Mate in Three?
January 31, 2011
The game of chess is a fascinating study of the human dynamic. Offence, defence, bullying, and retreat; sideshows, sparring, and subplots; bluffs, uncertainty, and much intrigue. Above and behind all this stands strategy. The mission never changes but strategy is another matter. Because of the number of pieces, how they interact, and the size and complexity of the playing field, strategy is necessarily fluid. The combinations and permutations are, for all intents and purposes, endless. And timing… timing is everything.
In 1743 at Flanders, the Scots Fusiliers were faced with the approach of the French cuirassiers (on mount). Upon contact with the cavalry, Sir Andrew Agnew ordered his line of troops to split in the centre and fall back to the sides. This, of course, appeared as a retreat, and the French cavalry advanced, charging through the middle. At this point, Sir Andrew issued the order often attributed as original to William Prescott, 32 years later at the Battle of Bunker Hill, “Dinna fire til ye can see the whites of their e’ en.” Caught in a surprise crossfire, the French cavalry was decimated. I just love the reported exchange between Sir Andrew and King George II, who challenged him with, “So, Sir Andrew, I hear the cuirassiers rode through your regiment today.” To which Sir Andrew replied, “Ou, ay, yer Majestee, but they didna get oot again.” (link to source)
More than a year and a half ago, while in Vancouver, I paid a brief visit to Southern Arc and sat in John Proust’s office, discussing strategy. One of the sub-topics of this conversation was infrastructure. By infrastructure, I mean team building. “When the time is right,” he promised, “you’re going to witness a whole series of strategic appointments to our team. These appointments will help to move this Company into the next stage with strength.”
Here’s where connecting the dots of this dynamic, with the benefit of hindsight, takes on the character of an evolving choreography on the chess board. The dance of the Knight in Selodong opens the performance with a strong King side foray, answered by the diagonal Bishop attack of the unrelenting moratorium on Lombok mining. Coupled with the Bishop attack, an early Queen move by the opposition (the crash of 2008) sends the home side into quiet mode, biding, biding, biding, lobbying, lobbying, lobbying. Some positive signs emerge with the publication of a number of implementation regulations attached to the new Indonesian mining law. With a few strategic Pawns in place (the Indotan acquisition and the purchase of the Selodong base camp), IUPs (mining licenses) begin to trickle in.
The moratorium is lifted and Southern Arc advances a key new piece on to the battle scene with the appointment of Celeste Curran as contract negotiator. Now, that’s what I call a ‘team building’ shot fired across the bow. Two and a half months later, the Company inks a joint venture agreement for two of its properties with the second largest mining company in the world.
As things begin to heat up, the Company adopts a Shareholder Rights Plan. The next month, at the November 19th AGM, Mike Andrews is appointed as the new President and COO. A member of Southern Arc’s board for five years, Andrews had recently brought the ‘ore-shoot’ type deposit, Way Linggo, into production on south Sumatra. En garde! Same day, the Company enters into a Heads of Agreement on Taliwang with Newcrest Mining, the world’s third largest gold mining company. Touché!
Three days before the AGM, Steve Garwin is appointed to SA’s Board of Advisors. World-renowned expert on structural geology and geochemistry, his doctoral thesis was on Batu Hijau (ka ching!). He will be presenting at SA’s investor information session at the PDAC in Toronto on March 6th and will be consulting extensively on site in Indonesia over the next twelve months.
Three weeks ago, SA announced issuance of the long-awaited IUP on its flagship property, West Lombok… followed next day by the release of impressive drilling results from Pelangan, its ‘ore-shoot’ phenom (ding, ding!).
While the Company has received no less than five written offers from major mining companies on its flagship West Lombok property, it has opted to advance the project on its own for now, preferring to drill some 200 holes there over the next twelve months.
Eight days after announcing the West Lombok IUP, the Company appointed Bob Parsons and Malcolm Baillie to its Board of Advisors.
Baillie is an engineer with over 30 years of CEO experience in Indonesian exploration and mining. Key experience is in negotiations with the Government of Indonesia, and as a director of the Indonesian Mining Association.
Parsons, too, is actively involved with the Indonesian Mining Association and with the PDAC (serving as a PDAC Board member for 18 years). Along with numerous other credentials, he recently served on the Board of Directors of East Asia Minerals Corp. (hmmm…)
Looking at the landscape, are you beginning to get a sense of triangulation at work here… or would that be quadrangulation? Pentangulation? Etcetera, etcetera. Better stop there before I fall victim to self-strangulation. I think you get the idea.
In April of 2009, John Proust said to me, “When the time is right…” Somehow, I’m beginning to think that this time is now upon us. Perhaps it’s early to say that we’re in the endgame, or to predict mate in three… or four… or five, but for certain, the game is about to become very interesting, indeed. Pieces in full development, the posturing is all but over. Play on!
What you’ve read so far are my scribbles from yesterday afternoon.
Held for today so that Vanya, my webmaster, could publish it (some people don’t actually work on Sundays), the presses on this piece ground to a screeching halt five minutes ago by virtue of this morning’s Southern Arc news release. Bob Gallagher, President and CEO of New Gold, has just been appointed to Southern Arc’s Board of Directors.
Kaboom!
While Vice President Operations, Asia Pacific, for Newmont Mining, “Mr. Gallagher oversaw the development of Batu Hijau, the billion tonne, world-class copper-gold mine located on Sumbawa Island.” Batu Hijau, by the way, happens to be Newmont’s most profitable mine… worldwide.
Double kaboom!!
As CEO of a $3.2 billion mining company, Bob Gallagher is not someone with a lot of free time on his hands. For that matter, none of these appointments to the Southern Arc team are lightweight, by any stretch of the word. Every one of them fits somehow into the overall strategic picture being crafted by John Proust and Mike Andrews and Hamish Campbell. As this picture begins to come into focus for us, I think it just as important, in view of the calibre of these appointees, to try to understand what they (the appointees) see in this Company. Appointments reflect not only the Company’s view of itself, but also the vision of those who join the team.
Fascinating. Just fascinating. Honey! Where’s the popcorn?
With respect,
Kevin Graham