Tools for Building Investor Confidence
Written by Kylie Williams
As mineral explorers and mine developers, we rely almost exclusively on investors to fund the work that we do. Our project may have amazing geology and be in a premiere location like British Columbia, but none of that matters if the management team cannot raise money to support exploration activities year after year.
The path to raising money, and the tools we use to communicate with investors, has changed over the last decade. Since the 2008 financial crisis, several significant developments have shaken up investment in exploration. One of the biggest has been the rapid growth of online trading, the digital platforms that allow investors to buy and sell stocks online. In the past, human brokers employed by banks or brokerage firms would call investors – on the telephone! – with any new ideas or hot stock tips, and secured investment for exploration in that way.
“Brokers used to be the key conduit of information to investors,” says newsletter writer, Gwen Preston, who publishes regular resource investment newsletters for her subscribers as the Resource Maven. “A huge number of retail investors in the resource space no longer have a broker. So, that conduit is broken.”
Now, chat rooms, virtual reality, and digital broadcasting tools are able to reach wider audiences online. These digital platforms enable individual retail investors who manage their own portfolios to find out more about the companies they are interested in directly. With fewer human brokers in the mix, exploration and mining companies now speak directly to investors using all the online tools and media channels available.
“Before 2008, it was really important to engage the banks,” says Preston. “It still plays a role, but the junior companies carry a much higher burden of requirement to engage directly with investors.”
Chat rooms are online communities where users can read and contribute to conversations on a particular topic. In 2015, Tommy Humphreys and Murat Ayfer launched CEO.ca, an online community where anyone interested in the Canadian stock market can strike up a conversation and it has since become a major hub for people interested in junior exploration investment.
“Not only investors and CEOs, but the technical people too, can weigh in on companies, ideas and information on a level playing field,” explains Sean Kingsley, director of communications at Crystal Lake Mining. Kingsley recommends the website as a great way to measure the sentiment around a company by seeing what the collective community has said about a company over time, and how responsive that company is online.
The number of annual visitors to CEO.ca has grown sixfold since 2015. Hundreds of people are active on the site each day, discussing opportunities, sharing and commenting on news releases, new results, and other public commentary published by companies and analysts. In the past 12 months, over 1.5 million new and returning users have visited CEO.ca and about 20 per cent of those are based here in B.C.
All of us are consuming digital content at an ever-increasing rate. Exploration and mining companies are embracing digital broadcasting platforms for sharing audio and video content, such as webinars, webcasts and podcasts. Rather than waiting for traditional media, like television news or newspapers, to cover a story, or waiting for the annual general meeting to roll around, companies can easily record and share important meetings, announcements, or custom content at any time and reach a potential global audience.
“I’m starting to see a lot of live podcasts and webinars now” says Kingsley. “It’s great to hear from upper management or the technical team and have a place to ask questions after. In a video, podcast, or webinar you can tell from a CEO or geologist if they are really passionate about a project.”
A communication tool that has taken the industry by storm is virtual reality (VR). Vancouver-based companies such as VRIFY, Moon Patrol VR, and Finger Food are creating immersive, interactive, multi-dimensional resources to help exploration and mining companies explain their projects to investors, as well as to a much wider audiences.
“Until now we have relied on two-dimensional tools to convey three-dimensional stories,” said Stephen de Jong, founder and CEO of VRIFY, in a recent AME story. VRIFY combines 360-degree imagery and three-dimensional models with text, tables and photos, to create an immersive, interactive presentation able to be understood by technical and non-technical audiences alike.
“People want information simplified, readily accessible, and presented in a digestible manner they can understand without needing to have an advanced academic degree,” said de Jong.
Let’s take this offline
Although this explosion of digital communication tools has opened a new world for talking to investors, nothing beats holding a sample of ore in your hand or examining a core sample up close. In-person communication and networking is still vital to translating information into investment.
“We still need direct contact,” says Kingsley. “Conferences like Roundup are needed for those one-on-one interactions. Speaking to the management or the technical team face-to-face at their booth at Roundup, that’s invaluable.” The Core Shack and Project Generators Hub at Roundup is one of the best places to find investor information firsthand.
About the Author
Kylie Williams has worked in the mineral exploration and mining sector for 20 years, first as a boots-on-the-ground geologist, and then as a freelance writer. She has interviewed specialists from all disciplines and published hundreds of articles in industry magazines and on corporate and government websites.