to have a final say.

It can be a very positive relationship, or it can be a very confrontational relationship, and obviously you don't want the latter.

Since you have that experience working with African countries, what would be your understanding of whether a project is investable there or not, even outside of what the mineral resource looks like?

Because that's a big consideration, and we know a lot of unfortunate examples where large companies started developing a specific site and then political instability basically put a stop to it.

Yeah, it's a massive concern for the industry because the reality is that you have to go to the jurisdiction that has the target.

You can't move a gold mine.

It's interesting because I've always found that conversation with North American investors.

They can see less risk in operating in a Mexican environment than in an African environment.

If you talk to a European investor, they see great opportunity in an African environment and see the converse in the Mexican or South American environment.

As far as operating in jurisdictions where nationalization takes place, or there are insurrections, or you have horrible circumstances where violence comes into play, these are very real.

I would say that there are certain jurisdictions where my risk tolerance today versus 15 years ago is very different.

I have lots of wonderful stories and experiences to tell my son about when I was operating in Africa, and I'm not too sure I would be doing those today.

We have maybe a higher level of risk tolerance than the average individual, who might not necessarily understand what it would be like to go into a developing country like Burkina Faso and drive around from one village to the next and how to operate comfortably and safely.

At one time, you would have thought Burkina Faso would never fall prey to the insurgencies that were taking place around it.

Burkina Faso is not a safe place any longer in some cases.

So at the end of the day, West Africa changed.