B.C. business leader Bryan Slusarchuk worked his way up from a golf caddy to a financier of major mining deals.
His biggest triumph began in the mining downturn of 2014, when Bryan and partners advanced $2 million (of an ultimate $15 million purchase price) for a gold mine in Papua New Guinea worth ~$500 million today. And there’s more - Bryan sees K92 Mining (TSXV:KNT) growing its high-grade gold resource to big leagues: 5 million ounces plus and annual production of 300,000-400,000 ounces, while maintaining industry leading costs.
When asked if he expects to ever find such good fortune again, Bryan’s response reflected an optimism that is common among successful resource executives. “I believe everyone gets 5 to 10 ‘once in a lifetime’ opportunities in their career,” he said in a recent CEO.CA Mentors Podcast that covered his career and portfolio of mining ventures.
As a teen during Expo ‘86 in Vancouver, Bryan brought home a full-size cardboard cutout of Ronald Reagan that inspired considerable teasing from his family. This unusual early interest in politics and also golf exposed Bryan to different careers in Canada’s resource industry. A few hard lessons as a young broker at Canaccord financing “Iguana’s” (entrepreneurs who say “I’m gonna do this, I’m gonna do that,” without ever executing) led him to start building his own companies.
Bryan is working to repeat the success of K92 in two new early stage ventures that he plans to list on the TSX-Venture exchange. These are:
- Fosterville South Exploration Ltd, focused on high-grade gold projects in Australia nearby and adjacent to Kirkland Lake’s Fosterville, the world’s highest grade and lowest cost gold mine (Approx $18 million valuation);
- Turmalina Metals Corp, building a high-grade copper gold portfolio in South America (Approx $25 million valuation).
Podcast topics include:
- K92 Mining inception, struggle, and future plans (00:01-18:07)
- Bryan’s youth and early career as a lumber trader and stock broker (18:07-29:09)
- Advice to young people considering careers in mining finance (27:27-30:32)
- The public venture capital industry and its challenges (30:33-36:03)
- How to be an effective promoter and handling criticism (36:26-44:54)
- New ventures he’s involved with (47:43-54:15)
- The Jim Slusarchuk Memorial Golf Tournament, honoring his late father, who passed away when Brian was 17 (57:00)
- Plus much more
Beyond his success as a venture capitalist, Bryan is an approachable entrepreneur with a big heart who has helped support CEO.CA from its earliest days. I appreciate him for these reasons and for sharing his story with us.
Disclaimer: Expectations discussed, especially those for K92 Mining, New Fosterville Exploration, and Turmalina Metals may not materialize. Bryan Slusarchuk is a shareholder in K92 Mining, and shareholder and officer in New Fosterville Exploration and Turmalina Metals. Tommy Humphreys is a shareholder in New Fosterville Exploration and Turmalina Metals. K92 Mining was an advertiser on CEO.CA in 2016.
Bryan Slusarchuk CEO.CA Mentors Podcast Transcript:
Tommy Humphreys: (00:01)
We first met 10 years ago at a TEDx conference where Bryan was speaking. I have since followed his adventures as a mining financier in frontier jurisdictions like Albania and Kyrgzystan. Bryan is perhaps best known for co-founding K92 Mining, a gold producer in Papua New Guinea. I used to joke about Bryan being eaten alive there, but he had the last laugh as the company today is valued at $500 million and widely considered to be one of the most promising gold producers around. Bryan is an approachable, strict smart venture capitalist and promoter, plus - backing him helped me pay for my first house. It is my pleasure to welcome back Bryan Slusarchukk to CEO.CA. How are you doing, Bryan?
Bryan Slusarchuk: (00:52)
Doing really well, Tommy. Thanks for having me on, and for those kind words in the introduction.
Tommy Humphreys: (00:59)
No problem. My pleasure. I want to discuss as much as possible today, but first I just have to ask you, how did you pay $250,000 for a mine with 250 million invested? What circumstances brought KNT together?
Bryan Slusarchuk: (01:16)
Well, out of the gate Tommy, is a little bit of background. I think it's important to remember the time period that we were negotiating on this. It was a Barrick asset. Barrick owned the asset for quite some time, but was very focused on the big regional perspective, the porphyry upside. Now due to market conditions and a whole bunch of other factors, they in fact did very little in terms of that big regional exploration, but that's why they bought the asset in the first place.
Bryan Slusarchuk: (01:52)
Barrick had purchased the asset for $140 million US, subsequently invested heavily on the upkeep of the asset and trying to get started. But they never really got to operate the mine and the mill in earnest for any prolonged period. The time period was difficult for Barrick. They announced that they would be divesting assets worldwide in order to lower a $13 billion debt. They were divesting from that region, that Australasian region in general.
For us as a small group of venture capital-focused investors and financiers, we looked at that asset a little bit differently. We looked at it as an opportunity to generate cash flow, because it's a very high-grade asset, the mill was constructed, there was an underground operation in place. We looked at the ability to generate cash flow quickly and then take a look at the bigger regional upside.
It really wasn't a brilliant negotiating team that put this together, it was just taking a well-known asset and taking a little bit of a different perspective, a different look at it in the right time. It was the right place, right time.
Tommy Humphreys: (03:21)
So obviously you had the advantage of Barrick divesting and needing to get out of assets, but it's really incredible looking back and at the time I felt as well just the structure that you guys put in place. Could you describe for the benefit of everyone, the structure that you used to acquire the asset, just so we can understand? I think it was staggered payments and Barrick had some greater upside, but you were able to get your hands on it quite cheaply, I recall. Do you mind describing that to us?
Bryan Slusarchuk: (03:53)
Sure. Absolutely, Tommy. Out of the gate, we negotiated the purchase of the asset for $2 million that went into escrow. $60 million of potential contingency payments down the road based on the amount of production over a 10 year period, we would be able to generate the amount of measured and indicated resource, we would be able to build up, et cetera. The $2 million went into escrow and the release from escrow from our group to Barrick occurred when the mining license renewal was in effect.
Bryan Slusarchuk: (04:35)
That process took a number of months, the mining license was renewed, and the 2 million left the escrow account and went to Barrick. We then owned that asset completely with the caveat that there could be some contingency payments up to $60 million in the future. Now, we progressed the project quite quickly, got it into cash flow, positive production with all of the typical hurdles and twists, and turns of a restart.
Bryan Slusarchuk: (05:12)
But once it was generating cash flow, we really went to work with the drill bit and started to develop quite an exceptional, quite an incredible high-grade resource. With excellent continuity, nice big wide veins and this was within the environment, the deposit called [Kora 00:05:30]. We started to look at the potential of those 60 million in contingency payments.
Bryan Slusarchuk: (05:36)
Went back to Barrick and the team, the negotiation led by a fellow named John Lewins, who's now the CEO of K92 and who has just done an exceptional job. John and the negotiating team, were then able to bring those $60 million of contingency payments down to 12.5. That has now been paid, so essentially we purchased this asset from Barrick, 100% for less than $15 million in total.
Bryan Slusarchuk: (06:11)
Really quite exceptional when you think about the fact that we're on track to do towards 80,000 ounces of production this year, with an average head grade near 20 grams per ton. That we're in the midst, actually almost finished an expansion ramp up, through which we will move into 120,000 ounces per annum plus of production starting next year.
Tommy Humphreys: (06:42)
How did you find financing when nobody believed in mining?
Bryan Slusarchuk: (06:47)
It's a great question, Tommy. It wasn't easy at the time to go out and finance this asset. Geologically, the asset looked great. We, after a lot of due diligence, became very comfortable with the jurisdiction and we knew that the exploration upside. The reason that Barrick owned this in the first place was very much intact and untested at that period of time.
Bryan Slusarchuk: (07:15)
We were able to attract financing on the back of the team that we put together, and I think that's just so important for anybody out there that's looking for financing and running into brick walls. The fact is that, there are a lot of great projects out there, that there are lots of projects with good geology, interesting.
Bryan Slusarchuk: (07:38)
I think that this Kainantu project is perhaps one of the most exciting gold projects in the world. But outside of that belief, we were able to initially finance it prior to starting to test them, unlock the [mastery 00:07:55] of Kainantu because of the team we put together.
Bryan Slusarchuk: (07:57)
We had a great team of technical guys, we had some mining engineers that we thought were just second to none. We had some great geologists that understood the upside at Kora and regionally. We also had some capital markets guys that were able to go start to unlock the value. With that combination, we were able to attract some very smart investors in the early days that were willing to take.
Bryan Slusarchuk: (08:29)
Let's face it, when I call it a gamble, any early stage mining investment is a gamble. At that point, these investors took a gamble that with this team we could unlock the value of the asset. In terms of how we raised the money, of course, we did it on the back of a wonderful high-grade mining environment. But most importantly, it was the team of guys that were put together to advance this.
Tommy Humphreys: (08:56)
What were the darkest days at K92, and how did you persevere through them?
Bryan Slusarchuk: (09:03)
For me personally, the darkest days were pre-going public, pre-IPO. When we had financing in place but we were moving along slowly on the ground, which is what happens when you undertake a restart of a mine. We didn't know that whether or not we could get this across the finish line in terms of the amount of financing that we would ultimately need to unlock the value. Because the market was so difficult at the time, nobody wanted to invest in gold.
Bryan Slusarchuk: (09:38)
That there were many sleepless nights, where I think we collectively wondered whether or not going so hard into a gold project at a time when the world didn't like gold projects, and maybe we were wrong. So always out of the gate on these things you do have, I think, some self-doubt. The darkest days for me were really trying to figure out if we were right or wrong in our assessment that we would be able to properly capitalize this.
Bryan Slusarchuk: (10:07)
Because one thing in my career that I've learned, Tommy, is that more projects fail because of poor capitalization than anything else. Under capitalizing these companies in mining is a dangerous, dangerous thing. Early on, I recognized that this would need capital to get it across the finish line. In the early days of production, we didn't necessarily have that capital.
Bryan Slusarchuk: (10:37)
It came together because of the fact we were able to attract great investors, great financiers, institutional retail, high net worth that stuck with us through all the growing pains of a mine restart, and that's paid off hugely for that group of investors. The original financing that was done including warrant coverage, those investors are now up 10 to 15 times their original capital investments.
Bryan Slusarchuk: (11:08)
It's paid off really well for the guys that believed in this project early, but there was a lot of doubt early on whether we would be able to properly capitalize the company.
Tommy Humphreys: (11:20)
I was one of those fortunate shareholders, Bryan, so thank you for that.
Bryan Slusarchuk: (11:24)
Well, thank you for believing in the team at the time.
Tommy Humphreys: (11:28)
I thought I was doing you a favor, but it turns out you were doing me one.
Bryan Slusarchuk: (11:31)
That's how it often works with favours in this business,they often end up the opposite of how they were originally intended.
Tommy Humphreys: (11:40)
When did you know that this thing was really going to take off and what did that feel like?
Bryan Slusarchuk: (11:48)
The first time that we did an institutional road show post the discovery of Kora. The extension of Kora, I should say, was a game changer for the company. K92 originally started to mine in a deposit area called Irumafimpa. Irumafimpa was narrow, not great continuity, it was very high-grade but difficult mining conditions. When the extension of Kora was discovered by the K92 team, it changed everything. Kora is wide, very high-grade, excellent continuity, great ground conditions.
Bryan Slusarchuk: (12:36)
It was the cash flow from Kora that really allowed us to start unlocking the potential of the K92 project. In that first institutional roadshow post our discovery of the Kora extension, I realized that things were going to be okay. The reason for that, Tommy, is that the smartest guys we sat down with technically and in terms of that capital markets experience understood right away that Kora was a game changer.
Bryan Slusarchuk: (13:10)
I realized that it wasn't just as recognizing how big Kora could become, but quite instantly the streets started to recognize how big Kora could become. Post the discovery of that Kora extension, everything changed for the company. It was after that first institutional roadshow that I realized that the market acceptance had changed.
Tommy Humphreys: (13:33)
Were you in Toronto at the time?
Bryan Slusarchuk: (13:36)
Yeah. I was on a Toronto and New York trip, we were able to head over to Europe shortly thereafter. The response from the smartest guys technically was exceptional. They understood what the discovery of the Kora extension meant. The average retail investor at that point didn't, and they wouldn't have reason to until more data started to flow. But there was no doubt that institutional investors with real technical bench-strength within their teams recognized what that could mean, and they were exactly right.
Bryan Slusarchuk: (14:19)
John Lewins and his team on site have done an incredible job quickly advancing Kora from that first discovery hole to the bulk sample, to the declaration of commercial production. That all happened at light speed. Subsequent to that, the resource has been growing. I think most people that follow the story know that we're targeting a high-grade resource of Kora by the end of the year in the neighborhood of 5 million ounces.
Bryan Slusarchuk: (14:50)
As these recent deep holes have shown outside of that 5 million ounce target area, this thing can get bigger and bigger yet. Where we're fortunate, is that we have positive cash flow. Unlike a lot of small companies, we can test that big, big, world-class size potential and great potential at Kora without having to now go back to the market. We're completely self-sufficient on site by nature of the cash that we're generating.
Tommy Humphreys: (15:22)
Your capital sufficiency now is probably why you've retired as president of K92, what do you think happens to the business moving forward?
Bryan Slusarchuk: (15:32)
Going forward, I think that John has the right idea and again, I just can't speak highly enough about John and his leadership. He's moving fast forward onsite to build the resource up, as fast as possible, as professionally as possible. At the same time, concurrently, undergoing a rapid expansion or production. This resource calculation that I mentioned that's upcoming towards the end of the year and moving into Q1 2020, that will form the basis for a study, a PEA on a third phase of expansion.
Bryan Slusarchuk: (16:13)
If Kora is at 5 million ounces at that point, I would anticipate they'll be looking at some sort of study contemplating 300 to 400,000 ounces per year of production. Remember, this in Q1 as an example of this year, of 2019, we were the third lowest or bottom five cost producers in the world. That was a testament to John and his team and the grade that we have, that we could do that.
Bryan Slusarchuk: (16:51)
Even during a development stage or growth stage ... And sustaining costs that we're amongst the lowest in the world, we had in that quarter a head grade in the neighborhood of 23.6 grams per ton gold. Not only is this big but these are high margin ounces. The plan and what comes next, I think the 100% focus of the company, build up the resource, show what that resource can mean in terms of a future expansion, concurrently build cash flow. People always ask me about M&A.
Bryan Slusarchuk: (17:30)
Obviously, if this is three, 400,000 ounces per annum, if it's 5 million ounces in growing of high-margin ounces, you're going to get approached, you're going to have a lot of those discussions. But I think what John is doing is correct, have blinders on and just fundamentally advance the company as fast as you can.
Bryan Slusarchuk: (17:51)
Because if there is an M&A transaction in the future, you want to make sure that you've pushed the envelope as much as possible onsite in terms of getting the biggest resource size and getting the biggest production profile that you can have for that point in time.
Tommy Humphreys: (18:08)
Well, congratulations Bryan. I want to just switch gears here and talk a bit about your upbringing. What were you like as a kid, were you a rich kid, what inspired you and how did you end up in this field?
Bryan Slusarchuk: (18:22)
Yeah. Not a rich kid at all Tommy, but I think a hard working kid. I was really involved in the community, involved from a young age in politics. My brother still jokes about it to this day, that when I went to Expo 86, I was 12 years old. People came back with all sorts of different fun stuff and I came back with a cardboard cutout of Ronald Reagan, that I could stick at the back of my room for the next several years.
Bryan Slusarchuk: (18:56)
It became a bit of a longstanding family joke. I was always very interested in business. I was curious about politics, curious about the community and making a difference. Very involved in golf is, I think we've talked about before. I worked at the golf course from I guess at 11, 12 years of age, cleaning clubs, I caddied, I was working in the pro shop throughout high school.
Bryan Slusarchuk: (19:27)
That was really interesting for me because through that experience, I got to meet all sorts of different people in business. My father was an educator, he was a high school principal and an elementary school principal. He was always very interested in business but wasn't in the business realm.
Bryan Slusarchuk: (19:47)
Through the golf course work that I did as a young kid, I got to meet people that were in all sorts of business and entrepreneurial endeavors. That really drove my curiosity, and I think is what led to my interest in the capital markets.
Tommy Humphreys: (20:06)
Other than your parents, who do you think had the single greatest impact on your life?
Bryan Slusarchuk: (20:11)
I think that other than my parents, I had an uncle that was very entrepreneurial and had a big impact on my life. Because of the fact, he ran his own business, I got to see him grow that business and really flourish with it. Lots of communication back and forth with him. Also, I had a grandfather that was just extremely interested in the markets and he in fact, we're celebrating his 95th birthday in a couple of weeks.
Bryan Slusarchuk: (20:45)
I know that when I'm there, the first several questions will be about K92, about various mining stocks. He really fostered that appetite or interest to learn more about the markets. Then I guess out of my early childhood, I also had a fellow that has since passed away. Who was a lumber trader, actually owned a large lumber manufacturing facility. Very entrepreneurial.
Bryan Slusarchuk: (21:20)
We became good friends, not only golf friends, but I did work for him. I was a stockbroker, he was my first client that I ever had. He was a real hard-driving guy. I think not taught me, but reinforced the need for hard work. Those few guys definitely had big influences.
Tommy Humphreys: (21:43)
Do you have a formal post-secondary education?
Bryan Slusarchuk: (21:48)
I went after post-secondary. I went for a couple of years, I got a diploma at college in the Fraser Valley, British Columbia. I then went and did my Canadian securities course, did the professional financial planning course. But also I think learned a lot, initially as a young guy in my 20s, doing a bit of lumber trading.
Bryan Slusarchuk: (22:13)
I'll tell you, it sets you up well for the stock market because it's a cutthroat business and it's a business that you have to really think on your feet a whole lot. Post that, is where I left and became a broker and started out as a broker in my 20s. Was exclusively focused on the natural resource space, mainly mining with a little bit of forestry in the mix.
Bryan Slusarchuk: (22:44)
If you're a broker or entrepreneurial broker I should say, and you're from British Columbia, you usually or at least in those days, you gravitated towards the mining business. That's certainly what I did, and then learned, I think a lot of great lessons of what to do and not to do from some of the early mining promoters/company operators that I helped to finance.
Tommy Humphreys: (23:16)
What would you say stands out most from your experience as a broker at Canaccord?
Bryan Slusarchuk: (23:22)
I think as a broker, what stood out most is that you want to back good groups that have track records of success. Because anybody can sit in a board room or a lot of people can sit in a board room, give a good presentation, talk about what they're going to do. As one of my friends in Australia told me they're called iguana; I'm going to do this, I'm going to do that and that. You don't necessarily ever see a track record of execution.
Bryan Slusarchuk: (23:58)
I learned early on, I think through some disappointments and investments that I made, that you want to see that there's some substance to the guys in terms of execution track record. I'm not a believer that you have to invest with guys that have only had monster billion dollars successes. But you want to invest with people that have shown they can execute technically on the ground, that they can advance a project and you always need a bit of luck in the ground of course. But if they do get lucky, that they're going to be competent enough to advance it.
Bryan Slusarchuk: (24:35)
I think that's something that happened with K92, is that of course, we were really fortunate when we had the discovery of the Kora extension. But we had the right group of people around that was able to take that good fortune or good luck in the ground and then run with it, and quickly advance it, execute it, and turn it from a concept into a real business.
Bryan Slusarchuk: (24:58)
As a broker, I learned again through successes and failures that you need to back people that have shown they can do it before.
Tommy Humphreys: (25:10)
I've had some exposure to some of the senior management team at Canaccord at the time you were there. I was just wondering, are there any Peter Brown or Paul Reynolds stories you can share with us?
Bryan Slusarchuk: (25:21)
Not a lot of stories. I worked with a small group of guys outside of the main centers, so not a whole lot of stories that I share. I think it's a great company and I just think they did an incredible job growing that from its venture capital roots to be a truly global powerhouse, and a company that has financed as many or more natural resource companies as any group out there.
Tommy Humphreys: (25:51)
Why did he leave?
Bryan Slusarchuk: (25:53)
I left for an opportunity that I saw geologically, that I wanted to chase and it came together with a group of people to do that. One of those people was Tookie Angus, and that was a guy I could have and probably should have mentioned earlier as having a big influence on my life. Tookie's just had an incredible career, incredible track record in the mining space, both as a lawyer, a company founder, a chairman on some boards of renown.
Bryan Slusarchuk: (26:28)
I left Canaccord to pursue a venture with Tookie. That for some time worked out well, it was pure exploration. We were able to fund it, get some very exciting [hold 00:26:44] but it never progressed because of conditions on the ground. But it was a project that I'm still quite proud of working on. I left Canaccord because I realized after my interaction with all these various groups, that if I had the right team around me, I could do the same thing that these guys were doing, that I was financing.
Bryan Slusarchuk: (27:09)
I wanted to have a bit more control over my destiny. As an investor, you write a check and then you're looking for updates. I wanted to be on the inside of a company, trying to really drive and transact, and build a business from the inside.
Tommy Humphreys: (27:27)
If you were starting your career again today, would the broker route be a good option?
Bryan Slusarchuk: (27:32)
I think the broker route's a great option in terms of learning the business, getting acquainted with different players in the business, getting to know some good geologists, some good engineers, some good bankers, et cetera. I do think that because of regulatory changes, the environment for brokers is different than it was in the past.
Bryan Slusarchuk: (27:58)
There's definitely across Canada more of a push, I think for brokers to become asset gatherers and focus on financial management, versus the transactional type broker that I was and that I liked being. I think that it's a tough call now how you enter the business and whether or not, the broker route's the right route.
Bryan Slusarchuk: (28:27)
I do think that another route, if you get involved with the right group is coming on internal, in an investor relations capacity, learning corporate development and moving that route through the business. I would say that both are good routes. But depending on everybody's outcome that they desire in terms of what type of business person they want to be down the road, likely some differences there that they would need to consider.
Tommy Humphreys: (28:58)
Just speaking generally, what advice would you give a young person with regards to building wealth in their career?
Bryan Slusarchuk: (29:04)
I would say that early on, it's about building and creating wealth. You're going to have to take some risks; career risks, professional risks early on and expose yourself to some wins. Once you have some wins under your belt, that growth of capital becomes a balancing act with preservation of capital and management of that capital.
Bryan Slusarchuk: (29:34)
In terms of how a young person comes in and creates wealth, I think not only is it hard work and striving to be curious, and learn as much about the business. But it's also important to build up a small network of people you trust from different disciplines and different strengths than you have. As you're looking to build with a team around you, make sure that it's not five people and you all have the exact same strengths.
Bryan Slusarchuk: (30:05)
Which I think is something that we all fall into once in a while. If you're going to be in this business, you need some good people in capital markets around you and banking around you. You need some great brokers around you. You need some great geologists and engineers around you. You need some good accounting and legal advice around you. My advice would be to surround yourself and interact with people who have different strengths than you do.
Tommy Humphreys: (30:33)
Public venture capital, how does it work and what type of projects is it suited towards?
Bryan Slusarchuk: (30:39)
I think that the mining business in that realm or within that realm, when do you go public or why do you need the public markets, why do you need venture capital within the public markets? There are a few reasons. One is, an obscurely exploration program. You want to share the risk, you're going to share reward but exploration is very high-risk, the potential rewards are huge.
Bryan Slusarchuk: (31:11)
But there aren't that many people that I know, that would go take consistently three, four or $5 million drill hole risks on their own. It makes sense to pull resources with other people, share that risk, share the potential reward. For exploration, I think that there's a huge function for public capital markets and venture capital within those markets. There's also the other side of the coin.
Bryan Slusarchuk: (31:43)
Established company doing well, do you go public, do you seek out venture capital to expand, or do you continue to organically grow? I think there are so many different factors for each business organization, each business owner to consider in that situation. But there's no doubt in my mind that in general, the biggest bang for the buck for owners of entities in the resource space, is going public.
Bryan Slusarchuk: (32:15)
It's a way to monetize your business, it's a way to de-risk your business. It's a way to smooth-out the swings in the commodity space to some degree, versus being privately funding and self-funding. I think that each business has to look at that on a case by case basis. But there's no doubt in my mind that anything with an exploration component to it requires venture capital.
Bryan Slusarchuk: (32:45)
It would be very rare that I would recommend people taking big parts of their net worth and betting that on a single drill hole, or a series of drill holes. Public markets, venture capital within this space suits that just perfectly.
Tommy Humphreys: (33:02)
What have been your biggest blunders in venture capital and what have you learned from them?
Bryan Slusarchuk: (33:07)
Yeah. The biggest blunders in venture capital, I think is being non-involved in different investments. I see this, it's a common occurrence for people in our industry. Is that things are going well, when the markets are good, you do generate a lot of cash flow. I think that when things are going well and you are generating a lot of cash flow, sometimes it's easy to get lazy with investments.
Bryan Slusarchuk: (33:37)
Make investments with groups who you have an acquaintance with, you know and you're taking a so-called pants-on an idea that they have in exploration or in the resource space, and you're not doing enough due diligence. Part of the reason I think is laziness. But part of the reason is; in those periods of time, we all get busy with our own stuff. If you have hours and hours of time on your hands during the day, you can conduct quite good due diligence on a project.
Bryan Slusarchuk: (34:11)
If you're tight because you're a busy person with your own business interests, with your own companies you're running and you don't have sufficient time or the team around you to do due diligence, I would say stay focused on your own endeavors. I think in the past, I have invested outside of my own businesses or businesses that I'm principal in without doing enough due diligence.
Bryan Slusarchuk: (34:42)
Over the years, I've learned to do less and less of that. Now, I am just extremely select in the companies that I'll invest in personally outside of my own group.
Tommy Humphreys: (34:56)
Why would you say is the toughest part of your job?
Bryan Slusarchuk: (35:00)
The toughest part of the job is just maintaining the right team of people around. The reason that I say that is that, you put together a great team for a single project or you're working with like-minded people. As that project becomes successful, people do want to go out, do their own things. People do have different ideas about what they want to do next. How do you keep the core group of people around that make things happen?
Bryan Slusarchuk: (35:33)
I've been fortunate that I've worked together with four or five people quite consistently over a period of several years. We're on boards together, we finance things together, look at project generation together, and it's finding that group and then keeping it together. The biggest challenge is, how do you keep that group of people that have created some sort of magic or execution in the past?
Bryan Slusarchuk: (36:04)
How do you keep them together for the next deal and to continue to look at stuff? You're never going to have a complete replicate of project board, the team on the ground, geology from project to project. But I think it's helpful to keep things as consistent as possible in terms of the team.
Tommy Humphreys: (36:26)
Obviously the more liquid your stock, the easier it is to acquire other projects and raise money. But if your pre-results or pre-revenue is very hard to get attention to your story, especially without a track record. I'm wondering, what do you think are the keys to honest or ethical stock promotion from your perspective?
Bryan Slusarchuk: (36:47)
I think it's awareness work that does two things. One is; you need a good institutional base of shareholders on every situation. The reason that I believe that, is that institutional shareholders, for the most part, the right ones have a longer time horizon than the average retail investor will withstand some of the cyclical downs or individual downs with your company during tough times, versus the retail investor.
Bryan Slusarchuk: (37:23)
You need that base, that core group, that sticky money in the deal that is there for the big out-sized returns. If a fund, that's a $500 million fund has $2 million invested in your company, they're not there to trade it for 10 to 15%. They're likely there for the chance, the opportunity, the high risk, high reward pond. They get a big out-sized 10X, 15X return that can then have ... For minor exposure, can have a material effect on the performance of their fund within a specified time.
Bryan Slusarchuk: (38:05)
You need that core. Post that or with that I guess, is a better way of saying it, you need to have broad retail awareness. In the old days, people phoned their broker for advice and their broker would give them two or three ideas, and that was the source of advice they would get in terms of these venture names. Well, now that's not happening for a number of reasons. In part, because so many people trade online, they manage own portfolios of investments via online trading, et cetera, the discount brokers.
Bryan Slusarchuk: (38:41)
You need to reach them in a broader way. I think being present on sites like yours, Tommy, the CEO.CA site. Being present and getting the story in front of newsletter writers that want to take some interest, you need just to have a broad audience following what you're doing. So that if you get results on the ground, it translates into buying. There's no doubt that retail buying is punchy when results come, good grades, there's punchy Bryan.
Bryan Slusarchuk: (39:14)
The combination of that type of active investor along with a base of sticky institutional investors, therefore, out-sized returns. To me, that makes sense. At the same time, I think you've got to do the traditional stuff; you've got to jump on the plane, meet with institutional investors, hit the major markets, try to discover some other markets. I always have respect for a CEO when I run into him at the airport or her at the airport.
Bryan Slusarchuk: (39:43)
I see that they're going somewhere in the Midwest or the United States, or the South, or some town in Europe that I haven't heard of. Because they're out there reaching out to pools of capital that don't get that much exposure to Canadian resource entities. It's hard work, it's not always a lot of fun but they'll be out there constantly telling your story. So that when good things do happen on the ground, there are a lot of people listening from both the institutional world and the retail world.
Tommy Humphreys: (40:17)
How do you handle stress and criticism?
Bryan Slusarchuk: (40:20)
Well, not well. I think at the end of the day, there are always going to be people critical of a business plan. That's part of fact of life when you're a public company. When you're a public company, you have thousands of owners. I think that it's great that people are critical, it's great that people question what the public company's doing. In K92, we've had an incredible amount of interaction with shareholders over the past few years.
Bryan Slusarchuk: (40:58)
Very supportive of what's going on, on the ground and the business plan, and sometimes critical of it, and people have differences of opinion. I've gone into meetings where we've had investors want us to get out and chase the big porphyry targets. Then you'll walk 10 minutes down the street to your next meeting and the investor will tell you to ignore the porphyry targets and concentrate on Kora resource growth.
Bryan Slusarchuk: (41:24)
Then you'll have somebody say, "Well, resource growth isn't that important, concentrate on ramping the production." Well, what these investors are saying by giving that criticism advice opinion is that they care, and they care because they're owners of the company. I think that anybody that gets involved with a public company has to be cognizant of the fact that you're going from being an individual owner or a family owner of something, to having thousands of co-owners with you.
Bryan Slusarchuk: (41:58)
I think criticism in that regard is great. I don't get too flustered by criticism of a company and how it's executed in a business plan. As long as it's well founded, there's good discussion about it. Let's recognize, everybody has differences of opinion. We're hiring the management as co-owners to execute the business plan. The fact is, if you don't like the business plan, you can convey it to them, work with them on it, get your opinion across.
Bryan Slusarchuk: (42:29)
At the end of the day, another beauty about the public market is, if you really feel that you're at odds with how a particular group is executing on the ground, you can vote with your shares and exit the name and move to a group that's more aligned with how you think strategically should execute. As far as criticism on different public companies, I don't take it to any degree is a negative. I think we're all co-owners.
Bryan Slusarchuk: (42:59)
When I'm a shareholder in something that I'm not involved in, I offer my opinions all the time also. I think sometimes they appreciate it, sometimes they ignore but I accept that. I'm investing somewhere and it's not a private business.
Tommy Humphreys: (43:14)
Well, I think naysayers make a message travel farther and also the more critical they are of a message, the more important the readers think it is. I've found some positive in criticism myself. I'm wondering, have you found comfort in tough times from a daily habit, a sport, an activity or a spiritual pursuit. What do you do in your darkest hours?
Bryan Slusarchuk: (43:41)
Where I live, I'm 30 minutes or so from a ski mountain that I really like. Last year, I had a record for the number of days personally that I've skied in here. To me, when things are a real grind in the market or there's some sort of issue that's going on. There's nothing more than I like them to get up and ski, even if it's only for a few hours in the afternoon, on a weekday, or if it's a full day on a weekend.
Bryan Slusarchuk: (44:15)
I think there's nothing better than getting out there and you're out in the midst of not only beautiful scenery but it's a complete change from our day to day environment. I would think that along with being outdoors in general, is the biggest spiritual refresh that I can have. Quite often over the past couple of years, when things have been intensely busy, I will get up to the hill and get there for three or four hours and come back just completely recharged with also different perspective on things.
Tommy Humphreys: (44:55)
After the success of K92, what was one extravagance you rewarded yourself with?
Bryan Slusarchuk: (45:02)
What is one I rewarded myself with? Not much in terms of real extravagance, I bought some new golf clubs and I was quite happy with that. In these things, common goal in terms of good ideas. There's a lot of idea for this one, a idea for other. I'm a large shareholder of K92, I believe that the best days are ahead of it. Of course, the success was nice because we created a lot of wealth for shareholders.
Bryan Slusarchuk: (45:41)
I think that post a couple of years of not being away from the phone or the desk, or the computer for a minute, my wife and I and the kids went to Hawaii and enjoyed. I vividly remember that trip, because I actually had the phone off a few times. That was once things were well on its way and things we're going exceptionally well at Kora, but there been no real extravagances. Sometimes Tommy, the way I'm hitting these golf clubs, I think I shouldn't have bought them but I had.
Tommy Humphreys: (46:18)
Do you think you'll ever get an opportunity like K92 again in your career?
Bryan Slusarchuk: (46:24)
Absolutely. I think there's a great saying that somebody told me once, they said everybody gets five to 10 once in a lifetime opportunities. There's no doubt that Kainantu, the project, it's exceptional. To find that type of grade, that type of size potential, the ability to cash flow early, it's exceptional and it's unique.
Bryan Slusarchuk: (46:48)
I don't want to take anything away from just how unique it is, but there are a lot of unique projects out there that are exceptional. You've got to have the right team to execute and unlock the value. We haven't enough guys around that as these projects come up, we can unlock the value. There are a couple of new things that I'm working on right now that I'm just exceptionally excited about.
Bryan Slusarchuk: (47:13)
Everything's different. It's not the same package as K92, but there are beautiful things within any of these projects. The fact is, K92 has given us an incredible amount of deal flow. Because of the success with K92, we've been able to pick and choose from hundreds of deals we've been shown. That's why I'm really excited about these things that I'm working on now.
Tommy Humphreys: (47:43)
Why don't you tell us a bit about the new ventures, starting with new Fosterville? Why is it a good bet?
Bryan Slusarchuk: (47:49)
Sure. This project Fosterville South, it's a really unique situation. I think that as everybody out there knows that follows the gold space, Fosterville is the lowest cost and highest grade mine on the planet. Fosterville has driven just exceptional wealth creation for shareholders of Kirkland Lake Gold, who own Fosterville. It's a real special environment geologically.
Bryan Slusarchuk: (48:22)
Now, if you walked through Toronto, London, New York, a number of years ago and talked about Fosterville, not a whole lot was known about it. Yeah, it's really been in recent years that Fosterville has become such a topical situation. We were fortunate through our network to have a geologist who lives in the Fosterville area, has worked in the area that knows the area inside out.
Bryan Slusarchuk: (48:51)
It's literally his backyard. He was able to, a couple of years ago before there was as much [inaudible 00:49:00] Fosterville as there is today. A couple of years ago, started to put together a land package. We've now acquired three separate projects in this region, including a large historically producing asset that's directly South and it joins Kirkland Lake's Fosterville tenements.
Bryan Slusarchuk: (49:24)
The three projects that we have in the region have all had historic production, including some small scale production, North of 50 grams per ton. One of the other projects has production North of 20 grams per ton, so exceptional grades. One of the other fellows that we worked closely with, Doug Kirwin, Australian geologist of real renown. Douglas Taylor wins the award winner, credited with leading the discovery team at [inaudible 00:49:54].
Bryan Slusarchuk: (49:55)
Doug looked at this series of projects for us from a technical perspective and came back to me and said, "This is a lot more than closology. This is exciting. Not only because these projects are adjacent to Fosterville or around the Fosterville, but geologically they have huge merits." I couldn't be more excited about that. A fellow [crosstalk 00:50:21].
Tommy Humphreys: (50:22)
Sorry. What is the valuation approximately and when do you expect this to be a public entity? I know you can't probably make promises about that, but just curious for context.
Bryan Slusarchuk: (50:32)
Yeah. It's private right now. We've just done a round, that was significantly oversubscribed for $6 million at 40 cents. We'll come out of the gate, so fully diluted with 45 million shares. That's a sub, in about $20 million cap, we're working towards advancing it to a public status now. For that $6 million of availability, Tommy, I think we had North of 25 million in orders and we're really pleased with the institutional adoption on this.
Bryan Slusarchuk: (51:16)
The demand institutionally was just incredible after guys did a deep dive on the assets. Tough to say exactly when it goes public, I would hope in the next four to five months.
Tommy Humphreys: (51:33)
Just moving to South America, you created a Peruvian copper and gold exploration company called Turmalina last year. Could you tell us about it and how you're going to make that a success?
Bryan Slusarchuk: (51:44)
Yeah. Turmalina Metals again, a private company. We did the last raise for $7 million at 50 cents. Again, formatically oversubscribed North of 25, $30 million in orders for that. Great institutional adoption on that. That company is working at advancing projects in Peru, Argentina and potentially Chile. The first project in Argentina [inaudible 00:52:14] has been active on, we anticipate [Assays Post 00:52:18] coming to trade publicly.
Bryan Slusarchuk: (52:21)
We're waiting for that public trade date. Incredible team behind that and we're looking at Turmalina branches that have often been overlooked. Our project in Argentina is one of the highest grade Turmalina branches ever discovered. Again, fitting in with the high grade theme. The CEO of Turmalina is Dr. Rohan Wolfe. I was mentioning earlier, by the way, just before we digress. A fellow named James Hutton is the CEO of Fosterville South, incredible guy.
Bryan Slusarchuk: (52:54)
But Rohan Wolfe and the team that he's putting out in South America, for the last two years, they've been scouring South America as we've been a private company looking for projects. They've looked through hundreds of potential projects and they've narrowed it down to three that they like. We're going public off the back of two of these projects and really exceptional grade.
Tommy Humphreys: (53:17)
What's the valuation on Turmalina?
Bryan Slusarchuk: (53:22)
Fairly similar. 50 million shares out as we go public and the last raise was done at 50 cents. So approximately $25 million.
Tommy Humphreys: (53:32)
Well, we'll look forward to the both of those. [crosstalk 00:53:34], sorry, go ahead.
Bryan Slusarchuk: (53:37)
Sorry, Tommy. There's a big K92 crossover there with Turmalina. I've come on as president of Turmalina. John Lewins who's the CEO of K92, has come on as an advisor to Turmalina. Mark Eaton who's one of the founding directors of K92, is on Turmalina. As we advance that, we'll have some great advice around the entity. Again, the grades are exceptional but as I mentioned earlier, I think it's all about team and we've got just an incredible team. That we're really blessed in terms of the team we have at Turmalina.
Tommy Humphreys: (54:16)
Just a few more questions, while I've got you. What personality traits have served you well in the venture capital industry?
Bryan Slusarchuk: (54:22)
I think, being curious. A curious guy and when I sit down to learn about a project, I'll ask dozens of questions. I'll want to know what the geologists on site think. I want to know what the engineers think. I want to know what the bankers like and don't like about it. I think being curious is important. At the same time, tenacity. Anybody that's done well in this business knows things never go straight up. K92 was a good example. We had twists and turns as any mining restart does.
Bryan Slusarchuk: (55:01)
It's easy in this business, I think to just throw in the towel at some points. I think that anybody that wants to be successful in this business has to be tenacious, has to be able to move through adversity. We were talking earlier, Tommy, about criticism. You have to be able to learn not to take it too personally, know that people have different opinions and just keep persevering, pushing forward and doing what you think is best for the project.
Tommy Humphreys: (55:32)
Can you describe a time when you were the recipient of an unusual kindness?
Bryan Slusarchuk: (55:38)
Recipient of an unusual kindness. On my first trip to Papua New Guinea, which is not a wealthy place per capita, they're emerging but there is still poverty there, et cetera. I was at a small airport and as with any first trip to a place, you're looking around and trying to get a feel for things. I had walked out of the airport terminal, was waiting for a drive or a driver that wasn't there yet.
Bryan Slusarchuk: (56:17)
There's thousands of people around and it was quite chaotic. Anyways, I see a guy running at me and I think, "Oh no, what did I do wrong, what was it?" What he had, was he had my ATM card that I had left in the machine a couple of minutes before. Yeah, and given where the ATM was, he must've spent 10 minutes finding me. Just unbelievable in terms of the perception we sometimes have of these emerging places.
Bryan Slusarchuk: (56:50)
You think that there's something there that likely wouldn't have been returned in any North American city. The guy went out of his way to get it to me. I thought it was great.
Tommy Humphreys: (57:00)
It's quite a metaphor because Papua New Guinea's turned into a bit of an ATM machine for you. Tell me what is the James Slusarchuk Memorial golf tournament?
Bryan Slusarchuk: (57:09)
That's a tournament that we organized now for more than 20 years. My dad, as I mentioned earlier, was an educator in the community. Very involved as a volunteer in youth sports, died of a heart attack at a young age. Quite, quite tragically given the age. The tournament's something we put on every year to raise funds for a scholarship. The scholarship is administered by what's called the Mission Foundation.
Bryan Slusarchuk: (57:39)
There's enough capital in it, that the interest alone from the foundation will spit-out multiple scholarships every year in perpetuity. The tournament's not only a way to raise funds for that scholarship, but also a way to get people together, talk about volunteering, talk about community. It's also a great time. We have a few laughs about old times and it's a real mix of people.
Bryan Slusarchuk: (58:09)
People from my life currently that I do business with, people that I went to school as a young kid with, and also friends of my dad's and former coworkers. Yeah, it's a special day every year and we're able to raise a lot of money for good cause in the process.
Tommy Humphreys: (58:30)
How old were you when your dad passed away?
Bryan Slusarchuk: (58:32)
I was 17.
Tommy Humphreys: (58:34)
Wow, it must've-
Bryan Slusarchuk: (58:36)
Yeah, it was a young age and all of a sudden, I think it accelerates to a couple of things in terms of what you think or perceive you have to do or that you have to quickly move into adulthood. It definitely did that, and I think I did that. Also now, we look back with a lot of, we feel that we're very blessed to have had him as a father. That tournament is one example of something we do every year to try to keep the memories alive of what was a really great guy.
Tommy Humphreys: (59:20)
I'm sure he'd be proud of you, Bryan. But if he was looking down, what do you think between you and Jim, would you collectively considered one thing you should change about yourself?
Bryan Slusarchuk: (59:33)
I should probably start to be a bit more healthy here, Tommy. I've gained a bit of weight in the recent years. I blame it on travel and blame it on everything else, but I know that's an excuse. With that, I think that just starting to care of myself a little bit better in terms of health. I've done that but at the same time, I mentioned skiing earlier. I've got to admit the ski jacket was a little tight, [inaudible 01:00:06] of the season. I'm going in the right direction now, but you can check back with me in a few months on how that's going.
Tommy Humphreys: (01:00:14)
Probably, I will. We can connect on that offline, we share that journey. Finally, Bryan, for a last question, what is your definition of a good man?
Bryan Slusarchuk: (01:00:23)
A good man, I think, a man that's honest. That tells it like it is even when it's not something that's popular. That stays true to himself even when it's not always the easiest thing to do. I guess in a snippet, somebody that moves forward doing what they believe is right even when it's not the easiest path.
Tommy Humphreys: (01:00:56)
Well, wonderful conversation. Great catching up with you, Bryan.
Bryan Slusarchuk: (01:01:00)
Great. Thanks a lot, Tommy.
Tommy Humphreys: (01:01:01)
Hope to see you soon.
Bryan Slusarchuk: (01:01:03)
Disclaimer: Nothing contained in the interview with Bryan Slusarchuk is intended to be investment or advice of any kind. All facts are to be verified by the reader. Expectations discussed, especially those for K92 Mining, New Fosterville Exploration, and Turmalina Metals may not materialize. Bryan Slusarchuk is a shareholder in K92 Mining, New Fosterville Exploration, and Turmalina Metals. Tommy Humphreys is a shareholder in New Fosterville Exploration and Turmalina Metals. Tommy Humphreys reserves the right to buy and sell securities in the companies mentioned without notice to readers. K92 Mining was an advertiser on CEO.CA in 2016. Mining stocks, especially those discussed in today’s interview, are very high risk propositions. Always do your own due diligence prior to making investment decisions.