Stephen Stewart | Attracting and Retaining the Next Generation of Mining Leadership Is Crucial

In this interview Stephen Stewart discusses attracting and retaining the next generation of mining company management.  Stephen offers wisdom to younger, striving mining professionals.  He describes why the Young Mining Professionals group was started and its purpose and goals.  Stephen also shares about current investment opportunities in the junior resource sector.

Stephen has been involved in natural resource development and finance for over fifteen years. He is a CEO of two companies: Orefinders Resources Inc. and Power Ore Inc., both listed on the TSX-V. And he is also one of the founders and the current Chairman of the Young Mining Professionals global group.  Young Mining Professionals Toronto was founded in 2015 and has grown into the premier networking group for mining professionals interested in meeting like-minded individuals who have dedicated their careers to the natural resource sector.

0:05 Introduction

2:40 Stephen’s journey to becoming a mining executive while in his 30’s

4:55 Common qualities of successful young mining executives

6:58 Fusing youthful ambition with experiential wisdom

8:22 Striving mining professionals need to be motivated by the “no’s” they receive

11:24 Purpose of the Young Mining Professionals group

15:50 Managing the boom-bust cycle as a mining professional

19:22 Stephen’s thoughts on current investment opportunities for resource investors

TRANSCRIPT:

Bill: Welcome back, ladies and gentlemen. Thanks for tuning in to Mining Stock Education, I’m Bill Powers. Well, as investors, we know that management is crucial for the success of a mining company and consequently our investment in that company, so as investors, we want to be able to identify quality, experienced management teams, but we also want to be aware of some of the larger issues that are going on. One of those issues is the recruitment and development of the next generation of mining company management.

Here to discuss this topic and more with me today is Stephen Stewart. Stephen has been involved in natural resource development and finance for over 15 years. He himself is a younger CEO of two companies. Both of them are on the Toronto Venture Exchange. The first one is Orefinders Resources Incorporated. The second one is Power Ore Incorporated. He’s also one of the founders and the current Chairman of the Young Mining Professionals global group. The Young Mining Professionals group was founded in 2015, and it’s grown into the premier networking group for mining professionals interested in meeting like-minded individuals who have dedicated their careers to the natural resource sector. With that being said, Stephen, welcome to the show.

Stephen: Hi, Bill. Thank you for having me. I’m thrilled to be here. I’ve listened to a number of your podcasts, so glad to be a part.

Bill: Yeah, thank you. I’d like to start off with you sharing a little bit about your background. You’re under 40, is that correct?

Stephen: No, actually, I’m 40 on the nose, as of September, so I’m, as everybody jokes me in their group here, I’m no longer officially young. I think once you hit 40, you can’t call yourself young, but nonetheless, so I’m still involved, but I’ve definitely handed the torch to the next generation.

Bill: Okay, but you achieved the role of being a chief executive in your 30’s, so I’d like for you to share a little bit about that. What was your journey and your development? How did you get to be a chief executive of a mining company in your 30’s?

Stephen: Well, the truth is, I grew up in the industry. My father was a, and still is, a lawyer practicing, so corporate securities lawyer. A large part of his practice was doing work for the mining industry, the junior… The Toronto Stock Exchange is generally focused towards the mining industry, and so that’s where, by and large, historically, a lot of the legal bills are paid for here, and so I guess I got exposed through osmosis, and his involvement, together with his clients. I met them, and I guess probably about 15, 20 years ago, he started dabbling in deals and became successful in it, and I worked beside him, and ultimately, that’s how we became involved, but on a larger part, I think it’s really being here in Toronto, and Vancouver would be the same.

They’re really the hubs of the mining industry and the junior business industry, Vancouver being more of a junior hub, while, as Toronto definitely having a whole lot of juniors, but probably more exposed to larger companies, but had I been born in Miami, I suspect I probably wouldn’t been involved in the mining industry to quite the same respect, so I think geography has a lot to do with it, but now that I did become involved with it, I’m hooked. We’re treasure hunters. We’re entrepreneurs. It’s, got the best job in the world. I probably want to be first baseman for the Yankees or the Jays maybe, but I guess being 40, I’m a little long in the tooth for that. I’m quite happy with how the cards have fallen so far, despite it being a pretty tough couple years.

Bill: When you look at other successful CEO’s and mining company leadership, people that are in their 30’s or even in their 20’s, what are some of the similar characteristics that you observe in these individuals?

Stephen: Persistence, dedication, they’re entrepreneurs. You have to have thick skin. You have to be willing to put yourself out there, seize the moment if you see somebody who you look up to, and they walk by the street, well, you have to be the type of the individual to go up there and say, “Hi, Mr. Lassonde,” etc., like that, so you have to be adventurous. You have to be outgoing. There’s so many characteristics, but to reference, call it the Young Mining Professionals, people who’ve won the Peter Munk Award, which is something that we give out every year, guys like Nolan Watson, guys like Steve de Jong, they all have those traits.

I’ll go back to being thick-skinned is something that I mentioned. You have to be able to accept “no.” I’m out there every single day making proposals to all sorts of different people, and I get “no” nine out of ten times, and you can’t let that get to you. You got shareholders, especially in this market. You are the steward for people’s investments, in some cases life savings, and that’s a lot of…

That’s a burden, especially in this market, and when, I don’t want to say through no fault to the individuals, but all boats have sunk, and oftentimes it’s the CEO who is held responsible, and rightfully so, but through extenuating circumstances in sort of a depressed market, you take a lot of heat, so you have to be able to handle those ups and downs and, at the same token, don’t, to quote Rick Rule, don’t mistake brains with a bull market. Don’t think that you’re that smart just because gold shot up to 1,900 bucks in a matter of a couple years. You have to be able to manage the highs and the lows. That’s a major trait.

Bill: As a younger striving professional, how do you manage and how do you fuse the entrepreneurial spirit and the desire to do things the way you think they should be done, yet at the same time relying and even bringing into your team people with many more decades of wisdom than yourself?

Stephen: You have to be humble in the sense that you have to be a perpetual student. You have to, again, go back to be willing to make mistakes, but do your best not to make the same one twice. Learn from those who have been there before, but don’t necessarily follow everything they’d done. You have to chart your own course. What else do I do?

I read. I mean, I think to me, books are probably my most valuable resource, aside from interactions with individuals, which is the most important thing, so mentorship, learning from people you respect, but aside from that, books, I go to the library once a week, and I pick up books on entrepreneurship, mining, finance, but also psychology, emotional intelligence or, what’s the word, I’m fascinated by the psychology of economics. I just, I take in as much as I possibly can, and I try and apply it to my life and my business.

Bill: What would you say to striving mining entrepreneurs and those that want to enter into leadership that don’t maybe have the family connections, or they aren’t close to people that already have obtained success and therefore could offer them a position at particular companies? The person that’s just cold, starting out, okay, they’ve chosen this sector for their career. You mentioned you get nine no’s before you get that yes. It made me think of a story. I have a friend who’s very successful in construction sales in Metro Detroit, where I live, and he told me that, “When I get a no, I just get excited, because it could be the next door that I knock on that’s a yes,” and this individual has done very well for himself with that mentality. Would you say it’s just that desire to press through the discouragements, also just the ability to connect with people through networking and just being relentless in that regard?

Stephen: One of the traits, as I may have or may not have said before, is, yeah, you do have to get, I don’t want to say excited by “no,” but motivated by “no.” It’s probably, the odds are probably more than nine out of ten. It’s probably 99 out of 100 no’s, but you can’t let that discourage you. You have to let it motivate you. I’ve had so many people with proposals I’ve come to them tell me that I’m crazy, but I know, deep down, that I’m not, and I find a way to make it work, so again, that goes back to persistence.

What do you do if you’re not dialed into the network, if you are from Miami or you are from Des Moines, or wherever, you’re not in one of these hubs, or you’re not in the community? Put yourself out there. Pick up the phone. Just like I said, seize the moment. Call Pierre Lassonde. Call Mark Bristow. Call me. Ask to be involved. Express your interest. Again, you’re going to probably be nicely told, “No,” 99 times out of 100, but if you’re really dedicated, you will find that individual that sees the passion and the desire in you, and you just start there.

You just start small. Doesn’t happen overnight. I’ve been at this for, I think, you introduced me as 15 years. I mean, I feel like it’s been longer than that, but it’s, for whatever success I’ve had, modest as it may be, it’s been through trial and error, persistence, and dedication. I love it. You have to love it. If you don’t love it, do something else.

That’s the most, if anything, I could take away to young people, not just in the mining industry, but find something you love and do it, whether that’s cooking or sweeping the streets. It doesn’t matter. If you love it, I think you have the ability to be the best at it, and if you’re the best at it, no matter what it is, you can be successful. How you define success, whether that’s the size of your yacht or whether you’re just a happy individual, well, that’s up to the individual.

Bill: You’re obviously concerned about the next generation of mining professionals. You’re one of the founders of the Young Mining Professionals group. Can you talk about what that group does, and what are your goals there?

Stephen: Well, the goal of the group or the group’s mandate is very simple. That’s to connect young people and educate them and others about the industry. I think one of the biggest issues this industry faces is a lack of knowledge about what we do and how important it is not just to the economy and to the local communities, but to our everyday life. I mean, I think there’s a disconnect in the supply chain. I think most people think that a ham sandwich comes from your refrigerator, and without appreciating a lot of ugly things have to happen in order to get that sandwich that you eat every single day. That’s sort of a bit of a grotesque example, but I think it holds true.

I think if you have all these people who are just fanatically outright against mining, but if you take their iPads away, and you take their airplanes away, and their cars away, or their bicycles, whatever it is, because there’s no iron, nickel, copper, etc., they will change their attitude quite quickly, but they just don’t realize how important mining is. I think awareness, education, are the two fundamental mantras behind the Young Mining Professionals.

Outside of that, I think what the group does, we do all sorts of things. It started off as a supper club where we’d invite Peter Munk, Pierre Lassonde, a Rob McEwen to come and talk to a group of 30 people. We keep, kept these events quite small and intimate by design so that everybody had an opportunity to actually personally interact with these people. That sort of small model caught on, and it’s wildly popular, and it still is to this day. In fact, tonight, we have Lukas Lundin in town, and he’s going to be hosting one of these dinners, and the tickets sold out in a matter of hours, for someone, for people to come and see Lukas Lundin. That’s how the group got started, but it grew. It evolved because there was demand and there was a drive to do it, because I think we’re…

I’ll note that everybody involved with the group, and now we’re global. We’ve got chapters in South Africa, Australia, London, all across Canada, and we’re evaluating other opportunities. They’re all volunteers, and so these people who are involved, they’re, are really quite passionate about it, and they want to see the business succeed for them, but also there are obviously selfish aspects. This isn’t 100% altruistic, I got to say. This has been life-changing for me to be involved with this group. It’s really changed my life through the people who I’ve met, my counterparts, but also people like Lukas Lundin. It’s a very powerful tool.

The last sort of point I’ll make about Young Mining Professionals that we’re very proud, this morning, in fact, on May 9th, we’ve announced we’ve got 10 scholarships funded to the tune of $44,000 this year that we are going to be giving away to exceptional students, and there are various different scholarships, but the application, if you go to our website, you’ll find all the rules and criteria, etc, and that’s just something, that’s a part of us coming full circle and actually giving back to help attract the next generation, not just the young, the YMPs who are really the sort of the 25 to 39-year-old set, but really the generation before us, because I think you walk into these geology classes and the mine engineering classes, and they’re dwindling. The reason they’re dwindling is because the perception of lack of opportunity because the cash has fled the industry.

Whether our scholarship program moves the needle or not, but I think it’s starting to. That’s $44,000 I think does make a difference, but we have bigger ambitions than that, but it’s all about attracting and retaining talent, which is even more important than assets in this industry, if you ask me.

Bill: There’s practical aspects to why young people choose careers. Obviously, you need to pay the rent. You need to have food on your table no matter what. With the mining industry, it’s so cyclical. It goes through the boom-bust cycle. When it’s booming, geologists are being hired. When it’s in the downtrend and they can’t raise money, geologists are being laid off. What would you say to the young person that’s looking at this sector and saying, “I’m interested in it. However, I don’t like the job security aspect of it because of the boom-bust cycle”?

Stephen: Well, I think that’s a fair comment. I think mining is certainly cyclical, no question about it. Fortunes are made and lost when people forget that, so everybody thinks they’re a genius when the market’s on fire and everybody thinks the world’s going to come to an end when it’s a down market like it is right now. It’s as depressed I’ve ever seen it, but to me, that’s the opportunity.

To answer your question, yeah, you have to have the ability to handle and manage those highs and the lows. I do think right now in terms of the opportunity, a lot of people got washed out, let go, left on their own accord, went to the marijuana industry or the crypto industry, etc., etc. That’s fine, but those who are left will benefit, and so maybe that’s the message we deliver to the young people is, if you really do love this industry, and you really are committed, and you’re not one of the marginal people, if you will, in terms of interest, if you’re hardcore, now’s a great time to get involved.

Then I’ll speak to the talent gap, and this is ultimately why I certainly started the chapter here in Toronto and pushed this group worldwide is because I’ve been involved for over 10 years, and I knew a lot of people, but they all had gray hair. I don’t think I knew anybody my age or younger, and so that’s what attracted me to YMP. I said, “Well, geez, I want to meet people like me.” That’s ultimately what happened, and then… Yeah, you have to be able to handle the cyclical market, is the bottom line, but if you love it, there’s no better place to be.

Bill: Do you if know that, in some of the universities that prepare younger geologists and these things, do they talk about financial planning for a career in the mining industry?

Stephen: No, I doubt it. I don’t think they do that in any industry or applied program at a university. In fact, the schooling system from JK all the way up to postgrad doesn’t really do a great job in that. I didn’t know how to manage my personal financial situation, and I’ve got two master’s degrees, so that’s the last thing they teach you. Yeah, they could do a better job in educating that, but I think you don’t discount people’s knowledge of the industry, so I think anybody who has heard of mining just automatically knows, “Oh, it’s cyclical.” I mean, I think that’s just sort of the de facto perception. It’s viewed as risky. It’s got bad reputation, but I think all of those things are false narratives. I think everything is risky. I think tech is risky. I mean, look at the 2000 bubble. I mean, that was risky. The AAA mortgages in 2007, I mean, CMBS, that was perceived to be bulletproof, but that was risky, so it’s a function of time and how you sort of evaluate risk. Is mining cyclical? Yes, but so is everything.

Bill: I’d like to get your thoughts on the current investment opportunities in the junior markets right now. You mentioned it’s quite depressed, even what you’ve seen in your career, this is one of the most depressed times. You run two junior companies. What’s your general thoughts on the junior mining markets and current opportunities?

Stephen: It’s very simple. I think it’s a rare opportunity to be a buyer, and we are buyers. We’re not sellers. That comes from an issuer standpoint, meaning managing a company and growing your asset portfolio, anybody who follows Power Ore or Orefinders will see we’ve been on the acquisition trail. I always use, we just made an acquisition that cost them $10 million to drill out a resource. $10 million. We bought it for pennies on the dollar. You wouldn’t have been able to do that in 2011, 2012, but because this industry is cyclical, because nobody seems to be interested in it right now, there are these unique opportunities where you can do that.

By and large, where the niche that I focused on is, I’d rather buy a drill hole that was done 10 years ago rather than buy one that was drilled yesterday, because a big, smoking drill hole that comes out yesterday, everybody’s going to get excited, but one that was done 10 years ago, the sex appeal has gone. Everybody has forgotten about it, but if you have the drill core, if you have the data, because that’s all a drill hole is, it’s data, so if you can get that, and the data is reliable, it’s got the exact same value inherently or intrinsically as a hole drilled yesterday. It’s just sort of a function of market psychology.

That’s where I see the biggest opportunity. I definitely want to get back to doing our own drilling, but the cost of capital’s too high. Why would we spend, why would you build a brand new house when you can buy the house right next door that’s the exact same, but it was built 10 years ago, but you buy it for 10% of the price? It just, you have to play the cycles. That’s the way I see it. There will be a time when you cannot make those types of acquisitions because everybody holds on to them, but for now, we see opportunities to make acquisitions over then drilling your own stuff right now, but we look forward to the day when we can get back to that.

Bill: Stephen, if listeners want to get in contact with you, whether it’s a younger mining professional that like to talk to you, you made that offer, or someone that wants more information about your company, what would be the best way to reach you?

Stephen: Well, go to my email. It’s [email protected] Go to orefinders.ca, go to any of our news releases on any of the companies, Power Ore, Orefinders. At the bottom there, you’ll see my phone number and my email. That way, there’s no typos. My contacts are always there. I always am available to shareholders, always available to young people. I’ll do my best to talk to anybody who’s interested in the industry. I try to make time for coffees and that sort of stuff, but of course, investors too, who see the market like we do, there’s a tremendous amount of opportunity from an investor and an issuer perspective right now. As I said, I think it’s a rare time to be making moves, and by that token, I think it’s also a great opportunity for young people to get involved in the industry, because it is downtrodden.

There’s probably less competition than there was five, ten years ago, and I think, look, the world is growing. China’s growing. Emerging markets are growing. Infrastructure in the West is crumbling. The population’s going to be 10 billion people in the not too, in our lifetimes. That requires lots of metal, and the resources that we are aware of, they’re old and tired, and we haven’t been finding new deposits, so to me, on a macro basis, that spells huge demand over the next 10, 20 years for the mining and metals space, so get involved.

Bill: Excellent. Well, Stephen, thank you very much for your conversation today, and I look forward to speaking with you again.

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