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Vaughan: Welcome everyone to Vaughan discovers a new series dedicated to uncovering the people behind the handles in our community. I'm your host Christopher Vaughan. I'm the community moderator at CEO.CA and I post under the handle @Vaughan.
On the line today we have Fraser Laschinger. People mightn’t be familiar with Fraser but he is a reliable source of level headed, intelligent discussion on CEO.CA and posts under the handle @fl. He currently holds the CEO position at Canadian Orebodies Inc. (CORE:TSXV), a gold exploration company focused on a prospective land package near Hemlo, Ontario. At 35 years old, Fraser is an up and coming young actor in the junior resource industry.
Fraser welcome and thanks for joining me today.
Laschinger: Thanks Chris. Good to chat with you.
Vaughan: Could you share with listeners a little bit of your background and how you found your way into the junior mining industry?
Laschinger: Sure, I'm happy to. I guess I took a bit of a circuitous route to find myself in mineral exploration. I was always oddly drawn to mining. The first stock I ever bought was a mining stock. It was back in 2004 and I was about 19 at the time. I sold it a year later and I think I made $32.
As far as my career path goes, i’ll note I'm not a geologist, I've just kind of picked up enough along the way to follow along. I went to business school and after that worked at an alternative energy startup. That company blew up in spectacular fashion in the 2008 financial crisis so I went to work in equity research for an institutional investment dealer. That's where I got my first proper exposure to the junior mining business. I was on the special situations team there but one of the things we covered was junior phosphate and potash companies and I think that was the last time a real fertiliser boom happened.
I eventually got tired of being chained to the desk all day so I left the research world to help my friend Gordon McKinnon at Canadian Orebodies. That was back in 2011 and I've been doing it for a little over 8 year now.
Vaughan: Are you coming across many people your age in this space right now? It seems there's a dearth of younger people.
Laschinger: There is a dearth especially as far as technical teams go. There seems to mainly be a lot of people that are from an older generation still. There's a few notable people that are young and having a lot of success but I find that there's not a lot of people in our age bracket that are interested in mining, become geologists and actually stayed in the field. It's been a slog for the last ten years or so.
Vaughan: Well maybe if the market turns around that might change.
Laschinger: It might if people start making money again, I think that always helps.
Vaughan: Well it certainly helps from the investor base point of view.
Laschinger: Yes but it helps to recruit talent as well. People often deride management teams that grant themselves options, but if those options don't actually come to bear fruit they're not worth anything. It doesn't feed your family. To attract talent, people need to be making money.
Vaughan: You are currently CEO of Canadian Orebodies Inc. Could you give the elevator pitch for the company?
Laschinger: Sure. Canadian Orebodies is a TSX Venture listed company trading under the ticker CORE. We are the largest exploration claim holder in the Hemlo greenstone belt with about 310 sq/km of what we consider to be highly productive ground. Our flagship Pic project is a large low grade system with a known strike length of about 3000 metres. We also have a high grade quartz vein system over a strike length of 400 metres that we refer to as the Smoke Lake gold system.
We've been active on the property for about three years. Each year our regional exploration has led to the discovery of additional new areas of mineralization, which is something that we're pretty excited about. There are gold showings all over what we consider to be a pretty vast property. The focus of work this year was on constraining the geological boundaries of the Wire Lake gold system and the controls on higher grade mineralisation so we can more efficiently target high grade zones within that large tonnage low grade system. It's kind of the boring work but we believe we were successful in this work and we're looking forward to testing our thesis by drilling in 2020.
Finally, I think aside from what we consider to be a great property our biggest positive is that we're lucky to have very supportive shareholders, including Rob Cudney at Northfield Capital who owns just about 20%, O3 Mining which is our second largest shareholder at 12%, as well as a number of fairly well-known individuals on Bay Street.
It's a big property in a historic district. We've got lots and lots of smoke and we're hoping to find the fire now.
Vaughan: Those names in your investor base are significant. When you get this calibre of people joining in to chase after a good perspective property, people should take note in my opinion.
It should be said for those who are unaware, you assumed the CEO role at CORE due to the tragic passing of Gordon McKinnon, another young actor in the junior mining space.
I've been following CORE's story since the beginning in 2017 and I had the pleasure of sitting on in on a conference call with you and Mr. McKinnon back in February of 2017. Both Mr. McKinnon's passion for the company and the industry as a whole was evident. My condolences for your loss.
How is the company coping with such a profound loss in the management team?
Laschinger: First of all thank you. There is no point sugar coating it, so to be frank it has been difficult on both a professional and personal level. Gord and I had been close friends since meeting in university in 2002, and we’d worked together every day for 8 years, actually up to the day of the accident. On top of that, we always ran CORE as a lean company. We tried to save money on G&A to ensure we spent most of our funds on exploration - that meant we were the only two full time employees. He was passionate about mining exploration, and a wonderfully affable personality, but beyond that he was just a good person. It would be a huge understatement to simply say he is missed.
But we have to carry on and thankfully we have an experienced Board to lean on. I’m finally getting out from under the pile of my to-do list and getting focused on 2020. I will do my best to see out Gord's dream of exploration success near Hemlo, which was his father’s greatest discovery.
Vaughan: Thank you for sharing that with us.
Being a millennial CEO of a publicly traded company what pros and cons does your age bring?
Laschinger: Honestly I don't think age is a defining factor in very much except for perhaps experience. I don't notice the age thing as much anymore. Probably because I'm 35 now but generally feel like I'm getting old. That's likely the extended bear market speaking though.
There's brilliant people that are both young and old. I've heard people say anecdotally that millennials may be more apt to try things that are outside of the box. Honestly, I don't know how true that actually is.
I think it's always good to have new energy in anything. So people who haven't been doing it for 30 years they might be a little more enthused about it, they might not be as jaded or as stuck in in their opinions or ways of doing things. It's a benefit to bring fresh blood into something.
There are more younger folks in the business than there used to be. My age definitely drew a lot more looks when I was appointed CFO back in 2013 as I was 29 at the time. I believe that as your confidence grows in your own abilities which tends to come with age, you tend to not notice things like age difference as much.
Vaughan: Moving on to the topic of investing strategies, would you feel comfortable sharing with listeners what are some valuable components or factors you consider in your own due diligence process?
Laschinger: I think the biggest thing is actually doing your own due diligence. It's good to see others opinions and to read what's on CEO.CA and on Twitter where people are feeding you information, but it's really important that you do due diligence yourself to know what is fact and what is fiction.
As far as specific components go, I think the share structure and ownership registry is a grossly underrated factor. You need to know who owns the stock and what their goals and motivations are. If you're a buyer they are your partners, so the ideal scenario is a tight structure with large holders that can and are willing to support the stock in the market. That latter part is important because tight structures in isolation can gap in both directions. If you can have a large shareholder that is willing to have that bid that supports the stock, that really helps limit your downside while maintaining that upside momentum.
The second one would be read all the financial statements and especially the notes. You've got to know not only the cash balance, accounts payable, debt etc. but you really want to know what commitments the companies made. You need to know the amount and the date of property payments, or other payments that are to be made, especially if the company doesn't currently have sufficient funding to take care of it. You can get ahead by knowing that a company is going to go out and raise $5,000,000 dollars next year. You can ask yourself pertinent questions like: are they able to raise the funds required or are they going to lose their property?
Third I would say transparency by management is key. You need to know the management teams of companies you invest in. They should be willing to engage with you, answer questions, be upfront. Shareholders should never be afraid to call the office and talk. Personally, I'm happy to take a call from a shareholder at any time. I can't always answer specific questions that they might have if it's a disclosure issue for example, but you're always willing to have that conversation. I think people are often afraid of reaching out to the office.
On CEO.CA I think Brandon MacDonald at Fireweed Zinc ($FWZ) who posts under @Brandon, and Doug Ramshaw of Minera Alamos ($MAI) and Great Bear ($GBR) who posts under @TheGalvanizer, are terrific examples of transparency by management using social media sites. Admittedly I have room to improve on this front but this stems from the fact that until recently I'd been using CEO.CA for strictly personal use.
Another factor is that your do diligence process should give you a price where you'd like to enter and exit. That comes from my research background but both those prices can and should change as new information arises. You need to be cognizant that you can't always exit with a takeover as they rarely happen. Your initial goals should be both reasonable and attainable. We're biased and we want to see our picks win but don't try to diminish negative developments. On CEO.CA you'll see a lot of people complaining about bashing and things like that, but discussing negative developments doesn’t and shouldn’t qualify as bashing.
With experience I've become way less concerned with hitting the absolute bottoms and tops. If you truly like a story sometimes you need to be willing to buy the ask.
And lastly just two general points: 1) I'm very wary of chat room exuberance and things like email or promo blast, but I also don't trade on short timeframes; and 2) always hold some cash to be able to take advantage of market opportunities because they arise, especially in names that are somewhat illiquid.
Vaughan: Those are all great points Fraser. To your first point about actually doing your own due diligence and not just taking someone else’s opinion as your own, I use CEO.CA as a place to discover names I haven't heard of and then I'll go and do the work myself to really look into the company.
Laschinger: CEO.CA is a great place to see news aggregation too. I subscribe to a lot of the companies that I own and the companies that I'm interested in following, but if I'm using the index I can see every headline that comes up. That's how I discovered a lot of the names that I ended up getting interested in.
Vaughan: CEO.CA is tapped right into the newswire. So as soon as it hits the wire, it hits our channels.
Fraser thanks for your time, I'm not going to take any more of it as I know it's precious. Thanks for talking with me today, it's a pleasure to have you as a member of the CEO community. I look forward to reading your posts in the future and good luck with everything over at Canadian Orebodies.
Laschinger: My pleasure. Thanks so much.
Disclosure: Christopher Vaughan is a shareholder of Great Bear Resources ($GBR) only and is not a shareholder of any of the other companies mentioned in this interview. Christopher Vaughan reserves the right to buy any and all of the companies discussed in this interview without notice. This interview is for informational purposes only and all investors need to do their own research and due diligence.