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Neil Woodyer’s leadership style is to be decisive and lead from the front.
Success or failure, there’s no in-between, he says with a chuckle from his Bogota office.
Neil is CEO of ARIS Mining (TSX: ARIS, NYSE: ARMN), Colombia’s leading gold producer and my biggest mining investment.
ARIS Mining is poised to generate around $300 million (all figures: USD unless otherwise stated) in sustainable annual EBITDA beginning in 2026, all without issuing new shares. What’s astonishing is that its current market capitalization is just $350 million. This suggests that ARIS may be on the brink of a significant surge, and Neil’s track record backs this belief.
I’ve closely followed Neil and his ventures for a decade. He’s best known for establishing Endeavour Mining (TSX:EDV), which started with a single mine in West Africa and has evolved into a $5.3 billion gold giant. It’s remarkable to recall that back in early 2015, Endeavour’s market cap was less than $160 million.
In my assessment, ARIS is ready to follow a similar success path.
Born in 1943 in Manchester, UK, Neil overcame shyness at boarding school, beginning at age 7. He embarked on a career as a Chartered Accountant after a £5 per week apprenticeship at a KPMG predecessor. His journey took an adventurous turn when he joined the UK’s Army Reserve as a cavalry lieutenant. Neil fondly recalled racing across the countryside in armoured vehicles, learning about leadership from World War II veterans.
He moved to Swinging 60s’ London in the middle of his apprenticeship, briefly managing a Chelsea nightclub after passing his accounting exams.
Neil found mining by chance. He spent five years in the grocery industry, including as the chief accountant for Mother’s Pride bread, with 40,000 staff, before a headhunter’s call opened Neil’s door to commodities.
He joined The Patino Group’s London trading division, a company owned by one of the world’s wealthiest families, known for their Bolivina tin fortune. Neil soon relocated to New York City, where he managed Patino’s Manhattan trading office, in addition to overseeing five other Latin American trading offices.
In his first metal trade, Neil secured a Chilean copper supply and arranged a $5 million loan, but Exxon disputed the deal after acquiring the mine. Neil returned to Chile, revealing the bearer bond taped to his chest in a dramatic meeting, forcing Exxon to back down. This early experience in metals trading set the stage for his future in mining.
Neil later worked as a management consultant, advising mining leaders on finance and strategy. He also led a Lloyds Bank trading company of 50 traders and mine financiers.
In 1988, Neil’s journey took him to Vancouver, where he joined Placer Dome to establish a merchant banking division. But in an unexpected twist, Placer’s new CEO was sacked on Neil’s second day on the job. He too was fired later that day. “I survived ten years in New York City and a day and a half in Vancouver,” Neil remembered. Soon he found himself starting Endeavour Financial, a mining finance advisory firm. His expertise in financing mines for off-take proved invaluable in Canada’s mining scene.
The boardroom at Endeavour’s Vancouver headquarters was affectionately called “the playroom” by the team. It was where they examined financial models, debated deals, and raised mountains of debt and equity.
Neil’s partnership with Frank Giustra, beginning in 2001, led to the transformation of Wheaton River Minerals into a $44 billion mining giant from $20.5 million within a decade under CEO Ian Telfer (current ARIS chairman). This journey included the creation of Wheaton Precious Metals, now valued at $21 billion. Endeavour Mining Capital also transitioned into a miner under Neil’s leadership, becoming a major gold producer in West Africa. In one of Endeavour Mining’s early acquisitions, it gained an elite South African mining team, who became instrumental to its success (many are now with ARIS). During Neil’s final 19 months as CEO, the company’s shares appreciated over 475%.
In 2016, just days after retiring from Endeavour Mining, Neil and Frank ventured into Latin America with Leagold, eventually merging with Equinox Gold in a C $750 million 2020 deal. However, Neil later regretted selling Leagold before seeing its full potential.
Now, Neil’s focus is on ARIS Mining, a $350 million market capitalization gold producer with impressive potential. In 2023, ARIS is set to achieve over 200,000 ounces of gold production. It has already earned $90 million in EBITDA during the first three quarters.
Named after the Celtic word for “Again,” coined by Neil’s wife Colleen, a certified goldsmith, ARIS has risen through a rapid series of strategic deals and the takeover of Gran Colombia Gold.
ARIS owns five substantial assets, and each one could be a company maker.
Segovia, a high-grade gold mine in Colombia’s Antioquia province, with 150 years of production history, is the big money-maker for ARIS, bringing in $156.1 million in trailing 12 month EBITDA (Nov ‘23 Presentation). It’s the financial engine that powers the company’s aggressive growth plans. There’s over 3.6 million ounces of gold resources left at Segovia, after ARIS recently doubled the measured and indicated ounces. Exploration is ongoing, and significant untapped potential remains.
ARIS is actively expanding its second Colombian mine, Marmato, a huge gold deposit with 6 million ounces in measured and indicated categories, plus 2.8 million ounces inferred and major exploration potential. The Marmato Lower mine is set to begin gold production in late 2025, with over a decade of reserve life and competitive mining costs. ARIS has more than enough capital on hand to finance this expansion, with $210.8 million in cash and $122 million in available project funding.
When combined with Segovia, these operations are set to achieve a total production exceeding 400,000 ounces per year by 2026. If targets are reached, and Neil has a track record of delivering, this could yield an impressive $300+ million in annual EBITDA at current gold prices (400Kx(1980/oz-1100/oz AISC) for many years. Just one year of these earnings is nearly ARIS’ current market capitalization.
Not stopping there, ARIS holds a 20% stake in Soto Norte, one of the world’s richest undeveloped gold projects, also in Colombia. ARIS has the option to buy an additional 30% stake (for $300 million) and is the operator of a joint venture with Mubadala, UAE’s sovereign wealth fund. Mubadala acquired Soto Norte in 2015 as part of a debt settlement with Eike Batista’s AUX, which paid $1.5 billion for the asset in 2011. Multiple feasibility studies have since been completed.
Plans are underway to move Soto Norte towards permitting. The recent approval of the Marmato Lower Mine bodes well for Soto Norte. With estimated production of 450,000 ounces a year (20-50% to ARIS) at All In Sustaining Costs below $500 per ounce, Soto Norte is a potential Tier 1 asset with an exceptional partner, seemingly forgotten by the market.
Neil believes Soto Norte should be largely financeable with debt, his speciality. ARIS has $373.3 million in existing debt obligations at Sep 30, 2023, with the majority ($300M) due in 2026 and paying 6.8% interest, the balance due in 2027.
In addition, ARIS possesses full ownership of the huge Toroparu gold-copper deposit in Guyana, previously valued at C $226 million in 2021, and the Juby exploration project in Ontario, Canada. Guyana, an English-speaking democracy with a booming resource economy thanks to a big offshore oil find, is a promising second location for its growth plans. Both Toroparu and Juby represent untapped opportunities for ARIS shareholders.
ARIS is also making strides with its 60 small miner partners, creating win-win partnerships that are setting a new standard in gold mining. They’re sharing their industrial-scale facilities, technology, safety standards, and access to capital with these small miners. This helps the small miners increase their gold recovery rates from roughly 50% to an impressive 90% while also reducing harm to the environment.
These partnerships benefit everyone. Colombia cuts down on illegal gold exports and sees local economic growth. ARIS shares in the proceeds without depleting its own resources. Plus, ARIS gains access to the small miners’ traditional mining knowledge, exploration skills, and community support.
As ARIS expands in Colombia, this approach sets them apart in a big way.
ARIS faces challenges, including country risk. Colombia, long hailed as a Latin American success story, saw the election of a left-leaning president in 2022 in a close election, initially sparking investor concerns. However, a year later, these fears appear overstated, with only minor tax increases enacted affecting the company. Security risks appear exaggerated after my extensive travels in Colombia, while execution risks remain, including potential construction risk at Marmato.
Investors lack a Colombian gold-producing peer for comparison, and ARIS’ lack of need for capital limits market attention. But, as investors seek Mid-Tier gold companies, ARIS may fill the void. Its focus on corporate governance, investor field trips, and the presence of a respected former justice minister on its board, as well as Neil’s constant presence in Colombia, are all positive factors.
Since taking over the Colombian operations, Neil’s replaced 22 of 23 managers, reached landmark agreements with small miners, permitted and started construction at Marmato, acquired Soto Norte and other initiatives, all in the past two years. His determination extends beyond the company itself; Neil has undergone a remarkable personal transformation, shedding an impressive 60 kilograms in the past decade.
His high-energy sets him apart from the average 80-year-old. Neil has a four-year-old son and three older children. Although Neil appreciates fine wines, properties in Tuscany and England, and fast cars, his true passion lies in building ARIS.
However, Neil isn’t solely responsible for nurturing ARIS. He’s supported by operational and financial experts, including COO Richard Thomas, a 30-year mining engineer, CFO Doug Bowlby, who was mentored by Neil at Endeavour, and SVP Tyron Breytenbach, a renowned former analyst and investment banker. Insiders own over 6% of ARIS and continue to buy in the open market, reinforcing my view of the opportunity.
In 2022, ARIS co-founder Frank Giustra invited me to his home in West Vancouver to discuss his outlook for gold and the company. ARIS chairman Ian Telfer also appears in this interview:
In a recent conversation, Giustra said that he admires Neil’s focus and “stubborn dedication.” Giustra noted Neil’s inability to suffer fools and his directness. “He’s always got Plans A, B, and C for any challenge,” Giustra stated. Ian Telfer, who joined ARIS as Chairman in 2020, following his 2019 retirement from Goldcorp, has collaborated with Woodyer for over three decades.
In the current economic climate, marked by uncertainty, geopolitical risk, and inflation fears, gold itself has shined as a reliable investment, but miners have been slow to catch on. Comparisons with the inflation era 1970s are evident, but then certain gold companies enjoyed astonishing earnings multiples exceeding 50-60X. ARIS is barely a 1X 2026 EBITDA at current prices. While I don’t expect a return to 1970s values, I do believe ARIS represents enormous, asymmetric value for investors and gold price leverage.
Trading liquidity has posed challenges, but ARIS is taking steps to address this with a recent NYSE listing. As ARIS continues to tackle the factors behind its market discount, liquidity should improve.
In Latin America, other gold producers with around 400,000 ounces of gold production have market caps ranging from $800 million (Torex Gold, Mexico) to more than $2.6 billion (Lundin Gold, Ecuador). This underscores the potential for ARIS, even if gold mining valuations remain stagnant and without factoring in Soto Norte.
For years, investors overlooked Endeavour Mining, but when they finally caught on to its potential, its market capitalization grew by 10X in less than 2 years. Before this, Wheaton River’s grew by over 50X during Neil’s board tenure.
ARIS Mining is emerging as a potential juggernaut hidden in plain-sight. Neil’s exceptional track record, combined with ARIS’s solid foundation and growth potential, positions the company to thrive amidst these challenges.
Neil Woodyer leads decisively and from the front; ARIS Mining (TSX:ARIS, NYSE: ARMN) is his next gold mining success story.
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