You are on page 1of 12

To: Tookie Angus, Tara Boragno

From: Peter Bell

Date: May 2, 2018

RE: Full Transcript – May 1st Conversation

Peter Bell: Thank you very much. Pleasure to be talking with you, Tookie. So much to talk about but
to jump right into it I would say that you seem to be most well known for your M&A
track record. Where did that come from? I've heard you mention even Hemlo in the 80's
and the legal offices before that. To wind the clock all the way back, anything you'd care
to share?

Tookie Angus: Going way back, Peter, my first foray into the mining business as a lawyer was a lithium
deal in the Northwest Territories in 1975. I actually worked on another deal before that
in 1974, which was a small heap leach mine in the Idaho. That was very innovative at the
time as there was only one previous heap leach in the state, which was Landusky. I led
that deal right from the initial agreement through production. That was my first real
crack at mining.

The company I represented with that heap leach was an indirect subsidiary of the
Superior Oil Company of Houston. In those days, a lot of the oil companies would
finance mineral development and exploration around the world. Superior Oil
reorganized that company and sold that mine. Shortly thereafter, I was engaged by Teck
to do some legal work and ended up doing some fairly significant work around the
Hemlo camp for them with some brokers who were financing other juniors in the area.

It’s ironic that I represented Teck against Corona at Hemlo, but then was hired by
Corona to take over Prime Resources and Steam Resources at Eskay Creek! By that time,
the original promoter Pezim was gone from Corona and I was dealing with Ned
Goodman.

Peter Bell: Wow.

Tookie Angus: I got a really good lesson or two from Teck. Shortly after the Lac Minerals case came out
in the black minerals case, resulted in Corona and Teck acquiring the lack mine at
Hemlo. Teck brought in the brother of Norm Keevil, Brian, as in-house counsel and they
basically turned me loose! So I went to the junior side.

By the end of the 80s, I was representing Bema Gold in Chile and spent quite a bit of
time in South America at the time doing all sorts of different transactions as a lawyer.

To answer your question, Peter, I got into M&A about 21 years ago now. I had been
recently elected as Chairman of an old sugar company that was the third largest sugar
refinery in North America at the time and that was a big part of the reason why I got
involved in M&A, as I’ll explain. But first I will just mention that I was Chairman of that
sugar company for the simple reason that somebody with my maiden name had been
on that company’s board for the last 106 of it's 107 year existence.

Peter Bell: The BC Sugar Refinery Limited!

Tookie Angus: That’s right. And that company had two major shareholders. One was Jimmie Pattison
and the other was Stuart Belkin. As you might imagine, there’s a good story or two
there. One in particular started when Stuart made a partial hostile bid to increase his
minority of 20% in the company to a majority. I don't like partial bids, I consider them
inherently unfair, so we got Pattison to come in with a full bid for the company. Then
Belkin found a new partner, Jerry Schwarz of Onyx, to top that bid. It was an interesting
scenario of a two hostile bids for the company from within the board and I was
essentially the referee.

Peter Bell: Sounds like a unique M&A experience.

Tookie Angus: It sure was. I learned a fair bit from that. I'm not sure about the numbers on that, but I
recall that we ended up selling at $16.50 a share. Of course, we could figure out the deal
value if we knew how many shares were issued. Anyway, it was quite a hotly contested
transaction. As you may know, take-over bids are often like catching a hatchery fish
because they often just roll over and die when you put a hook in it's mouth. Barrick and
Placer Dome comes to mind.

The next phase of my M&A activity kicked off a dozen years ago now in 2005 when I was
the Chair of the Independent Committee for Canico Resources and we had a hostile bid
brought by CVRD of Brazil, which is now called Vale. We had a pretty good contest on
that one and I can give you some numbers from it because I've got the tombstone
handy. It was $941 million in cash for an undeveloped property.

Peter Bell: Wow.

Tookie Angus: That what I consider to be a unicorn in this business. It was an actual sale and not just an
evaluation.

Peter Bell: I’ve never heard of anything like that, Tookie.

Tookie Angus: It was pretty special, Peter. Bema Gold was the next one. I helped negotiate a friendly
takeover by Kinross for three-and-a-half billion dollars worth of Kinross paper in 2007.

After that was Ventana in 2011. That was another unicorn. It was the fastest deal I've
ever seen to that kind of valuation ever. We listed the company on the Toronto Stock
Exchange in November 2008 and the stock promptly went to four cents a share.

Peter Bell: Oh no.


Tookie Angus: Yes. I was the lead director for Ventana and we thought we were onto a discovery in
January 2009. We had a bit of money, but we needed more. Ross Beaty came in with
some money following an introduction I made to Richard Wark and two-and-a-half years
after listing, we sold it for a total valuation of $1.533 billion cash.

Peter Bell: Wow.

Tookie Angus: We were only selling them 80%, so they didn't pay that much but that was the total
valuation.

And the next one after that was Plutonic Power, which was one of the biggest green
power companies in British Columbia. I was the Chair of the Independent Committee
there and we sold it to Ross Beaty and Magma Energy for around half a billion dollars.
Of course, Magma became Alterra and it was recently sold.

Peter Bell: Yes, I recall hearing about Plutonic Power’s run of river projects back when I was a
teenager at my first investment conferences.

Tookie Angus: The most recent M&A deal was a very difficult transaction for Nevsun. I was the Chair of
the company and acquired Reservoir Minerals for US$575 million. We won the
contested shareholder vote on that deal by two percentage points.

Peter Bell: Oh my god. I’ve heard some stories about that one, Tookie!

Tookie Angus: We were dead in the water, Peter. Some arbitrageurs had sold shares to a dissident
group. They were trying to collect some risk arbitrage, but they sure put our control
position into question. They could have blocked our extraordinary resolution, so we
bumped the offer up by two bucks a share and made a deal with one particularly large
shareholder. Maybe you heard about the so-called “Chinese shareholder”?

Peter Bell: Yes.

Tookie Angus: Well, he wasn't. He’s a Brit living in California making movies. Quite an eccentric sort of
guy. I never met him. I don't know if any of us ever saw him. When we came to revoke a
bunch of his proxies, we found out that the electronic agency closed at midnight. We
had only started revoking these proxies at about nine o'clock that night and the meeting
was the following morning! That was a close one.

I only serve as Chair for three companies now. One is San Marco, the other is K92, and
the third is Kenadyr in Kyrgyzstan. All three are great companies, but I’ll mention one
thing about San Marco that connects back to what we were talking about earlier: San
Marco was started about eight years ago by Bob Willis and I, and Bob was responsible
for running a company in the seventies called Pioneer Metals, which was the first mining
deal I was ever involved with – the Stibnite heap leach in Idaho.

Peter Bell: Small world!


Tookie Angus: And K92 is worth a word, too Peter. I don't know if you saw the press release on it last
week, but they put out some assays that were just astounding.

Peter Bell: I think I did see that. It was 100 grams or something, right?

Tookie Angus: No, 500.

Peter Bell: Oh no. I can’t believe I missed that.

Tookie Angus: 16 ounces gold per tonne or so. I saw a piece of the core. You sure didn't need to use a
jewelers loop on it. I said to the guy, "what's this 10 ounces to the ton?" He said, "No,
try a factor of 10 on that." I think that company will be very successful and will attract
some attention in the future.

Another one that's attracting attention right now is Arizona Mining. I'm just a
shareholder there.

Peter Bell: You’re a shareholder of numerous companies, too. You're a force to be reckoned with in
the community.

Tookie Angus: I’m afraid that it's about time to quit doing this, but I probably never will. I may do it in a
less obvious way in the future.

Peter Bell: It’s good to have you involved regardless. We will watch for your fingerprints on the
best deals out there.

Tookie Angus: I did an interview with Charlotte MacLeod and INN at PDAC this year that’s up on
YouTube. I didn't tell her, but I have never done an interview in my life before.

I didn't name any names but I gave some hints and actually had some people
responding to guess at which deal I was talking about. Some people got it! It's a very
interesting vanadium play in Nevada – vanadium in North America is extremely rare.

Vanadium has terrific applications, not just for steel strengthening. It's an alternative
battery metal is used for large storage batteries that are used to turn intermittent wind
and solar power turns it into baseload power. That change is very important for the
economics as intermittent power is typically discounted in the spot market, whereas
baseload power gets better pricing. I think these batteries will just revolutionize
intermittent power.

Peter Bell: There’s an economics paper titled “Storing the un-storable commodity” that riffs on
how dams effectively serve as a battery, too. Very important economics at play in the
electricity markets and the new batter tech is certainly exciting.

Tookie Angus: I think the vanadium application is going to be a really big one. The Chinese have a lot
the vanadium deposits, like the Congolese have all the cobalt.
Peter Bell: And the the Chinese are sure active in Congo developing the cobalt, too. It’s an
interesting time for commodity markets with China on the rise. Can I ask about Eritrea,
Tookie? It may be the most controversial one of all the stories you mentioned.

Tookie Angus: I can't really talk about it because I'm no longer involved with the company, but what's
gone on there isn’t particularly controversial to my mind. The courts have basically said
that the people won’t get a hearing in Eritrea, they'll get one here. I don’t know how
they’re ever going to prove any of the allegations, but they’re going to get hearings in
BC. I believe it’s politically-motivated by people who want to pierce through company
structures, but a basic tenet of company law is that you can't do that. The purpose of
the company is to have a separate legal entity and you can't just pierce through it to the
parent unless there's fraud or something like that. It will be interesting to see what
happens there. There has certainly been a big discount to the value of Nevsun.

Peter Bell: And that transaction with Reservoir, big win there as well.

Tookie Angus: Yes, that is probably one of the best undeveloped copper golds in the world.

Peter Bell: And to clarify – in that interview with Charlotte at the PDAC this year, you said that you
were at PDAC this year because somebody was getting an award but I couldn’t quite
figure out who it was.

Tookie Angus: That was Arizona Mining. They sent me a plane ticket because I was the vendor.

Peter Bell: Right. You mentioned that you were a shareholder of Arizona and that helps explain it.
Thank you.

Tookie Angus: When I met Mr. Garofalo for the first time, he thought that I was a Director of one
company that Goldcorp had acquired but I told him that I wasn’t but I did sign a lock-up
and support agreement. I wasn’t a director or an officer, but I did get invited to his
closing dinner. These aren't important roles, just private investment stuff.

Peter Bell: Sure but they’re say something about the way you approach the business. You’re clearly
happy to get involved, even in an unofficial capacity. Sounds like you love what you do.

How about your background in the legal profession – I don’t see many lawyers taking
active leadership roles in the junior mining space quite as much as you do but it’s an
important skillset to have within the company.

Tookie Angus: Lawyers were discouraged from getting involved with public companies for a long time.
You can imagine what some of the partners thought if one guy had options and they
didn't. It could be fairly divisive.

It was a very hard line for me to walk at times – being an Independent Director while
doing legal work for the company. Over time, the perception of these things change.
Now, of course, some firms actually encourage it so that they can have better client
retention! It's really all over the map. Some firms don't let it happen, but others don't
mind. It's not widely encouraged.

Peter Bell: Well, I wouldn’t expect that to stop you. The word “independent” gets thrown around
so much in this space – used and abused.

Tookie Angus: That may be. Although, if I say I'm independent then I am.

Peter Bell: I hear you, Tookie. You mentioned a lithium deal in the Northwest Territories way back
in the 70s – did you have any connections to Lou Covello all those years ago?

Tookie Angus: Yes, I've known Lou for many years. I've know guys like Charlie O'Sullivan and Gren
Thomas for decades, too. I actually opened an office in Yellowknife for Faskin Martineu.
The guy I hired to open the office was older than me at the time and he had two dog
sled teams that he would run in the wintertime. You can’t take the dogs out on these
barren lands in the summer because of the heat, but you sure can do it in the winter
when everything freezes over. It's like a playground for these guys up there in the
winter. I remember a Partner Meeting where someone asked about him – they said,
“he's been up north for a long time now – should we bring him back to Vancouver?”
And there's an old saying that people that live up north should, so I told the partners
that his health looked good to me as he was out there running his dog sleds but that's
how he died. Heart attack killed him before he hit the ground. He opened that office
and was the lawyer I used to stake the ground for that lithium deal in 1975.

Tookie Angus: These things come full circle.

Peter Bell: Great to hear you say in that interview that you really like to be there involved in the
early days of the building these companies and to be involved in early-stage exploration.
It’s interesting to see you focus on early-stage companies and early-stage projects.

Tookie Angus: I've been involved with a lot of them, Peter. I’ve probably been a Board member for at
least three dozen public companies.

Peter Bell: And how about that transition from private company to a public one – the whole “going
public” process. Any thoughts on that?

Tookie Angus: Well, it's getting more and more regulated. When I look at what goes into normal stuff,
like annual meeting materials, I am surprised by how much it’s grown. I'll never forget
the Centennial year of BC Sugar – I counted up all the pages in the entire annual report
and there was only like 10 or 20 pages.

I've always tried to provide mentorship to younger guys who are taking companies
public, too. I’ve done that with quite a number of people.

Peter Bell: It's important to pass that information along and it puts you in a place where you get
your pick of the litter, too!
Tookie Angus: That's true, to some degree. They know how to find me.

The biggest thing I'm undertaking right now is something that was initiated by my son,
in fact. They have a list of projects in Peru as long as your arm and they're coming from
Peruvians! I had spent five years at Nevsun with a full team and US$400 million to spend
just scouring the Earth for projects like this and we never found any of the stuff that
we’re seeing in Peru now.

Peter Bell: Wow.

Tookie Angus: It's a very interesting time in the business right now.

Peter Bell: I wonder about market cycles. There seems to one camp that says, “Bear markets just
kind of implode on themselves and roll over into bull markets just as day comes after
night.” But if a good bull market has to run on the merits – there has to new, good
projects appearing.

Tookie Angus: Just look at those drill holes from K92 I mentioned. Those are from grade-control
drilling. That’s not an exploration drill hole. We'll be mining that material in the near
future. We'll probably have to slow the mill down an awful lot so we don't throw it out
in the tails, though.

Peter Bell: There could be some curve balls headed for the met team with high-grade like that.

Tookie Angus: We didn't have a gravity circuit installed when we took that project over from Barrick,
but that may change. K92 was another interesting transaction – it’s not on my list of
successful sales yet, but it was a good buy. Barrick invested around 300 million there
and we paid them downstroke a million bucks with no royalty. If we ever get above a
couple million ounces of measured and indicated or produced, then we have to pay
them another $60 million.

When I saw the former co-President of Barrick, who is now the CEO of Arizona, I asked if
he knew what we paid for that. He said, "Don't tell me." He’s now sitting in an office in
the World Trade Center in Vancouver with Richard Warks group that actually occupies
the former premises of Angus, McClellan, and Rubinstein. That used to be my office.

Do you not know Jonathan Rubinstein?

Peter Bell: No, not well enough.

Tookie Angus: He's the Chair of MagSilver. He's also a Director of Detour. And he was the guy who
hauled me into the Canico story when the market cap was $50 million. Two-and-a-half
years later, it sold for basically $50 million less than a billion.

Peter Bell: Hard to believe, isn't it?


Tookie Angus: If you totalled all this stuff I've done in say the last dozen years, I think we're talking
somewhere in the neighbourhood of eight billion dollars.

Peter Bell: And to have that coming from you in the West Coast independently is such an outlier.

Tookie Angus: I'm looking out at the ocean here now. We’re 15 feet from the high water mark. The
tide's covered the boulder now, but there’s been a giant eagle sitting on it for the last
hour or so today.

Peter Bell: Wonderful.

Tookie Angus: We call it the house that Canico built. When that deal closed I left town.

Peter Bell: Good for you.

Tookie Angus: I moved here January 2006. It's a small coastal village with about 8,000 people, a large
percentage of whom are Native. It was invaded in the early '70's by hippies and draft
dodgers from the Vietnam War. After they mixed up with the local fisherman and
loggers, it's become what I would call an alternative kind of place.

There’s an incredible mix of artists, body workers, all kinds of fishers. I know people who
live further up the coast in places like Garden Bay who can go on a cruise for three
months and make enough money to live for the rest of the year. It can be a good life for
a musician.

Peter Bell: Interesting how it's a small community. The Sunshine Coast is a small community just
like the junior mining business is a small community. And both are full of all kinds of
characters!

Tookie Angus: For some reason the West Coasters are a bit resented in the capital markets out east,
but I’d say they’ve been disproportionately successful.

It's kind of like the rivalry between Perth and Sydney, except the guys in Perth have got
to be the most special business people I've ever dealt with.

Peter Bell: Special?

Tookie Angus: Oh, they're really special out there. Where do you think the salt job came from at Bre-X?

Peter Bell: I have no idea.

Tookie Angus: I think from Perth.

Peter Bell: Having lived through all this stuff yourself and seen it all come and go, do you think
we're in a good place now for this business?
Tookie Angus: Yes, I think it’s a very good time. In the old days, there were only a few promoters and
there weren't a lot of really smart young guys. Those smart young guys showed up, now
they're mature, and there's another round of young guys out there.

I went to visit one of the guys who I advise in his office downtown and when I got there I
realized that I first came to work in that building in 1969. I told him that and he said he
was in kindergarten then.

Peter Bell: Amazing how the buildings are still there. It’s a great city.

Tookie Angus: I did hop around on law firms though.

Peter Bell: I heard you say Faskin Martineau earlier. I’ve also seen mention of Stikeman Elliott .

Tookie Angus: I started at a firm called Bullhouser and left there in '86 to join up with Rubinstein and
these other guys at the new World Trade Center building. The Bullhouser group weren't
very nice about it though, as no full partner in that firm had ever quit before in their 95
year history. I got my revenge ten years later when I came back as the Chair of BC Sugar,
which has been their corporate client for 80 years.

Peter Bell: Did you keep the account with them or move it across the street?

Tookie Angus: Oh no, I just told all the guys from Bullhouser what to do.

We made a big mistake with Angus, McClellan, and Rubinstein when we merged with
Smith-Lyons in Toronto, which was Corona's law firm. Corona was moving to Vancouver
and Smith-Lyons thought they better have an office in Vancouver or they might lose the
business to me. That's when we got a proposal for a deal from Paul Carroll, who worked
with Ned Goodman. We called it an RTO, but they got insulted by that and long story
short, I left there and went to Stikeman. I had a pretty good time at Stikeman. I was
there about half-a-dozen years, but they were closing down their international mining
practice and that was one of the things that really attracted me to them. It just wasn't a
good time in the business because it was just after Bre-X had killed the business.

I hung in there for a while. They didn't want me to grow a big team, but I wanted an
opportunity to do that so I took a 50 percent pay cut and went to Faskin Martineau. I
was only there two and a half years, but the year after I left they appeared in this book
called “the International Who's Who of Business Lawyers”. This book recognized
Fasken’s Mining Unit as the best global mining unit. That's after I had gone. I was
working freight.

Peter Bell: Says something about the legacy, doesn't it? Sounds like you helped make quite a unit at
Fasken for them to be recognized like that. These kind of legacy influences can be really
important, whether for a legal firm or junior explorer.

Tookie Angus: Just look at Stikeman's today, Peter. The managing partner at Stikeman’s Toronto office
is Jay Kellerman. Jay will say I was his mentor. I hired him.
Peter Bell: Wonderful. And how does Endeavour Financial fit into all this?

Tookie Angus: Things hadn't quite got going again in the junior mining business after the nuclear
winter caused by Bre-X. There wasn't a lot of M&A going on, but I'd just had a big win
when I left First Quantum with the stock at $25. I was one of the founding directors of
First Quantum.

Peter Bell: I saw mention of that, too. That’s amazing.

Tookie Angus: I made some money there. And I made money on Canico, too. At that point, I'd had
enough of downtown. I'd been there for 30 years, so I moved up here to this beautiful
place.

Peter Bell: And they let you? You were a Managing Director for Endeavour, right?

Tookie Angus: No, I quit. We had a mutual parting of the ways. January 1, I came up here. I still go
downtown every once in a while and see Frank.

Peter Bell: One thing that occurs to me is that there doesn't seem to be much wreckage left in your
wake.

Tookie Angus: No, I don't think you'll find too many shipwrecks. The amazing thing, Peter, is that I
don't think many people dislike me. I got to be about 50 years old before I found people
that didn't like me.

Peter Bell: That's pretty good for a lawyer.

Tookie Angus: And they were from Toronto!

I was on a panel for Insight Legal Conferences with a guy from the Toronto Stock
Exchange, the engineer who blew the whistle on Bre-X, and a lawyer from Barrick who
was involved. The three of us got together and decided not to blame the TSE because
that deal went straight from Alberta to Toronto. If it'd come through Vancouver, it
would've been caught because there were actual geos working in the Vancouver Stock
Exchange. The Toronto Exchange didn't have geologists.

Peter Bell: Alberta seems to be the hot bed for some of it, too.

Tookie Angus: Before Bre-X, I was quoted by Peter Newman in his book "The Titans" as saying "You
don't do gold deals with guys from Calgary and you don't do oil deals with guys from
Vancouver." The guys from Calgary didn’t like that one.

Peter Bell: Loud and clear, Tookie!

Tookie Angus: That Bre-X story had all kinds of effects. Do you remember when Brian Mulroney was
getting two million a year for being a Director for Barrick?
Peter Bell: No.

Tookie Angus: Well, He was. Apparently he asked George H. W. Bush to speak to the Indonesians about
Bre-X on behalf of Barrick before they found it was a fraud and Bush said he'd never
been so embarrassed in his life as when Mulroney put him up to it

Peter Bell: That's pretty bad. Can I ask you about one of things you said in that interview with
Charlotte at PDAC again? “Discovery hole market” – it’s a great phrase that I hadn't
heard many times before. Have you seen a discovery hole market before?

Tookie Angus: Yes, I have seen a discovery turn around the markets. It happens.

Look at GT Gold for an example. They put out their first drilling July 2017 and did a
financing the year before that. Well, they actually visited me the year before that to see
if I could help them get some financing. The property had never been drilled, but it had
these unusually high soil anomalies in gold. I told them to hang it up and don't bother.

There were two big shareholders that had between about 25 million shares between
them and they decided they weren't going to put up any more money for drilling. The
thing was parked. When the current president came to see me in July 2016, he came on
a Thursday and by Sunday he was all done.

It was another year before they had the discovery hole, but that was a pure discovery
market right there. It lifted a whole bunch of guys in BC.

Peter Bell: And you talked about how it takes a while to figure out this game, too.

Tookie Angus: Well, I’ve learned it the hard way. I didn't own any paper around Hemlo. I was there
representing UK brokers when we were financing Golden Sceptre and Goliath, which
had a deal with Noranda on the middle of the three mines. We did a smaller financing
than they had intended to do at something like five bucks for a share and a warrant on
Christmas eve. And when we closed on the third week of January, the stocks were
trading at $25.

Peter Bell: Sounds like a different time.

Tookie Angus: It was a different time, but it can happen again. Look at that Hecla-Klondex deal a
couple weeks ago at a 60% premium. How often do you see that?

Peter Bell: It's a significant when you’re talking about billion dollar deals. And how Judson Cutler
and Keith Minty at Stope Capital Advisors. Any thoughts on them?

Tookie Angus: Keith and I have only just started to get to know each other. Judson went to high school
with my son and I’ve been an early investor in Rover. I think I have just under 5%. I
won't be marching to the wicket with that stock, I always give the guys a chance. I'm
gonna be there to do help them do something up north as I know the area fairly well. I
know people in the area and I'm invested elsewhere in that area.
Peter Bell: Having Lou Covello and Aurora Geoscience is great, too.

Tookie Angus: I think he's got a pretty good property out at Cabin lake property. He has a very good
shot at that.

Peter Bell: Thank you very much for talking to me.

Related Interests