Rock Bottom to The Big Score

My Mining Journey

I never expect to get choked up at the Vancouver Resource Investment Conference. Nor did I know what to talk about in my speech, because I hate facts and stuff. But I do love stories. This is mine.

Timestamps:

Personal Crisis 0:03
Mining Comes Calling 1:38
Million Dollar Question 2:29
Genesis of CEO-CA 3:16
REKT in the Klondike 4:06
Dilution Fatality 5:21 Lessons from an Icon 5:59
3 Keys of Mining Wealth Creation 7:40
Lessons from Willow Ufgood 9:22
10X Net Worth in 6 Months 10:29
Holding a 100 Bagger 11:23
Crypto Epiphany 12:20
Emptiness of Wealth 13:12
Why TheBigScore Now 14:36
Favourite Junior Miners Now 15:12
Final Thoughts, Choking up 16:30

Audio only link

Transcript:

Tommy Humphreys 00:03):

Six 10 Jervis Street in downtown Vancouver. This building was constructed in 1910. That's three years after the Vancouver Stock Exchange opened. The VSE traded about $650,000 of volume that year, but our story actually starts a hundred years later in the summer of 2010, and I live in the top left unit in the top left corner of that building. The last year and a half had been pretty hard for me. I had my business partner and I, we were doing web design and we made the common mistake of young people and took three years to file our first tax return. So we were behind with the CRA and my partner left and the business just hit a wall and ran out of money. But there was one thing that was keeping me going through that period, which was this beautiful, incredible woman that I was living with, and she was my north star at the time.

(01:03):

And I came home from one of my troubling days. And on the computer, which we shared on the desk, there was a Craigslist posting. And on that Craigslist posting was an apartment. And that's how I learned that she was moving out. I was devastated. I spent the next few months trying to get her back, and one day she told me that she found somebody new. And I was obviously crushed, but there was more. He lived in my building and beyond that, he lived on my floor in the unit next to me. And in that modest place, there were mice scurrying on the ground and I was broke and broken and I was so pissed. And I sat on my bed and I remember I said to myself, you're going to get rich in junior mining. I knew about the junior market growing up mostly because of all the fancy houses that came up in Vancouver. And it seemed like the only ways to get rich were in real estate development or junior mining stocks. My grandparents lived on this quiet street. This is in West Vancouver, and in my high school years, three of these six houses were constructed and they all all belonged to mining people. I said, that's interesting. But my parents were very negative about the junior market. They said, it's a dangerous place. It's full of scammers. You can be anything you want growing up except a mining promoter.

(02:29):

So I found myself at the January, 2011 VRIC. This is a year later, but I knew nothing. I was very insecure and had a lot to learn. One of the challenges was I never went to university. I never had geology or engineering background. I wasn't a CFA or a money manager or a broker or connected in this space. And I was trying to find out what's my edge. One of the many people I was seeking out advice from was a broker. And he said about the same thing, cynically to me. He said, how are you going to make it? And then he said, A line I'll never forget. He said, how do you beat chess Master Bobby Fisher? You play him in anything but chess.

(03:16):

So ceo.ca was born because my edge was making websites and I could do that. I wasn't brilliant at it, but I was good enough and I could talk to people. The top right version was the first site we launched in 2012, and the bottom right is the second, and the version on the left is what you see today. But I spent 2011 to 2016 just obsessively trying to learn about this market. And I interviewed people frantically. You'll never find a nicer lot of people than mining CEOs because they always need money and they're always looking for a new audience. So I made all these interviews and transcribe them. And between those years, I believe that I consumed tens of thousands of news releases. And I was slowly but surely getting the hang of how this thing worked. But there was some challenges. In 2013, I met this man, Eric r, he's no longer with us.

(04:13):

And I took a picture of this meeting because it was just so funny to me that I was like, I think I got to remember this. But Eric had the key ground in the Klondike gold rush area, and he said he had some very famous backers who were exciting. His market cap was like $8 million and he had a fresh $3 million treasury, and he threw these gold nuggets on the table. And in his adorable German accent, he said, I've solved the riddle, I've solved the riddle. And he pointed on the map and said that he's found the source of the Klondike Gold Rush. And I thought it was ridiculous, but at the same time I was like, this is a bad market. This is a cheap stock. There are big players. I put about 50% of my capital in the stock. It was 8 cents, and within three months it was a penny and a half.

(05:00):

Eric pivoted to a project in Portugal, which is a very nice time, a very nice place to explore if you're in your sixties and living on the shareholders and his family worked for the business, the money was gone. But Peter Tallman has cleaned up that company and continues to develop it today. But that was one of the lessons. This was another story where there was no chicanery involved, but there the top left of the screen, there was a 10 million market cap company with a very good project. And on the bottom right of the screen, there's a 10 million market cap company with a very good project. And what happened in the middle was those three years, the company had difficulty raising capital because commodity price didn't move and it had to raise money at successively lower prices. So the valuation stayed the same, but the shares increased by 10 x and that picture, that gravity is what deals in this space are facing unless they experience one of three things.

(05:59):

I met Mr. Telfer along the way. He was an amazing inspiration to me. He was a very slow starter, the last man to get into university, and he became a chartered accountant when he was in his mid forties. He went to work for Robert Friedland, but he was nervous about the job because Robert wanted him to run Vengold. It was a 300 million market cap gold exploration company in Venezuela that had never drilled a hole. The equivalent of that today would be like a billion market cap exploration company with no drilling. And Ian was nervous, but he wanted an opportunity. But he had the wherewithal to say to Robert, Robert, if I do this for you, I don't know if it's going to work. Can I get a little bit of exposure to the other things you're working on? And as luck would have it, VenGold never found any gold.

(06:43):

It pivoted to a.com startup and 10 years later went bankrupt. And Ian tried the whole 10 years to make it work. But one of those other projects that Friedland was working on, lucked into a nickel find called Voises Bay in Newfoundland. And his early shares saved his neck. And this shows to me that there's a randomness with discovery, and discovery is one of the holy grails of wealth creation in the space, but there's a randomness to it. And it only came from a portfolio, and he didn't know where it was going to come. Ian also at 55 years old, launched Wheaton River Minerals. We took it over and he had a view of higher gold prices. He and partner Frank Giustra. And through mergers and acquisitions, they increased the value of this $17 million shell to 22 billion US and five years they did it through acquisitions.

(07:30):

And this wasn't a discovery story. This was a story about getting bullish on the gold price at 300 bucks and having it run to a thousand and overpaying for acquisitions and moving aggressively. But if it's not a discovery, you need a sentiment change in the market and you need the commodity price to go up. Those are the two things. There's a third thing. This man is Daniel Ameduri, he's in the audience. And that third thing about this space, if there isn't a discovery, if the commodity price isn't going up, the only other thing that's affecting the share price is the supply and demand on the shares. There are 3000 pre-revenue issuers in Canada, and they're consuming capital to create wealth. And so they always need more money. And unfortunately, this space is not extremely strong at reaching the 6 billion people out there who might be interested in investing in this space.

(08:23):

We all focus on the 5,000 who are in here who've already heard 50 mining stories. So Daniel, he grew up with me in this space, came from California, and he's just been absolutely gifted at connecting Vancouver deals with bigger audiences. But promotion is just such a vital factor. The stock has to be a discovery, a commodity price, sentiment change or promotion. Otherwise, your chart is going to be like one of the ones that you experienced earlier. So marketing is vitally important, but it's also an opportunity because most of these issuers are very poor communicators. And if a better communicator can come and take over a story and that story can spread, it can make a major difference in the valuation of an early company, early stage company. Long-term market's a weighing machine, but short-term, it's a voting machine and your access to capital, it's all about how you promote.

(09:17):

And Daniel's the best at it. He charges accordingly. In 1988, this is one of my favorite movies, Willow Ofgood. So I'm struggling through this sector and trying to figure out my way. Willow was a farmer and he was like the village clown, basically. Nobody liked him. He had no respect, but he always wanted to be a sorcerer. And he got an opportunity to interview with the sorcerer and apply for a job. And in the movie, he was amongst the final three. And the sorcerer said, okay, the final test, he held his hand and he said, the power of the world is in which finger. And the first aspiring sorcerer touched this hand and the sorcerer said no. And then the next one touched this finger and the sorcerer said No. And Willow looked and he hesitated, and then he touched this finger and the sorcerer said, no apprentice this year.

(10:13):

And later, the apprentice put his arm around Willow and he said, why did you hesitate? What was your first thought? And Willow said, well, my first thought was it was my finger. And the sorcerer said, that's right. You've got to believe in yourself. In 2016, I found myself in the middle of a hurricane because in 2015 I was writing and participating, investing in the space. And that's the gold chart, the big chart. It moved from a 10 80 to 1400 in a few months. And the same time I was able to invest in a friend's startup, lithium exploration company right at the head of the green energy move. And within six months, I had 10 times my net worth. And it was just incredible to experience this miracle Telfer, who I talked about earlier. He describes money coming into this space as like a pouring a whiskey bottle into a shot glass. And this is what happened. And it's just a little blip on the TSXV chart in early 2016, but it was completely life-changing for me.

(11:15):

I was able to be around some incredible discoveries. This was nexgen. We were in the stock at 33 cents and 40 cents, and it's now $10.50. I sold at $2.60. This was great bear biggest discovery win. I think of the last five or six years. I had the stock at 15 cents. I sold it at 15 cents. But it taught me that I could be there. And even without having a lot of reason to be around by focusing on the space I was at the table in these early deals, there wasn't the information about the discovery when I sold, I needed the money. And I don't look at this chart with any animosity because even if I was there when the discovery, I would've sold it at $2.80 anyway. And who has the wherewithal to hold a stock from 15 cents to 30 bucks? Do you think you can do it?

(12:02):

I think the only way you really hold onto a discovery like that is if you are management or insider and you can't sell optically or if you're locked up or if you're rich enough that you can just let it ride. But fact is these things happen sometimes. And if you're in the space, you get to see them. In 2016, I just had this instinct, which was that I think these little mining stocks, they're just people projects in capital in a little Canadian public company. Why can't we do this for crypto? And this idea germinated into a company, and it was an absolute miracle for us because we tied up a Bitcoin and Ethereum mining operation and team in 2017 in the middle of a crypto euphoria. And the stock was an absolute juggernaut. It went from 2 cents a share to $6 down to 10 cents, up to $9.

(12:54):

It was an absolute roller coaster ride. But this little hunch was life-changing for me, and it gave me the financial success that I dreamed about that day in the apartment. But the reality was when I reached the financial goals that I had, I still had an emptiness feeling. And you get to the top of the mountain, you think you're climbing and you realize there's not much there. And I was very mixed up. Excuse me. So I met this guy. He reminded me of Lebowski. He was just super chill. He didn't drink white Russians. He actually didn't drink at all. And he was the first guy I met that had a cool, he had a good life and he didn't drink, and he was a good businessman. He said, I just want to be the kind of partner that I seek. I was really drawn to him. We spent a lot of time together. And then I asked him, I said, I think I might need some help getting sober. And fuck, excuse me, that was five years ago. And that was completely transformative for me.

(14:08):

So anyway, I found that financial success alone was not enough. And what I really needed was just sort of rework where my value system and that sort of brokenness inside that money alone can't satisfy. But anyway, now I'm a father of soon to be three girls and married happily. And I have this new websites called the big score.com, where I'm writing about stories that inspire me. I want to share what I learned. I want to entertain people. I really like the emotional side of stories and the transition that people make and wealth creation stories. So I have a YouTube channel and a Twitter page and the big score.com. And I really enjoy doing it. I do it for fun, and it gives me a reason to keep looking at all these press releases and to be in the space. So I encourage everybody to subscribe, and you might learn something there.

(15:12):

I'd be remiss not to talk about a couple of companies that I'm excited about. Aris Mining is chaired by Ian Telfer. I've made a large investment in Aris. This company has no dilution risk like a typical junior. It's a 500 million market cap. Canadian closer to 900 million with debt, has five incredible projects. It has close to his market cap and cash. It's cash flowing dramatically right now, I believe it's trading close to one times 2026 cashflow. And Aris is either going to be a consolidator of other mining companies and become a story like Mr. Telfer Wheaton River, or it will be consumed, I believe, because gold mining has to consolidate. And a company like Aris is an incredible place and no one cares. So it's cheap and it's come off in the last couple of weeks. And I like it. I'm on the board of advisors of Meridian Mining, an 80 million market cap company in Brazil that has a very compelling project and good people and have a large investment there.

(16:09):

This company has 8 million at the last quarter, but the biggest risk in this space is dilution. It's going to need a bit more capital, but very compelling project with a 10.6 month payback real people. So I volunteered to help them with some marketing work and haven't been super successful, as you can see in the share prices, 30 cents. So driving in this morning, I passed the six 10 Jervis, and I always look up at that building and think about that time. And I think my message is, if I can do it, anybody can do it. Excuse me. And the last thing at the end of Willow, he comes back to his town and he's the sorcerer. He always want to be, excuse me, it's a beautiful message about a little person realizing his dreams. In some ways I feel like that, but if I can leave with anything, it's the power of the world is in your finger. Thank you.

Nothing in this communication is intended to be individual financial advice. These are my personal views and may contain errors. I'm not a licensed investment advisor and reserves the right to buy or sell any security without notice.