Commander Resources CEO Robert Cameron believes prospect generators expose shareholders to multiple opportunities and increase their chances of making a return.
In the interview below, Cameron discusses the benefits and challenges associated with the prospect generator model, and why he believes it is important to have discipline and restraint when choosing to develop new projects. According to Cameron, the key is to expose the company to as many projects as possible, securing a small piece of multiple operations before moving on to the next property.
Cameron also outlines the company’s top three projects in Canada and explains why Commander has chosen to expand its operations in the country. According to Cameron, Canada’s mining-friendly tenure system is optimal for prospect generators like Commander, which has enabled the company to explore its newest copper project in British Columbia. Commander was drawn to expand its copper portfolio based on the projected demand for the element, which Cameron expects to rise along with increasing copper requirements in countries like India and China.
Below is a transcript of our interview with Commander Resources CEO Robert Cameron. It has been edited for clarity and brevity.
Investing News Network: How long has Commander Resources been around?
Commander Resources CEO Robert Cameron: The company is 30 years old. We started as Major General Resources and over time we rebranded and changed our name to Commander.
INN: Is Commander Resources a prospect generator company?
RC: As a prospect generator company we expose our shareholders to multiple projects that are funded by our joint venture partners.
INN: Why should our investor audience invest in a prospect generator?
RC: It’s a conservative approach to the high risk-reward scenario to exploration where the odds of discovery are low. Instead of focusing all our effort and money on one shot, we take projects to the drill stage and find partners to do the heavy lifting. This allows us to have multiple projects that are funded by our partners. We also generate income through option payments, share payments and royalties. It’s a very sustainable business model that protects shareholders from excessive dilution and addresses the high-risk nature of exploration.
INN: You only take it to the drill stage?
RC: It’s tempting to keep going because you love and believe in your projects, but you need that enthusiasm to bring in a partner. Drilling is expensive and can use up a lot of your treasury. I’d rather spend that money building our portfolio and exposing our shareholders to six or more joint ventures or opportunities. We take a smaller piece of the action, but we get exposed to it through royalties, share positions and partners.
INN: Does it takes a certain amount of self-discipline to stay in that space?
RC: Very much so. We’re all geologists that want to make a discovery. The biggest temptation all prospect generator will face is when it’s too good to give up. For example, Virginia Gold Mines Inc. was a prospect generator until they came across Eleanor. They knew they had something significant and drilled it themselves. They eventually sold it to Goldcorp (TSX:G,NYSE:GG) for an incredible return.
INN: Please tell us about your team.
RC: Prospect generation is labor-intensive because you’re always looking for new projects, upgrading your existing projects and marketing to a larger audience. I’ve been a geologist for over 35 years. I’ve worked with majors and juniors as a consultant and dabbled as a mining analyst, giving me banking experience. I worked for Phelps Dodge and Freeport-McMoRan (NYSE:FCX) for 18 years which gave me international exposure.
I hired my VP Exploration Stephen Wetherup out of high school when I was with Phelps Dodge. Our director Bernard Kahlert is a senior geologist that has worked with majors and numerous other companies. He’s been with us since day one and is well-known throughout the mining community. We also rely on experts and consultants, which keeps our overhead low and manageable. We can expand if we need to or cut back when we need to conserve capital.
INN: As a prospect generator, your ability to de-risk a project is contingent on the expertise of your team, correct?
RC: Yes. Ultimately our projects must be marketable and we have to know our audience. We must have something solid, like targets. We can’t rely on our real estate play. We also have to address a marketplace that grows with newly-listed companies looking for property and majors looking for a top-tier target.
INN: How many projects do you have? What are your top three?
RC: We have 10 projects that we’re looking for partners on. We have one active joint venture with Fjordland Exploration (TSXV:FEX) and HPX, which is Robert Friedland’s private company. They’re exploring our South Voisey’s Bay nickel-cobalt property in Labrador.
We have three others that we’ve been developing over the past five months that we’re looking for partners on. We’re starting to release results from our exploration program for our top project, Sabin, a massive sulfide project in Ontario. We’ve completed a VTEM survey on the property and released the results last week.
INN: What are the highlights from that release?
RC: We’ve owned the project for 30 years. While digitizing and modernizing the database, we recognized that there was a lot of opportunities because it hasn’t seen any modern exploration or geophysical work. The VTEM survey highlighted quite a few conductors on the property.
We’re not a resource level yet, but there are numerous exploration opportunities, particularly in areas that haven’t been explored. The survey also expanded and enhanced what we already knew, which should help us attract a partner to bring the project forward.
INN: What’s the second tier project?
RC: Our Flume gold project is our second tier project and is located in the White Gold District in the Yukon, which has garnered a lot of attention over the past 10 years. The Coffee project was sold to Goldcorp and Kinross (TSX:K) sold the Golden Saddle project to White Gold Corp. (TSXV:WGO), who recently made a new discovery at their Vertigo deposit.
We have a large land position that makes up the Flume project. The property has a 10-kilometer gold-arsenic soil anomaly that is known to occur throughout the region.
INN: How is the Yukon in terms of a mining jurisdiction?
RC: It’s an excellent place to work and accessibility isn’t an issue. We can drive to Dawson and the roads on the property make it easy to bring our equipment in by barge, making exploration quite feasible. White Gold has the dominant land position and has acquired 70 percent of the district. Overall, there’s not a lot of land with serious targets is available, but we think we’ll be able to attract a partner. A lot of majors are looking in the area and we have all the hallmarks of a good project.
INN: And number three?
RC: Last summer we wanted to increase the copper exposure in our portfolio and did some regional work in central British Columbia (BC). Through our expertise and understanding of porphyries, we selected a couple of areas for soil sampling, which highlighted a copper soil anomaly. We staked the property based on data we got off the internet from the government’s database as well.
We recently released some results for our new Henry-Lee copper-gold porphyry project and picked up some land to the southwest from a prospector, expanding our footprint. We have a four-kilometer-long copper soil anomaly underlined by altered intrusive rocks that have the looks of a porphyry. We did all of this in a period of four months. We’re hoping to bring in a partner. If not, we’ll complete some geophysical work and firm up the quality of that target.
INN: Why did you want to add more copper to your portfolio?
RC: We have a diversified portfolio with some copper assets, but we could use more. The 18 years I spent with Phelps Dodge and Freeport McMoRan made me comfortable with copper and I know the market well. I think we’ll see a shortage within the next few years due to global electrification. Most people talk about energy metals, but copper is essential and it’s a well-understood market. We know the sources, the end users and our market studies are predicting shortfalls.
INN: What else is affecting the copper market?
RC: If you study the copper requirements for developed nations, you’ll notice that they plateau at a certain point. In developing nations, like China and India, they’re still ramping up. Once they plateau and reach modernization there won’t be enough copper.
INN: Are you happy with the portfolio have at the moment or are you still looking for more projects?
RC: We never stop looking and getting projects out the door. I mentioned my top three, but we have other projects that are garnering attention. We’re always replenishing our portfolio, looking for new opportunities and ideas.
INN: Why are most of your projects in Canada?
RC: We have one in Mexico, but our effort is focused on Canada. It’s a great jurisdiction with diverse geology. Canada has the Archean Shield, the Appalachian belts in the east and the Cordillera belts in the west. Jurisdictionally, the public domain databases are second to know and allow you to work from your desk on the first pass.
The number one reason I like Canada is for its tenure system. It’s easy to acquire land cheaply. You also don’t have to make payments to the government for 10 years. You do your work as there is an annual work requirement. You can bank the property for five years, so if you have a good year you could put the property aside without any financial commitments. Many other jurisdictions have annual taxes and work requirements, requiring constant expenditures.
INN: Is this the only reason that you stay in Canada?
RC: Many of our target companies in Canada. They understand the value of having Canadian assets as well, making it easier for us to market our projects.
INN: You must have many long-standing relationships with all of these companies.
RC: We all have our networks. The senior guys have larger networks because they’ve been around longer and it’s a small community. It’s also collaborative in many ways.
INN: Why would you invest in a prospect generator?
RC: I’d invest in a project generator because we effectively manage our treasuries and expose shareholders to multiple opportunities. We’re not spending investor money on projects that have a low probability of return.
You also don’t have to pick the one project the company is exploring and can rely on management to pick multiple projects for you. I’d even recommend in investing in multiple prospect generators and capitalize on their partnerships as well.
This video interview is sponsored by Commander Resources (TSXV:CMD). This video interview provides information which was sourced by the Investing News Network (INN) and approved by Commander Resources, in order to help investors learn more about the company. Commander Resources is a client of INN. The company’s campaign fees pay for INN to create and update this video interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Commander Resources and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.