Interview with Jim Paterson, CEO of ValOre Metals (TSX-V:VO)

ValOre Metals is a Canadian explorer with a PGE + gold asset in Brazil, Pedra Branca, and projects in Canada. ValOre is part of Discovery Group. The company is focussed on exploration, discovery and project advancement in minerals and mining.

We wanted to start by learning more about the Discovery Group. The purpose of the group is not to build a "power structure," but is instead intended to build a framework to attract knowledgeable individuals into the group, both technically and corporately. The group has allowed ValOre to cooperate and benefit from some excellent minds and strong companies. It has also allowed ValOre to make acquisitions that it perhaps wouldn't have been able to make alone. The Discovery Group acts as the colonel, but it does not affect the day-to-day operations of individual mining companies.

We always hear about 'strong management teams,' but how are good managers actually defined? First and foremost, absolutely "no assholes". We like the bluntness. The other criteria are slightly less hyperbolic. Paterson looks for "quality" people who are better at their jobs than he is. He also ensures not to seek too many management staff and not to allocate them excessive levels of power.

ValOre metals is a new vehicle, but not a new company. Originally a spin-out venture, founded in 2008, the company's current strategy is clear. At present, ValOre holds Uranium, precious metals, and base metals projects. The goal is to locate large scale mineralization with significant exploration upside and to make such projects relevant and meaningful to major global mining groups. ValOre focussed on projects that have benefited from substantial investments by previous owners. This appears key to minimising CAPEX and maximising margins. The share price flatlined in 2019, but Paterson is candid: this was an issue created by a stock rollback, in addition to a flawed rights offering. The share price started showing signs of life in 2020, but COVID-19 and the market reset have put a stop to that for now.

What do the numbers look like? ValOre, as it is described today, has raised C$7M including recent warrant exercises. The company paid C$3M "cold, hard cash" and will end up issuing 25 million shares for the 100% acquisition of Pedra Banca. Paterson thinks that ValOre has obtained "a lot of data," and has recently put out a 43-101 resource around this data. There are 5 zones that make up a little over 1Moz of palladium and platinum. Several of those zones have exploration potential. Palladium, in particular, is really hot right now, and modern technology had allowed ValOre to evidence the palladium potential in black and white.

ValOre has two years of exploration ahead of it. Will it need to raise capital? Paterson is clear: ValOre needs to go to market but is very used to this being a uranium explorer. The company only has several hundred thousand C$s today, so a financing looks on the cards very soon.

Does the management team have any skin in the game? Paterson has a huge 18M shares out of 90M total. The last 1M shares he bought were at 35%! He is strongly aligned with shareholders and states he will "never" ask people to put money into a company unless he has put money in himself. The threat of losing a salary is far from enough risk for a management team to be truly aligned with shareholders. We love this.

What did you make of Jim Paterson? Is ValOre resources a company you will investigate further? What did you like and, more importantly, what didn't you like about this interview?

Company page: http://valoremetals.com/

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