Wednesday, March 28, 2012

Interesting piece on stock option payments for management, by Kyle McLean of Exploration Insights:  The conflicting issues of dilution and alignment of interests, combined with a capital intensive situation (like mining exploration and new technology plays) mean that management mistakes are paid for by shareholders in businesses where very few of the companies could ever receive a cash payment on sale of their real estate or intellectual properties that exceeded their market cap.  He argues for an incentive system based on and fostering accountability, a focus on capital gains, entrepreneurial spirit, and a caretaking mentality.  Not sure how this would be be into practice, though.

Tuesday, March 20, 2012

FAIR Canada, the Canadian Foundation for the Advancement of Investor Rights, posted a very interesting article yesterday (you can read it at:

The writer suggests that there are signficant actual and potential conflicts of interest in the way we currently run our stock exchanges, with the needs of the investors, who depend on the exchanges for their regulatory function as well as their trading utility, often taking a distant third place to both listed companies and the profit motive.

From an IR perspective, these conflicts are pretty clear.  Not to mention exchanges buying an IR firm in order to support their listed companies and then promoting the IR to new listings....

Friday, March 9, 2012

PDAC -- the Prospectors and Developers Association of Canada -- had its annual conference this week at the Toronto Convention Centre.  More than 31,000 people turned up, which made the show crowded, but exciting.  Despite the fact that some people were saying the show has become unmanageable, we got a charge out of seeing that many energetic and enthusiastic mining and service companies in one place. 

We walked and walked and talked and talked.  We heard scads of great stories -- it amazes me how undervalued some of the smaller players are, priced far below asset value.

Key to getting those valuations up to a more reasonable level is, of course, attracting investors.  Federal Mining Minister Joe Oliver did his best to help, announcing that he foresaw $100 billion in new investment in mining over the next 10 years ($100-bn-mining-investment-in-next-decade-minister). 

Given that 40% of global exploration spending, amounting to $4.2 bn in 2012, comes from Canadian companies, it's clear that mining is a big ticket item for Canada.  In fact, mining employs more people in Canada than any other industry, including the automotive.

So, is the show too big?  I think, not big enough!