The Heroes of Mining
I’ve done hundreds of mining tours over the last dozen years. At one point or another, I’ve run into about everyone in mining. Investors don’t realize it but even for the giant economic impact mining has on the world, it’s a small community. Everyone knows everyone. That’s both good and bad. You make your reputation. It both leads and follows you around.
I was out in Nevada on yet another tour visiting some interesting projects. I ran into someone I met years ago a couple of weeks ago. I started thinking about the impact that five people have had on mining. I’ll call them the heroes of mining. Most investors would never know or understand the oversize impact these five guys have had.
You can’t build a mine without
having a project. You can’t have a project without someone
finding it in the first place. I’ve been fortunate enough
to meet the people who between them are responsible for putting
together hundreds of millions of ounces of gold and silver. They
were prospectors of sorts and very similar in nature.
I’ll list in no particular order.
Carl Pescio - Nevada
Mark Creasy - Australia
Bob Allen - Colombia
Shawn Ryan - Yukon
Peter Megaw - Mexico
Carl wanted to get into production and he kept his eyes on Hycroft. It had been in production from 1987 until 1998, producing some 1.2 million ounces before the low price of gold put the mine into care and maintenance.
Vista Gold picked up the Hycroft Mine while it was in care and maintenance. Carl approached them with the idea of buying it from them. Vista wasn’t interested in either selling or putting it into production themselves but came up with an interesting suggestion. Vista would put the Hycroft and $25,000,000 into a new company to be called Allied Nevada and wanted Pescio to throw in all his claims.
It has been a marriage made in heaven. At $1600 gold, the mine has just about 25 million ounces of contained gold and 867 million ounces of silver in proven and probably reserves. It’s an open pit heap leach mine. Most of the silver a lot of the gold will be left on the leach pad but they will still have a very low production cost of about $600 an ounce.
As Carl always believed, the mine is perfectly leveraged to a higher price of gold. It is now the biggest project in Nevada and will soon be one of the ten biggest producing mines in the world.
That even ignores the other 100 projects the company owns.
In 1991 he sold his interest in the Bronzewing and the Jundee gold mines for $120,000,000. He was Australia’s first “Prospector of the Year” in 1993 but I highly suspect that if possible to win multiple times, he will have that honor coming again soon.
Mark not only finds exciting projects and advances them; he is a big investor in the mining sector with investments in some 44 mining companies.
Bob is the largest claimholder in the country. He provided the projects to get a number of companies started and knows more about the geology of Colombia than any other prospector in the country. He has a major position in Continental Gold and Solvista Gold. He is the Chairman of Continental Gold which has had dozens of potential projects vended into it by Bob Allen.
Shawn and his live in love and mother of their two children, Cathy Wood, met in 1992. Shawn was a mushroom picker and Cathy was a free spirit. Over the next few years, Shawn picked up a few dollars a year from the Yukon government who had a program supporting prospectors. Shawn and Cathy would pick mushrooms and file mining claims. Shawn has no professional education, everything he knows he learned in the field and from a Canadian government geologist named Mike Burke who encouraged Ryan over the years and passed on as much education as Shawn could pick up.
I met Shawn about 5-6 years ago. Everyone who ever travels to the Yukon to explore will meet Shawn at one time or another. It’s a small province with a lot of potential. Cathy Wood and Shawn Ryan agree, they have accumulated over 35,000 claims in the Yukon. I was up there visiting another junior and we flew out to the project in a chopper to beat on some rocks. Shawn was still living in a run down, low rent accommodation.
Shawn has done deals with literally dozens of junior mining companies, taking both shares and a cash payment. He uses the money to pick up more claims. If you are going to explore in the Yukon, you will be dealing with Shawn Ryan.
I was in Mexico about seven years ago visiting one mining company and I got a phone call asking that I stay over a few days and visit projects with Peter Megaw. We drove around Mexico for three days and I learned enough to at least be awarded a Masters in Geology.
Peter lives in Tucson Arizona and made Mexico his bailiwick many years ago. He knows something about every Mexican project I have ever heard of. He is easily the most interesting person I have ever talked to about Mexico. He was an instructor at both the University of Texas and the University of Arizona and it shows. He makes things seem simpler to understand than anyone I know.
Peter started tromping around Mexico around 1988 picking up projects and learning about every property he could. He is an encyclopedia of information about Mexico, Geology and crystals. Naturally he speaks English, Spanish and Swedish.
From the time of the Revolution starting in 1910 until the mid-1990s, foreign ownership of mining projects was highly regulated. Basically a foreign investor could be only a 49% owner. So the foreign companies put up 100% of the capital but didn’t control the companies or the profits. That kept hundreds of economic projects from being advanced. Well in advance of the Mexican government waking up to economic reality, Peter was positioning himself to advance the industry. The law changed in the mid-1990s but with the Bre-X blowing sky high in 1997, it essentially killed the mining business everywhere.
When the smoke cleared and metals prices started higher after the turn of the century Peter started dozens of mining companies moving forward with good projects that he had researched. He was a prime mover behind both Excellon and Mag Silver.
Lots of people in the mining business have met one or more of these prospectors/geologists/early adaptors. Few have met all of them. And I’d guess most people tend to take them for granted. But none of us would have jobs if these guys hadn’t invested their time; money and sweat doing research many years before this boom began ten short years go.
Peter Megaw was touting Mexico when only fools and Englishmen invested in Mexico mining projects. But he saw the future and believed in Mexico. Now he’s easily the most knowledgeable geologist in Mexico. He even turned his young daughter into a crystal expert and entrepreneur when she had barely entered high school.
When Bob Allen began promoting Colombia as the future of gold mining in South America; Medellin, his base of operations, was a war zone with people being murdered daily. Those riding motorcycles were forbidden to wear helmets so the police could identify them when they shot someone.
Shawn Ryan and Cathy White had to pick wild mushrooms to buy the food to get them through the winter. Every spare cent went into picking up more claims. Now nearly every junior in the province has handed over shares to Ryan and White to explore.
Mark Creasy is a legend in Australia. They had to invent the concept of “Prospector of the Year” just for him; he filled the boots so well. On his website he proclaims, “Prospector of the Century.” I’m not sure if he means the 20th Century or the 21st Century. Certainly he has a claim on the title for the 20th Century and given his new deal with Novo Resources, I think he will be in the running for Prospector of the Century for the 21st Century.
I was a pilot for many years. Most pilots believe there are good pilots and there are good mechanics but few good pilots who are also good mechanics. It may be a good thing that Carl Pescio isn’t either a pilot or a mechanic but not only is he the best prospector in Nevada, he had the vision to see and turn the Hycroft Mine in Nevada into one of the ten biggest mines in the world at among the lowest price of production at the highest profit margin.
I’ve watched hundreds of mining companies not move forward an inch in the last 11 years in the midst of the greatest price moves in history while Carl laid the basis of everything that is happening in Nevada and got a giant mine into profitable production at the same time.
It has been my very great pleasure to meet all of these guys at one time or another. Without them we wouldn’t be here. We all owe them a giant debt of gratitude.