Value Generation and a Passion for Discovery
Eurasian Minerals has over 1.5 million acres around the world dedicated to over seventy projects. Its success is borne out of a passion for exploration and discovery which has generated value. This passion has been incorporated into the company’s business model to maximize shareholder value through royalties and mineral rights.
David Cole left a career with Newmont Mining Corporation to establish Eurasian Minerals. “I founded the company by understanding the value of mineral rights, the power of discovery to create value and understanding that royalties are the right instruments to have. All of these things can be incorporated into to one very efficient business model known as prospect generation.” Cole said.
“There was a very successful prospector in northern Nevada by the name of Lyle Campbell that had a phenomenal track record of organically growing a royalty portfolio through the prospect generation process. Over time I paid close attention to how he executed that business model.”
Cole also acknowledged the success of Pierre Lassonde of Franco Nevada and Euro-Nevada. “By accumulating mineral rights and royalties around the world over a number of years, he created a major and hugely successful company.”
“We have found that by giving our partners 100 percent project equity from the start, that we have been able to maintain solid deal flow through the difficult downturn of the past four to five years. Additionally, they are more likely to extend us a larger royalty which of course our shareholders love. By utilizing a three pronged approach – exploration, royalties and strategic investment – we have structured a strong foundation from which to grow, thus maximizing value and returns,” he explained.
“We are big believers in geographic diversification,” said Cole. “We have worked in large number of countries around the world. This is really to our advantage as we have engaged a broad spectrum of different people that have had unique in-region knowledge in these various jurisdictions. We have leveraged that unique in-region talent pool into a portfolio of royalties and exploration properties.”
For Eurasian Minerals, cash flow results from mineral production royalties, periodic property payments from partners, advance royalty payments, project milestone payments and fees for managing projects for its partners. These serve to support sustainable mineral property acquisition and exploration programs. Eurasian Minerals acquires early-stage mineral properties with unrecognized potential, performs low cost exploration techniques that produce evidence of mineralization, then seeks partners to advance the project through discovery and into production, while Eurasian retains a royalty interest on any metals produced.
Eurasian Minerals uses its strong financial position to make strategic investments in unrecognized or undervalued exploration companies. The company’s worldwide network of industry professionals develops innovative deal structures, rethinks geologic models and uncovers new investment opportunities while advancing asset value and exit strategies.
The company builds shareholder value while remaining well-funded and positioned to operate to the fullest. Eurasian Minerals draws from its global exploration network to identify early stage investment opportunities.
In Nevada, Carlin Trend royalties provide ongoing cash flow. In Turkey, the company enjoys a portfolio of royalty and partnered projects that include gold, gold-silver, porphyry copper-gold, and lead-zinc-silver properties. Eurasian Minerals is also exploring world-class gold and copper-gold settings in Australia and New Zealand.
In Europe, copper and copper-gold exploration properties in Sweden and Norway in addition to royalty properties in Serbia are important aspects of the portfolio. The company partnered with Newmont in Haiti, which also has multiple gold, copper, copper-gold, and copper-gold-silver occurrences and drill-ready prospects. Eurasian Minerals also benefits from geothermal royalty properties in Slovakia and Peru.
Through prospect generation, royalty purchases and strategic investments, Eurasian Minerals generates and develops projects while identifying industry partners for exploration and drilling, resource delineation, development and production.
It has cycled through over 250 exploration licenses in Turkey, with two critical assets that continue to produce value for the shareholders. The first is its Akarca discovery, one of the earliest business units in the company’s history, and the second is Balya.
The company owns one hundred percent of the Akarca Gold-Silver discovery and is currently negotiating with a potential partner on that asset. This discovery is generating substantial interest with its proven exploration techniques and $13 million of outside investment.
Eurasian Minerals has a four percent production royalty on an advancing lead-zinc-silver discovery at Balya. Cole credits the project’s astute Turkish operator, Dedeman Madencilik, a well-funded mining company. They have recently sunk shaft on the project and started production which promises significant cash flow for years to come.
In Serbia, Eurasian Minerals has a royalty on the huge Cukaru Peki discovery in the Timok Magmatic Complex now owned by Nevsun. The project represents a significant part of the company’s royalty portfolio, and Cole believes the assets are undervalued in terms of stock price.
Production on the project is being fast-tracked, much to Cole’s pleasure as it can only mean faster returns for Eurasian Minerals as a royalty holder. “We’re delighted to hear that. We constantly hear a lot of geologic passion surrounding that big discovery in the industry,” he noted.
Cole believes another important driver and undervalued asset in the portfolio is the Malmyzh copper-gold project in far-east Russia. Eurasian Minerals owns forty percent of the controlling and private company, Intergeo Copper, which is advancing that discovery. “I talk about my passion for value creation at the end of a drill bit through the discovery process, and this is a phenomenal example,” Cole said.
The company’s premier asset is the royalty on the Carlin Trend in northeastern Nevada where Newmont is producing gold from multiple deposits. Newmont has recently completed a $300 million-plus shaft to expand production. At Leeville, Four Corners, Carlin East and other areas where we have a one percent overriding gross royalty. That’s a key asset within the portfolio that we are very proud of,” said Cole.
As Cole explained, it is a balance between, “geologic skills and business acumen.” He described this combination as “alpha”. Eurasian Minerals draws from a host of top-tier consultants who work on a part-time or as-needed basis, which serves the firm’s flexibility and scalability.
The core of the team consists of roughly twenty individuals who operate from offices in Ankara, Turkey; Littleton, Colorado; Tucson, Arizona; and back office operations in Vancouver, British Columbia. Briefcase offices — consultants who operate on a fly-in/fly-out basis are highly cost-effective and efficient business units who operate globally.
“A big step in creating our team was the merger with Bronco Creek Exploration. Bronco Creek was a U.S. based company out of Tucson, conducting prospect generation which Eurasian Minerals became a shareholder in,” Cole explained.
Bronco Creek was a strategic investment that helped to expand Eurasian Minerals’ global network. “We ended up merging the two companies, and now the intellectual talent that came with Bronco Creek are some of the pre-eminent contributors to the organization.” Eurasian Minerals also enjoys strategic regional alliances with other mining companies.
Cole remains, “humbled and thrilled to be able to work with the folks that I get to work with. They are very astute, very well educated, worldly individuals, and there’s just a whole lot of mutual respect in the roundtable environment here at Eurasian Minerals.”
“Marketing is an important part of what we do,” said Cole. “A lot of different companies say they are a prospect generator, but where the rubber meets the road in this business it is deal flow that makes it all work.” Consistent delivery is the backbone of good industry relationships with partners and customers alike.
“Anybody can acquire projects and do their best to add value by performing exploration geology, but not everybody can get deals done on the backside, and this is one area that Eurasian Minerals has done really well.”
The company has completed deals with some of the world’s largest mining companies, as well as a cross-section of mid-tier and junior companies. Cole cited Rio Tinto as an example of a deal that has recently been completed. “I think that speaks to our reputation and our ability to bring them a product that they want and that is prospective mineral rights.”
To accommodate the current climate in the natural resource sector, the company adopts the latest technical advances, specializes in in-region expertise and is able to make quick decisions and execute swiftly together; this offers Eurasian a unique competitive advantage.
In the future, the goal is to grow a royalty portfolio and increase cash flow which Cole believes will lead to a re-pricing of the enterprise. Driven by his passion for the field and discovery, Cole will continue to find ways to feed the ongoing success of the firm.
“By putting new prospective mineral rights into the portfolio, by executing deals with quality customers that will invest money and expertise into advancing those assets, so we have more cash flow and royalties at the end of the day, we will grow the value for our shareholders, and that’s the most important thing we can do,” Cole concluded.