XL: Am I correct in saying you’ve been practicing law for over 55 years now?
Yes, I was called to the bar in 1950, so 56 years.
XL: And how did you first become involved in the resource sector?
Well, in the 1960s, I invested in a company. I put twelve thousand into it, and lost that. (chuckles) That’s when I decided I’d better get on the other side of the table. So I set up a company called Christina Lake Mines Ltd, and I went from there. Subsequently I became involved with Pyramid Mines Ltd.
We financed Pyramid on a private basis. We were in the Highland Valley, first of all. That didn’t work out. So Henry Hill suggested that maybe we should take a look at Pine Point in the Northwest Territories, which is lead-zinc-silver. There were a few claims that were coming available, so I took a look at them and I said, “We’ll buy those up.” So we bought those. I said, “We should stake another 50 claims.” So we did…
And then I said, “Let’s stake another 50.” We eventually wound up, by acquisition and staking, with 427 claims. Then we did an IP survey. Harry Siegel was the guru on that particular type of geophysical work. We came up with a classical anomaly. We drilled it, and we wound up with approximately 13% combined lead-zinc, but very thick, very thick. Well, the stock jumped up to $22, and there was pandemonium on the streets. (chuckles)
People were stopping their car in the middle of the street and buying anything, just running into the stock exchanges – which were down on Howe Street at the time – and buying. So, we went from there. We brought in a couple of other parties to assist in the financing. Charlie Elliot and Bill Robinson, both out of Toronto. And then we went ahead and did additional drilling, and we proved up a substantial ore body. We sold that out to Pine Point Mines for $33 million.
XL: Nice profit, I’m sure.
Oh yeah, it was nice. Then I set up another company as well, called Coronet Mines. I was staking up in the same area. Once we acquired sufficient claims for Pyramid, I went with Coronet. We wound up with another ore body. That was sold out to Pine Point mines as well. It was a smaller ore body. It was sold out for about $1.2 million. The discovery was in 1965, and the sale took place in 1967. And then we had to battle with the tax department for about three years.
XL: What was that battle about?
They considered that the moneys from the sales were taxable. We took the position that they were not, because of the prospecting laws that were in effect at the time. We brought in a lawyer from Toronto. We documented everything. We interviewed every prospector. It was well organized. Eventually there was a meeting – and I’d already distributed half of the proceeds. So they wanted to tax us for the remainder plus 15%, so in other words, 115% of what we had.
Walter Williston went in to meet with the Department of National Revenue, as it was then called. He phoned me and said, “Things are going very well, but they’re having a problem because they think that the minutes were doctored in the book.” I said, “Why would they think that?” And he said, “Well, they’ve taken a look at your minute book, and it shows that they’re torn out, there are certain articles, minutes from another book torn out and put into there.”
I said, “Just a second.” So I talked to my secretary, Carol, who’s been with me for years. She eventually retired after 40 years. And she said, “Yes, well that’s right. When we got the minute book in, it was in the old form where they pasted everything in. I took everything out and set up the new minute book in the new way we do it.” Walter said: “Have you still got that old minute book.” And Carol said yes. So he said: “Can you courier it back to me?” So I did. They fitted everything together and saw that both books were the same. And that was the end of the case. They gave up, and we distributed the balance of the proceeds.
XL: There must have been many examples, like this, when having a law background benefited you on the business side.
Yes, it helped.
XL: Did you have any oil in the ‘60s?
Not in the ‘60s.
XL: That was the ‘70s.
That was the ‘70s. We got into the oil side in the ‘70s. I incorporated a company called Enex Mines Ltd. NPL. These were the NPL companies. It was with a group in Edmonton. We were exploring for uranium in the seventies. We had Dr. Garnet McCartney, who was considered to be the uranium guru at that time. We went into the Athabasca Basin.
XL: Did you also have Woollett working for you?
We had Trigg, Woollett and Associates. We had Murray Trigg. He was retained through Garnet. He’s a very big man, about six-foot-eight. We wound up with a lot of claims in the Athabasca Basin that didn’t work out, except for one block of claims, and that was the Mann Lake claims, which we still have.
We brought in Cameco first, for an interest. Then we brought Chevron in. Eventually, Chevron sold out its interest, partly to Cameco and partly to UEM. The net result is that they each wound up with 35% and we retained 30%. We retained it for all those many long years when the uranium price went down from about $26 to about $6 and it didn’t make sense to work on it anymore. You just couldn’t make any money off it at that time. But we did retain this interest because it had a huge boulder train, extremely radioactive. Murray Trigg was convinced that somewhere there we had an ore body. So over the years, we kept on doing our programs, making sure everything was in order and so on.
First we had UEM as the operator, and then, in recent years, it became Cameco. We drilled a number of holes. Actually, MN-5 – that we drilled a number of years ago – ended up in uranium, not in the grade that we required, but we did have uranium. We had very strong conductors. So a number of those were drilled, but we didn’t end up with the high grade that we were looking for. But additional geophysical programs took place over the years, and we identified a very strong conductor north to south. Then we drilled two holes, and one of them, it hit the non-conformity.
The other one ended up going through four intersections, one grading 7.12% U3O8 over 0.25 meters, the second grading 5.53% U3O8 over 0.4 meters, and then there were two other thin sections. So we know we’re into an ore body, we just don’t know what size. Maybe it’s an ore body, but maybe it’s not commercial, but it certainly looks like we’re into a McArthur-type deposit. The McArthur deposit is 25 km to the northeast, and the Millennium deposit is 20 km to the southwest. So we’re right on the trend. Then you have Cigar Lake to the north, Key Lake to the south. Key Lake is mined out. Cigar Lake, well, everyone knows about the problems that they’re having.
XL: Just to back up, which company did it start out as first?
It started out as Enex Mines Ltd NPL. Then we dropped the NPL. Then it moved from there to Enex Resources Ltd. From there, the name was changed to Enex International Ltd. The final name change was to International Enexco Ltd, with our subsidiary being, Enex International Inc, that’s the U.S. subsidiary.
XL: I didn’t know the property had been around for that long in various versions of the company.
Yes, it has. Then, I had a company called Coralta Resources. That was when I got into the oil and gas business. I built that up to where we had a cash flow of $50,000 a month.
XL: When was that, that you had Coralta?
That was in the ‘70s. Then I eventually sold control of Coralta, and I was on the board for a while and then dropped off the board. But in Coralta, on the oil and gas side of it, we drilled a number of holes in the Strathmore area and had substantial production. We put pipelines in, several miles of pipeline, and a compressor station. To put that in, I used a private company of mine, View Mont Estates Ltd, to put the capital up. And for that, View Mont Estates ended up with a 25% interest, which it still has.
XL: You also do real estate deals with View Mont, is that correct?
Yes, View Mont is a real estate company.
XL: Interesting. Maybe we can get back to that. But to concentrate on the past resource companies you were involved in, could you tell us about Ivory Oil & Minerals? When did that start up?
Oh, that’s years ago, in the ‘70s and ‘80s. We had a number of different projects in it.
XL: Were you involved from the beginning in Ivory?
No, I wasn’t involved right from the beginning. I came in at a later stage. It was Ivory Oil & Minerals at the time. Eventually with that company there was a reverse takeover that took place, and now it’s Ivory Energy Ltd. I’m still on the board, and I’m a major shareholder. It’s controlled by Greg Hall and Ian Gallie. Ian’s the president, and Greg Hall is the chairman and chief executive officer.
XL: You’re also involved in Red Hill Energy.
I’m the chairman and chief executive officer.
XL: Right. And you’ve been with Red Hill for a while. Originally it was UGL Enterprises, right?
It changed its name a number of times. And eventually, the last change was to Red Hill. Ranjeet Sundher is the president of the company. We eventually evolved into a coal company. There’s a deposit called the Ulaan Ovoo deposit. We completed a 43-101, which proved up 208.8 million tons of coal with an average BTU content of 10,000. So it’s a very substantial deposit. Then we have acquired the land all around us, so we’re going to increase that as we go along. We have another one called Chandgama, which is close to the capital of Mongolia with 70 million tons. I think we’ll be able to prove that up as we go along to 150 million tons.
XL: Seems like a smart move to be involved with coal in that region. I was just reading about all the coal plants China plans on building.
Yeah, the timing is good. This may very well be a power source because we are on a grid in-between Russia and China. I mean, it will cost a huge amount of money. Maybe up to a billion dollars to put the power plant in. That is one direction. The other direction is to go into an operation whereby we ship to the railhead in Russia, and then into Japan or South Korea. There is a Russian company that is doing that right at the present time, shipping coal on the Russian line into Japan, and they’ve made overtures to us. We have quite a number of people really interested in this particular coal deposit.
And then we’re in the uranium side as well over there. We have 13 uranium properties. We have a joint venture with Mega. Mega has a right to earn a 50% interest by the expenditure of $1.5 million, and they had to give us a couple shares as well, which we sold for approximately $500,000. To earn a 60% interest, they have to spend an additional $2 million. We’re the operators, and we have a substantial crew over there, and a drilling program and so on.
XL: One of your biggest successes was putting together Silvercorp, which was originally SKN Resources. I was hoping you could give us a small overview of how that process came about.
SKN had been Spokane Resources, and we had done a lot of work down in Mexico, which didn’t really prove out. So, there’s a Chinese chap named Dr. Rui Feng, or Ray Feng, and he was involved in China. We got together and talked about it. We decided to bring Rui in, roll the stock back, and go into a specific property in China. As it turns out, that property didn’t work out. We had the minerals, but they weren’t economic. So there was another property that Rui had identified, which was a silver property, that’s the Ying property. He decided to put that into the company, and it went from there. Now it’s in production, making substantial profits. As of today, it was trading at $21.75. So it’s been quite a remarkable success.
XL: Built up from a reasonably small company in the beginning.
It was built up from nothing into this company. Rui Feng, he’s built a mill that does a thousand tons a day, together with administration buildings and all the support materials, ball mills, etc. He did the whole thing for approximately US$6 million. Just unbelievable. Mind you, he had put two other properties into production previously. So he did a remarkable job on that. Now there are 800 workers over there. It’s maybe the old style of mining, but with the cost of labor, it makes sense. So the company is really doing well.
The Ying deposit on the high-grade portion of it worked out to about $1000-$1200 per ton. (points to a rock gleaming with silver sitting on a window ledge in the boardroom). That’s about a $1,000/ton material right there. So what happened was in building it, high-grading the property and shipping the ore, actually the cash flow built the mill. Then the company did raise $60-odd million at $19.50/share. But that money has never been used. So the company is now sitting on $75-$80 million, it’s in production, and making, well, $40 million in the last quarter. He’s done a beautiful job.
XL: How has Silvercorp overcome the difficulties with permitting that stymies so many other companies working in China?
When you’re going into a foreign country, as far as I’m concerned, you can’t just go in yourself. You’ve got to bring in people from that country that speak the language and that are familiar with all the officials and so forth. Rui Feng is able to put these permits through and get things done on a really accelerated basis. He’s done a fantastic job.
XL: And what was your involvement? You basically went and found Rui and brought him in?
He was with another company. He was with a company called Pacific Minerals, and he wound up coming to our office. And actually Paul Simpson was the first one to meet him and introduce him to me. But he has a mine in production in his own name in China, so this is really interesting to me.
XL: He already had some experience.
He put two mines into production before this one.
XL: So that’s a few of the bigger companies that you’ve been involved with in the past. Are there any others that we missed?
No, I don’t think so.
XL: I love the story about how you almost went head-to-head with Howard Hughes over a casino in Las Vegas.
Oh yeah, that was part of our history. That was when Ray Maclean and I decided that we should get behind the tables, just like we got behind the tables in the mining industry. There was a hotel that came up for sale, the Landmark. Howard Hughes was involved at that time. He had the Fronteer, and the Sands, and the Stardust, and one other. He put in a bid of just over $17 million for this Landmark hotel that had a casino on the top in a revolving floor.
The gaming commission didn’t want Howard Hughes to buy this hotel because he was practically controlling Las Vegas. He was also a recluse at that time. So what they did was, they put it out that if anyone came in and made an offer of the same price, they would approve it. So Ray and I went down, and decided we’ll buy it. We dealt with the Teamsters. They had an $11 million mortgage on it. I got them to increase it to $13.5 million. Another company agreed to put up $2 million for me, and all the equipment and so on.
We were all set to go, and then we got scared. We didn’t know enough about the casino side and we wondered if we could be killed for this. So, in the end, we decided to back off. But we learned a lot, and we really got to understand the situation. So when three casinos up here came up for sale, it was referred to Ray Maclean. He got together with me, and I drew up all the documentation on acquiring them. I also took an interest, as I normally do. That’s the origin of the Gateway casinos, and the Gateway casinos have been quite a success story.
XL: So you didn’t end up in Las Vegas, but you ended up getting three nice casinos in BC.
Yes, and some of the casinos were rolled into an income trust, Gateway Income Trust. They own the Burnaby casino, and four casinos in the Okanagan, Vernon, Penticton, Kelowna, and Kamloops, as well as the Palace casino in the Edmonton Mall. The deal was that our company, Gateway Casinos, would develop a property, and then they would have a first right of refusal.
We built a hotel in Langley, and we built the Cascades casino, and that was vended into the income trust. We still have the Star casino in New Westminster, and we’re building another new casino in New Westminster. It will be finished this year. That will be vended into the trust as well. And then we have the Baccarat casino in Edmonton. So, it’s evolved into something really substantial, worth maybe over $1 billion.
XL: It’s interesting that you went into casinos when so many people consider resource stocks a big gamble themselves.
Oh yeah, it’s just another gamble.
XL: You’ve been around through the Vancouver Stock Exchange days through the Bre-X scandal to the development of the 43-101. I’m sure that our readers would like to hear your view of how the resource industry has evolved over all those years.
Well, back in the 1960s, things were fairly loose. We didn’t have the regulations we have now. Back then, you would just hop on a plane, head across to Victoria, and meet with the superintendent, who at that time was Bill Irwin. You could put things through fairly rapidly, as long as you had a background and a reputation of integrity. One situation I put it through in one day, which was just remarkable.
But after Pyramid, you wound up with an element that came in, out of Toronto, and they weren’t here to build mines. They were here to fill treasuries, and pump up companies, and so on. So we had an unsavory element that took place out here for a while. But gradually, the regulations started to tighten up. Now it’s not that easy to put things through anymore. You’ve got to spend time, and there’s a tremendous amount of paperwork. And it’s getting more and more so.
XL: Do you think the paperwork has become too burdensome?
Well, it is a very important aspect. You have to have knowledgeable people working for you now. We have a chartered accountant who has three degrees, and we need him – badly! You have to be knowledgeable about the rules and the regulations and make sure your filings are made and so on. The role of the lawyer has become much more important in the past few years, as well as the roles of the chartered accountants and the chief financial officers. You’ve got to have a good, solid chief financial officer, and they’re difficult to get. Some people have bought a company just to get a chief financial officer.
XL: We haven’t mentioned the Contact Lake deposit that you have with International Enexco. That’s going to be big.
I started to mention that with Coralta. At the time, I was working on a property with a chap named Ken Chattin in Contact, Nevada.
XL: And what time period is this?
This is around 1973. We drilled a number of holes. We proved up about 7.3 million tons of 2.31% copper, and a half an ounce of silver. But the price of copper dropped down below $0.60. To mine it, our costs would also have been about $0.60, and that didn’t make any sense. So we put it in mothballs. Then we farmed it out to Phelps Dodge. It was a very tough contract with them at the time.
XL: You basically bullied them, right?
Yes, I suppose so. But it wasn’t smart. So, they drilled this hole called PD-4. It was into the sulfides and it went down 2,200 feet and wound up with one section of 22% copper, together with gold and silver, together with another section that was around 20% copper. Overall we ended up with around 15 feet of approximately 21% copper. They called it a million-dollar hole in those days. A million-dollar hole then is like a ten-million-dollar hole now. But that’s when the copper price dropped way down. With everything depressed, and Phelps Dodge was putting two huge mines into production, so they walked.
We retained it for a number of years after that. Then we farmed it out again to a company called Golden Phoenix. They had it for seven years, but the price of copper was still down, fluctuating between $0.60 and $0.70. Well then, luckily enough, they defaulted. So, I took the property back. That was two years ago now. Then I immediately went in and staked everything that was open, and luckily it was open.
Golden Phoenix had some other claims that were important to us, so I negotiated a deal whereby I took control of those over from them, in return for giving them a release from the claims against them. That’s the way it was at that stage. Then we did a 43-101 on it, and we proved up a substantial tonnage. We’re now at the stage where we have about 14 million tons, proven and inferred. We’re on a drill program now where we’ve drilled four holes, and we’re on the fifth hole now.
XL: Your goal is to double the resource to 28 million tons, right?
Yeah, but I’m not too sure we’re going to do that. What we’re doing is taking it one step further to the proven stage with the oxides. Then, we’ll go into the exploratory on the PD-4. That’s into the sulfides. But the idea is that I’m going to bring the oxides into production because we do have substantial tonnage.
XL: Why have you not twinned that PD-4, just for market attention?
I know that people talked about why I was not doing the exploratory. We went out and raised about $16 million for the treasury. I want to put it into production. If I go full tilt, the earliest I can do it is in two years. The drilling program has to get to the stage where I have measured tonnage. We’re on a 6,000-meter drilling program at the moment. We’ve just secured another drill. And we’re going to have another 6,000 program. When we’ve done that, we’re ready. I’ve hired an engineer. He’s got his Ph.D. and he’s going to do the metallurgy, and the mine planning and so on.
So after this is done, we’ll do the exploratory work, but at the same time we’re going to be getting everything ready for production. That’s the game plan. So the company is doing very well. It’s got proven, well, I call them proven reserves. They’re not really at that state, but they will be, very shortly. Substantial tonnage, ready to go into production from the oxide standpoint, maybe it’ll be heap leaching or maybe it’ll be a ball mill. Maybe it’ll be an SXEW plant. All of this will be determined as we go along. That’s why I’ve hired the other people. Then I’ve hired another man to work strictly on permitting, and then I have our project geologist as well. We got a nice little team put together down there, and it’s working well.
XL: Someone like you who’s been in all these different cycles, when you feel today’s euphoria with people saying “Ah, uranium’s going hit a hundred bucks.” Could you tell the readers about the past cycles and say whether or not it’s the same sort of feeling.
In the sixties, when we had Pyramid, it was wild jubilation because it was so widely held. And that carried on. Then we had a lull in the ‘70s. And then in the late ‘70s, it started to boom again. In the ‘80s – just the beginning of the ‘80s – everything went all to hell again. So it’s like a business cycle, ups and downs and ups. And then, in the late ’80s, it started again. This boom that’s taking place right now is unprecedented.
We have never ever had a situation where every metal has moved up. And all together. Not just a small amount either, it’s substantial. I mean, who ever thought you were going see a time when copper would go as high as it did. We use a figure of a $1.25/lb to $1.50/lb for copper, by the way. But, you know, gold is moving. I see gold moving further because of the weakness in the U.S. dollar.
XL: Arnie, your vision of the dollar. You were around during the currency crisis, you were around when the U.S. dollar de-coupled from gold. What do you see happening with the dollar?
Well, with the dollar, it’s quite obvious. They can’t keep printing money. And that’s what they’re doing. They’re just printing money unbelievably, which is inflationary.
XL: More money is chasing the same number of goods.
You can print money if your gross domestic product is increasing, steadily. That gives you the right to print money. But the minute your gross domestic product starts falling off, you’ve got to stop – but that’s when they want to print money, that’s when they need to print money. That’s the problem.
XL: Arnie, if you don’t mind, could you recount the story about you and Murray Pezzim for our readers. He was another legend in mining. And, by all account, The Pez – as he was called – was a real character.
It was Pezim and Glick, the two, they were a pair. Pezim and Glick were together.
XL: I don’t know anything about Glick. Can you give us the background?
The best I can remember his name was Alan Glick. And they were involved together back east in the stock business.
XL: In Canada or in the States?
In Canada. No, they were from Toronto. Pezim was a butcher, I mean, literally, he was a butcher. That’s what his business was.
XL: A meat butcher?
A meat butcher. Pezim was a butcher. Yeah, but he was a very glib butcher. And he got involved with Glick. And they started buying and selling stocks. And they were opportunists as well. And so when Pyramid hit, of course, every stock went crazy.
XL: So they were in Pyramid?
No, they were not in Pyramid. But, you know, Pyramid was known right across the country. I mean, it was just a bonanza. And so every stock was going like crazy. Every claim from Pine Point down to the border was staked. Thousands of claims. And it was just one of these great claim rushes. It was a natural for forming new companies. People were wanting to invest and so on. So out come Pezim and Glick. They rented the suite at the top of the Georgia Hotel, which was all in pinks and purples, and call girls. And they invited the Pyramid Group, which was us, to come down. So I went down, and I went up to their suite. And this is where I met him for the first time.
XL: So this is in what year, ’65?
No, this would be ’66 because it’s after Pyramid. And that’s when my wife said when we left, “If you get involved with that man, I’m leaving you. That’s it.” And I said, “I agree with you.”
XL: How old was The Pez at this point, roughly?
He was in his late 20s, early 30s. I think Glick was a little bit older than him, maybe four or five years. He was a quiet sort of a guy, very bright. So I didn’t get involved with him at all, until we took over a company, which eventually became Trian Equities, but originally the name was Tri-City Resources, and I had been asked – this company was run by geologists, they were all geologists – and one of them had asked me to work with him. And so we started buying shares in it. We wound up with a substantial number of shares.
And then one of the brokers who represented quite a large number of people, he was kind of tired that this group of people weren’t doing anything. They were out staking and acquiring claims, and I think they had their own agenda, sort of. So they wanted to put other people on the board. So they came to see Ray Maclean. We met with them a number of times.
Then I asked my friend on the board what he thought of it, and he said he didn’t want any change. And I said “You know, this group of shareholders are really unhappy, and they could be a problem.” And he said, “Well, that doesn’t matter; we’re not going to do it.” So anyway, we ended up with a proxy battle.
XL: With Glick and Pezim?
No, no. They weren’t in there at all. I’m just telling you how this occurred. So, there was a big battle. And we wound up taking over control because we had the shares. And because of the fact that the board was against us – the ones that we were taking over from – we took ‘em all out. And I wanted my friend to stay, but he said, “Oh, no, I’m not staying. I have to stay with my group.” And I said, “Well, fine, I appreciate that.” I remember his wife was furious at me.
Then what this group did was, they went out and they got a hold of Murray Pezim. They said, “We need your help, can you come along?” Well, pardon me, they went to him before the battle. And so they had acquired shares, but not enough. Well, then after we had control, Pezim went out and kept on buying and buying shares. So pretty soon he wound up with approximately fifty percent of the shares.
Well, we couldn’t win, so when you can’t beat ‘em, join ‘em. So I called a meeting with him. And I said, “What we’ll do is, we’ll set up a board where there’s five and four.” I knew they wanted to have five. So I said, “OK.” We had three million dollars in the treasury, by the way, at that time. So I was on the board, and then Bill Irwin, who was the superintendent of brokers, he was hired as president. And then they set up an executive committee which consisted of Bill Irwin and myself and Pezim. And we had one meeting. Pezim proposed something and we said, “No, we don’t see it that way, and we won’t go along with you on it.” And that was the last meeting we ever had of the executive committee.
XL: It was the first and last.
The first and last meeting of that executive committee. Bill was still the president and he and I were good friends, good business friends. We just saw eye-to-eye on business, that’s all.
XL: And whatever Pezim proposed was fairly ludicrous, was it?
I don’t recall what it was, but it just didn’t make any sense. Let’s put it that way. To either of us, and we’re businessmen. So, then what happened was Pezim had a private company and, without consultation, he wound up selling preferred shares in that private company worth three million dollars to our company. With nobody knowing it, and I’m on the board.
So I said to him, “Murray, you can’t do that. You have to put that money back. You’re taking a liquid asset of ours and you’re putting it into a private company with no liquidity whatsoever, and no justification for it.” So I said, “It’s a conflict of interest. You didn’t have the approval of the board. Put it back.” Well, he wouldn’t put it back.
So he was down in Scottsdale at this time. And I went down to Scottsdale. He had this new wife who was really quite a gal. He had several wives, as you know. This one was really in superb physical shape. She had her own gym and kept in really good shape. Later on, she socked him at a board meeting. (chuckles all around) But anyway –
XL: Did that really happen?
Yeah, it did. But anyway, on this situation, we were down there, and I said “Well, look, Murray, we’ve got to reverse this. I want the money back in. You go in as chairman of the board, but Ray is going in as president. And we’re taking over with six and five. You can have your five.” It was Les MacDonald and his crew. And he said, “OK, well, I’ll do that. But I’ll do it if you’ll go on the basis of six and six.” “No,” I said. “No, I wouldn’t do that. It has to be six and five for us. But you’ll be the chairman.” And so he eventually agreed.
And I went back and I met with the board. And they said, “What agreement?” And I said, “OK, that’s it.” So I immediately called a meeting, and I laid out exactly what had occurred, and how this three million dollars had moved, and an action had been commenced. I commenced an action right away, by the way, against him, for fraud. So it was a real to-do then.
He got Farris and company in, and they were all yipping and yapping. And we threw them all off the board. Then at the meeting they all came in saying “Hey listen, let’s compromise. Why are we fighting?” and so on, “Why can’t we get together?” And I said, “Look, you had your time and you’re going.” So I kicked them all off the board. And we took over. And I guess that’s probably the last time I dealt with Pezim.
XL: That was concluded in…?
That was in the ‘70s.
XL: Were there any other characters like Pez?
No, Pez, as far as the market was concerned, he was unique. At one time, over 50% of the total shares that were trading on the Vancouver Stock Exchange were through Pezim. He was that powerful. But the trouble was that he was a manic-depressive. And he was such a good salesman that he sold himself. He got convinced the stock was going higher and higher, so he bought himself.
Of course, eventually you run out of buyers and the stock came down because there was no one there to support it. And it would go down and off the boards. And then he would just be totally depressed and would go down to his place in Scottsdale. And he would be sort of a recluse for five months, and then he’d get back into his manic stage. And he would come back. And his buddy, Art. While Pezim was buying, Art was selling, always. This was a pattern. So Art would have all the money. Pezim would be broke. He’d go down, he’d come back, and he’d get together with Art again. And Art would say “OK, if you’re all set and you’re in good shape, I’ll back you.” Then he’d get back into another company, and off they’d go again.
XL: What made Pezim such a great salesman?
He was absolutely flamboyant. He was the president of the BC Lion’s Club here for a while. He bought the club for a while.
XL: I wanted to ask about your son, he’s on the board of International Enexco.
Oh, Brad, he heads up an environmental team. He got his degree at UBC in Economics and Political Science. And then he went to the London School of Economics to get his master of science in economics. He was offered a scholarship to go for his doctorate. And he decided not to. He decided to go for law, so he went to McGill. So he did law, and he was in the Senate for McGill. Then he joined Lawson Lundell. He’s a very good lawyer.
XL: He seems to be following in well-traveled footsteps.
He’s probably better than me. My other son is Mike. He’s with our firm here. Mike defends, primarily, lawyers that are charged with negligence. He’s very good.
XL: I didn’t realize you had a son in this office.
Oh, yeah, that’s Mike, yeah. He’s highly regarded because you know, because he’s constantly defending lawyers. Oddly enough, the ones that are charged with negligence are the ones that are really good lawyers. They’re just so busy, they just overlook a few things along the road.
XL: Arnie, what’s your secret?
I don’t have any secrets. I just get interested in things. And money doesn’t matter anymore, obviously. But I just like to be successful.
XL: You’re not interested in retirement?
I don’t know why anybody who enjoys their work would retire unless they’re retiring to something they enjoy better. And I don’t see it. I mean, if you retire, you go in for golf. Well, all of a sudden, you get so involved in golf that it’s just work. That’s your work, is golf. Well, who wants golf for work? I like deals. And I like people. I like putting things together.
XL: You’re so active and vigorous. What’s the key to your longevity?
I work out every day.
XL: Every day, really?
I work out every morning, every morning.
XL: One question that we like to ask everyone that we put in the Explorers’ League is can you point out fellow colleagues who are also doing an excellent job, or industry leaders?
There’s all sorts. There’s Mike Jones of Platinum Group Metals. He’s terrific. There’s Mark O’Dea, who’s at Fronteer Development.
XL: Anyone else?
There’s George Cross. You’ve met George, haven’t you?
XL: No, not yet.
George Cross had the George Cross News Letter. His father had it before him. And everybody knows him and he’s very bright. George and I have lunch once every one or two months or something like that. When he comes across something really interesting, he calls me up and says “I want to bring this fellow to lunch.” That’s how I met Mark O’Dea. That’s how I met Mike Jones. And I liked them. So my attitude in investing is, first you look at management. If management is good and has a good track record, you can go with it, even if the project isn’t as good. If there was one company that had great management and a mediocre project, and another company that had a great project and mediocre management, I would go with the people. That’s what I do. So I go with the people.
XL: Well, that’s the whole idea behind the Explorers’ League, too. Here are some of the guys with the best track records. Just look at what they’re doing. And you’re one of them.
Well, thank you.
XL: And thank you for all the great stories.