#52 - Dealing For Decades With Francois Robert And Rob Krcmarov

I'll start off and perhaps Francois can chip in. Our skills were complementary. Francois was very much on the technical side, and his knowledge of deposits was absolutely breathtaking. Mine was more on the business of exploration, so they were kind of complementary. I would say that we share the same values. We always strive to do our best and were very much ambitious for helping to make or facilitate some sort of discovery and achieving team success, not personal success. And I had absolute trust in Francois. Neither of us was political in any way.

Geologists are generally very curious in nature, so it's important that you never disconnect from what the ultimate objective is: let's make a discovery and add some value to the company and hopefully to society in general. What you don't want is for people just to pursue intellectual pursuits and do scientific experiments. It needs to be applied, and there needs to be results. You need to learn some aspects of business. Initially, that starts out by being on joint venture committees and then eventually transitions to leading negotiations. One of my roles was to look for new business opportunities, and that means understanding what motivates other companies that have assets or projects that you cover. You need to understand what their financial drivers and motivations are, what their financial capabilities are, and then try and find some common ground on where you could potentially help each other.

Yeah, sure. Francois is also a very practical geologist. Usually, when we participate in due diligence ahead of any sort of acquisition or major joint venture, Francois has this unique ability to spend one or two days on site, or whatever time is allowed by our host, and he'll completely understand the geology. So when we do a due diligence, Francois really gets down to what are the key things that we don't know, what are the risks, and what are the opportunities, and he'll break it down very easily. He's just a very practical person and understands what the company needs.

The teams are integrated. There are two streams, but they're not. This is all the exploration team; it's all one team. I would suggest that we had a very close team for many years. We had incredibly little voluntary turnover. There was usually some pre-work that had to be done. There were always field visits where we would go in teams, and we'd often get 70 to 80 percent of all the geologists globally attending that. That fostered a real sense of a global exploration community and really being a part of something much larger. That was a very powerful thing. I think we also took a lot of time to make sure that our teams had plenty of professional development opportunities, but also making sure that we weren't a silo in the company. It was always front of mind. Exploration funding comes and goes in the industry. Fortunately, that was never really the case in Barrick. We always enjoyed adequate funding and sometimes very good funding. But I always made a point of making sure that I would simply communicate the value add of the exploration group, what they were getting for the money that was invested in exploration. We certainly enjoyed our share of discoveries, some economic bodies that are being mined today and some that will be mined, but also some not, but always adding value. I made sure that every board meeting I attended, I always focused on the value proposition of exploration and making sure that we communicated with all so that we weren't a silo.

Really, the power in the system was that everyone had a say. The proposal of a project or an idea, they got to put their own idea in front of the entire group. So everyone had a platform, everyone had a voice. The discussion included everyone. There was no management filter. People got exposure to a lot of different projects, not just their own. They got to understand how other members of the group were thinking and discussing things. So I think it was very powerful. The other part is, while the area selection criteria underpins the technical aspects, particularly of early-stage projects at the generative level and particularly pre-drilling, as you go up the resource triangle into the drilling stage, you need to start considering that project economics become increasingly important. So there's that dynamic between the importance of having a fact-based assessment, as Francois spoke about, and the increasing importance of understanding the potential value of your body, which becomes a major talking point when you get into more advanced stages of the project.

I think part of the answer is that we would spend plenty of time in the field, and people become comfortable. You know, you're sharing long car rides or long hikes or whatever, and you have that geological and other banter. So it puts people at ease and they realize that we're not some mysterious head office people; we're geologists just like them. I think also we took the opportunity to show people that we were genuinely interested in their professional development, so there was no real judging. The objective of the whole group was to present an idea, and if the group decided that it wasn't worth pursuing, it's really no problem. I'd say the other part is that almost every geologist had to put up some sort of proposal or had to speak to something, so it just becomes embedded in your DNA. It becomes part of the routine, and people generally become more and more comfortable with it once they've done it a couple of times.

We wouldn't always seek unanimous consensus; in fact, that almost never happened. But when a decision was made, people could understand the rationale and the reasons that went behind it. When we rated and ranked all of our projects at a particular stage of the pipeline, no one had 100% agreement that the best project was the best project and the worst project was the worst project, but generally people were kind of comfortable that the relative order was okay. Sometimes we would spend maybe an hour or two discussing a project to make sure that, particularly when it was near the cut-off line on whether we would fund it or not, everyone had their say. Then ultimately, if it was still ambiguous, obviously myself, I would have to make that call.

Yeah, so the Barrick exploration system originally had three pillars, and we used to call it People, Pipeline, Knowledge. One was about how we share knowledge across the group; we've kind of touched on the technical part. But then there was the People pillar, and that was really on how we develop our teams, how we give them professional development opportunities, how we give them challenging assignments, how we assess performance. A key part of the performance assessment is that it can't be just a tech sheet. Francois and I would go to each region and we would typically spend two or three days talking about every single junior scientist and other key members of the exploration team, looking at where there were development opportunities, where people needed a bit of a boost, and where we recognized outstanding talent, making sure that they didn't get bored in those jobs. We gave them some sort of international challenging transfer or a promotion or whatever the case may be, just to make sure that people progressed through their careers and were satisfied with the challenging work. We put a lot of emphasis on that, and that wasn't something that was driven by HR; that was entirely driven by our exploration team.

I think it did. For example, there was a time we had some of our South American geologists in Alaska, we had some in British Columbia, we had quite a few in Papua New Guinea. We had a member of our Tanzanian exploration team come over to Nevada for a year to expedite his entry into a management role. So making sure that it's as global as possible is one reason why, during the last busts, we had very little voluntary turnover.

I think the executives are sophisticated enough to understand that exploration is essentially a knowledge industry, and they understand that it's important to invest in the talent pool. So I don't think that part of it really became an issue. When we go into busts, at times Barrick had definitely made missteps and were in financial dire straits for quite a few years. That's a time where the whole business is suffering, and you need to understand that some very difficult decisions have to be made. Unfortunately, I have had to downsize our group on occasion, but it's always with transparency, always making sure that people understand the business reasons, and it's not about performance. It's really just the business is hurting and we have to do what we have to do to survive.

Yeah, so I would say that we generally continued to invest through bust cycles. What really hurt us was that we had a project that was never completed, and we invested north of seven billion dollars of capital in that. Then we also did the Equinox acquisition on a low-grade copper deposit in Zambia, really close to the peak of the copper price, and we had 13 billion dollars in debt. That was almost an existential crisis, and that was a time where we had to make very, very tough decisions for the business to survive. But generally, during previous busts, we continued to develop and address the retention issue.

Yeah, no, I think you make a very good point. We got to know people on a personal level, and I think the EQ, it's nice that it's either innate or not enough for Francois. The other thing I would say that's very helpful is that he shares what he knows. It was always time for a bit of a laugh, and while it was intellectually enriching for me, and lots of fun too, both of our families, Francois's family and my family, they also clicked, which really makes it easy.

It's really about being consistent and basically getting the message out and not creating confusion. So people understand what you stand for, what the company stands for, what the team's objectives are. Having these global budget discussions where everybody gets to participate and hear the same message and the same conversations and arguments at the same time, that's one opportunity. Francois used to do a monthly technical newsletter that went out to all of our staff, so messages were reinforced that way. I would occasionally do town halls with all exploration hands on deck and invite questions, making sure that it was just complete transparency and consistency. You just got to take every opportunity to communicate whatever the message is.

I think you have to accept it and you have to discuss it. You're not always going to agree; sometimes you have to agree to disagree, but it's important to have an honest, transparent conversation.

Yeah, I mean, I never aspired to being the head of exploration for Barrick. I kind of fell into it, partly luck and partly hard work for sure. I would say it was the same with Francois. We're more ambitious for discoveries. We have this term in Barrick exploration: it's about being discovery-driven, making sure everyone's completely aligned and actually adding value. That's really what gives your job a sense of purpose. When you make a discovery and hopefully it gets mined, and that makes a contribution to communities and society in general, and our ambition for our teams to develop, that's incredibly rewarding. I have to say that I've worked with many Barrick alumni out there, and I'm just so pleased that many of them are doing very well. Every time I hear of their success, it just brings me great joy. So again, focusing on developing people, on achieving team success, and then making a discovery, that's the important thing.

In Barrick, for over 10 years, I used to go to every board meeting and I would make a board presentation. I would always remind them of the value proposition and be able to break down what we do into something that board members, who have very diverse backgrounds and quite often with no technical knowledge, could understand what we were doing and how we were adding value. By constantly showing that you're aligned with the business objectives, that what you and your teams are doing are going to add value to the company, and by having regular success as we had enjoyed, it maintains that credibility.

No, not really. I've always strived to do my best. If my honesty doesn't appeal to people and ultimately I'll get fired, well, so be it. That's fine. I had no doubt that I would get another job. But I have to say, working for Barrick was very rewarding for me. It was a very ambitious company, always evolving, so for me it was like a new company every few years. We had quite a few CEOs during that time, but I must say it was a very exciting place. As I said, we had some missteps, and that certainly made things interesting and challenging. But when you have a look at the international span of the company and the resources that we were given to fund our exploration programs, it meant that we had every opportunity to make some sort of discovery and make a difference to the company or to society in general. As I said, that gives real meaning and purpose to what you do. I've always been proud of what Barrick stood for and achieved. Barrick's values are great. Sure, we make missteps, but it's not something that we deliberately do. We've enjoyed our team's fair share of discoveries, some economic and not economic deposits, but always adding value and always having that sense of fulfillment. I've been very grateful to the company.

I just want to clarify something. In the last couple of years, I haven't been directly reporting to the board. When a new board member starts, I would take them through an hour or two of induction, explaining the business of exploration on a one-on-one, much more personal level. But previously, when I was attending all the board meetings, it's really a two-way street. Conveying the value proposition of Barrick exploration upwards, but then also, whether it was from the CEO or the board, I would circle back with our teams and explain these are the issues in the company. Sometimes it wasn't pleasant. Sometimes it was, 'Look, we've got 13 billion dollars in debt. We're going to have to deal with it, and we're going to have to make some very tough decisions. So just want everyone to understand it and be prepared for it in the coming weeks or months.' So really, again, it's about making sure that the messages flow in both directions.

I'm going to jump in here, Francois. I completely disagree. I think he could have easily done my role and done it well.

I would say that you make friendships during the course of your work, but again, it comes down to what do we stand for as a team and what's your opinion. Sometimes you need to make some very difficult decisions about whether to let someone go who you have a friendship with and genuinely like, but it comes down to business. We're working in a business, and you've got to be objective. For Francois and myself, it really comes down to that transparency, honesty, and respect. I'll never do anything to undermine Francois. In general, it's just not in my nature.

Yeah, and just one other thing that Francois touched on but I think it's really important: it's important that you never shirk your responsibility. If a tough business decision needs to be made, you need to get ahead of it. You can't be waiting for your CEO or the board or other members to tell you to make this decision. You can only build credibility by managing your own business and taking responsibility for it. That continues to build credibility.

Whether you're doing a critical analysis of the business and you realize that exploration is expensive, and perhaps there was a question that at the time the company said we would never do deep marine tailings disposal, no riverine tailings disposal, no erodable waste dumps. You have to question, 'What are we doing here? Is this a really good investment that we could make?' There was also a long stretch where there were no discoveries being made in Australia, not by us, in fact not by anybody for many years. So rather than wait for a decision to be made for me, I took responsibility for that and decided to give everyone an equal haircut, really just close down an entire region and fully fund where some of our best opportunities at the time were. That's in terms of managing the whole business. But also, sometimes we need to pay back the budget. Rather than going to the board with an inflated budget and letting them do the hard work and say that's too much, you need to reduce it, we'd always plan alternative scenarios so that if funding was tight, we knew exactly what projects we were trimming. We would be prepared for that and make our own decisions rather than be told to do it. That continues to build credibility.

It is critical. If you shirk that responsibility, people will see it for what it is. It's completely disingenuous. I think you have to own your own business and be responsible for the decisions that you made. Sometimes part of that is delivering honest, frank, straightforward bad news and making sure that there's a discussion that can happen. Sometimes the path is set and a tough decision is going to be made. Allowing people the opportunity to probe and ask questions around it, like 'Why are we doing this?', is a really important part of the learning process.

Yeah, sure. I mean, there's a fair bit of overlap, but really fundamental is you've got to have some sort of strong technical foundation. You might not necessarily need to be the world expert on anything, but a really broad, strong technical foundation of many different deposit styles and really having a look at many different rocks. Some operations experience is really critical and important, something I didn't really appreciate all that much earlier in my career. Lots of field work, especially early in someone's career, and I would advise people not to specialize early. Having a sense of curiosity, creativity, and that discovery-driven element is really important for a successful explorationist, not someone who's just pursuing intellectual curiosities, but someone who actually wants to make a discovery and make a difference. Understanding the whole business, as Francois said, is really important. Understanding commercial aspects of the business, legal, metallurgy, mining, that's all building a more complete picture and understanding how exploration fits in the whole mining ecosystem. So it's very important to have some career diversity. Understanding project economics to make sure that you're not wasting valuable dollars on drilling out a project that's ultimately going to be futile, because that's a massive opportunity cost and it eats away at your credibility. Developing strong communication skills is really important, being able to simplify a message so that a lay person can understand what the value proposition is. It's also important that every geologist learns how to articulate their ideas and influence other people. You could have the world's best idea, but if you can't communicate it and articulate it, you're not going to get any buy-in, nothing's going to happen. Again, understanding and conveying the value proposition of exploration all the time is important. And finally, having critical thinking skills. Exploration is not really a recipe-driven approach. Sometimes you need to make leaps and think a little bit more creatively, ask those questions: 'What if this variable has changed? What if that variable had changed? What would the deposit or the anomaly look like?'

Yeah, I will just add to that. This is where the area selection criteria at different scales come in as well, because it shows you what's important to see in a prospective target at different scales. But then it tells you, 'Okay, what's missing?' I personally use that mentally as a checklist when I go and visit projects at a target stage or target delineation stage. It tells you what is the gap in understanding your target, and any additional work needs to be tailored to address filling that gap. So answering the question, 'Do I have the right kind of alteration?' Then you can use whatever technique or tool or approach that will answer that question: 'Do I have this kind of alteration? Can I vector into it or not?' That shortcuts a whole bunch of other steps. So it helps you identify what are the key questions to answer to advance the project to the next stage. There's a simple connection, but that geology is certainly in the very context of understanding.

More transparency. Sometimes even enforcement is important, making sure that exploration is a serious endeavor that's genuinely looking to add value, rather than having some of these lifestyle companies. Well, you're not going to make many friends with that comment, Rob. I know, maybe edit that one out.

I think for me, there's two things. One is understanding the business of exploration, how best to add value using the shareholders' money basically. And the other part is making sure you understand completely what the community concerns and issues are. That's really critical, and that's something you need to do better.

My pleasure. Nice talking to you. Thanks for the opportunity. Amen.

I think I kind of fell into it. The moment the seed was planted, I was in grade 10, and I was walking upstairs to the library, and our careers guidance counselor, Mr. Burns, shouted out to me and my two friends, 'Hey boys, there's jobs in geology.' I said, 'What's that, Mr. Burns?' He said, 'Well, I don't know. Look it up in your careers guidebook.' So I went home that night and I looked it up, and I looked at the requisites: must enjoy working outdoors, must be creative, and all those sorts of things. So that planted the seed. As I went through high school, I was very much a science channel, and when I went to university, I picked up geology, chemistry, physics, and maths. In second year, there was only one geology subject and two chemistry subjects. Towards the end, because there was no second geology subject at Adelaide University in those days, I remember the lecturer for chemistry coming in saying, 'We're not doing a practical for the next couple of weeks. We're going to take you out and show you the exciting life of what a chemist does.' The first week, they took us to Amdel Laboratories, and I saw these chemists in white lab coats pressing buttons on machines and writing things down on clipboards. I thought, 'That looks very much like a factory job. I'm not interested, because I've worked in factories.' The second week, they took us to the forensic labs, which was really fascinating. I remember speaking with the chief scientist there, and I said, 'How many of these labs are there?' 'Just one.' I said, 'Well, how many of you guys are there?' 'Well, there's about 16 of us.' I said, 'Ah, so how often do jobs come up there?' 'Well, honestly, almost never.' So I saw the deal. I was already enjoying geology, so that's basically it.