Mike Fagan Joins as Editor of Resource Stock Digest & Hard Asset Digest
Editor's Note: You've probably already started seeing Mike Fagan's name around here. He joined us a few months ago to edit our new premium publication: Hard Asset Digest. I figured it was time you got to know him a little better considering Hard Asset Digest is now in full swing and open for new membership. Mike has about as deep a background in mining as you can get, starting at a very young age staking properties in Nevada, Arizona, and California. Get to know him a little better in the interview below.
Gerardo Del Real: I’m here today with Mike Fagan. Mike has a history in the resource sector that goes back many decades and on behalf of Resource Stock Digest and Hard Asset Digest, welcome to the Digest Publishing family.
I know you grew up in a mining family ... I’m interested to hear what that was like...
Mike Fagan: Good morning, Gerardo. Happy to be with you and excited to be a part of the Digest Publishing and RSD family!
You know, I’ve been a fan of Resource Stock Digest for a very long time and you’ve definitely taken the site to a whole new level.
I know I’m a bit biased... but I honestly believe it’s one of the best resources out there for resource stock speculators.
But yes... grew up in a mining family. In fact, my brother and sister and I all spent the better part of our summers in the field staking gold and silver properties in Nevada, Arizona, and California with my dad... and also with my mom on several occasions.
I guess you could say I was the one most enamoured by geology and mining – so yeah, those early experiences of running mineral property grids and examining rocks became the foundation of what would become my career and my passion.
In the early-’80s, I actually had the experience of being intimately involved with one of my Dad’s gold exploration companies, Brican Resources, through the full gamut of what you strive for in this business.
Over the course of a couple years, we were able to take the company from initial property staking and sampling... to the discovery of an ore deposit... and, ultimately, to gold production.
So that was an unbelievably exciting and educational ride!
GDR: That’s really interesting, Mike. I imagine things were a bit different back then in terms of the process?
MF: You know, the process itself hasn’t really changed that much, Gerardo, but the regulations companies have to go through to develop a property are very complicated and expensive now.
Today, mining firms have to have a lot of expertise to function in all aspects of the development process. That means the financial and legal considerations as well as the physical property work.
In the late ‘70s, the Federal Government got into the mining business big-time through the Bureau of Land Management. Up until then, usually only State Regulations were used to manage the maintenance of mining claims.
Back then, there was a tremendous amount of resentment toward the BLM sticking its head into the mining claims regulations. But by 1979, the BLM began producing, really for the very first time, accurate Township Maps showing the valid mining claims for each specific Township.
So, in the end, things worked out fine, and the BLM/State system is the system now in use for determining who owns what and where when it comes to mineral properties.
GDR: What about the way things are done in the field... has that changed much?
MF: Actually, yeah. The process of field work has changed dramatically with lots of new regulations, equipment, and technology coming in over the last few decades.
If you can imagine, back when I first began running mineral property grids, hand-held GPS devices simply did not exist; literally all we had for direction in the field was a compass!
We’d stake our mineral properties with a long-tape, a compass, shovels and pick-axes, and 4x4 wooden posts. That’s it.
I can tell you, Gerardo, it was not a lot of fun carrying those heavy wooden posts up and down the hilly terrain of Nevada and Arizona in the middle of summer (laughs)!
Later on, those posts gave way to much lighter plastic PVC pipes – so that was definitely a welcomed change!
Today, it’s simply map-staking on the computer in many jurisdictions.
GDR: Mike, I’m actually a bit envious. I love doing boots-on-the-ground research and exploration. But you literally grew up doing that! Any interesting experiences out there in the field you’d like to share?
MF: Yeah, I had many, many learning experiences; the first one could’ve easily killed me.
I was on a Nevada gold property reconnaissance trip with my dad and a few other... shall I say... salty miners. I think I was the first one to hop out of the truck, and I noticed some old wooden planks laying on the ground, which, of course, being green, I proceeded to walk over.
All of a sudden, I hear one of the old miners yelling at the top of his lungs, “Michael, get the hell off of those boards!” Of course, startled, I immediately hopped off. The guys come over and start removing the boards, and soon I’m staring over a mine shaft of about 150 feet straight down!
So, yeah... my mining career could have been a very brief one (laughs)!
Back then, there were tons of open mining shafts and tunnels all over the Public Domain. Just about all of them have been secured and made safe now.
Of course, that’s in the US.
I was recently on a mining site visit in Guanajuato, Mexico, and there was a vertical mine shaft with zero fencing around it and nothing covering it and no warning signs at all. And this was just a few hundred yards from a small neighborhood with children.
So, yeah... a bit of common sense and caution goes a long way in the field.
GDR: That was definitely a close one, Mike... thanks for sharing and glad you lived to tell it! So, Vancouver, British Columbia, is obviously the epicenter of the junior resource sector and has been for a very long time. Was that also the case for the companies your dad, Brian, was bringing public during that time?
MF: Yes, these were all Vancouver-listed companies back when it was known as the Vancouver Stock Exchange. Of course, today it’s referred to as the Toronto Venture Exchange.
My Dad moved the whole family from Rhode Island to Vancouver in the early ‘70s specifically to work in the mineral exploration business. Eventually we moved back to the US, but we maintained a family residence in Vancouver up until just a few years ago.
I got to spend lots of time with my dad in the offices of junior mining companies on Howe Street where I learned how junior explorers are put together and how acquisitions and joint ventures work.
In fact, our company, Brican Resources, was the originator of the Prospect Generator model which is still widely used today.
As you know Gerardo, this is where a junior company acquires multiple early-stage properties on the cheap and then sells an interest in each property to a joint venture partner who then provides all of the funding and exploration work required to advance each project.
This model increases the odds for a successful mineral discovery by spreading the risk across numerous projects while preserving the company’s treasury.
Back in ‘85, my dad put together a promotional video for Brican, which explains exactly how the Prospect Generator model works. I’ll send a link that you can post with this interview if anyone’s interested in seeing it.
I can tell you, it’s a true classic and very much worth watching as both a glimpse into the past as well as something that really hasn’t changed all that much in the last 30-plus years... except, of course, the dollar figures being a lot higher now than they were back then!
GDR: Definitely...I’d love to see that and I will post the link so everyone can check it out. I know you studied geology at the University of Colorado before pursuing a business degree at San Diego State University. What did you do after that?
MF: Yeah, so after college, I decided to go into the marketing, editorial, and IR side of the resource business and landed my first writing gig with one of the more prestigious firms in the business; this was in Del Mar, California.
That’s where I met a very close colleague of both of ours, Jeff Phillips, who was also just breaking into the sector as a founding principal of that firm.
So yeah, I started off on the editorial side of things... creating corporate profiles and marketing pieces for various resource companies and also writing copy for a couple of the financial newsletters that were around at that time.
As a company, we’d travel to the various mining conferences, and this is where I began forging relationships with many of the top players in the business, including many of the legends we’re both working with now with Hard Asset Digest such as Rick Rule, James Dines, Van Simmons — to name just a few.
GDR: Oh, so you actually knew these guys when they were young...(laughs)!
MF: Yeah... this was before all the grey hair and bald heads! But still a great, energetic group of guys who remain at the very top of the industry.
GDR: I know there were quite a few big winners that came out of that firm. It must have been exciting working on those... especially being relatively new to that side of the business.
MF: Absolutely! It was quite the wild ride. I remember writing the initial corporate profiles for Ultra Petroleum and Pennaco Energy when they were completely unknown oil and gas companies trading around a buck a share.
If memory serves, I believe Pennaco went to $19 a share before being bought out by Marathon Oil in a $500 million transaction. And Ultra Petroleum went all the way to $200 a share on a split-adjusted basis.
We had a number of gold, silver, and copper winners as well. Too many to list here.
So, yeah... lots of excitement... but I have to tell you, at the same time, I received a very valuable education in the negative side of the business as well.
GDR: Oh yeah, what was that?
MF: Well, while we weren’t actively covering Bre-X, we certainly were following it just like everyone else. Pretty much everyone in the world believed it was the richest gold deposit in history at... I believe, 70 million ounces at its peak.
Of course, there was no actual peak! As you know, Bre-X turned out to be the biggest scam in the history of mining where the principals were caught “salting” which is the process of essentially adding physical gold particles to the rock that came out of the drill core.
They did this to artificially elevate the gold content on the way to the assay lab.
I remember... I believe it was May of ‘97, the morning after the scam was revealed, all of us huddling together in front of the Level II screen in Jeff’s office. I think he was the only one who had a Level II screen.
We stood there in awe, watching trade by trade, as the stock plummeted from a couple hundred bucks a share to virtually zero in just a few minutes.
Naturally, all of the other mining companies that had exploration projects in Indonesia crashed and burned as well. It didn’t matter if they had good projects or not. Bre-X killed that area play and pretty much cast a dark pall over the mining business for a number of years.
I distinctly recall walking back to my desk in a sort of daze thinking to myself... wow, I’m pretty sure I just witnessed history!
GDR: No doubt about that!
MF: Yeah, it was just like a Hollywood movie with suspicious deaths out of helicopters, conspiracy theories, you name it. And it eventually did become a Hollywood movie called Gold starring Matthew McConaughey.
Definitely worth watching if you haven’t already seen it.
You know, Gerardo, Bre-X completely changed the Canadian mining business. It ultimately led to the 43-101 mineral disclosure rules we’re all accustomed to today.
So, I guess you could say a lot of good eventually came out of it.
GDR: That’s incredible, Mike, to have experienced that in real-time. Of course, I’ve read the books and I’ve seen the movie... but what a first-hand education! So, what did you do after that?
MF: Well, all of this was happening around the time of the Dot.com boom... so, as budding entrepreneurs, Jeff Phillips and I embarked on a Dot.com startup called Ubrandit.com.
We took it all the way to an American Stock Exchange listing and flew out to New York to ring the bell at the AMEX. It had a lot of promise and did quite well out of the gate.
But, like so many of the Dot.commers at that time, it eventually became a casualty of the Dot.com bust.
I guess we made the mistake of adding “dot com” to the end of the company name (laughs)!
GDR: Yeah, probably! I do remember that bust quite well.
MF: Yep, another valuable lesson to be sure! After that, I immediately went back into the resource sector as a copywriter for various leading mining stock newsletters.
It’s been a lot of fun... a career of sorts I guess you could say. Lots of ups, lots of downs, lots of conferences and mine site visits.
It’s given me the opportunity to meet and get to know a lot of the major players in the junior mining sector. I wouldn’t change a thing.
GDR: And now, I’m happy to say, you’ve made the decision to come and join us at Digest Publishing and Resource Stock Digest as a contributor and also as editor of your new venture, Hard Asset Digest.
MF: Yeah, Gerardo. I honestly feel like all roads have led me here, and I’m really excited to be working with you and the rest of the team.
It’s sort of like a homecoming for me... you know, working with people like Jeff Phillips, James Dines, Rick Rule, Van Simmons and Brent Cook once again and spending time with, really, the legends of the resource business.
As you know, I just interviewed Mr. James Dines of The Dines Letter, and that’ll be coming out in this month’s issue of Hard Asset Digest.
I think Mr. Dines is one of the most prolific financial writers and market prognosticators of all-time... and I think our subscribers are going to be very surprised by some of his predictions on precious metals — especially silver!
GDR: I can’t wait for that... and yes, he’s also one of the nicest people in the business... I know you’ll agree with that. Very humble and at the same time so bold in his predictions.
You also interviewed Van Simmons of David Hall Rare Coins recently. I doubt there’s anyone on the planet that knows more about the rare coin business than Van....
MF: I’ll agree with you there, Gerardo. And again, one of the nicest people you’ll ever meet.
The thing that impresses me most about Van is his openness and willingness to work with anyone who’s interested in developing a rare coin portfolio.
As you know, this is the guy who co-founded the Professional Coin Grading Service that’s used all over the world to grade coins.
And whether you’re a billionaire looking to create a large safe-haven or an average investor who’s simply interested in starting a rare coin collection... you can literally call up Van, and he’ll take the time to answer all of your questions, educate you a little bit, and get you pointed in the right direction.
He did that for me... and now I’m building a rare coin portfolio of my own. I can tell you, Gerardo, it’s a lot of fun! I only wish I would’ve started doing this a long time ago.
The coins just have so much history and are so beautiful... it’s a really exciting way to invest... especially with the ever-increasing need for safe havens these days.
And not to mention that fact that gold is in what looks to be an extended bull market.
GDR: I agree, Mike. There’s no one bigger in rare coins than Van. And for resource stocks, there’s no one more respected than Rick Rule of Sprott USA who you also just interviewed for Hard Asset Digest...
MF: Yeah, you know, Gerardo... I think you could say we have every base covered when it comes to the world of natural resource investing!
I interviewed Rick back in November, and he’s been gracious enough to work with us on Hard Asset Digest, and you can tell he really believes in what we’re doing and what we’re trying to accomplish for everyday investors who are looking for contrarian wealth-building strategies from the experts.
A lot of people don’t know this but Rick will personally review your resource stock portfolio for free with no obligation of opening an account with Sprott. That’s truly unheard of in the business, and people can learn more about that and a lot more in the interview.
And mind you, this is a firm that manages or administers around $14 billion in natural resources and precious metals... and Rick is willing to open accounts for as little as $20K.
So, just like Van, it’s not an “only for the very wealthy” endeavor.
But yes... absolutely thrilled to be working alongside Rick Rule, and I know you are as well, Gerardo.
No doubt, our readers are going to receive an invaluable education from Rick’s insights, as well as the insights of our growing list of legends as we forge ahead with Hard Asset Digest.
GDR: Without a doubt! It’s been a lot of fun catching up with you, Mike, and I’m happy our readers are getting this opportunity to learn more about you, your unique background, and the expertise you bring to the table. So, thank you for that!
MF: My pleasure, Gerardo! Always great chatting with you. Let’s do this again soon!