29/09/2020 - 06:30

Julimar find the icing on top as Goyder enjoys a good run

29/09/2020 - 06:30

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After 40 years in mining and exploration, Tim Goyder has racked up many lessons for investors and business owners.

Tim Goyder is disappointed by the lack of support from institutional investors for people building a business. Photo: Gabriel Oliveira

The starting point for Tim Goyder’s approach to business is pretty simple.

“Number one, I’m an owner, I’m a shareholder; that drives how I react,” Mr Goyder told Business News.

“I don’t need directors’ fees, I want enough of the cake to make a difference.”

Mr Goyder’s ‘cake’ has got a lot bigger over the past two years, as the four companies in which he has invested most of his money have enjoyed strong share price gains.

The most notable success story has been Chalice Mining, which made a major nickel, copper and palladium discovery earlier this year just 70 kilometres east of Perth, at Julimar, near Toodyay.

“It was a magnificent discovery but it is early days,” Mr Goyder said.

“What I’m so excited about is the greater potential within the Julimar intrusion. There is a good chance of this being a world-class mine and province.”

The share price of all three listed companies Mr Goyder chairs is close to five-year highs, though their recent trajectory has varied.

Shares in DevEx Resources have rocketed over the past six months to more than 30 cents as it pursues a range of exploration projects across Australia, including land near Julimar.

Lithium stock Liontown has been broadly flat this year, but that’s a pretty good outcome in the circumstances. “It has a tier-one lithium project in a tough lithium market,” Mr Goyder said.

Like many others, Mr Goyder sees the lithium market turning in three or four years, at which time he believes Liontown will be well placed.

Mr Goyder is also a big investor – and former director – in Strike Energy, which has achieved great exploration success in the Perth Basin.

Looking collectively at his portfolio, worth about $130 million at current share prices, it’s not surprising he is enjoying himself.

“The best period in my life is probably now,” Mr Goyder said.

“Liontown is going to have a lithium mine, Chalice is making tremendous progress towards having a mine, and I can see Strike Energy producing gas in the next few years.

“It has been a long time in the making, but one could look at that now and be quite proud of it.”

History

Mr Goyder has been involved in exploration ever since he left school, in 1973.

“I had an interest in geology and prospecting and it all started there,” he said.

“The nickel boom was on, and it was an exciting time to be in Perth.”

He was a major shareholder and director of exploration company Kemple Mines at the age of 26, and was negotiating deals with the likes of Lang Hancock and Joe Gutnick.

In 2000, Mr Goyder bought Kalgoorlie-based drilling contractor Grimwood Davies, which expanded to have operations across Australia and a small presence in Africa.

“It was a challenging business to run,” he said.

“We were in a tough market.”

Mr Goyder sold the business for about $60 million in 2007 to private equity-backed Boart Longyear, which was preparing for its stock market float at the time.

“It was quite a tough decision to sell. It was a very good business and I had a very good team,” he said.

The year of the Grimwood Davies purchase was the same year he chaired the stock market listing of Bullion Minerals, after a $3 million IPO.

Bullion morphed into Uranium Equities in 2006 before changing its name to DevEx in 2017.

Its foray into uranium shows that not all Mr Goyder’s ventures have paid off.

In fact, he admits to having made quite a few bad decisions over the years.

“There are heaps of them. I don’t recommend it for the faint hearted,” Mr Goyder said.

“You have to roll with the punches.”

DevEx still has large land holdings in the Northern Territory, which could pay off if the uranium market ever recovers.

Mr Goyder is also a director and shareholder of unlisted company PhosEnergy, which is chaired by another prominent Perth company director, Tony Kiernan.

PhosEnergy has a joint venture with Canadian uranium miner Camico to extract uranium from phosphate deposits at just $16 a pound.

It’s another long-term investment that might pay off if the uranium market improves.

Bullion’s change of name to Uranium Equities occurred in tandem with several deals Mr Goyder led in 2006.

Bullion spun-out its gold assets into Chalice and Mr Goyder chaired the IPO of Liontown, with former Equinox chief executive Craig Williams

“It was really a case of taking advantage of the market,” he said.

“The market was quite strong then, it was easy to raise capital.”

Mine building

Mr Goyder’s experience provides a case study on the challenges of raising capital for exploration plays.

Liontown raised $26 million last year when lithium was running hot, but could not repeat that now.

“If the commodity you are in doesn’t interest the market, you are in a tough spot,” Mr Goyder said.

Conversely, Chalice raised $30 million earlier this year after its Julimar discovery – with investors wanting a lot more – while DevEx has raised about $5 million in each of the past three years.

Mr Goyder’s biggest frustration is the lack of institutional support.

“In Australia, the institutions seem to invest in the top 50 to 100 companies,” he said.

“There is very little institutional money coming down to the sub-$500 million companies, which is disappointing.”

One of the few institutions to have provided long-term backing is Frankton Resource Fund, which became a Chalice shareholder in 2010.

Mr Goyder said very few institutions sought to back people building a business.

“It’s one thing raising money, it’s about building companies,” he said.

“I’ve been very lucky having a group of private shareholders, high-net-worth individuals, who back me.

“It’s harder to get institutional investors to do that.”

Mr Goyder said further tax incentives would encourage more investment in growth businesses.

“We need Australian institutions to start thinking more locally,” he said.

“I think there should be some tax advantage to invest, not just in exploration, but biotechs and IT and these things in Australia.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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