In a wide ranging conversation with Rick Rule, Robert Friedland discussed among other things, the mining cycle, the need not to punish creatives and institutional stupidity.
LONDON (MINEWEB) – Ivanhoe Mines founder, Robert Friedland urged investors to take a longer term view of the mining industry, on Wednesday, reminding them that the current bear market will turn, at the final event of this year’s Mines & Money Conference in London.
In a conversation with investor Rick Rule, chairman of asset manager Sprott US Holdings, Friedland called the bottom for mining stocks. “This is very much what a bottom feels like,” he said. “Most of the CEOs of the major mining companies have had their heads cut off and used as bowling balls by their chairmen, so the major companies are risk-averse and the junior companies are living in an anaerobic environment where capital is really difficult to achieve.”
“This is going to result in a spectacular bull market,” Friedland said. “It could take a year or two before there’s a sudden and violent turn for the better, but the school of fish will turn.”
With junior mining stocks not uncommonly trading at discounts to their cash backing, the cheapest exploration anyone could do at the moment, Friedland said, was buying assets on market. “He who has an operating team and access to capital really has a chance of building something. This is actually the good part.”
Asked specifically about exploration and why he has been so successful at it, Friedland said, in a lot of cases, like Voisey’s Bay for example, the discovery, had absolutely nothing to do with luck and everything to do with science and a huge amount of work.”
But, he said the key he said was to allow the creative people doing the exploring, the freedom to take risks.
Exploration is a creative process of thesis testing, he said, “It’s like organising a playpen. Creative people shouldn’t be punished for failure, because in the exploration process we are in the business of drilling dry holes. You can’t keep drilling where you’ve looked.”
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