08/03/2018 - 15:42

Finlayson steers Saracen rise

08/03/2018 - 15:42

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40under40: First Amongst Equals winner Raleigh Finlayson has drawn on his childhood experiences in WA’s outback to run one of the state’s biggest gold mining companies.

Raleigh Finlayson has grown Saracen's market capitalisation significantly. Photo: Attila Csaszar

Raleigh Finlayson attributes some of his business acumen to the challenges faced growing up on a sheep station near the town of Kookynie in the Goldfields region, so it is perhaps fitting that, years later, the two primary assets of the mining company he runs are located either side of his childhood home.

“It gave you a bit of a hard edge; we didn’t have a huge amount of income coming in, so you’re up against it trying to make ends meet,” Mr Finlayson said of his childhood experiences.

“I loved being out amongst the nature, you’ve got three quarters of a million acres to roam around, so it was a great experience as a young kid.”

That toughness and sense of adventure acquired in his younger years has helped Mr Finlayson as he has steered gold miner Saracen Mineral Holdings’ growth from a market capitalisation of $9 million to $1.3 billion over the past eight years.

Now producing 300,000 ounces of gold annually between its Carosue Dam and Thunderbox projects, Saracen recently posted a half-year profit of $46.7 million, more than tripling last year’s result.

The company also has reserves of 2.1 million ounces.

After initially showing an interest in farming, Mr Finlayson said he changed tack during high school.

“I think for a lot of the time my whole family thought that I was going to become a farmer, but towards the end I decided I actually wanted to do something else and get away from that,” he said

With his parents not keen on him going to Perth, Mr Finlayson said the Western Australian School of Mines in Kalgoorlie was the next logical step, and it is a time upon which he reflects positively.

“It gave me a really good opportunity to get into the industry and I’m very grateful for that,” Mr Finlayson told Business News.

Now serving as WASM alumni president, he said the school had a number of initiatives it was working towards.

“We’re just trying to keep up the quality of the students coming out of there,” Mr Finlayson said.

“We’re looking to get a Harvard-style mining school of excellence going, and maybe trying to set up an underground test mine.”

Challenges

After serving as chief operating officer for five years at Saracen, Mr Finlayson took over as managing director in 2013, aged 34.

Within a month of being appointed to lead the company, the gold price had plummeted $US400/oz and Mr Finlayson initiated a strategic review that included suspending a $25 million expansion project and cutting directors’ pay.

“We made some pretty hard decisions that, I suppose if you knew in hindsight gold prices would pick back up in two years you wouldn’t have to worry about it, but you’re trying to plan for the worst and hope for the best,” Mr Finlayson said

“You’re making some decisions that you know will hold you in good stead if the bad times continue.”

Mr Finlayson said having a strong support group allowed him to make tough decisions.

“I often talk about CEOs being the pointy end of the triangle in a business; in our case you’ve got hundreds of employees looking to you when things aren’t going well, and likewise a bunch of shareholders looking to you, so often you’re at the pointy end of the stick and it can be a very lonely place,” he said.

“I think having good, sound mentors that you can rely on and lean on when you’re in that moment is really important.”

Founding chairman Guido Staltari was an important mentor to Mr Finlayson, and his departure at the end of 2014 provided another challenge.

“It’s sort of like the training wheels come off for the first time and you feel vulnerable,” Mr Finlayson said

“I’d been MD for a number of years but it’s still one of those things … you like to have that counsel close to you.

“It was the first realisation that you’re doing it yourself and you’re never really sure.”

Mr Finlayson said the transition to new chairman Geoff Clifford had been smooth.

“Geoff is well suited to a big organisation, he has an accounting background and has been a chief financial officer, so he’s been a great chairman,” he said

Success

Mr Finlayson puts the company’s success down to a range of influences.

“There’s a fair bit of luck; I mean over a 10-year period you hope to get a little bit of it,” he said

“But nothing more than having good people around you and supportive people, but also people who have a debate.

“We’ve got a board that doesn’t just sit there and agree with each other, we have a vigorous debate.”

He also lists a strong family foundation as a key ingredient.

“It’s really important to have that solid base at home,” Mr Finlayson said.

“Also having good mentors externally. It took me a period to realise the value of that, but I think having a sounding board external to your own rigours of the business is critical.

“And as my founding chairman always said, ‘stay on the bike’ – those periods where it got tough, when you get the wobbles up, you’ve got to try and stabilise and keep the wheels in motion, keep the lights on and if you can get through that then it’s a lot better on the other side.”

Future

With the company currently producing 300,000oz of gold annually, Mr Finlayson said Saracen had bold plans to increase production.

“We’re looking to grow our business and maybe get to 700,000 ounces, which is another step change again, and try and get into the ASX 100,” he said

“That involves continued commitment to growth both internally and externally.

“We’re going pretty hard organically at the moment but we also recognise that an opportunity might appear externally – it might be a gold deal in Australia or something overseas, and we want to be ready to act on that.”

Mr Finlayson said he also had a desire to spend more time with his growing family.

“I’d love to do some travelling around Australia and that might be in little snippets or a prolonged period,” he said.

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