Exclusive Commentary From Pan American Silver Founder Ross Beaty On Minefinders Acquisition, Alterra Power & More

February 16, 2012 | By Tekoa Da Silva | Leave a Comment

rossb I once again had the great opportunity to connect with company builder Ross Beaty this week. Ross is Chairman & Founder of the $2.5B Pan American Silver Corp., Executive Chairman of Alterra Power Corp., and over his 37-year career in the mineral industry, he’s created over $4 billion in shareholder value.

The items I asked him about were principally the recent Minefinders acquisition made by Pan American, as well as an update on Alterra Power—Ross’ most recent corporate undertaking.

Here is written copy of our conversation:

TD: Ross, what are your thoughts on Pan American Silver Corp.’s recent acquisition of Minefinders?

RB: I voted for and support the deal. It is a defensive move that will strengthen our company a lot if silver drops, since the Dolores Mine has lower operating costs. It is also a longer life mine than our other assets. It will also strengthen us a lot if we don’t end up getting our operating permit in Argentina any time soon. But if silver goes up AND we develop Navidad it will be somewhat dilutive.

TD: How would you comment on the scarcity of available silver deposits around the world Ross? Because this acquisition seems to be outside of the company’s original plan of seeking organic growth.

RB: Silver deposits are very scarce. Good ones even more so. And good ones for sale even more so again. Pan American has grown through a combination of acquisition and organic growth and this deal, while larger that we’ve ever done, fits the business plan as stated.

TD: Are there accretive growth options available to the combined companies that may not have existed before the proposed transaction?

RB: The combined company has many good growth options in Mexico, USA, Peru and Argentina. These will be pursued but we will always look for deals too. We have done two in recent years and have looked at dozens. Very few fit us and we are not deal junkies by any standard. The best shareholder wealth creation always comes from organic growth, but it is more uncertain and risky.

TD: When we last connected in early December, you indicated you thought Alterra shares were at the cheapest levels investors would have access to over the next 12 months. Since then, the shares have moved from .35 cents, to now close to .60 cents–which is nearly a 100% return in about a month and a half. At .58 cents currently, what are your thoughts on the value of Alterra share ownership?

RB: Alterra shares are worth a lot more than the current price and should continue to move up. The market in 2011 was very oversold and we were affected by many factors that had nothing to do with our actual enterprise value. 2012 has already started well – all our operations are producing well, our growth platforms are solidly moving ahead, our management team is very strong and we have the capital to execute all our growth plans without going ba alterra1 ck to the market this year. I am very excited about our potential this year and as the year advances I think our share price will too.

TD: Ross, thank you so much for sharing your comments once again.

RB: It’s my pleasure, thank you.

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This was another commentary from one of the “greats” in the mining business. I recommend investors research Ross Beaty and his background not only before investing in his companies, but as a means of comparison against other companies and leaders in the mining space.

To learn more about Ross Beaty, Pan American, or Alterra visit: Alterra Power and Pan American Silver

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Thanks,
Tekoa

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