Page 19 - Demo
P. 19

 John Hathaway: Tom, it’s so nice to see you. Thank you for inviting me.
Dr. Thomas S. Kaplan: The pleasure is mine. And so is the honor.
I’ve known you forever, it seems.
You have.
Through many iterations. What led you to NOVAGOLD after Apex, African Platinum – or, as then known, South African Resources – and a few other things along the way, not to mention your other interests that are not remotely gold-oriented? But maybe they all fit together.
It may simply be because I’m shallow and superficial, but I am clearly drawn to the iconic. I’m drawn to beauty. I’m drawn to great assets – those things which really give me a sense of joy when I’m engaged with them. And that runs the gamut. So, in my business career, I’ve had the great luck of being able to either discover – in the case of silver, platinum, natural gas – or to take control of assets that are really category-killers in their space, and which have almost always ended up being in the portfolios of much larger companies who needed these kinds of assets to move the needle in their own reserves or production.
There is something of a correlation when you look at my other interests too. In art, for example, I’m drawn to Rembrandt. There isn’t any list of the greatest painters of all time which doesn’t include Rembrandt and several other artists that I love. It’s that combination of intensity and beauty – similarly with a passion that, for me, is even something that burns brighter than art: wildlife conservation. I’ve always been drawn to the big cats – actually all cats, big and small. There’s something about the grace and the beauty and the power of cats that has a certain charisma. They are iconic, they’re at the top of the food chain, and they’re the umbrella species under which if you save them, you’ve also saved all the flora and fauna in these critical ecosystems. So, whether it’s assets or whether it’s other beautiful subjects, there is that commonality of the
iconic nature.
NOVAGOLD, in many respects, embodies my arc in the mining world. When I began my career in the nineties with Apex Silver and through our own engagement in African Platinum, which was taken over by Impala – and indeed in NOVAGOLD itself – what my career has shown is two very distinct features. The first has been the constant in my career: this gravitational pull toward category-killer assets. Assets which any larger company would want to own at a price if given the opportunity. I’ve come to believe that no matter how sophisticated a piece of paper is when you’re doing a transaction and making an investment, at the end of the day it’s all about the assets.
If you don’t have a high-quality asset, but you’ve got the best kind of piece of paper, you’re still going to lose money and it’s only going to be heartache. It’s all about the assets. And if you superimpose onto those assets great management teams, then you can deliver outstanding returns. In silver we had a 200X return and that got me started. And then we went into platinum, in which we had a 100X return, and hydrocarbons a 100X return. We then sold everything in 2007 in order to pivot into gold and silver. It was the only thing that I really believed in. And I was lucky. We were able to make exits in hydrocarbons to Encana, in platinum to Impala. And so when we entered
the financial crisis, I had capital and conviction, and whenever
I have capital and conviction in something, it proves to be a lethal combination.
You say that’s dangerous.
It is, it really is. Now, I had coveted NOVAGOLD for years, and I had watched it go from a 60 cent stock to $14, $15 when Barrick made a hostile takeover attempt in 2006. I didn’t own
it. So I’m not taking any credit for having owned it. I fell into that trap that investors sometimes face and thought I missed it instead of realizing you do not make money looking in the rear- view mirror. I watched the company and shareholders reject the Barrick bid and the stock went to $19.74 CAD. Again, I didn’t own it, but I did watch as it made a round trip and at different intervals, I would look and say, maybe now is the time to strike.
What was it that attracted me to NOVAGOLD? Donlin Gold. I really felt that Donlin Gold was the ultimate category-killer.
I had that sense that the Donlin Gold trend could be something
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