The choice, despite a handful of convincing reasons to the contrary, was an easy one: stay in North Bay, Ontario, or move to Vancouver and run a junior mining company.
It was the mid-1980s. At the time, Robert Quartermain knew nothing about running a junior firm. He didn't own a suit, he'd never met a lawyer and he hadn't read a balance sheet.
Quartermain had experience working as a junior geologist and running a drill program for the original Teck Corp. at what became the David Bell gold mine – a historic property in the Hemlo gold mines district in northern Ontario, one of Canada's most fruitful mining territories.
But a cuff-linked executive he was not. Yet.
Despite his then-sartorial deficiencies and boardroom naïveté, Quartermain bit.
"I could carry all my personal goods in a packsack in those days. But I just said 'great,'" Quartermain told Business in Vancouver.
"I arrived in Vancouver in 1985, and I've been here ever since."
The fledgling company was Silver Standard Resources Inc. (TSX:SSO). When Quartermain took the helm, its market capitalization was a paltry $1.9 million and the company had only one other employee, a secretary.
Metals prices, too, were down. A metals cycle had just finished, and with sagging prices, Silver Standard's stock price dropped. Years prior, the company's per-share price had been north of $3, but by the time Quartermain was the boss, Silver Standard was trading at around $0.20.
To raise money, Silver Standard did a rights offering, raised $600,000 and, according to Quartermain, slowly began working globally.
The transformative moment for Silver Standard came in 1992. That year, noted investors Rick Rule and Jim Blanchard, both silver bulls, approached Quartermain with an idea. They believed silver prices would, eventually, go up. Quartermain agreed.
Thus began Silver Standard's aggressive purchases of global silver deposits.
"So we went out and did some grassroots exploration, and we went out and bought assets that had come off the previous cycle when silver went up to $50 in the '80s," said Quartermain.
"The thesis was to accumulate the world's largest in-ground silver resource and take advantage of a rising silver price. And that's what we did. What you're seeing now with Silver Standard is they are selling a lot of those assets off."
For years, Silver Standard never produced an ounce. The company bought deposits and sat on them. Things changed in 2008. Silver Standard decided to develop its Pirquitas property in Argentina.
The switch from mineral accumulator to mineral producer, however, wasn't easy. There were cost overruns. The company's board swelled and some of the new directors – engineers, for the most part, said Quartermain – believed the company needed new leadership.
"They wanted someone more familiar with mine production and mine development than I was," said Quartermain.
"And so in January 2010 I retired. Although, I use that world loosely."
Silver Standard had about a $2 billion market cap when Quartermain left. Not surprisingly, the job offers came fast and furious. But Quartermain thought he'd earned some time off.
Instead of getting back to work, he drove across Canada.
Quartermain flew to Halifax and headed west, stopping to visit friends along the way. He was nearly free of the mining industry on his trip, but a few "interesting" press releases caught his eye.
Drill results from Silver Standard's Brucejack project in northern B.C. were showing numerous high-grade hits. The company originally acquired the property in a merger with Newhawk Gold Mines in 1999 for $3 million. But, as with other Silver Standard acquisitions, the project was quickly shelved.
In 2009, a drill program on Brucejack yielded only one high-grade gold hit, but the releases Quartermain was seeing were showing six more. The project was initially believed to contain only vast amounts of low-grade gold.
Upon his return to Vancouver, Quartermain got a call from a friend in Toronto telling him Silver Standard wanted to sell Brucejack.
Quartermain's retirement, however notional, was over.
"CIBC were the bankers. They were talking to major companies, but I said 'put me on the list.' They said 'we're looking for $450 million,'" said Quartermain.
"I said, 'Don't you worry about that, let me see what I can do.' I went to Europe and China with people that had financed before, and we were able to raise a couple of hundred million but not the full amount."
Luckily, Silver Standard hadn't attracted any buyers. The two parties decided to do an initial public offering, and Quartermain put up $7 million of his own money to complete the deal.
Pretium Resources Inc. (TSX:PVG) was born.
"In my 35 years in the business, seeing this piece of drill core with this kind of gold told me you don't get this kind of high-grade gold unless there was more of it," said Quartermain.
"That was my thesis."
Quartermain's theory has since been publicly tested. Last year, Strathcona Mineral Services Ltd. resigned from the project because of a dispute with Pretium over the results from the bulk sample program of Brucejack that Strathcona was hired to oversee.
At issue is how much high-grade gold is at Brucejack. Strathcona believes there are "no valid gold mineral resources" at the project.
"Without mineral resources there can be no mineral reserves, and without mineral reserves there can be no basis for a feasibility study," Strathcona reported.
Snowden Mining Industry Consultants, which sides with Pretium in the disagreement, has since taken over the bulk sample program.
"With high grade and a lot of low grade, you have to make sure you get the right volume metric interest of those two together," said Quartermain.
"My attitude has always been to get all of the data; we are only part of the way through the program."
Strathcona's projection – regardless of its accuracy – has hurt Pretium's stock. Shares dropped almost 30% the day Strathcona made its announcement, and although the stock has climbed from its 52-week low of $2.83 per share, it is still well below its high of $10.67.
Longtime friend Rick Rule, chairman of Sprott U.S. Holdings and investor in Quartermain's project, said Quartermain's track record of success was more important to Sprott than the controversial data.
"We at Sprott have taken the point of view, first of all because we trust Quartermain, that this was an honest dispute and that the presence of gold is ultimately more important than the distribution," said Rule.
"Time will tell whether or not we are taking too many risks, but we are taking it because of who the guy is at the top of the company."
And for Quartermain, the future of Brucejack carries with it not only a responsibility to shareholders, but his legacy as well.
"I think it will define my career – it will bookend my career nicely," said Quartermain.
"My career really started out of school at the Hemlo mine, which was one of the more interesting gold discoveries at the time. It was very different than this, very different mineralization. But here I am, not quite 40 years later working on another high-grade, world-class deposit." •
