How to Become a Millionaire by 30 in Junior Mining
A Canadian Wealth Creation Story
In my juvenile quest to become a millionaire before turning 30, I was losing hope just weeks before the milestone. Vancouver, my hometown, was a stark contrast: a haven for the wealthy but gloomy for the rest.
At 21, I ventured into web design, seeking success. But by 24, I was broke and adrift. Then, a book, "The Big Score" by Jacque McNish, changed my life.
The Big Score tells the story of a penny stock's ascent from 15 cents to $200 per share after a Canadian nickel discovery. Two of the main characters in the book, who actually built lavish estates on my grandparents' street, brought this story home for me.
Despite not knowing anything about finance or mining, I realised my edge was in building good websites. This led to my founding of CEO-CA, a community for junior mining investors. It filled a void in the penny stock information market.
The commodities sector, notorious for its cyclical nature, attracts investors at the worst times. I was one of them. Despite diving into junior mining in 2010, right at the peak, I remained determined to learn the ropes and come out the other side a winner.
After five years of fascinating experiences but little profit, I began to doubt my millionaire by 30 dreams.
But, an acquaintance from my childhood, Brian Paes-Braga, re-entered my life. He was an ambitious guy who knew how to make people feel good. He'd saved money from fast-food jobs to buy an apartment and had become a stockbroker.
Brian and I shared the same hero: mining entrepreneur Frank Giustra, one of my grandparents' neighbours. I had interviewed Frank a few years earlier. It went viral, and he was pleased.
Though Frank wasn't ready for a joint venture at that moment, he allowed me to stick around.
In 2015, our industry was four years into a slump. Brian, the friend who threw parties and had left his stock brokerage, was exploring technology ventures. Our paths converged, and we started spending time with Frank's circle of friends.
Then, an opportunity came knocking on Brian's door. The father of his high school friend was a mining prospector. He had staked claims next to North America's only lithium mine believing the lithium below extended onto his property.
But, the resource industry had been down for so long that people had forgotten its potential. Still, Brian's idea for a new lithium exploration company had promise.
Frank agreed to back him, and with innovative deal-making, we secured shares. Brian formed a private company with seven owners, including myself, investing $40,000 as a deposit to acquire the 1,640-acre NSP lithium property.
We then merged the private company with Royce Resources (ROY), an inactive public shell on the TSX-Venture exchange controlled by Frank that gave us our public listing. I received 550,000 ROY shares (with resale restrictions on a 3 year schedule) for an investment of less than $5,000 in the private co. ROY assumed our obligations to fulfil the option to acquire NSP.
ROY then raised $1.754 million at $0.15 per share, valuing it at $2.24 million pre-money. Looking back, the fact that ROY started with a low valuation and founders' complete focus gave investors a great opportunity. I invested an extra $37,500 for 225,000 shares in this round, for a total of 775,000 shares. Eighty-nine investors, mostly friends, wanted us to succeed.
In October 2015, just weeks from my 30th birthday, I pitched the story to CEO-CA subscribers.
Around this time, Brian reached out to Paul Matysek, a mining mogul known for multimillion-dollar deals in the lithium, potash, gold and uranium sectors.
Paul was on the hunt for new opportunities and saw the lithium market timing as favourable. He liked Frank and Brian's concept but wanted better assets. In a game changing moment for ROY, Paul agreed to join as executive chairman and steer its growth, leading to our rebranding as Lithium X (LIX).
The deal to go public was in progress when I celebrated my 30th birthday. I held stock in a promising new venture, but I still fell well short of my million dollar goal.
A few days later, Brian, Lucas Cahill, Jonathan Roth, Tim Oliver and I flew to Las Vegas to strategize. We visited Clayton Valley, home to North America's only lithium brine mining operation and LIX’s new property. During the drive, I confided in Brian, expressing my doubts about succeeding in the industry. In his unwavering optimism, he not only reassured me that prosperity awaited, but he firmly believed that with LIX, we were on the cusp of achieving that success. On site, we explored LIX’s ground (pictured above), tasted lithium-laden brines, and laughed a lot.
LIX started trading on November 30, 2015, at an impressive 40 cents. We watched the stock price closely in our shared office in Downtown Vancouver.
Days later, an interview about LIX on BNN TV got us cheering. A financing round raised $3.24 million at 30 cents per share. More financings followed at successively higher share prices.
In mid-January, we stuffed Frank’s private jet full of LIX investors and headed to Las Vegas. A limo ride with Paul, who wore a pink Lithium X hat, created a jovial atmosphere. We had arranged for vans to drive us to Clayton Valley when a well-heeled investor pre-empted the plan with private helicopters to transport us there. In a scene Paul describes as “Right out of Apocalypse Now," the tour touched down on the ground, feeling invincible.
But at the Vancouver Resource Investment Conference a week later, Brian and I were heckled by attendees who alleged Lithium X was a scam. We left the conference shaken, absolutely determined to prove the critics wrong.
LIX continued to expand in Clayton Valley, becoming the largest land claims holder with over 15,000 acres, nearly 10X bigger than when we started, helping the stock soar through $1.
Paul was determined to diversify LIX further. After extensive negotiation, he secured the Sal de los Angeles lithium (SDLA) deposit in Argentina for $8 million worth of LIX shares and future commitments. He thought it was a good project, close to his old one. LIX issued more shares at a much higher price to pay for it, which didn't dilute much and was good for early investors.
Six weeks later, LIX stock soared through $2 on enthusiasm for the new asset. Unexpectedly, we found ourselves in a rare junior mining bull market in spring 2016. And with Elon Musk declaring the world's need for lithium, a wave of copycat lithium ventures emerged.
LIX wasted no time in de-risking SDLA through drilling and studies, which sparked interest from potential suitors. A deal with POSCO fell apart, but Credit Suisse introduced a Chinese acquirer in 2017, who made a cash offer. On December 18, a $265 million, $2.61 per share sale was announced, a mere 25 months after Lithium X's inception.
The market initially doubted the deal and the stock dipped under $2 again in late February. To be honest, we weren’t sure it would close either. Brian, Lucas, and I were on a flight from Los Angeles to London in March 2018. The boys woke me up with the news that the entire $265 million wire had arrived in LIX’s bank account! Not one mini bottle of vodka on the Boeing 767 aeroplane survived the duration of the flight.
We landed in London on Brian's own 30th birthday, and the elation of the following 48 hours was unforgettable.
My initial millionaire by 30 goal might have slipped through my fingers, but it turned out to be a mere footnote in the story. A few months later while walking home it dawned on me, my LIX share position was worth close to $2 million. This was an astounding amount of money for a punk like me. I had to pinch myself to remember it was all real. With those newfound resources, I soon bought my first house, and life took a turn for the better in ways I could have never imagined.
From the helicopter to the limos and the high fives, you might be wondering how much work I actually did. While it’s true that we were extraordinarily lucky with the timing and the recruiting of Paul and his team who did the really heavy lifting, having an associate like Frank was no burden to bear either. He opened so many doors for us.
One of the many priceless benefits of the LIX experience was that I developed some self confidence - something I had been sorely lacking until then. I had this dream of being a big shot, but didn’t really believe it would happen.
This story taught me that fast success in junior mining is possible with some luck and an excellent team. Trends create opportunities, and smart deals can bring huge rewards.
Bottom line: getting rich is super fun, especially when it’s fast, and you’re doing it with good guys.
Clive Ashworth, John Rud, Lucas Cahill, Frank Giustra, Gord Keep, Paul Matysek, Bassam Moubarak, Will Randall, Eduardo Morales, Dale Johanssen, Jeff Zicherman, Jasvir Kaloti, Dan Kriznic, Harry Pokrandt, Rob McLeod, Robert Hirschberg, Jon Jones, Jon Roth, Tarik Elsaghir, Fabrice Taylor, James Stafford, Keith Schaefer, Daniel Ameduri, Nick Hodge, Mario Vetro, Carson Seabolt, David Duggan, Robert Sinn, CriticalInvestor and many others deserve immense credit for our success. My sincere appreciation to everyone who contributed to Lithium X and those who supported us along the way.