Trends and opportunities in mining and metals transactions

Theo Yameogo: Hi everyone, and welcome to our three-in-one transactions and strategy session. We are pleased today to pull together three of our top brains from Norton Rose Fulbright, Kingsdale Advisors, and EY to talk about what we are seeing in the Mining and Metal transactions and strategy space. But also, to basically give us a hint about how they view 2021 to be playing out.

I have the pleasure to have with me, Amy Freedman, CEO of Kingsdale Advisors. Pierre Dagenais, Partner at Norton Rose Fulbright, and Jon Wojnicki, Partner at EY.

Before I do the quick intro of the panellists, I just want to reiterate that we're very pleased to have you on. We know that you have other choices of webcasts, especially during COVID lately, and we really think that this is going to be useful and insightful for you as a company or as a service provider - if you're a service provider on this call.

I also want to share sympathies to people that are going through COVID, but still made it to the call, or people that have families going through COVID because it's something unusual. And we want to share sympathies for anybody on the call who has a loved one or who have close friends that are dealing with COVID. We all going to go through it, and we'll get out of it soon enough.

All right. The format of this webcast is going to be fairly simple. We're going to start with Pierre Dagenais talking about his view on the topic. And then at the end of it, I'll ask him a quick question.

And then Amy Freedman will also talk about how they see things from the Kingsdale Advisors side of our sector and then again, one quick question. And Jon Wojnicki will talk about how it's used on the EY side and a quick question.

The good news is that these are three different lenses of the sector that actually allows the audience to truly get the three-in-one, when I'm going to three separate webcasts.

And then, at the end of the presentations, we'll also have a list of questions. We collected probably about 20, 25 questions from you guys in the audience when you were registering, and we put them in categories that we will have the panellists answer.

And after, we'll also take questions from the audience. So, feel free to type your question. We have a team that is not visible on camera, but we have a big team working for all of us. And they'll be collecting your questions for us to share with the panellists.

Let me start with the bios. Amy has been CEO of Kingsdale Advisors since 2017. And she joined Kingsdale in 2014 as executive vice-president. She's definitely a seasoned capital markets professional. She has tremendous years of experience in investment banking.

And she's also responsible right now for the leadership at Kingsdale Advisors. She focuses on providing superior services and outstanding strategic advice to public company boards. I know that some of you on the call here have Amy supporting you. So welcome, Amy.

Amy Freedman: Thank you.

Theo Yameogo: Our next panellist to introduce is Pierre Dagenais who practices corporate and securities law and he emphasizes particularly on M&A and corporate finance in the mining sector… He has acted as council, many M&A transactional as you will expect. And he also did a lot of takeover bids and statutory arrangement.

He also acted for issuers, underwriters, investors in many public offering and private placement transactions. In his job, corporate law practice, he advises Canadian public companies on continuous disclosure obligation, including mining disclosure, corporate governance matters – and he's qualified to practice both in Ontario in Alberta. Welcome Pierre.

Pierre Dagenais: Thank you, Theo.

Theo Yameogo: Last but not least is Jon. Jon's a colleague of mine and Jon co-leads the EY Parthenon for Canada. EY Parthenon for Canada is actually a strategy and M&A practice group within EY, and Jon joined EY in June 2009. He's a seasoned strategy and transaction professional with more than 25 years leading many engagements with mining companies.

He's focused really on how C-suite creates value for shareholders. So really, they are on the agenda - what do you need to improve your return on invested capital, so that you can actually increase performance.

He knows mining really well. He's been to many mines and has also worked on capital investment and productivity improvement for many mining companies across the world. Welcome Jon.

Jon Wojnicki: Thank you.

Theo Yameogo: Just so that you know, who is talking, I'm Theo and I co-lead Mining and Metals in Canada with my co-leader, Jeff Swinoga who is not on the call today.

I'm a mining engineer originally. I also have a PhD in mining engineering, but I focus recently on the business side of mining. So, a particular interest of mine is digital transformation, innovation for the sector.

And as we all know, transactions is very critical to how we actually have the time and the luxury to effectively execute digital transformation and innovation in mining.

My job today is to really be the traffic control guy. That's all I do. And we have the experts on the call. And we will start with Pierre’s presentation. And then we'll ask him questions after he's done his slides. Go ahead Pierre.

Pierre Dagenais:

Great, thank you very much. Thanks everybody for attending. It's fantastic we get to get so many people here…I think I could jump right into the first slide on M&A trends and consolidation.

There's no surprise here. I think as most people have probably noticed, last year was a difficult time for the mining sector. At least the first half of the year. Obviously with COVID coming in, in the beginning of the first year of the first quarter, that created a lot of economic uncertainty, huge volatility in commodity prices, and then a lot of restrictions on operations of many mining companies. They couldn't conduct operations.

Some of the few bright spots, especially later in the year, were some gold mergers. Many kind of shared exchange, no premium transactions, and we started to see a bit of a pickup in 2020 that was driven by the expectation of an economic recovery with vaccines and other matters, and the general reopening of the economy. I think also Asia did kind of got out of the pandemic quicker.

And so that also increased demand for certain resources. I think our sense is depending on the timing and breadth of the recovery, we would expect to see more consolidation in the Canadian mining sector for 2021. That's where we see it. Onto the next slide - finding financing options.

I think with the unexpected global economic recovery, we think there's going to be more financing options available for mining companies. We think the traditional means of IPOs and then for private fund companies and then perspectives and private placements for listed companies as well will be available in part, depending on the commodity prices, but we think there's an increase for that. Other more novel types of structures, the ATM offerings, we think there is a good chance that there may be  increase in the use of those in part because of recent regulatory amendments – and also because of volatility in commodity prices because, I'll speak a little more in detail on the ATM's, the ATM's are a lot more flexible as to when you go to market and when you issue your shares.

Royalty and streaming will continue to be a suitable option, as well as bank financing for established projects. Again, it'll in part depend on the credit markets for some of that, but we think right now everything looks good and we think there'll be increased financing for 2021. Over to the next slide.

I was speaking a bit about ATMs. I thought this would be an interesting thing to talk about. We're seeing more use of them. They've been around for a while in Canada, but we think because of new amendments, they're going to make them a lot more practical for many issuers. What an ATM is, or an at the market distribution, is an offering structure which allows companies to sell their shares directly on the stock exchange.

As I was mentioning earlier, it provides increased financing flexibility because you can tap the market if and when you need capital, and you can do it at market as opposed to at a discount which is more typical for a traditional equity offerings.

Previously, there were amendments back in August of this year. Prior to that, the regulators required you to make certain exemption relief applications and get orders which took time and expense. But these recent amendments for the most part have eliminated those obligations.

There's still a requirement that you put in a shelf prospectus which requires you to qualify your shares, and there's other things as well, which I'll speak about, but it has streamlined the process to a large extent. Over to the next slide, please.

Some of the amendments that they've reduced is that there's no sales cap on how many shares you can issue in a given day, as well as there's no restriction that the program itself be limited to just 10% of your shares. That provides a little more flexibility. Now, regulators are always going to be alert to potential abuses of ATM programs, even though they've eliminated these requirements. The big issue there is, what they're going to be mindful of, is this issuance of shares through the ATM programs materially affecting trading? Because the idea is these are supposed to be done at market. And so there shouldn't be significant fluctuations in prices.

Other amendments have just reduced some of the regulatory burden. Before you had to make filings monthly. Now it's quarterly. Those changes, I think are going to make these more available and more user-friendly to issuers. We've seen, since the amendments have come in place, a few more mining companies use them. I think that's going to be something to watch in the year.

That was my overview of the two projects.

Theo Yameogo:

Thanks Pierre. How long does it take to set up an ATM program? And also, are the ATM generally broker or non-broker transactions?

Pierre Dagenais:

Those are good questions. So, usually I would say it takes about three to four weeks to set up an ATM program. It's a two-part process. Before we get into the two parts, you obviously have to be a public company listed on an exchange in Canada.

And you have to be current with your continuous disclosure requirements. But the first process is to put a base shelf in place. This is a document that sets out how many securities you want to qualify for in an offering.

That document is reviewed by our regulators. And to finalize comments, it typically takes a week to two weeks, depending on if there're any issues. That's the main one. So, you get that cleared and that's the first step.

The second step is to draw down on your prospectus. And that's where you're actually drawing down and saying, "We're going to buy X amount of shares under the ATM." And when you do that, that document is not reviewed. To put that in place, you have to disclose that you also, as to your second question, you have to have a broker involved who's going to be selling those shares on the market.

And you have to enter into an agreement with the broker at the same time. That's the two-part process. The dealers will want to be doing some diligence of the company because they're going to have potential liability under the prospectus, so there'll be involved in that as well.

You can streamline the process and you can do a lot of these things at the same time, but it's about a three to four-week process.

Theo Yameogo:

All right, thanks Pierre. There are questions coming in on an ATM and when we get to the plenary, I'll ask more about this one.

Pierre Dagenais:

Sure.

Theo Yameogo:

Amy, your turn.

Amy Freedman:

Great. Thanks. And I guess we'll switch over to my deck. And I won't layer in the introduction of Kingsdale because Theo did a great job, so we can skip our commercial and talk just a little bit about the background of activism. And we think of activism, both in terms of proxy contests and hostile bids and/or call it “vote-no campaigns” or “give-me-more-money campaigns”. That's all what contests are.

We saw a little bit of a lapse in Q1 last year, needless to say COVID, and it wasn't really in Vogue for a period of time to be attacking companies when the world was facing a global pandemic, but investors will be investors, and normalcy, as far as the world of capital markets - I don't know if we can call it normal - seem to have returned when the world was coming to an end in March. And then for many sectors, their recovery was quite quick, quite tremendous and obviously notably, we had a better gold cycle last year than we did in previous years. So, driving more activity.

I think the dip was rather brief in some ways and in the end of the day, investors are out there to make money, and so contest activity started back. In June, there were nine which was a high, and all of this is only what's public.

There's lots of stuff that happens in private, but lots that happens in public as well. And then, we've seen not only financial activism, but we'd be remiss if we didn't mention ESG as a major theme behind activism these days which can relate both to climate disclosures and in the backdrop of all of this social unrest last year. Diversity as well.

Going to the next slide. There was a drop in M&A activity last year, but from September to November, there was a lot more deal activity. Rumor has it - as all of my friends in financial services and legal firms will tell me - there's a tremendous amount of activity coming, and so maybe that's true. Maybe it's not, but time will tell.

But it sounds like there's a lot of deals in the making and I'd say that one of the hindrances or difficulties with transactions, as many of you have had been attending webinars, et cetera, is ability to do due diligence. Depending particularly if it's physical due diligence around site visits, et cetera has been somewhat hampered by limitations on travel.

I think that depending on quality of your data and what's available without requiring physicality, that may drive some of the M&A activity.

So, one of the things we want to talk about was what we call bumpitrage. And I think of bumpitrage in two ways. Traditional bumpitrage is - somebody actually comes in and takes a position in a company when it's in play. They're in there for, call it more traditional arbitrage/hedge fund activity where they see an opportunity, they take a big position and then they try to extract more value out of a transaction.

Just basics, which we had talked about at the beginning, as many of you will know. Depending on the type of transaction, but plans of arrangements, require 66 and two thirds votes to happen. And it's 66 and two thirds of shares that are voted at a meeting. It's not 66 and two thirds of shares that are outstanding.

And since most companies don't have 100% turnouts - depending on your percentage that you may own of a company - it can really drive whether or not a transaction can be successful.

That's more formal bumpitrage that’s event driven. But then there are usually, or can be investors that are already long-term investors in your stock that have significant positions that basically just come out with statements that they're not happy with the value and they're not satiated with what the board's proposing. The likes of Letko, come to mind because Letko Brosseau has been very well known to come out and say they don't support values and transactions, but they're not in there as a bumpitrage play.

This is a brief case study just to bring up an example, and it's not in the mining case. But it's similar. This is more traditional bumpitrage that happened last year at HBC. And that's not HudBay company. That is Hudson's Bay company - the clothing department store for reference to my mining crew. But that was a more traditional bumpitrage situation where Catalyst, which some people may be familiar with, has many arms to their organizations. Sort of private equity, hedge fund, you name it.

They came in there in an opportunistic way. Not only forming a position in the stock, but then actually going out and doing kind of a mini tender to get more shares to create this block. This was a transaction that was an insider deal. There is a majority of minority.

When I talk about vote thresholds or even different when you have insider transactions, you can have even more power because you need majority of minority votes. So that you can play that math as well. And so they came in and ultimately, the $9.45 original offer that they were never going to offer any more money for became $11 a share. And so, they made money on their acquiring shares anywhere between $9.45 and $10.30 and Obviously everybody ended up with a different deal.

That's just one case study. There were quite a few more last year. I think, the one message that we're telling people, and this is the next slide, some examples are, bumpitrage or vote no, or people holding out for more money is definitely a theme in the market – and particularly it can be the case in cash deals because cash is a final exit. And so, take privates, we've seen take private, because Hudson's Bay was obviously a take private. Great Canadian Gaming was a take private this year. Last year, there was Canfor, which actually got voted down. That was also a take private because there’s no opportunity to ride the upside, and in the land of COVID, there is a disdain over opportunistic takeouts because you could be in a depressed sector. So not as applicable to mining, because it's not feeling the pain as some other sectors. But if people view things as opportunistic in terms of timing where you've taken away upside, that could be theirs and they no longer have exposure to it, there's greater sensitivities around it. So, our message to every company is deals that are not a certainty. The board needs to exercise its duties in evaluating transactions. But ultimately the shareholders get to cast the vote.

So, moving to the next slide - activists picking targets - there's some formulaic approaches, some of them are more opportunistic, they look at peer trading valuations, they look at, particularly relative to your peers, how are you doing? They also start calling other shareholders to see what other shareholders are thinking and starting to see, is everybody happy? They gauge a temperature because they can do this legally, and they can come out with a view maybe, that has some following to it to give it more thrust and then depending whether they want to be the front man/person as I should probably say, they will then start thinking about making a campaign. So, they look at the deal terms.

The other thing that is critical in transactions and something Kingsdale does is, depending on your shareholder base, the proxy advisors do have an influence in shareholder transactions of the proxy advisors - I'm referring to ISS and Glass Lewis - they recommend on anything that has a vote. So, if you're doing a deal, that's not by tender, tenders don't get opinions. But if it's a plan of arrangement, you will get an ISS and Glass Lewis opinion, and they will look through some of the terms of the deal, the process around the deal, particularly how well the company was shopped. And then the activist will look at these elements as well to take shots at whether or not they think a transaction was properly pursued. And then obviously, as I mentioned before, engaging with shareholders.

A I would say the proxy advisors are influential in M&A, but less influential than they are in proxy fights because in the end of the day, a lot of it comes down to valuation and what the portfolio managers believe is supported and what the opportunity is in the long run.

So, moving to the next slides.

I think I talked about this, the activist - this is from the board side - you've got to make sure that you have a supportable process. You don't want to downplay down. Everybody's risk is always about if the deal doesn't happen, there goes your premium and it trades back down to where it was before, but then it's a question for how long? Think about the roles that external parties can play. Like, what are equity analysts going to think about it? Who's friendly to you? Think about who may or if it makes sense to wall cross any shareholders. We obviously know that there are sensitivities around shareholders getting into blackouts, but if you've got a chunky top shareholder base and you're not sure where their heads are at and you put out a deal, and the first thing that happened - which is what happened in Great Canadian Gaming - was their larger shareholder who had a significant chunk came out and said, we don't like this deal at all. And so that's not the press release that you want to read on day one. So really, having a sense as to where your shareholders are, generally, their appetite for sale is one of the most important things. And then, you've really got to be able to have the story to be out in supporting the deal. So those are a few tidbits of advice. I'm sure we'll have a more engaged discussion as we go on, but I think that's it for me.

Theo Yameogo:

Thanks, Amy! Quick question for you on bumpitrage. By the way I had to look it up and saw the article that started talking about it. This is not a very common word in the mining world, but obviously seems to be something that you see more and more of it. It looks like it's a form of sabotaging a deal. Is there an upside to this?

Amy Freedman:

Well, the upside usually is that the deal ends up at a higher price. Maybe not an upside to the buyer, but certainly an upside to those who are shareholders. So, what you do find is it's very few deals that don't end up happening. You know, I think last year, very notably you saw Air Canada and Transat, and that wouldn't have a bumpitrage because Letko had been a shareholder for a while. And obviously this was pre-pandemic. So, hindsight 2020, but there was probably one of the most significant raises on an offer price in the end of the day, then there wasn't. And, and the bottom line is I think what most shareholders think generally is what's the downside to asking for more. If you don't ask, you may not get. And board ends up getting a better price for all your shareholders. The board looks good too. So, I don't know. Maybe win-win.

Theo Yameogo:

Okay. Then we'll have more questions about bumpitrage for sure. And then I'm sure the audience, some of them are just like me discovering these new terminology. That's actually critical as we move forward. So, thanks Amy. We going to pass the mic to Jon, Jon, please go ahead.

Jon Wojnicki:

Good afternoon everyone, or good morning if you're on the West coast. The theme of the presentation today is going to be about the current context, the business context and mining, and then capital allocation.

So, in the current environment, most of the miners that participate in the big commodities should be spinning off a lot of free cash flow. Precious metals are at good price levels. Silver recently has had a really good run. Gold has had a good run for a little while now. And palladium is at quite high levels. Base metals prices are fairly robust, especially nickel has seen a bit of an upturn. Hopefully it can sustain. Zinc has been robust for a few years with some ups and downs. And Copper is at very good levels. Same for iron ore and in coking coal. So, the revenue line is doing quite well to the extent people were able to sustain operations during COVID. They should be seeing good revenue. In terms of their cost structure to the extent some items are denoted in local currency, such as labor, which matters more in underground processes, but does also matter in other processes most producer currencies are at.

Theo Yameogo:

Did we lose Jon? Okay, so I'll be asking questions. If you don't mind, while we're waiting for Jon, I’ll go back to Pierre for a second here. Is it possible to name companies that use an ATM right now?

Pierre Dagenais:

Yeah, there's a few. There's public disclosure, so they would have to disclose that on CDR. I know Golden Star put one in recently and there's a few other mining companies as well. That's the first one I can mention off hand. So, they are becoming more common

Theo Yameogo:

Cool - and Amy - under bumpitrage and all other issues, like you talked about, what can we expect the role of proxy advisors, like Kingsdale advisors to be?

Amy Freedman:

Well, proxy advisors refer more to ISS and Glass Lewis, and Kingsdale is on the solicitation side, just for clarity. So, we actually prepare and help to get the vote and advise on how we think the proxy advisors are going to recommend. I think the challenge really in the proxy advisor world is when a slew of shareholders comes out, opposing a transaction or thinking there's more value there, there's a struggle on the side of ISS and Glass Lewis to recommend for a transaction when there is opposition. So, depending on what the nature of the opposition is. Now, they might be more suspect of a shareholder that just piled in for the sake of trying to get more money for something. So that would be more traditional bumpitrage. But for example, in the situation that I've referenced in the deck, with HBC, there was a lot of criticism there around the process that the board undertook in order to reach a transaction, and there was more about that process than the value that was critical for the proxy advisors.

I don’t know if you got Jon back. I see a cell phone. So maybe he's back on.

Jon Wojnicki :

Yes, I am back by cell, but why don't you guys do Q&A until I pull up on screen. It might be a smoother presentation. So, go ahead with the Q&A.

Theo Yameogo:

Additional question to Amy around the proxy advisors. In recent months, there’s been a lot of talks on ESG, and I know we have an ESG section for when we finish the presentation, how are the proxy advisors got to play around the numerous producers of ESG ratings?

Amy Freedman:

Well, I mean, some of the proxy advisors actually own rating companies, and they have their own metrics and organizations that they use for those ratings. And they issue separate reports surrounding ESG factors. But when we look at sort of the more macro reports that they write, like that headline reports, I think a lot of the way that they evaluate ESG comes down to how a company actually provides enough disclosure for them to make evaluations. So, some things are more formal, like obviously climate change and what are you doing? And are you following TCFD? And those metrics make it a lot easier. Are you looking at SASB standards as well from a sustainability standpoint? So how you draw those into your proxy circular to be providing more fulsome disclosure helps guide the proxy advisors as they make their recommendations, but they do hone or have their own proprietary methods for evaluating ESG factors.

Theo Yameogo:

Okay. Thanks, Amy. I'm going to go back to Pierre while Jon is getting ready. Pierre, what are some of the key issues that your clients consider before they put an ATM program in place?

Pierre Dagenais:

I think that the key one, the most important one to think about is what are your capital needs going forward? And when do you need it? So, because when you put the base shelf prospectus in place, you're going to have to disclose how many shares or how much money you want to potentially raise. And that could have an overhang on your stock price potentially. The other related point is, you have to disclose whether you're going to potentially use an ATM for that base shelf. And the regulators will ask questions about that. And they'll look at what your volume of shares are, what's the expected proceeds you want to raise from an ATM. And you have to kind of think through whether this something that we can feasibly do over a period of time and raise money kind of on a day in, day out basis when we need the money.

If, if it's a situation where you need the money upfront, the ATM probably doesn't make a lot of sense. And I think it's probably better to go to a more traditional offering, whether it's a prospectus or a private placement. Some of the other advantages though, obviously are, if you're using the ATM, with commodity prices and volatility, which are going to presumably reflect your stock price, you can go into the market and you can be buying at market price when your price is high. So, you're, getting the shares at a better value. So that gives you flexibility. The commissions from the underwriters tend to be less as well. So those are all advantages. The question is whether you can use that flexibility with the market can support it or not. And if not, then maybe a more traditional financing is a better way to go.

Theo Yameogo:

All right. Thanks Pierre. I've got another question for you, but when we come back to the plenary as it's related to what you just said. Let's go back to Jon. Jon you were talking about the currencies and commodities.

Jon Wojnicki:

The story there is miners should be producing lots of free cashflow, good prices. Input costs are a little bit lower. Currencies are at normal levels. Miners should be cranking out free cashflow.

Now, one question that always comes up when miners are producing lots of free cashflow is what are they going to do with it? There's a mixed track record of success with that. And, there's no shortage of ideas, whether it’s going to be ideas from their board, from investors, from friends that own juniors, bankers will be walking the halls and suggesting all sorts of interesting ideas, but, what are good ideas for different companies and at different times varies.

If you look at that slide, I will take a few minutes to introduce it. These are some of the options that miners have at their disposal in terms of how to deploy capital. On the one axis is the return on capital, the IRR.  On the Y axis is the risk – it is a favorable risk up high, an unfavorable risk down low. And then the bubbles you see that are different ways to deploy capital that plotted are different colors. And the color really represents how actionable that is by an individual mining company in their own. So, you see infill exploration at the top, it's green because something that mining company largely can control itself. Where some other things like a share buyback, that depends a little bit on the market, whether it's a good thing or not in terms of deploying capital.

So, the color indicates how much it's in a miner's control or the company issuers control. And the size of the bubble is how strategic is it really? Is it going to provide a rerating? Is it going to be a next leg of growth? And so, it's a complicated matrix with a lot of information packed in on it, and it'll be different for every individual company. What you see here is kind of a conceptual representation of sort of 20 years of watching and studying the markets. But for every individual company, this is going to be a different picture. Some that are very undervalued share buybacks, provide a very big return on capital. Some of an all-time peak valuation, maybe share buybacks are not the best thing to do with capital. So, this is just kind of an across-time, cross-company snapshot of on average, of what works for the mining industry.

I'll just take you through this, and this'll probably be the bulk of the conversation and questions on this topic. M&A is one of the topics on here. And sometimes there are good deals, sometimes not so good deals, but as you know, Paulson will, as I told people a couple of years at the Denver gold show by and large miners, haven't done a great job of deploying capital through M&A. We mean here, not at the market deal where it's kind of a merger equals with limited small to zero premium. This is kind of the 40%, 50%, 60% premium, where there may not be a lot of regional synergies or asset level synergies. Those tend not to go particularly well and tend to be done sometimes at the top of the market.

So, we're thinking through what makes a good deal. And are you being realistic about viewing how hard you want to pursue it, or chase it or bump into the bumpitrage, if you will. Other things that you'll see on this page that may be of interest are operational improvements, deploying capital to make the operation better is usually pretty quantifiable and risk-free. May not be always be the juiciest return and that you can't put a lot through it cause they're smaller opportunities but tend to be better uses for capital. Brownfield expansions, if you have those in your portfolio and your stable of tools to deploy, tend to be better from a return and risk profile, depending on the technology you're trying to develop. Technology opportunities maybe helpful. Joint ventures are useful. And with this, there's a few on there, two that are worth talking about a little bit more are dividends and share buy backs.

So that's something people get a lot of pressure to do. Certainly, some of the clients I've been talking to have been contemplating, what's the right mix of these different ways to return capital at this time in capital markets. Dividends or share buy backs or any of them at all? Do I reinvest back in the business? And so, there's some pros and cons to each.

Dividends by and large are pulled in kind of the more generalist investors. So that's a positive … and it's a positive signal that you anticipate having stable cash flows, but there are challenges with the dividends on that people like dividends to be increasing over time. And that may be a challenge.

If the core business sees some unexpected issues, you may have to yank those dividends and that creates then a shareholder turnover and you're almost imposing a taxable event on investors. And if you're a Canadian with an RRSP, you don't really care so much. Even if you're Canadian outside of an RRSP dividends are treated not too badly, but for foreign investors, it could be a challenge. And so unbalanced people have preferred share buybacks  because people concentrate the shareholder base and there's a capital gain that should be incurred from that if they're bought at a good time in the market cycle and people can choose when they're going to have that taxable event  - they  can sell when they want to, or they can hold onto the shares and participate in the ongoing upside of the company. So, on balance, that seems to be the preference, both kind of analytically, logically, and what we've heard from people talking to their shareholders. So, that's one of the preferred ways.

One last slide I'll touch on quickly. Sometimes more aggressive shareholders encourage people to lever up to do share buy backs. And this is great if you're consumer packaged goods company in the S&P 500, or you're a utility company, you have stable cash flow profiles, you're able to issue debt in the jurisdictions where you have a profit and then shield the interest, you have a cost of debt that's much lower than your cost of capital in mining, midcap miners in Canada. The cost of debt sometimes approaches their cost of capital depending on the situation. So, there's not a significant change in the cost structure of the company. And also, the going firm assumptions. If you've got a mine life of five years, maybe not great to lever up to buy back shares. You kind of have to deploy your capital and extend your mine life. So, for miners, resist the pressure to lever up and buy back shares or issue dividends. As popular as that may be amongst generalist investors and activist investors in the U.S., our advice would be to maybe stay away from that.

Theo Yameogo:

Jon, a quick question, before we go to plenary. It's actually a double question on the previous slide that you had. you mentioned a bit about the M&A, but why is the greenfield projects not entirely in the control of a mining company?

Jon Wojnicki:

The greenfield projects, which is a big way to deploy capital and often quite strategic because it adds another producing property, can diversify risk across jurisdictions. It can make you a multiple property producer. So sometimes that leads to re-rating. So, all those things are very good, but why isn't it in your control entirely?  As we can see from some notable examples in Arizona and in other jurisdictions, it's not always up to you when you can actually build and start a large greenfield project. There's a lot of consultation that's involved, a lot of permits that are involved. In some cases, the capital markets have to be supportive because the commodity price backdrop or the availability of capital is quite right. It’s a big lever to pull. On average people tend to get them right often rescued by the metal price or an extension of mine life, but they tend to be positive to do. Some big blowouts have been horrible, but it's also not in your control. So, you have to maintain a portfolio of other good things to deploy capital.

Brownfield projects, if you have them. Use your balance sheet to earn into projects others can't fund, maybe. It's kind of JVing with limited premium. Grow your reserve base. While you push forward on some of these things, study M& A opportunities, study your greenfield projects. Keep an active portfolio, because those two are in your control.

Theo Yameogo:

We are now going to go to our plenary Q&A and I would like to start with Pierre. In this plenary we have talked about base metals in general, but also battery metals, international affairs, ESG streaming, and small cap. And these are questions that we received from the audience, and then we re-categorized them to make it easier. Pierre, what are you hearing from your clients and from different participants in the sector around the volume of transactions for base metals.  In Canada, we tend to talk a lot about gold. But what do you hear around base metal in general?

Pierre Dagenais:

Gold really picked up at kind of the middle to the end of last year because gold prices increased considerably. And the base metals, you know, things like copper started to increase a little bit, but they obviously weren't going up as much. Gold has leveled off a bit now.  The base metals, I think it's really going to depend on where the economy goes here. I mean, we're hearing some things about potential transactions. But I think it really depends on what happens the next couple of months. How long is it going to take for the vaccine rollout, for the economy to recover because the base metals will start to increase and then I think you'll probably see more M&A then.

Theo Yameogo:

Thanks, Pierre. Jon, do you have anything to add? And maybe it's not only base metal. Maybe it's also a battery metals.

 Jon Wojnicki:

I don't know if many of you track battery metals, but there's been quite an uptick in battery metal prices. And people are beginning to recognize the prices, especially in things like lithium and nickel may begin to turn. And cobalt from sort of more certified, cleaner, ESG responsible sources are going to be in scarce demand.  We are beginning to get the sense that the eye is turning to that market. And recently certainly there's been some notable offtakes. Tesla, for example, has signed a big offtake deal with Piedmont, who then also signed a deal with Sayona Mining on a deposit in Quebec to kind of secure offtake. But we think that's sort of the beginning of other things that may begin to take place in the lithium space as people realize electric cars are beginning to be accepted.

People see lots of growth. Lots of people are building battery plants. But the raw materials aren't there. There needs to be sort of $40 billion worth of capital investment into lithium extraction and refining in order to meet even modest projections of electric vehicles. That's going to be a constraint, especially as the chemistry shifts towards more lithium hydroxide, rich battery chemistries and away from the cobalt rich ones. You may see some M&A there as people that are more downstream, either joint venture in, or do major financings, or outright acquisitions of people that are refining lithium chemicals or have refining projects on the books, and they just secure offtake. Tesla announced their own refinery and is commercially securing offtake, but others may do different things.

Theo Yameogo:

Thanks, Jon. Amy, when you talked about the behind the scene of transactions, we saw in the TMAC saga that government can step in and no matter what the shareholders are doing, is a new reality that comes up. What do you foresee will happen in 2021 and beyond when it comes to those kinds of moves by government to prevent takeovers?

Amy Freedman:

I am not an expert in governments per se, but as everybody knows in transactions and depending on who the buyer is, there could be more risk, particularly when it's a foreign purchaser. So, there is this second step. We've seen it in mining, and we've seen it in other industries as well - Aecon, to ring a bell from way back when. And yet, you'll look at the performance after that was quite tremendous. So, there is deal risk around foreign purchasers. And my friend Pierre and the legal firms have sometimes better perspectives on this, but I think that's just another calculated risk. It certainly helps if you've got overwhelming shareholder support for a deal in the backdrop of any necessary regulatory approvals. But then you're also talking about quite frankly, politics where somebody has to be a lobbyist to solve some of these issues. And how do we want to ensure that we're protecting assets while at the same time we're participating in a global market, because I think there is a balance there.

Theo Yameogo:

So, Amy, are we foreseeing that maybe somebody, especially the ones that are lots of cross border - are we foreseeing that they will maybe start thinking about having lobbyists or political advisors in addition to what we traditionally build the boards to be?

Amy Freedman:

No doubt there are lots of people who are not only jurisdictional experts on boards, depending on where your assets are. Because there's also a difference between a company that may be a Canadian company, but their assets aren't Canadian. TSX is the hub for many mining companies, but not everybody's assets are here. So, there's a difference jurisdictionally wise. So, it depends quite frankly, on where your assets are, what skills you need and what you're trying to play because I think the challenge really is you don't want assets to also be, how do you find the balance that you're not hamstrung to get the best available price while balancing those protections. And so certainly we've seen lots of companies where there's cross border deals or other things where there's commitments to maintaining things in Canada, commitments to maintaining employment, and other things that help assuage some of the concerns. I mean, unfortunately I think a lot of these things sometimes turn out to be for show. But in the end of the day, if it ends up getting a deal done that's successful, this also plays into the more massive debate that people have on stakeholder-ism, which I won't deflect onto that debate today. But you know, it's really a matter of who is the corporation responsible to? And in Canada, that's the stakeholders in a total view. So, shareholders are only one constituent.

Theo Yameogo:

Pierre, I know you have something to say about this. Whether or not the TMAC saga is going to become something new, I just wanted to add a flavor to it so that you can enrich your commentary. When we started closing the borders, we started hearing lots of voices talking about how we outsource some things and we should have kept medical pharmaceuticals in Canada. And then we saw also in the US discussions around more protectionism around what we do or what we don't do. If we think about battery metals like Jon is talking about, and we think about what's happened with TMAC in your view and how not disclosing your clients, you guys get to touch on those ones a lot. Are we going to see, on top of what we're seeing right now, a new regulation around, oh, we're not going to export lithium or we're not going to export carbon or anything that has something to do with what we call the critical transition, energy transition material?

Pierre Dagenais:

I think there obviously is the trend towards protectionism. In part, I think because of what happened with the pandemic, I think TMAC is a little bit different. It was a gold company, I understand, and they were really more concerned about the strategic access to the Arctic. So, the way I understand, it wasn't so much for the actual metals that they wanted. It was the fact that they were getting access to a very sensitive area. So, I think that one's a little bit different. There was also state actor involved. So that's, I think, a little bit different than other situations.

But I think there could be a general trend for companies to look at their resources that they have ... and that resources that are seen as strategic, for whatever reason that may be, it could be for a variety of reasons like batteries, other things, …,  that certain companies or certain countries may actually start restricting access. So that's a potential trend because we're seeing kind of protectionism generally. So, I wouldn't discount that at all. And I can see countries starting to look at that. The reality though is most of the mining industry is very global. You have global buyers. And so, I don't see it restricting the market considerably, but there could be certain areas that are seen as strategic where there could be impacts.

Theo Yameogo:

Okay, thanks! Jon, this came up a lot from the audience. And it has to do with Joe Biden in the United States. Do we expect anything that will change materially with Joe Biden's presidency on mining and metals, not only in United States, but also for us in Canada and globally?

Jon Wojnicki:

So, in anticipation of this question, I talked to some of my US colleagues. I haven't done sort of a review of any pending policy. So, it's not fully informed with official policy. But the opinion is by and large from some of our senior practitioners in the US that the Biden policy is probably going to be tough on the coal business. I don't think that's a surprise to anyone. Sort of mixed on what it's going to mean for things like getting gold projects approved in Nevada. They think that's largely going to be an involved analysis and consultation, but it's going to be a rational process. Perhaps the same for copper in other parts of the US, which has sort of repositioned as an electrification, enabling the cleaner economy. For sure, rare earths and battery metals are becoming a hot topic politically. And we'd probably see a lot of flexibility and encouragement on getting a North American supply base. It's not even a US specific supply base. And things like potentially strategic reserves, if some of those metals that are enablers of the new economy and the cleaner economy, which is a big agenda of the Biden administration. So that's the view of some of our people and it remains to be seen. But I think tougher on coal, better on things that are enabling the green economy. And for softs and fertilizers and gold and things like that, it's probably an open conversation.

Theo Yameogo:

Amy, any comment to add to this?

Amy Freedman:

I think Jon did a pretty good job there.

Theo Yameogo:

All right. And now a question for you, Amy. In your slide, you had ESG. Well, I think you call it climate change, ESG and diversity, as rising topics. What do you see right now? Is it that it's in the agenda or is it that boards are thinking about it? What's the status of, and when can we anticipate the trend to be for this year?

Amy Freedman:

The trend is long underway on diversity as it pertains to women. Diversity is not a new topic. As I said, as it pertains to gender, it's expanded now to the BIPOC community. For everybody who should understand, that term is Black, Indigenous and People of Color. So now folks are looking at more diverse boards and how are you responding to the need for diversity. So, it's completely actionable. The Task Force that has been working with the securities commission came out with bold statements on diversity. The excuses are no longer in mining. I will make the unpopular comment that it's been an old boys’ club for some time. It's chummy. It's who's friends with who on boards. I personally sit on a mining board. I'm not a mining engineer with no mining expertise. So, everybody on your board doesn't need to have technical ability.

There are lots of positions on boards that may not be the technical people, but that can be filled by diverse folks. At the end of the day, there's lots of talented people also with the necessary technical backgrounds as well. So, in my mind, it really won't be tolerated. Boards that are not having a diverse representation on their board and aren't setting targets/policy/actively doing something about this are going to be criticized by their shareholders. There will be low tolerance. I'd be remiss if I didn't make the point that it comes down to who your shareholders are. So, if you have the sophisticated institutions in your funds, if you have ETFs in your shareholder base, if you're influenced by ISS and Glass Lewis, pension funds, et cetera, that leads to negative results. If you have a more or less traditional following, you might get away with it. But just because you can get away with something, obviously doesn't make it right. So, I think hopefully we're moving to a very low to zero tolerance environment.

Theo Yameogo:

Pierre, on this topic of ESG, a question from the audience on whether or not we're going to get to common reporting standard at some point. The audience member is saying there's almost 10 currently in existence. Are you hearing anything around that in the legal world?

Pierre Dagenais:

Globally, there's a few standards out there. I know the task force in Ontario that's recommended, the process in the UK that's been adopted by other countries, or in Europe.  So, I think over time, there's going to be some, there's a lot of similarities, but I think over time, there's going to be adoption of, if not one uniform process, a few processes that are consistent. But that's going to take a bit of time. But I think that the key issue is that regulators are focusing on this issue and public companies are going to be obligated to disclose these requirements, which I think is pushing everything in the right direction.

Theo Yameogo:

Yeah. That's a very interesting segue into this question for Jon around cobalt mining and the DRC.

Jon Wojnicki:

I think we can build on this last question and this question together.

I think increasingly in a number of other basic material industries, like pulp and paper for example, people have to supply a certification that they are looking after force in a certain way or using certain types of chemicals in making pulp and treating effluent in a certain way. And they have to get certain certifications to bid on tenders to sell their products. And so, I wonder if that's not coming in the mining industry, especially for things that are meant to sort of be green and ESG friendly, like batteries enabling the transition to electric vehicles. It seems a bit out of place that you kind of have the mining tactics that happen in the DRC being a critical part of enabling an economy that's supposed to be sort of advancing society forward.

At least that's the assertion that that's what it's doing. And so, there's some enabling technologies here perhaps as well. Not just sort of maybe certification, and standards, and practices, and an audit trail for that, but the question is, certainly in diamonds, people are trying to put a lot of time and energy into sort of tracing origins, individual serial numbers and the block chain of custody and things like that are sort of things that people are talking about. Now, is cobalt valuable enough to do that? Tough to say. But certainly, something along those lines may develop in some of the bad actor commodities like cobalt where people are really concerned about the point of origin.

Pierre Dagenais:

Just to add, I think a lot of the major lenders and banks are adopting these requirements too. So, they'll have to make sure their borrowers are in compliance before they can lend. You know, IFC and other global entities that have already been adopting those rules and I think large banks will do the same thing.

Theo Yameogo:

Staying on the same topic, one question from the audience around where we will raise capital as a sector to support the green infrastructure and the EV. Do you guys anticipate it will be the same type of lenders or are we going to see a new breed of lenders into the space? Elon Musk was saying that Canada keep producing green nickel, I will need the nickel - are we going to see maybe a Tesla starting to fund a mining company with the purpose of getting their ESG to a certain level  so that they can produce those materials? What's your take on that?

Jon Wojnicki:

I think there is a need of a new type of investor into the battery metals. $40 billion needs to go in. Currently, lithium is a $3 billion market. It's complicated. Different technologies, evolving technologies. For a $3 billion market with maybe one broadly investible blue chip company in the space like Albemarle, which has a big market cap and a certain amount of liquidity that a billion dollar fund could take a meaningful position in and hope to be able to trade it. Wall Street doesn't care so much. It's just too small a market to understand it properly. So, who's going to provide that capital? Some of the deposits in the industry is not big enough to move the needle for mega minors like BHP. Rio Tinto is not really advancing its Jadar project in Serbia. Anglo American has not shown an appetite. So, I think we're going to have a sort of mining private equity coming into the space.

We may have to see some of the battery or OEM players coming in. We may see sort of the pseudo sovereign wealth funds like Investissement Québec seems to have big positions in a lot of the lithium-ion battery metal type opportunities. And you can see other people that are kind of trying to have an ESG agenda to their investing that are pseudo sovereign wealth or kind of semi-sovereign pension plans unlocking this opportunity and getting behind it, seeing the long-term view and the trend and not needing an immediate payout. But definitely traditional money of big chemicals, big mining isn't moving. The auto OEMs apart from Tesla aren't really investing that far upstream. So, we're going to have to see a new investor. It'll be interesting to see how these types of investments qualify for green bonds, or climate bonds, or all sorts of other things.

Elon's comment about green nickel from Canada. That's great. But Quebec with all its hydro power is a fantastic place to process lithium through to cathodes and graphite into anodes. When people ship spodumene, which is a precursor of lithium, it's 94% waste. And that stuff gets shipped from Australia in the middle of the country, to the coast, all the way to China, and inland to be refined, and then finds its way to Japan or Korea to be made into batteries, which then goes to the US to go to car plants.  That’s not very green for something that's green.

So, when you look at supplying North America, Quebec is definitely a good place to meet and parts of Northern Ontario, a good place to meet the need. But we're going to have to see a new kind of investor getting behind it in order for the capital to actually be there and it's probably not Wall Street initially; may get there, but not right away.

Theo Yameogo:

Question around predictability of regulatory processes in Canada. How is the deployment and availability of financing effected by somewhat unpredictable regulatory process in Canada, which is influenced by various social factors? Do we see the regulatory process in Canada somewhat unpredictable? And second, what are your clients saying around deploying capital?

Amy Freedman:

Well, I think we touched on the regulatory process a little bit earlier and Pierre can comment more, but obviously like your ability to raise capital and there's lots of focus on how to open the capital markets up wider to give a better and easier access to capital, which is the taskforce that's been mentioned before. Part of their goal is to make it more accessible. But I don't want to backtrack into discussions about obviously the other anti-competitive and bureaus and etc that get involved. That’s a government arm over the securities regulators and I'm more comfortable in the securities regulation land. So, it's tough to say what that question is actually really asking. To be frank, I don't know if Pierre has a different view than me. There was lots of words in there, but I don't know that there was an end game question.

Pierre Dagenais:

I agree. So like Amy, I'm more on the securities law as well. I think there's a lot of things changing I think in the investing world for resource companies, whether it relates to ESG, indigenous rights, other matters. I think those areas obviously are going to have an impact, they're having an impact and so I think those areas are just going to be more of a focus. But I don't think it's just a Canadian issue, I think it's an international issue.

Theo Yameogo:

Okay. We'd go back to some interesting ESG debates, the private vs public. And again, Amy, you talked about some companies being taken private. The question from the audience is regarding the ESG effort. The audience person asking the question seem to think that when the company is private, they have less requirement on the ESG front than when they're public, because when they're public have to disclose it. Is that something that you're hearing from board members or is that something that we think may happen in the future?

Amy Freedman:

Public companies are held to different standards than private companies. And when you think about being public, that comes with a slew of obligations, disclosures, and risks, and companies often opt to stay private because they don't want to have those discussions and they're regulated in a very different way. As far as it comes to certain rules and regulations, those apply to everybody, but certainly in the public company domain, when you are looking for other people's money, you have to answer to other people. I think it still happens in the private world if you're getting any external funds, but it's just not the same comparator base. When you're in the public company domain, you have public company peers, everybody's being compared, then somebody sets the bar and you've got to meet that bar and then you've got to keep going. So of course, there's far more disclosures, behaviors, everything that comes when you decide to be in the public eye. So, it's just factual.

Theo Yameogo:

Thanks, Amy! Question there on SPACs. Pierre is that more in your field? The question is, do you expect to see greater use of them?

Pierre Dagenais:

So that's interesting. In the US very recently, there's been a lot of use of SPACs recently. Canada, as you may know, we've had a form of our own SPAC with the CPC structure for venture companies for a long time. And those have been very successful. We also have a SPACs at the TSX level too, which have not been used as much. Are they going to be used more? I know in the US they've been quite common. I think the market right now, the way the market is, they're seen as a very easy way to raise capital. I'm not seeing as many in Canada, so we'll have to wait and see. I mean, the US markets are obviously a lot deeper market than Canada. But the CPCs have been very successful for the more junior companies. That's what I've seen.

Amy Freedman:

Definitely in the mining space, I would say that, that's the perfect road to go on public has been CPCs. It's a great program for junior companies and I'm going to guess it's here to stay.

Pierre Dagenais:

I agree with that.

Theo Yameogo:

Okay. Any comment on small cap mining companies? We've been talking a lot generically about the size. And I remember back in between 2012 and '15, there was this focus of junior companies getting wiped out because they won't have access to money. I will start with Amy. Any comments on small cap miners in Canada?

Amy Freedman:

The thing about small cap mining is small cap mining can become large cap mining overnight. So, there's the unique part about mining. At the drill bit, next thing you know, you find something and you're no longer a small cap. At any sector or any story, going public for the sake of going public and you don't have positive momentum and you don't have news flow, you end up becoming orphaned, which is just a capital markets problem generally. And you could sit there orphaned for quite a bit of time until you come across something. So, you got to balance the need for capital using the public markets as a vehicle versus other vehicles.

There are limited choices and to be frank for early stage mining companies, the venture exchange has been the choice for many. So, I think that that is the appeal of the Toronto Stock Exchange, particularly the Venture and the CPC program we've been talking about, but it still comes down to, if you're not finding anything and you're not proving a value, they're not going to be valued, it's just math there. And then the problem really becomes, depending on your trading, you could have a big disconnect between your market value and what you see your perceived NAV as if you actually do have an asset. So the biggest problem with being public, sometimes is there can be a disconnect between your asset value and your public market quote, which therefore creates a situation where somebody could offer you a massive premium to your share price, which in premium terms look great, but on valuation terms don't. And then you got to deal with the fact that you bought public shareholders who may think only in terms of premium.

I'm throwing out a lot of thoughts here, but in the end I think the market is helpful to the junior players. I think the more we do to promote the fact that the market should be there for these guys is a good thing for healthy capital markets, but it's not without risk.

Theo Yameogo:

I'll come back to you on another question for the gap between the stock and the actual enterprise value. Pierre, any comment on small caps?

Pierre Dagenais:

I think Amy gave a very fulsome answer. I think the other thing with Canada is, we are still a leader in the junior mining and Canada is still the place to go for access to junior mining companies, the CPCs and other ways of going public. The reality is a lot of these mining companies, their valuations, their pricing, are driven off the commodity cycle. So, we've been through different cycles and may be starting to emerge again with where we are in the pandemic and trying to get out of it. And that's going to probably lift junior mining companies stocks, hopefully, which will result in a number of things: easier access for them to raise capital, more M&A...So, I think that's potentially a sign to see in the near term.

Theo Yameogo:

I want to add a little bit of a flavor to your answer, if possible. When you're answering, can you also touch on the royalty that maybe small caps maybe looking to design?

Jon Wojnicki:

So, looking at small caps, signs of life - some bought deals for smaller companies, and that's great. And you see everyone every day, there's more and more announcements. So somewhere the money is finding its way to the junior, flow-through shares have been helpful. Look, 2017, 2018, the commodity prices weren't there and the sector was getting crowded out by cannabis, different gaming stocks, different Bitcoins and other kind of exchangeable coins. So, the stocks were getting crowded out especially funds were sort of disappearing as people turn to different kinds of passive investing in ETFs. But somehow that's turned now. The junior stocks have been more in focus, flow-through shares are better understood and they're getting some action.

And the other form of financing that's been very helpful is been the streaming and royalty companies who have some pretty sophisticated groups that are willing to roll up their sleeves and do real diligence and buy a slice of an asset and with significant money upfront that is enabled to provide a big gap in the capital structure that was otherwise not getting filled. And they actually take some price risks, they actually take some volume risk, they're willing to share to a certain amount with some kinds of debt instruments. And so, it's a very useful piece of the financing puzzle and certainly has its place for mid-caps trying to build projects or for slightly larger companies trying to recapitalize or finance certain acquisitions. And there's also the bifurcation of the metal values where these companies play in actually had real value. A mid-cap copper miner is not going to get credit for the gold byproducts so much, whereas a royalty company can trade at two or more times NAV.

And so, there's a lot of difference in valuation to split in a negotiation and a financing. sSo they have their place and they've been helpful to the smaller companies.

Theo Yameogo:

I want to go back to Amy on the valuation question. I was recently in industry, but I remember clearly so many meetings and investor calls where always the question are, "Oh, our stock is undervalued." And what's your advice to. And recently, as of last week, I saw some bunch of analysts who were basically going back and forth on two major gold companies and one being undervalued yet they has the same amount of ounces and things like that. What's your advice to companies' boards, or companies' management that tend to believe they're undervalued?

Amy Freedman:

Everybody believes they're undervalued. But in the end of the day, you're worth what someone's willing to pay you. So, look, there are disconnects in the market for sure. And in this land also, as I'm sure many people are reading up on all the retail trading and how retail trading is driving prices and maybe those aren't as informed trades as maybe institutional trades. But the problem or the challenge, and really, I'm tapping back into my capital markets expertise here, not so much Kingsdale per se, but the fact is your shareholder makeup can also influence your value. You can see stocks that trade on a lot of volume or little volume, stocks that don't trade at all and they're are less reflective so then liquidity becomes an issue. But it's also circular because you don't want to issue capital, or you don't want to issue of equity when you think your value is low. You get in this small problem with how you've been capitalized to actually realize that value.

And ultimately really, it's about how much disclosure do you have in order to explain to the street and to the people that drive values of stocks why your value gap is there. So again, this all also comes down to communication, how are you talking to your shareholders? Who are your shareholders? How much do your shareholders own? If you've got control blocks, it's tougher to have liquidity to establish value. So, these are things to think about with your financial advisors particularly like people get excited about selling shares, they get excited about cornerstone shareholders, etc. But you've got to be cognizant of some of the things or the impediments that those can create. Some can be validators that then create value and some can actually lead to less liquidity which leads to less value appreciation and take over premiums. Lots goes into that and it's really about how much are you communicating, why you think you're valued that way and ultimately finding a shareholder who also believes in it who starts buying your stock to start supporting that value.

Theo Yameogo:

Thank you. Before I go back to the panelists for the closing comments, I just want to reiterate that we're really pleased to have all of you guys join this webcast and listen to this three-in-one discussion. And I think that it's very important for us to get feedback from the audience. So, there's going to be a survey at the end of this session that you're going to receive so please feel free to fill up the survey.  We will follow up with anyone that registered and attended with the material that was shared during this webcast so that you can have some material. We'll of course make sure that all the few firm are in agreement with that. Let's start with Pierre just the same way we did the presentation. Any closing remarks in a minute or less.

Pierre Dagenais:

Other than just to say thanks for everybody taking the time. I know this is obviously a tough time for everybody with the pandemic and it was great to share my thoughts with some experts in that area, both Amy and Jon, and Theo. So, thanks for the opportunity.

Theo Yameogo:

Thanks, Pierre.

Amy Freedman:

Always a pleasure to participate in these panels but the words of wisdom, if I have any to leave everybody with in the public capital market domain is, really know your shareholders. That's the biggest disconnect and the Task Force is working on that too, but you got to know the people who own your shares because ultimately they drive outcomes. So, that's my final closing thought.

Theo Yameogo:

Thanks, Amy! John?

Jon Wojnicki:

I echo what Pierre said about, thanks and hope everyone's doing well in the pandemic. One thing I'd like to just maybe leave off with is it's good to see signs of life in the Canadian mid-cap and junior mining sector, sort of from Vancouver and Toronto. It's a lifeblood of a lot of those cities and the professional service firms, whether it be the accountants or the strategists or the banks or the law firms, firms like Kingsdale, the engineering companies, the labs... It's a big part of the economy and I think it was a long tough run from sort of 2014, 2015, 2016 were pretty bleak, '17, '18 weren't much better. So, it's great to see signs of life coming back into the sector, a big, important part of the economy, that's something we do really well here. So let's hope we maintain that momentum and don't lose the world-leading position.

Theo Yameogo:

Thanks everyone! And thanks Pierre, thanks Emmy, thanks Jon. That was very insightful, and we look forward to the next webcast. Thanks everyone. Have a good rest of your day.