My friend Keith Barron just emailed me with a pdf article from Mining markets March issue pages 24 to 28
titled EFFIN ANDERSON
Here is the text:
Rarely has mining seen a
more polarizing ?gure than Patrick
F. N. Anderson, the former president
and CEO of Aurelian Resources.
Those initials represent Fer-
gus and Neill, the sort of middle
names that Irish immigrants from
Belfast bestow upon their only
son. But it was probably lost on
Anderson’s parents how appropri-
ate those initials would become,
especially for disgruntled Aureli-
an shareholders bitter about what
they perceived to be an insuf?-
cient price paid by Kinross Gold
(K-T) for mining’s biggest Cinder-
ella story in a decade.
When Kinross executives ap-
proached Aurelian’s board about
a takeover in June 2008, no one
knew, least of all Anderson, the
kind of vitriol that would be un-
leashed by Aurelian shareholders
when the dust had settled.
In late July, Kinross offered
Aurelian shareholders about $1.2
billion (the deal was worth a little
less than $1 billion when it closed
in late September) in shares and
warrants, or about US$85 for each
ounce in the 13.7-million-
company-maker Fruta del Norte
deposit, in Ecuador (see sidebar
on Page 28).
Shortly after the news became
public in late July of last year, a se-
lect group of Aurelian sharehold-
ers started to beat the drum about
how they had been “taken to the
cleaners.” Phone calls were made.
Form-letter campaigns launched.
Word of the “injustice” reached
editors at the Globe and Mail, Na-
tional Post, and here, to Mining
Markets’ parent publication, The
Northern Miner.
One letter sent to this of?ce
reads: “Patrick Anderson and the
Aurelian board of directors gave the
company away to Kinross Gold Cor-
poration for a small fraction of its
value. To be sure, the of?cers of Au-
relian were well compensated. They
received millions of stock options
while the rest of the shareholders
were taken to the cleaners.”
The Globe called Anderson but
never printed a story. The Post
called, too, and printed a story but it
was more about shareholder angst
than the supposed rotten deal.
“It’s really a minority. It’s a
small, very vocal group of vitriolic shareholders who
feel they got screwed on the deal. As time goes on I
think they are beginning to realize – and most are –
that people didn’t get screwed on this deal. The rea-
sons we did the deal are unfolding…and it’s turned
out to be a very good deal for Aurelian shareholders,”
Anderson explains. “It is the best deal we could have
done.”
He adds: “I think expectations were very high…
That group of shareholders was envisioning a share
price for Aurelian in the hundreds of dollars. There
was this 200 Club group of shareholders who were all
going to hold on until the stock reached two-hundred
dollars. They had sold themselves on this dream of
another rocketing share price like we saw from the
forty cents to the forty-dollar level, which, barring an-
other discovery on the property, I don’t see how that
could have happened.”
Anderson, though, was playing against the odds
from the beginning and despite the obvious success
of delineating the biggest gold discovery in a genera-
tion, he did not hold the right cards. The Ecuadorian
government, meanwhile, led with a pair of aces.
In January 2008, the government levied a new 70%
commodity price-based windfall tax on miners and
almost simultaneously revoked hundreds of mining
licences.
By April, Ecuador’s government, led by Rafael Cor-
rea, had suspended all mining and exploration in the
country until a new mining law was in place. Ander-
son could read the tea leaves and Kinross had a decent
offer on the table — a soft landing, even if it didn’t
come with a boardroom view.
“I don’t know if I would have added much to the
Kinross board,” Anderson admits. “As we were moving
the discovery toward production, I
came to a realization about myself:
that I really enjoy and know about
exploration. I really don’t know
much about production but I know
enough to know that I prefer explo-
ration.”
Newsletter writer John Kaiser
followed the Aurelian story from
the beginning but never invested
in the junior. Kaiser watched the
remarkable story unfold and con-
tends that Anderson and the Au-
relian board were the victims of
circumstance.
“The Aurelian discovery was a
grassroots discovery of a world-
class deposit. Unfortunately, geo-
political problems prevented (Au-
relian) from getting acquired at full
value,” Kaiser told Mining Markets.
But for every mining industry
man in his corner, Anderson prob-
ably counts two on the other side,
some of them big-time players.
One executive with Toronto-
based Dundee Securities, a ?rm
that fronted some Aurelian ?nanc-
ings, once deemed Anderson “un-
?t to run a public company.”
“I think they’re wrong,” An-
derson says, returning ?re. “We
were conscientious. We were as
transparent as possible. We stood
up under investigation and passed
with ?ying colours. I think we ran
a public company well. I think I
ran a public company well.”
Maybe, but other money men
went as far as to launch a lawsuit
after they watched their warrants
expire while, from their perspec-
tive, Aurelian sat idle.
In July 2006, Robert Cudney’s
North?eld Capital, Jonpol In-
vestments, Morrie Tobin, Mark
Monaghan and Kevin Everingham
?led a $3-million claim against Au-
relian in the Ontario Superior Court.
The suit purported that Aurelian did
not do what it could to get listed on
the top tier of Vancouver’s TSX Ven-
ture Exchange. Such a listing would
have allowed Aurelian to petition
the TSX for a two-year extension of
warrants that were owned by the
plaintiffs. The listing did not happen
in time, however, and the warrants
expired. The suit is ongoing but is
now Kinross’s property.
“If we were still Aurelian, and
there had been no transaction, we
would never settle on that lawsuit.
I don’t know what Kinross’s inten-
tions are,” Anderson says.
Anderson ruf?ed more feath-
ers among mining’s “old boys”
network as part of a group that
toppled the board of high-pro?le
junior Noront Resources (NOT-V)
Popular former Noront CEO Richard Nemis stepped
down in late October after a proxy war for control
was launched by Rosseau Asset Management, a hedge
fund that owns just less than 10% of Noront. Backed
by Rosseau, Anderson is now a Noront director.
After living in Vancouver at the time of Anderson’s
birth, his parents traded life on the Left Coast for an-
other on the Gulf Coast, settling in
Pascagoula, Miss., a port city east
of New Orleans. That’s where An-
derson grew up.
His family remains in Missis-
sippi but Anderson returned to
Canada in 1986 to earn a bache-
lor’s degree in geology from the
University of Toronto. He would
eventually graduate, but not be-
fore a detour found him trying his
hand at the culinary arts in 1988.
In 1994, after his last exam
but before graduation, he headed
to Venezuela for a ield-based job
and remained there for years. It
was where he would work with
Keith Barron, who helped Ander-
son found Aurelian.
The junior’s story is the stuff of
legend; part folklore, part reality.
Anderson and Barron applied
for their irst concession in Ecua-
dor’s Cordillera del Condor in Feb-
ruary 2001, following six weeks
of prospecting in some remote re-
gions of the country.
Two months later, in a turn of
good fortune, the Ecuadorian gov-
ernment announced new mining
rules that gave individuals and
companies one month to con-
vert their outstanding concession
applications – some more than
10 years old – into titles and be-
gin paying patents. In May 2001, about
80% of the country’s concessions were
declared void, giving Aurelian the rare
chance to acquire a large, contiguous
land package.
Seeing the opportunity, Aurelian per-
sonnel took turns waiting in line at the
patent of?ce for weeks to be near the
front when concessions became avail-
able.
Aurelian augmented its land position
by purchasing the La Zarza concession
from private interests in July 2002 and
the concession became the core of the
Condor project – 950 sq. km of mining
concessions and home to Fruta del Norte,
the epic gold-silver deposit. Aurelian Re-
sources went public in 2003, raising $3
million at $0.50 a share.
Going back a little further, exploration
on La Zarza by Australia’s Climax Min-
ing from late 1996 through mid-1998
turned up the Ubewdy, Bonza and Las
Peñas prospects. But after minor drilling
on other prospects returned only modest
grades, Climax let its concessions lapse.
In 2004, Aurelian sunk 28 holes to-
talling 6,900 metres into Bonza and Las
Peñas and outlined 500,000 oz. gold at a
grade of slightly more than 1 gram gold
per tonne, certainly far less than bonanza
grade.
By the end of 2005, Aurelian was
wrapping up almost two years of region-
al sampling that had outlined another
33 gold targets at Condor. Those targets
were ranked and slated to be systemati-
cally drilled in 2006 but Aurelian had lit-
tle cash left. Anderson says this was the
low point of his career.
“We were nearly out of money…We
had no audience. The phone calls weren’t
being returned. That was very frustrat-
ing,” Anderson recalls. “The de?ning
moment, of course, is when we made the
discovery.”
Earlier in 2005, Steve Leary had joined
the company as exploration manager,
bringing along experience in epithermal
systems. He reinterpreted a pull-apart
basin identi?ed by Climax, and decided
that the basin in?ll conglomerate was
mostly post-mineralization and, there-
fore, epithermal deposits could lie buried
below the basin sediments.
Leary and Anderson took the revised
interpretation and exploration
model to the board and pitched the
members on spending Aurelian’s
remaining treasury to drill one of
Condor’s most favourable targets,
Fruta del Norte.
The deposit is an intermediate
sulphidation epithermal gold-sil-
ver system, hosted in andesitic vol-
canics and buried inside a Jurassic
pull-apart basin that basically pre-
served most of the epithermal sys-
tem. The third hole into Fruta Del
Norte hit the buried, gold-rich sys-
tem. One intersection returned 8.4
grams gold per tonne uncut across
205 metres. Another hit 189 me-
tres averaging 24 grams gold per
tonne uncut.
“I checked (the assay results).
Re-checked them. Called up the
lab to make sure there weren’t any
errors,” Anderson recollects. “I was
terri?ed, terri?ed that we screwed
up somehow.”
When everything checked out,
he ran into the street to share the
news with anyone he could ?nd
until he had a sudden revelation.
“I had two different shoes on,”
he recalls.
Since that moment Anderson
has been on something of a roll.
He recently turned 40 and lives
in English Bay in Vancouver with
his new wife, a former mining ana-
lyst with Genuity Capital Markets.
They have travelled to Spain,
surfed in Costa Rica, and Anderson now owns a sea kay-
ak. Anderson, in many ways a child at heart, has anoth-
er hobby – sharing a growing collection of remote-con-
trol helicopters with Aurelian’s former vice-president of
corporate development, Tim Warman. The helicopters
are something Anderson describes as “just fun.”
When he’s not toying, Anderson serves as direc-
tor of several juniors: U3O8 Corp. (UWE-V), Colossus
Minerals (CSI-T) and Noront.
“I’m generating a few other projects in the back-
room, exploration projects in other parts of the
world,” Anderson says. “I usually invest in an industry
I know, our industry. I look at the projects and I look
at the people. I look at the philosophy behind the ex-
ploration and the discovery.”
Chances are he will never ?nd another discovery
like Fruta del Norte, but investors, disgruntled or oth-
erwise, might be wise to follow Anderson on his next
adventure. |
