Auryn Resources pursues world-class discoveries; the company has 7 active gold exploration projects (Canada and Peru) with high grade, oxide orebodies. Management owns 15% of the company; Goldcorp invested $40M and now owns 12.4% of Auryn Resources. The company is positioned for substantial growth with scalable deposits and the team at Auryn Resources has a tremendous record of past successes.
Globe 24-7 is a Human Resources Consulting firm that specialises in talent acquisition and human resources solutions for the global mining industry. Globe has been in operation for fifteen years and has staff in 15 countries servicing small, mid-tier and large-scale mining companies through its project recruitment, search, HR consulting and HR Systems divisions.
[Left: Ivan Bebek (Auryn Resources), Right: Luis Valente (Globe 24-7)]
Entering Q4 of 2018, Globe 24-7’s Luis Valente meets with Ivan Bebek – Executive Chairman and Director of Vancouver-based Auryn Resources Inc. (TSX: AUG, NYSE: AUG) – to discuss Mr. Bebek’s outlook on the mining marketplace and his vision for Auryn Resources.
Luis
Ivan, you are a mining entrepreneur and you have an incredible legacy of successes with your exploration assets – financing, advancing, and monetizing them. You played an instrumental role as President and CEO with Cayden Resources, a company which you co-founded, and which sold in 2014 to Agnico Eagle Mines for $205M. You have over 18 years experience in financing, foreign negotiations, and acquisitions in the mineral exploration industry. This is a tough history to beat; what is your vision now for Auryn Resources?
Ivan
Luis, we designed a majors exploration portfolio in a junior to try and solve the pipeline challenge which majors are experiencing for growth. The scale of most of our projects is similar to that of a Newmont portfolio. Goldcorp made an investment of approximately $40M into our company because of the scale of projects that we are focusing on. We are exploration based; we are looking to find projects in places that have not yet been drilled before, and which are in safe jurisdictions. We feel that all the easy deposits in geopolitically safe regions have been found globally. We are in Northern Canada as well as Southern Peru with both early and advanced stage exploration.
Luis
Can you describe your team and the work that has been going on?
Ivan
During the market downturn, we hired much of Newmont’s global exploration team. This doesn’t guarantee success, but it does guarantee a high quality of work. Our data is worth more than your typical junior. This is for 2 reasons: the strict controls and discipline around our data, and the copious amounts of data/samples we take when screening for ounces. For example, at our 300km long Committee Bay project, we have sampled from one end to the other; if you tried to walk everything we did in a straight line it would be the equivalent of walking from Vancouver to Montreal in an 8-week time-period.
[Sampling work at the Committee Bay Project, Canada – Photo courtesy of Auryn Resources]
Luis
Is it a challenge to find investors?
Ivan
We have used our credibility from previous successes in financing our company; we have never had an issue raising money.
Luis
You operate with a strong social license. Can you share an example of your community engagement?
Ivan
Socially, we treat assets as if they were a mine from day one. For example, in Peru at Huilacollo, the first day we got that project we started working with the community. Before we took one sample or accessed the ground, we were successful in bringing in an $850,000 water program for irrigation for farming needs; this was up in the Andes. We were paying about $200,000 of that over four years and NGO’s came in and supported the rest. We try to work with cooperative, supportive groups to move sustainable operations to the communities we go to. Whether you find a mine or not, you are going to have an impact.
Luis
How have things been going at the Denver Gold Conference?
Ivan
Things are going well. We have a number of projects that peak interest; especially at the mid-tier level. This is a good place to do business.
Luis
What are investors looking for today in a miner?
Ivan
Growth! The last 7 years of downturn curtailed a lot of balance sheets. There has been a lot of deflation in exploration and perceived unnecessary costs to tighten balance sheets. Majors have divested many of their non-core assets and eliminated growth. We have picked up some of those assets.
For an exploration company, growth comes from a project pipeline. A discovery is worth way more than a Feasibility, Development, or PEA study. It is the best return an investor can get. The last 5M ounce mine discovered was 5 years ago – this point comes to mind when you ask me what investors are looking for – discovery and growth.
Luis
Switching to an HR perspective, what do you see as the gap in talent in the mining industry?
Ivan
There is a difference in the age demographic across almost all fields. For miners in their 60’s, this may be their last decade of pushing and building these companies. It then drops down to mining executives in their 40’s. There is very little between the 40’s and 60’s demographic. There are a lot of geologists, but not as many going to school for it because the sector has been down for about seven years and the entry jobs are just not there. On the HR side, finding good people with the ability to raise money is a challenge.
Luis
Over the next 5 years, do you see a disruption with technology? How will technological change effect the talent needed in industry and the way you structure your teams?
Ivan
There is a lot of disruptive technology that is being created and tested; we are doing some of it ourselves. We are working with AI platforms. For our Committee Bay Project, we have screened it with so many layers of data. However, the data still has to be collected physically. You can’t get rock samples across 300km without physically grabbing it and logging it – the information then goes into a data set. I don’t think technical disruption will replace people taking the samples. It might replace a few people processing the samples or the data though. We used drones over our entire belt so that we did not have to be there 12 months of the year; it is cold and when it snows in Nunavut, you can’t see the rocks, so the drone technology helps us. Technology is going to create a level of efficiency which has been lacking; there will be cost savings too. Because mining has such a physical aspect, there will always be a need to have a physical presence.
We have looked at projects with big personnel numbers and thought that we could do the projects with 10% of the staff; but we will always be balancing out the social impact regarding people in the local communities.
Over the next 10 years I foresee an advancement towards physical mining personnel being reduced. But I think there will still be a high demand for physical exploration. You have to touch, see, and map the rocks, and take the samples in exploration. I don’t think that that will go anywhere; but in the operations, I think we will see change.
Luis
What sets you apart from others and what have you done to enhance your appeal?
Ivan
We work as a flat-style management. We defined our leadership by responsibility, not remuneration. We are aggressive in a good way and we take big swings toward world-class discoveries. We have never had a problem financing, during both good times and downturns. We found a 5M ounce gold mine and sold an exploration project with 100 drill holes for $205M in the middle of a bear market. We also have a good following from shareholders globally. This all helps to set us apart and it enhances our appeal.
Luis
What is going to happen with Gold?
Ivan
As we approach 2021, I foresee $2,500/oz gold. We are approaching a supply cliff – no new mines are being found; debt is increasing as well. At $1,900/oz gold we saw some companies (majors) hit a bottleneck with little profitability. The bottlenecks are higher from an investors’ perspective. However, physical gold (deposits) do not have those bottlenecks. I think the natural investor would buy gold but they have detracted from gold altogether as they saw mining companies losing money. Sometimes the investing/equities market goes part in parcel with the physical gold market. If you are not making money on your equities because of the inflated cost and bottlenecks created in a rapidly rising gold market, then you may not run out and buy physical gold.
At Auryn, we are comfortable at the current metal prices; I can only dream about the valuations we will see at $2,500/oz gold prices. [smiling big]
Globe 24-7
Auryn Resources just announced high grade sampling results from their Sombrero project in southern Peru; 31.6 g/t gold and 5.25% copper. More news from Auryn Resources is available on their website at: www.aurynresources.com/news/2018/
[Some of the Sombrero Project landscape, Peru – Photo courtesy of Auryn Resources]
About Globe 24-7
Globe 24-7 (Globe) has been conducting human resources consulting and search assignments for local and international mining, power, manufacturing and energy companies around the world for fifteen years. Globe has offices in the major markets of the world to ensure consulting assignments and search campaigns are effectively managed at both site and corporate locations and has grown internationally to now service small, mid-tier and large-scale companies through its project recruitment, search, HR consulting and HR Systems divisions.
