 Okay, so we're here today to interview Bob Schaefer. The interviewer, as usual, will be William McCrae. And we are in downtown Toronto. So we're going to begin just with a few simple questions. So could you please state your full name? Okay, I'm Robert William Schaefer. I generally go by Bob because there was so many mix-ups with my father who was Robert Martin Schaefer and he got called Rob. Okay, so you're Robert Jr. No, he had a different middle name, but that's okay. And could you please state your age? I just turned 62. Happy birthday. Oh, yes. And where were you born? I was born in Chicago, Illinois. And as a child, what did your parents do? My father was in marketing and my mother had been one of the first flight attendants. And in those days they had to retire when they got married and so at age 25 or so she retired as a flight attendant and became my mother. Okay, and did you have any siblings? I've got a brother and two sisters, all of them younger. And what did you guys do for fun when you were children? What was your hobby, your past times? What did I do for fun? I played all the sports, everything. Like summertime was baseball, fall was football, winter was hockey. I started playing golf when I was about 12, 13. I still play basketball, still play golf. Up until last year I continued playing softball as well. Okay, and any interests in the sciences or? I didn't know it, but I was collecting fossils and pre-rocks and things like that. Through grade school and had no concept of even what geology was until I'd gotten later in high school and still didn't think that was what I wanted to do. I thought it was going to be a lawyer. Okay, now or less. So I started my first semester in university taking pre-law type courses and I'd had the basic sciences through high school and so you had to take a science program. So I said geology kind of integrates chemistry, physics, biology, so I decided I'd take geology the first semester and well, behold, that was what I got my best grades in and I enjoyed the most. Okay, and so from there what did your bachelor turn out to be? Was it still pre-law or completely? No, in the next semester I switched it to geology and so I had a geology major and German minor. Okay, interesting. Yeah, but Germany seemed to come to me easily. I don't hear that a lot, but good for you. Okay. And which school was it? I went to Miami University in Oxford, Ohio and I guess what made me a little strange is I was growing up at that time Vietnam War was going on so I was subject to the US draft and I drew a draft lottery number of four and thought I was going to be drafted and going to Vietnam and so when I realized that I accelerated my coursework thinking well I knew I wouldn't get drafted for at least 18 months and in that 18 months time I took as much coursework as I could to get as close to my degree as I possibly could. Well, four days before I was to be inducted, Nixon ended the draft and I was one semester away from graduation so I finished a full bachelor's BSc in geology in three years and knowing that I didn't really know what kind of geology I wanted to specialize in so I played both sides of the fence with mining geology or economic geology and petroleum and applied to graduate schools in both areas and decided I'd go into the economic geology side and so I decided to stay at Miami of Ohio got a master's degree there in two years with a thesis one of the first gold theses since the price of gold allowed to float back in 1974 and so I went from Ohio to Nevada to work at a gold mine and finished the degree in 1975 and went on to work at a Ph.D. Migrating in mineral economics no longer German, fortunately you had to have a foreign language to get a Ph.D. so I'd already completed that requirement by having that German background. What was your first job? First job I got paid to do as a biologist? Okay, well I did get a stipend from the company I did my master's thesis at which was a small underground gold and silver mine in Nevada but then let me think, my first real paying job was as a summer student working for Rio Tinto up in Alaska and spent the summer mapping a world class porphyry molly deposit in southeast Alaska not far from Ketchikan and then you got to turn that into a consulting gig while I was in grad school so I continued while I was still taking classes and doing thesis research consulting about 10 hours a week or so making about $70 an hour. I was going to say consulting at such a young age. It frustrated my professor in particular because yes I had a full scholarship to go completing grad school and he liked to use that as his hold as grad students to kind of make him their working slaves but I was making more money as a consultant but I was getting good enough grades they couldn't take my stipends away so I was making $35,000, $40,000 a year as a student and living a pretty good life. With the scholarship too. What kind of consulting did you do? Well because I was in school I really couldn't go out and leave the university very much so I did a lot of microscope work core logging and that sort of thing. Evaluation of structural analysis and that sort of thing. And did you mention you considered your first job to be up in Alaska? A lot of people I speak to either they fall in love with kind of the surveying environment exploration environment or the opposite. They realize that's really not what they want to do. How about you? It was both. Seriously I worked as a exploration geologist and exploration manager until I was in my early 40s so I spent a lot of time in the field all the way up until I was about 43, 44 years old that I got my first job as a mining executive when I moved from being the U.S. exploration manager for BHP living in Salt Lake City to Vice President of Exploration with the original management team at Kinross Gold. So that's when I first started doing a lot in Canada. I moved here at that time. And then I've been more or less the executive level since then. And briefly could you give us kind of the outlines of your career and then we'll go into detail. Okay. Well while I was in finishing grad school at Arizona I worked as a consultant largely for U.S. Borax, Rio Tinto. A couple of other companies I worked for Conoco Minerals. I worked for Occidental Minerals. Who else? Coal Corporation. Then when I finished school, my first job was with billets and metals and ores. Their U.S. subsidiary and was based in Reston, Virginia, where the U.S. Geological Survey is headquartered because they were just setting up a presence in the United States and I essentially evolved to be in their senior geologist responsible for Appalachian geology. Two modest discoveries. A tin discovery in North Carolina and a copper discovery in Northern Alabama of all places. Shortly after that I was then transferred to Reno, Nevada, where I initiated the first gold exploration program billeton that I've ever done on a worldwide basis looking for Carlin's style and volcanic coast of gold deposits. And while I did that it occurred to me as I was driving across the country there were no books that researched the geology of those styles of gold deposits. So as I'm driving across the flatlands of the central U.S. I wrote an outline for a book and took it to the Geological Society of Nevada and said what we should do is put out a symposium on these microscopic gold deposits and sediments and volcanic rocks and come up with a publication out of it and it evolved into a 700 page book a three day symposium that netted them over a million dollars and set the organization up on a permanent financially sound basis and since that time the Geological Society of Nevada has held such a conference every five years. So that was kind of exciting. At that time as well I led a small exploration team. We made a modest gold discovery too small for the billeton organization so I took it over myself and did a little more exploration work out of my own pocket, optioned to a Canadian junior company and we put it into production. So that was my first discovery as well. What's considered a modest discovery? I found about a 300,000 ounce gold deposit open pit carlin style deposit for about a half a dozen years it produced 60,000 ounces a year and was one of the lowest cost gold producers in the state of Nevada for that time frame. So it was pretty exciting because I got a royal kick off out of it. Out of all the, it's quite a prolific Well that was just the beginning. That takes me to 1988. So in 1988 a Kentucky West Virginia based coal company who specialized in open cut coal mining back there was enamored with gold. They said open pit coal mining can't be that much harder than open pit gold mining. Why don't we get into gold and they recruited me to set up a gold company for them in Reno. And within 18 months I made an acquisition for them on a Karen maintenance gold mine up in Montana that what we put into production a year later we grew the reserves from about 200,000 ounces to over a million ounces in that time frame as well with an intense drilling program made a discovery in Southern California called the Briggs Mine currently operated by Canyon Resources that went into production in 1992 and is still producing and made a discovery, another discovery in Montana called McDonald which is a 5 million ounce deposit but the state of Montana decided they didn't like cyanide usage in gold recovery so they passed a state law specifically focused on that deposit so it wouldn't go into production. That was kind of interesting. That last the coal company decided after about 24 months that they didn't really want to be in gold after all. They didn't see it really be an analogous. We had spent probably about 20 million dollars getting all these things moving and sold the company for over a hundred million dollars so they were happy. I was happy and took a short term of consulting because gold was in the downturn at the time and somehow you always lose your job just to the wrong moments. Yeah I know it's very cyclical. It seems to work that way. Anyway, let me make sure I get this order correctly. So I got 1991-92 and that's when BHP knocked on my door. They said they needed a new U.S. exploration manager who married me and moved me from Reno to Salt Lake City which was the kind of historical headquarters for BHP because at that time it was called BHP Utah International which had been a coal company and BHP being an Australian major still wanted to have a strong presence in North America based on Salt Lake City. That's where I worked from then. And that's where I kind of became enamored with that city and really liked living there. I stayed with BHP from 92 till 95 when Kinross contacted me and said why don't you consider moving to Toronto and becoming their first VP of exploration and I said of course and that's what I became involved with PDAC at the same time. I moved up here in July, by October the executive director of the PDAC had heard about me so he called me and said let's have lunch and I told him how I worked with the Geological Society of Nevada and set them up. He said well you should do things with us as well and I got involved with planning the convention on an annual basis from essentially 95 until just a couple of years ago. So while at Kinross we made other discoveries, we got involved with, initially I was just looking at exploration in the mine areas because that's really what they wanted was production type exploration and then we took over Amax Gold which opened Kinross up from a company that operated essentially in the Timmins, Kirtland Lake area and in Zimbabwe to acquire a gold, operating gold mine in Alaska at Fort Knox in Far East Russia at the Kubaka Mine and in Chile at the Ryukyo Mine and we made a small discovery extending our body, oh they also had a mine in B.C. I forgot about that, the QR mine. Interestingly the mine manager called me one day and said we've only got nine months of reserves left in front of us and don't have anywhere to turn. Can you come out and help us find something. So I went out there for ten days studied the geology, geochemistry and geophysics and came up with an exploration plan and our first eight holes were discoveries in a new ore body so we extended the mine life by another two years but at that point in time the mine was no longer of interest and we sold it. Similarly the mine that we acquired in Russia was a very high grade open pit mine called Kubaka well they only had five years of mine life left in it at the first board meeting the chairman said Bob we need you to find another identical ore body that's within trucking distance of this place that's a thousand kilometers from the nearest town and I said well there's only a couple of ways to do that and the way I thought would be most efficient was to essentially try to cooperate with the Russian government get access to the historic exploration data they'd collected in the region show the Russians and have them fully integrated into how to import that and interpret it in a GIS type system, define exploration targets and then do a rapid evaluation of what turned out to be 45 targets that we identified in a six month period of data analysis by hopscotching teams and two helicopters on a rotating basis and by the next onset of winter we'd identified three targets we wanted to drill now there'd never been a winter drilling program in remote Russia ever before and we set out to do that as well and this first program was location was about 60 kilometers away from the mine and it was a duster, it didn't work out the second project however was a target that we'd identified as a result of some stream sediment geochemistry, some interpretation of distal rock alteration underneath a glacially covered area in a stream valley and our first drill hole found mineralization virtually identical to the mine we drilled over a period of two years we drilled enough holes in that valley to define a little over a million ounces at almost 20 grams per ton in open pit configuration and that became a five year extension to the mine life that they asked me to do so inside of 18 months I've made two discoveries for them kind of by the pants because I was put under pressure saying we need you to find it now then Kinross decided they wanted to have a research office in Salt Lake City because that's one of their founding locations as well that's how they learned about me so they said why don't you go back and head up that office for a while and we learned very quickly that the chairman, CEO really like having one of his direct reports that far away so we decided to part paths but that didn't hurt too much in the five days later the Hunter Dickinson Group in Vancouver called me and said would you like to join us and that was in 2004 I became vice president of business development for them and I stayed with but I told them at that point in time my wife was the manager of a giant Macy's department store and so finding an equivalent job for her in Vancouver would have not been possible so I said you don't have to give up your career I'll I got Hunter Dickinson to agree that I should just commute on a weekly basis so I'd get out of plane every Sunday evening and usually for the first six years I'd fly home on Friday evening but that don't let me one and a half days at home I started to kind of realize not a lot of work gets done on Friday so instead I'd fly home on Thursday night and so I'd have Friday, Saturday to fly back again on Sunday anyway during that time I moved from vice president of business development to they changed titles around became senior business development executive and finally executive vice president of Hunter Dickinson and during that time we made a number of acquisitions that I was involved with notably the Bernstone Gold deposit in South Africa the Ola Zink lead deposit in Poland the Florence in situ leech copper project in southern Arizona let me think I know there's one or two more in my brain stop clicking in anyway so we anyway grow in the company Amali Tungsten deposit in New Brunswick called Sisson a BMS Zink led copper gold deposit in southeast Alaska and so on so we generally had about one reasonable acquisition per year over a 10 year period and then this past as this term got deeper and deeper beginning in 2008 finally this year it made logical sense I should just move along because there were no resources left to do another acquisition after Hunter Dickinson they had enough they had their plate full of projects and not enough money to support them so we made an agreement that I would no longer make the commute I'll my title will switch from EVP to executive advisor and like I'm free really to do whatever I want and they'll call me what they want some advice on things and that's where we are today so would you be semi-retired people I talk to retire but they don't really retire no geologists, many people don't retire we're having too much fun so last year I made an attempt with a couple of other mining engineer and financial guy we created an executive team that made a bid to acquire a nickel copper project from Rio Tinto that was located in northern Michigan unfortunately our bid came in about 10 million shy and so the Lundin corporation ended up buying the Eagle project currently I'm working on three other acquisitions and having a lot of fun doing it we're about made an attempt to acquire Barrick's Cowell Gold project in Australia we put in an offer of $450 million cash and it wasn't quite enough either having said that we believe the group got it overpaid substantially for it and I'm working on like I say three others now so one of them is going to stick to the wall is there any consulting? a little bit I'm doing some expert witness work dispute between two joint venture partners that should probably go to arbitration or court ruling that'll be fun, yeah I've not done that I just completed the program at the Rotman Business School I'm a director so I'm planning to evolve more to a corporate director position with major companies instead of junior companies so I think what I hopefully will do is complete one more acquisition that gives me an operating company and get on one or two quality company boards and move forward until whenever the time is right out of all your jobs there were a lot, can you think of one or a few that were at times dysfunctional? dysfunctional I can think of some dysfunctional management teams I'm not sure I want to name names per se but sometimes the maybe perhaps an example one of the companies that I worked with carried out a merger between itself and another operating company while the CEO chairman considered himself an acquisitions expert as well and yes he'd made good acquisitions but he essentially considered due diligence particularly on the technical side to be just perfunctory sort of thing that didn't mean anything so usually when you carry out due diligence on operating minds you send a full team and evaluate for two to five days to see how it's operating, where there might be problems and that sort of thing, he would assemble his team we'd visit two or three minds in a day so really there wasn't a true due diligence analysis on the operation he just wanted to get the deal done so he could move on to the next activity and that's probably not the best way to take care of the shareholders money at a couple of the operations yes they needed to have some major capital infusions to write some bad things a couple that were also okay so it I guess it balanced but it wasn't right you've traveled a lot and you've worked a lot around the globe you had mentioned Africa, South America, Russia, Australia I guess the question is are there any notable areas and were there any major differences you saw on how a mind functions in Russia for example compared to any mind in Canada the way the permitting process and the exploration governance by the country's government certainly is different, I guess one of the things I'm most notable for or notorious for was carrying out a due diligence in Afghanistan in 2008-2009 six trips to Afghanistan the project was called the INAC copper project located about 150 kilometers south of Kabul in the same area where Osama bin Laden was hiding out in fact I went into his cave and yeah there were some tense times on the area there were some bombs and shells around and things like that yeah I've worked in about 75-80 different countries and so again at BHP we were the first people in China back in the early 90s and how should I say you knew that one of your friends and translators worked for the Chinese equivalent of the CIA and he would spend every night trying to get me drunk so he could pump me with questions about things I shouldn't talk about and that was always interesting sparring with him Did the mind ever become a mind in Afghanistan 100 Dickinson looked at this as the best second place finish we ever had. We gained global recognition for the quality of the work we had done but the Chinese put money under the table and got the bid and then the Chinese proceeded then to try to change the terms of their deal and the property is still in suspension, nothing's happened really and the Afghanistan government still continues to contact me to ask for advice or ask me to come back again but I've largely give them advice but I'm not going back right now you're fully well versed in the mineral economics you had talked a bit about them but what are some of the major acquisitions that you've talked a little bit about a lot of those at Kinross and 100 Dickinson in particular I guess what are the largest or your proudest proudest not all of them come to fruition at this point I think the ones that are going to be the most interesting will include the Florence Institute Leach copper project in Arizona and that will be really the first of its type in that a major full-size porphyry copper deposit was oxidized so that the sulfide copper turned oxide copper which means it's leachable by acid it's in a perfect environment for rather than just making a hole and digging it up you drill holes into it infuse the rock with very weak acid it's weak enough that you could drink it without serious problems keeping the you inject the solution into one hole and it's surrounded by 5 other holes as long as you're sucking up more than you're pushing in you can control the flow direction of those solutions so the water that acid never gets out of the sphere of your activity and so you're able to recover all the copper without ever digging a hole and so when it's finished you back fill the old drill holes with cement and it could become a subdivision or a shopping mall or whatever and no deleterious effects it's more like a petroleum technique to a degree it is and so it'll be the first of its kind to make it all the way to commercial production we've experimented with it and it works very well the other one that's going to be quite interesting I think is the Olsa zinc lead deposit in Poland that area is one of the oldest mining camps in the world they've been actually recovering zinc and lead from that area for a thousand years the quality of the zinc and lead there are no impurities in it and so the concentrate that will be produced from this can be blended with other types of concentrates to improve the overall quality it's like diluting the bad stuff by putting more good stuff in and it's a neat little underground operation again back to the world class size in excess of 100 million ton type underground mines so it'll be a less 40 year mine I have a few social questions for you that I like to ask most people I interview one would be about women what was the or how present or absent were women throughout your career and how did that change I took my first job at Billiton there were no women on the technical staff at all but I had an exploration office working in the south in Alabama, Georgia, north and south Carolina and we decided to do a very large regional geochemical sampling program well we pulled together a team of eight summer students and I made sure half of them were women and the subsequent year the project geologists that were full-time staff people moved on to new things and I just essentially hired one of the women to become the project manager for that project thereafter so I think I've been at the early stages of having women doing field work with the rest of the guys at this point in time I'm mentoring three young women who are just finishing university or still in university we talked probably about once a month about the things where they feel like they've had setbacks or directions they might go provide some of my network names to them as well so they are able to build their own networking capabilities also at BHP my office comprised 1, 2, 3, 4 women as field geologists out of how many? Out of 12 that's still more than the norm the norm is about 20-22% if I remember correctly so we were up in the one third range and what kind of setbacks do you have a hard time in the field work surrounded by mostly men or joining a man's job or environment? None that I ever observed in the groups that I've managed I was very lucky that the guys were also quite mature about dealing with having a woman as part of their working team on the diversity at the CIM currently one of the founding members there and I participate regularly in women in mining activities in the US I participated in women in mining programs that have gone to Washington DC to lobby congressional leaders and that sort of thing as well I'd tease them that I was their mascot but it was all part of trying to just get the job done to inform government leaders as to what mining really was about. And do you see the trend of women working in those jobs increasing or? I think it's going to increase a bit more I don't think it'll ever really exceed maybe about 30-35% at any given time because the style of work oftentimes doesn't fit the ambitions that many women have either it requires a lot of travel, being in remote places and that sort of thing and it's going to sound bad with a lot of women just wouldn't enjoy doing that stuff for more discussions I have with them That's for another question I guess a social question and you have a bit of insight on the US side of it but I'd like to ask as well if you think there is a disconnect between mining or natural resource industry in general and society, media, people? Certainly and how do you see it? A lot of people in today's world think electricity comes out of the wall the water comes out of the tap and gasoline comes out of the pump and cars just come out of showrooms and there's been a strong disconnect as to the sources of all those things that make their lives comfortable One of the things I'm planning to do as the incoming president of the PDAC is promote a cooperative public outreach program to remind the population of Canada who are really quite knowledgeable about mining anyway they realize that Canada is a natural resource focused economy remind them that their quality of life has been based on and derived from the natural resources industries but I think a little reminder periodically is an appropriate thing there's probably a greater disconnect in the US by far. How so is it just because most of the population is less surrounded by those resources? To some degree the US is I won't say more urbanized in Canada because most Canadians live in larger cities but the US urban areas are certainly disconnected from the sources of those natural resources and a vocal minority gets a much larger theater to play at as well. So there's probably far less appreciation of where the natural resources that make their lives comfortable come from One of the things I like about Salt Lake City, it's a city in the mountains we have mountains on both sides of the city and on the western side within the city limits is the largest copper mine in the North America it's a big open pit copper mine that you can see the dumps from that's been operating since 1903 called Bigham Canyon they've mined over 5 billion tons of rock out of the hole so it can be seen from the moon and there's never been an environmental disaster of any sort in that 100 plus years of activity within the city limits of Salt Lake and in fact back in the 60s and 70s when I was a kid Sunday night TV was Lassie and Bonanza and that sort of thing Sunday night in Salt Lake City after Bonanza they had the Kennecott Family Movie and it would be sponsored by the mine the first 15 minutes was statistics of what went on at the mine that week in terms of how many tons of ore were removed and how much metal got produced and if there was an accident or not and then the movie would start 15 minutes after 9 and go commercial free for the rest of the evening so they kept the people informed Salt Lake City what this mine meant to their economy so that's a good example I've heard people in the mining business say you say yeah it goes both ways there could be a lot more done by a lot of the natural resource companies and industry itself to actually educate young kids or anybody really to show what they actually do this public outreach program that I'm talking about starting to implement would focus on various demographics I'm thinking you probably need a message that goes to the grade school middle school age crowd the late high school university age crowd to the late 20s and then another message that goes to the working adults as well so that each one gets kind of the same information but presented in a fashion that communicates with them better and there has been not a lot but the formative portions of public outreach PDAC and CI both have great programs with mining matters and mining for society in the respective organizations and they educate the teachers and the school kids about what natural resources mean to them and they make it fun with exercises that are carried out at school or at conventions and that sort of thing I can think of the state of Arizona has hired on the staff of the University of Arizona a former high school teacher and geologist and she has developed a whole curriculum of things to teach at various grade levels and each year visits more than 1000 students in the state and gets a day at probably 70 schools during the school year to go through the school and teach at different levels for a period about what mining does for their lifestyles and for the state of Arizona that kind of thing might not be a bad model to go elsewhere with Absolutely I think we need to communicate better with the media itself. I think media likes to sensationalize things It's kind of their job at the same time True but it's not bad to have sensational good news as well or less biased at times having a news commentator who understands where these resources come from not just the story itself so that they can make a little more accurate judgment as to what's going on when an event occurs rather than relying on the hysterics at times that occur Thank you. I know we're running short on time so I'll ask you, I'll just finish with a few questions We can split it in two if it makes it easier but what are you proud of stuff in life and you could go life in general and professional I think I'm proudest of the wonderful marriage I have with my wife Patty being married as an exploration and field jealous business development guy means around the road a lot and we've got a I think a pretty functional and understanding relationship no matter where I am in the world I call her at least once every day and I mean I called her from Afghanistan I've called her from a helicopter crash in Siberia one time in a snowstorm things like that but that way she knows what I'm up to she feels like she's part of my side of life and I feel like I know what's going on at home and so she feels like I'm contributing to hard decisions when she's there by herself and that seems to really work and so it's a mutually supportive situation I'm really happy with that I think probably the thing I enjoy most about my career has been the feeling I have giving back I like the volunteer activities that I do quite a bit so being involved with the Geological Society of Nevada early in my career the SME in the US which is the equivalent of CIM I've been on their board for 15 years being involved with the PDAC and CIM here in Canada and with the Mining Hall of Fame all of those things they probably eat 20 to 40 hours a week of my time in the evenings but that keeps me out of trouble every night when I'm away from home too because I can work on I've always got something I can work on but it's very exciting to see programs come to fruition we'll finish with one question and that's one of the favorite ones I like to ask is if you were talking to someone a much younger student for example what would be your one important life lesson or piece of advice you could give them on a career basis do what you enjoy don't make going to work at Drudge make it something to look forward to every morning I get up at 5am and I'm in the office at 6am every morning and it's because I like what I do what I really think I enjoy about the jobs that I've had is that it's progressively integrated further and further by science and understanding of earth processes and geology with the business side and mineral economics such that I now can ask the dollars and cents questions as they relate to what's likely to happen in the rocks and in terms of make enough time you gotta always make time for yourself yes you can get burnt out and so that's why a couple nights a week I play basketball or softball so but you can still I can still work a 14 hour day and play two hours of a sport in the evening before I have a supper and go to bed I make life fun that's basically what I try to do you a big coffee drinker? I don't drink coffee at all I never learned how I tasted it when I was four and I said same you're high on life that's good I'd be dangerous if I had caffeine in me I'd be forever bouncy off the ceiling yeah I love the same way right on well whatever I do drink my fair share of wine Bob Schumer thank you very much oh it's enjoyable thanks so much