This article is on the SFR thread, and fitting in with my speculative bent, could be the after story we are all hoping for a year or two down the track, of a 37 bagger!
Ok back to dreaming...............
Persistence pays off for Sandfire Resources.
Sarah-Jane Tasker From: The Australian November 15, 2010
KARL Simich has a story every junior explorer dreams of but very few get to live. He found the big one -- a life-changing, company-changing copper discovery that saw the shares of his company, Sandfire Resources, shoot from 20c to $7.50 in just over a year.
But the road to success for the mining industry veteran has not been without a few bumps and he was forced to retrench most of his staff when the global financial crisis hit, because with only $3m in the bank, he thought it was time to batten down the hatches.
But he kept one driller on, who told him he should drill deeper holes on the site. So, five months after sacking most of his staff in November 2008, his small team discovered the DeGrussa copper-gold project in Western Australia.
"You have to be really, really resilient, persistent and consistent and exploration is not for orphans and widows," he says.
"You have to have the character and passion and ability to get up every day when you realise you are going to go out most days and fail. Exploration is all about dealing with failure, not success."
The success story of Sandfire Resources starts with a renowned prospecting geologist, the late Graeme Hutton, who had pegged the tenements -- 900km north of Perth near Meekatharra -- where the world-class discovery was found.
"The find was the culmination of that amazing, classic, Australian prospecting, of 'I'll get back there one day and have a look'," Simich says, adding Hutton had been over that ground 30 years previously.
"He had a place in Broome and you would sit around with him and talk about tenements and he had file notes and rocks and would talk about all the years he had walked over the ground. He had been over the ground in 1972."
Simich started his professional career as an accountant and didn't enter the lucrative world of resources until he joined a gold explorer in 1987, igniting his appetite for the risk-reward nature of the sector.
He has developed five mines but the surprise find at Sandfire is an achievement few explorers get to enjoy.
"This is an amazing story and an amazing development and is about sticking at your passion for the right reasons and being able to pick yourself up when things are tough," he says.
"Just before we made this discovery, we had a company that had $3m in it and we thought the world was over because of the GFC, so we retrenched just about all of our staff in November 2008. Five months after retrenching everyone, we made the discovery.
"It was a combination of good luck, grit determination and perceptive geology and all the planets lining up."
It was a 27-year-old female drill rig operator who made the discovery, after convincing Simich that, despite some poor drilling success, the company had to dig six deeper holes.
In April last year, the holes were drilled and the start of the discovery was made.
On April 30 last year, the company put out an early warning to investors that it had found something interesting and by the third week of May, results were released that essentially announced the discovery.
"We didn't know it was there but having made the discovery, it was almost like you could do it in a day," he says.
The junior's stock has been on a rapid rise since the discovery but in only February last year, Simich had sat with a co-director and flagged that they should buy some more shares at 5c a share.
"We had too many grumpy shareholders and we needed to have a bigger interest in the company, but we didn't end up doing it," he says.
The stock has had a fairytale run and closed at $7.90 on Friday.
But not all investors were convinced when the discovery was first announced and it took a short while for the market to react.
"The sad thing about Australian investors is they didn't believe the results in the first instance and it took them some time to get in and buy," Simich recalls.
He is passionate about his company and wants to lead it to production and was surprised when OZ Minerals made a move on the junior earlier this year and took a 19.7 per cent stake in the company.
Simich refused OZ Minerals' request for a seat on his board and he is confident more success is to come from the flagship project, which he believes the team is well positioned to realise.
He has realised the dream of every junior explorer and despite the success he has had, Simich still sees himself as the champion of the smaller guys.
"We are simple guys, who roll our sleeves up and get dirty with the rest of them," he says.
http://www.theaustralian.com.au/business/
AVB Price at posting:
13.5¢ Sentiment: Hold Disclosure: Held
