 | Bio |
Simon T. Ridgway is President and Director of Radius Gold, Inc. Unlike the heads of many junior exploration companies, Ridgway is not only known for making deals that profit his shareholders, but for actually getting out in the field with his team of prospectors and making grassroots discoveries.
Before starting Tombstone Exploration Ltd., his first junior mining exploration company in 1994, Simon Ridgway spent 20 years kicking rocks in the Yukon, and in speaking with him, one gets the sense that kicking rocks is still what he likes doing best. Nevertheless, in the almost 15 years he has been managing exploration companies in North, Central and South America, his practical, low-cost approach to exploration management has led to major discoveries in Honduras and Guatemala, and what looks like one (or more) shaping up in Nicaragua. Along the way, he certainly has created a lot of shareholder value
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| Interview |
XL:First off, let us officially welcome you to the Explorers' League.
Thank you, it's an honor to be included. I like the professionals you have associated with the organization-quite a crew.
XL:Thanks, we think so, too. Let's just start at the beginning. Did you go to school to study mining, engineering, or geology? Or did you come into the business from the financial side?
I came into it through prospecting. When I was young, I spent a lot of time reading true adventure stories, many of them about the Klondike Gold Rush of 1898. Later I headed to the Yukon Territory, Canada's northwest and the home of the Klondike. That was where, in the early ‘70s, I learned to prospect for Gold. That was my education.
XL:What made you decide to take up prospecting, specifically?
I have no school background in geology. I liked the outdoors. I liked adventure and had a strong desire to travel. When I finally made it to the Yukon, I decided to learn about prospecting.
XL: You have an accent, what's the origin?
From England-Wolverhampton in the midlands, to be more specific. It's a fairly strong accent, isn't it?
XL: When was it you started your first company?
The first company was in 1991. I had spent about 20 years prospecting in the Yukon territory and vending the prospects to Vancouver companies to advance them. That's basically what my companies still do. We do a lot of grassroots exploration, try to find new gold-mineralized deposits and systems, and then advance them, either through joint venture or on our own.
XL: The generative model.
Yes.
XL: What was your first company called?
The private company I ran in the Yukon was called Walhala Explorations and it was a profitable private exploration company. My first publicly listed company was Tombstone Exploration Ltd., which was focused on exploring in Venezuela. I ran that company for four years and then the Venezuela gold rush started. I had a good head start on other companies coming into the region and Tombstone's share price went very high. The company raised a lot of money, and new management came in. At that point I stepped aside and went to Central America and started another company.
XL: Why did you choose Venezuela?
Actually, that was on the advice of an Alaskan financier with gold fever. I won't mention his name, but he had a gold operation in the Yukon Territory. He had heard much about the potential of Venezuela from some contacts of his, and he said he would finance Tombstone if I agreed to prospect in Venezuela. That was 1991. It was a very tough year to get a company listed on any exchange in the resource business, so I agreed. The company was listed on the Vancouver Stock Exchange in November of '91, and I moved to Venezuela in December of that year. Venezuela is pretty hard slogging for a prospector, as it's mostly saprolites, which means a very thick tropical soil profile. The area I was working in had very dense jungle growth, so there wasn't a lot of exposed rock, not much prospecting to do-but there was a lot of gold there.
XL: Did Tombstone ultimately come up with a mine?
Unfortunately, no. We did find some deposits-several-but they were not economic at that time. When I left the company, it had about $20 million in the bank and a lot of prospects. The company is still active in Venezuela today under a new name, Mena Resources Ltd., and some of those prospects are working out. For example, the Valle Hondo project is seeing renewed exploration under a JV between Mena and a Venezuelan partner.
XL: So, leaving Venezuela behind, you moved to Central America. Is that when you found the Honduran and Guatemalan deposits?
Yes. When I started Tombstone, we had very little money, so I lived and worked in Venezuela and every three months I would fly back to Vancouver to file the quarterly financial reports for the company. For a couple of years, as I'd fly over Central America and I'd see all these active volcanoes, I'd think about how prospective the territory looked. So, as soon as I left Tombstone, that's where I went. That would have been 1994-December 1994.
XL: You weren't overly concerned about political stability at that time?
No. Honduras was a safe place. That was one reason I initially settled there. Unlike Nicaragua and Guatemala, where civil wars had just ended and they were still sorting themselves out politically, Honduras was safe-and the mining law was still unfavorable to foreign miners in Guatemala and Nicaragua. As a vehicle for my new venture, I took over a company called Mar-West Resources Ltd., by buying a control position in the company.
XL: What was your first big find in Honduras, and how did it come about?
We spent '95 and '96 doing a lot of prospecting-when I say we, I mean me and a couple of Yukon friends that came down to work with the company. I began doing lots of research, and it became evident that a lot of the Central American gold deposits were at least spatially related to hot springs. So, we pulled out all the data on hot springs in the region and began visiting them one by one and prospecting the areas around them. We found about four million ounces total with that approach. It was a very scientific approach (chuckles).
XL: And it involved lots of bathing in hot springs along the way, I suppose.
Of course. Our grassroots prospecting covered a lot of the country of Honduras. We'd take stream sediment samples, then run the samples in for assaying. Things certainly started happening when I twigged onto the hot springs connection. That's what led us to the San Martin deposit in Honduras and almost simultaneously to the Cerro Blanco deposit in Guatemala.
XL: What's become of those prospects?
The San Martin discovery hosts about a million ounces of gold. We sold it to Glamis Gold Inc., a New York-listed producer. It is still being mined today-and very profitably-by Glamis. They also later purchased the Cerro Blanco Gold Deposit when they purchased Mar West Resources: that is a two-million-ounce gold discovery.
XL: So both were more or less discovered at the same time, by the same method?
They were both discovered within a year of each other. We had such success drilling off San Martin, we immediately expanded our horizons and went into El Salvador and Guatemala, using the same approach, looking at all the hot springs in those countries.
XL: When did Glamis buy Mar West?
1995 and '96 were spent prospecting Honduras. At the end of 1996, we were drilling at San Martin and began to understand we were on to something good. In 1997, we drilled off the deposit, simultaneously expanding Mar West into the neighboring countries El Salvador and Guatemala, continuing with the hot spring focus. Towards the end of 1997, we made the Cerro Blanco discovery, which we began drilling in 1998. In November of 1998, we received an offer from Glamis to purchase all of the shares of Mar West and the shareholders decided to cash in and take a tidy profit. One of the provisions of the sale of Mar West to Glamis was that my team and I were excluded from exploring in Honduras and Guatemala for a certain period. So, we moved to Mexico, where we started a new company, Radius Explorations Ltd. We were able to JV a property to Barrick (which didn't become a mine), and once the exclusion period was over in 1999, we moved back to where we really wanted to be: Central America. Specifically, Guatemala.
XL: So, that's how Radius got started. What did you find in Guatemala?
We have several new discoveries in Guatemala that are still under development with our joint venture partners. One of these -the Tambor property in Guatemala- has a very good chance of becoming a mine. One of the key questions remaining, and one that our joint venture partner Fortuna Ventures Ltd is looking for answers to, is how big a mine it's likely to become. We discovered Tambor in the year 2000 and structured a joint venture with Gold Fields of South Africa in 2001. They advanced the project and defined a resource of about a quarter million high-grade ounces of gold, which they decided wasn't big enough for them. In late 2003, we bought out Gold Fields' interest in Tambor in exchange for 1.3 million shares of Radius. They now hold just over 5 million shares in Radius and are our biggest shareholders. They've been great supporters.
We just announced a new JV on the Tambor property with a company called Fortuna Ventures Ltd. Fortuna will be working to grow the gold reserve at Tambor and will be doing a lot of drilling in the New Year.
While Gold Fields were advancing the Tambor property, Radius moved into Eastern Guatemala where we made three new gold discoveries on our Banderas, Holly and Marimba properties. We just joint-ventured these three projects to Glamis, so we'll see if they develop into mines.
XL: But you also started exploring in Nicaragua ...
Yes. Following the discoveries in eastern Guatemala, we were looking to expand into new pastures. Nicaragua was such an obvious choice: a long history of gold mining, great geology, a new and workable mining law and no or limited competition-my ideal situation. We started in Nicaragua in late 2002, and within six months our geologists made a number of gold discoveries, including our highest priority project, the El Pavon discovery.
XL: We've all heard of El Pavon, of course-do any of the others look as good?
Some of them are shaping up, and one in particular has the potential to be very significant, but it's still early days. You know, when you do this kind of prospecting, you find new gold-mineralized systems, and you never know until you put some holes into them how big they may or may not be. And that's what we're continuing to do now in Nicaragua. We've had a lot of success there finding new gold systems-El Pavon being one of them-but how big they are, whether or not they will become El Pavons or San Martins, we don't know.
XL: Now that you've made such a large find in Nicaragua, are other companies moving in?
A few, but we've pretty much got the country to ourselves. We have a very large land position. After finding El Pavon and a couple of other systems with a similar apparent structural control, we got all the land in the area that we thought was prospective for that same kind of system. We have about a million hectares in Nicaragua. It's a big country, though, and there's room for others-we'd be happy to see other exploration companies there, but to date, nobody is really making any headway.
XL: How do the Nicaraguans feel about Radius?
Oh, they are very happy. In the area around El Pavon, extremely happy. I mean, we're employing at least 60 locals on a daily basis-sometimes up to two or three hundred. The mayors, the clergy and most of the local people are very, very happy to see that work in the region. And we're making sure to employ as many of the local people as we can. As opposed to just bringing in a D-6 to build a road, we employ local people to do it by hand. And we've always taken that approach, you know, make sure that all the people in the region you're working in want you there.
XL: I've heard that from several companies recently. Why is it then that mining companies have reputations for being such bastards?
Because they were. (Laughs) I think mining companies have learned a lot over the last five or 10 years. You've really got to take the people that live in the area into account. I mean, if you look at the old cowboy movies, the mining guy was always the bad guy, with the hydraulics, beating up on everybody. I don't know if it was ever that way, but it certainly isn't these days-hasn't been for the last decade. I've always made sure that I generate as much employment as I can for the local people. I think most companies do the same thing. But sometimes mining companies that have worked many years in North America take their first step into Latin American countries, or the third world as they call it, and make mistakes. When they bring in outside help, because the outside help is skilled and the locals aren't, they upset the locals.
XL: So, was El Pavon discovered using your same hot spring methodology?
No, we'd given up on hot springs already, because we'd basically covered all of them in Central America. Now, it's just basic prospecting: walking the fields and breaking rock. We pick areas where we see good structural controls, in other words a good plumbing system-we're using Landsat and air photo work-and then we go into the region and prospect. It's rock and hammer prospecting, and stream sediment sampling. I have a steady group that has been with me since 1994, when I first went into the region-I still have the same prospecting geos with me. They love what they do, and they are motivated to find new systems. As soon as they've found one, they want to move on to the next one. They wanted to leave El Pavon months ago, find something new.
XL: How many people are there on your prospecting team?
About ten that are the core group, been with me for years. They are not all geologists. Some of them, like myself, are just prospectors-guys I mentioned that worked with me up in the Yukon Territory. They are people who like being in the field.
XL: How did the El Pavon JV with Meridian come about?
We're always taking other companies down to show them what we've found. We've done that since the Mar-West days: touring mid-sized to larger producers around, to show them what we're doing. Meridian expressed strong interest in El Pavon. Ralph [Rushton, Radius VP for Corporate Development] and I met with them and told them we weren't interested in a standard kind of joint venture-from a market perspective that wouldn't be in our best interests. They continued to express their interest in the property, so we put our heads together and came up with this model. I think it's the first time I've seen this kind of joint venture. It allows Radius to joint-venture the project without "giving away" ounces to the incoming partner and it gives Meridian what they want: exclusivity.
XL: Yes, it looks like an excellent deal.
It's a good deal for Meridian, allows them to get familiar with the deposit and the people and culture of the country before having to lay out the millions to purchase the deposit. If we proved it up ourselves, we'd spend 10 or 15 million dollars drilling, and then we'd market it, and they'd have to go into competition with Glamis or the other mid- to major-sized producers to acquire the prospect. It's an attractive deposit, so they'd probably pay a hundred bucks an ounce at that point. This way, they exclude all competition and only pay fifty bucks an ounce for their 60 percent of the deposit-they'll probably have to pay more for the 40 percent that we'll still own. Sure, they've got to spend the $15 to $20 million to find those ounces, but by doing that they get to know the region well, they get to know the country well, and they get to avoid mistakes.
XL: El Pavon's still open, right?
Absolutely.
XL: We won't hold your feet to the fire on it, how big do you think that thing really is?
I think there's a very good chance for three million ounces. It could certainly be larger, and in my dreams it would be larger, but I would be surprised if it wasn't at least two to three million ounces. The extent of the veins and the consistency of the grade we've found are very encouraging. When you can walk along a vein for 500 meters on the surface, it's obviously going to have some depth potential.
XL: Excellent. What about your other companies, besides Radius?
I'm on the board of other companies and I like to work with other people that I've known for a long time and have respect for, but my focus is Radius. That's where all my effort goes.
XL: There are questions we hear frequently about global trade, the teetering U.S. economy, and how they might affect the price of gold and other precious metals. What's your take on all that?
I'm a prospector. I don't know a damn thing about that. I understand it's important, but there's no point in making things up. I like looking for gold. I look for gold in bad gold markets and I look for gold in good gold markets. It's what I do, and I believe I do it well, whereas predicting the economy or gold prices in the future-there I have no skill set.
XL: Very good. Do you do any investing of your own? Besides your own companies, are there any others you admire, that do a really good job?
I've been buying a company called Viceroy for the last month [October, 2004]. They have a discovery they've been drilling for the last year. I really think it's a significant deposit and someone is going to buy the company for twice what it's trading at now. That's my belief. It's a gamble, but I think Viceroy is a good play.
XL: Well, there's a reason we call it International Speculator and not International Investor.
(Laughs) That's right. I think Viceroy is a great speculation at this price.
XL: Any others?
Probably North American Gold. I like what that company is doing in Sweden and Finland. I think Sweden is a great place to work.
XL: This is one of your companies, right? I was just looking at that web site-it seemed quite humorous to go to North American Gold and see Sweden and Finland on the map.
(Chuckles). Yes. Initially, the idea was to focus on Nevada and Mexico, but an opportunity came up that was in Sweden, and we jumped on it because it was a very, very attractive property. Buck Morrow runs the company-he's a very experienced mining engineer who has brought a number of mines into production in Nevada, our primary focus. But when the opportunity in Scandinavia came up, we jumped on it. Scandinavia is a great place to explore. Also Mena resources. I know those prospects and I like them; that's also one to watch. As is Fortuna, the guys that have taken over Radius' Tambor property-that will be a mine one day.
XL: So, there's a lot of upward potential with those?
That's right, and very little downside.
XL: Any final word for our readers?
With exploration plays, it's usually management. With early-stage development companies, if the management is good it controls the funds' use, and good things can happen. If you get in at the right time, it's not as high risk as people think it is. If you don't research management, well ... you are likely going to lose your money. You also want something based on multiple projects. Obviously, you don't want to put all your money on a company that's only got one horse. Multiple projects and management. That's pretty much what Doug Casey always says, actually.
XL: Indeed. Well, thank you very much for your time.
Thank you
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