Communication with investors, shareholders, analysts and newsletter writers is critical for company executives, but with diaries cleared of travel commitments for the foreseeable future, how is the sector undertaking IR in the time of COVID-19?
With physical meetings no longer possible, the sector has largely turned to internet-based communications technology to engage with investors, a novel approach for some, less so for those already using it.
"We've always done a lot of conference calls with investors and continue to do so," Steve Low, of GoGold Resources, told Mining Journal.
"We just held a virtual roadshow arranged by our UK brokers to replace a trip to London, where we were able to conduct a number of meetings with current and potential new investors from the UK and Europe from our home base in British Colombia. We have also been looking at additional ways to communicate online, including an increased social media presence and the potential for a series of video updates from site," Darin Labrenz, CEO of Pure Gold Mining, told Mining Journal.
John Welborn, CEO Resolute Mining, said technology provided the tools "to maintain active lines of communication and ensure investors are kept informed and have opportunities to engage with the company despite restrictions on travel".
Kinross head of communications Louie Diaz told Mining Journal the company decided to hold a virtual annual general meeting to "protect the health and safety of its shareholders and employees, while ensuring we provide the same level of disclosure, transparency and participation as previous meetings".
"President and CEO Paul Rollinson and senior management also participated in a fireside chat with TD Securities to discuss Kinross' global response to the COVID-19 crisis. A similar call, hosted by Paradigm Capital, was held for a number of investors."
Stephen Williams, head of business development at Bluestone Resources, told Mining Journal: "We are in the midst of setting up webinars and will look to connect with retail shareholders through a series of 30-minute discussions. Similar on the institutional front but one-on-one. The video aspect of it is important especially for them to see us."
Institutional investors have readily adapted to the change.
Joe Foster at precious metals investment fund Van Eck told Mining Journal: "We have been working remotely for over [four] weeks now and it's really been business as usual without the commute. Lots of Zoom meetings and conference calls to replace in-person meetings. A significant portion of our communication from the office is already phone/internet based, so it's not a huge transition. The biggest change is that we can't do mine site visits. Maybe virtual tours is the next big thing."
Michael Scherb, founding partner and CEO at London's Appian Capital, said the group was doing more, but shorter, conference calls - up to a maximum of one hour long.
"We do Appian team meetings using Zoom as we can put presentations up and go through them," he said.
"I try to track team efficiency and there has perhaps been a 10-15% drop-off due to working at home, but that is okay."
Appian has more potential deals to analyse resulting from a news release it issued at the end of March inviting companies needing a capital injection to get in touch, but remote comms has its limitations. "We have been contacted by companies with stressed balance sheets and that foresee future stresses to come, as well as from groups with no debt seeking alternative sources of finance given that equity markets are shut. We can go through data rooms on the desktop and build our own resource models and mine plans but the ability to do site visits to evaluate investments can be hurt. We cannot do international travel, but we have local teams in many regions that can still do them," Scherb said.
For IR marketing firms such as Red Cloud Securities, Adelaide Capital and O&M Partners, the go-to solution has been the webinar, which essentially sees a company executive go through their corporate deck virtually with viewers able to submit questions.
"We are doing some things differently, however, we set up the firm with a non-traditional service focus in many areas of media (social media, video services, etc.). This has allowed us to pivot our clients to a much more virtual type of market outreach. Although not perfect, the client feedback has been tremendous," Red Cloud CEO Bruce Tatters told Mining Journal.
Kai Hoffman, CEO of boutique investment bank Soar Financial, is currently unable to take clients on road shows in Germany and instead is conducting virtual road shows via Twitter Live, a tool to stream and Tweet live video from the Twitter app. Investors ask questions by using the hashtag #ask with the company ticker. "The current downtime is making people innovate. We at Soar are providing the same service and the same important connections we did while able to travel and meet face-to-face, but at home. All you need is a computer," Hoffman told Mining Journal.
"During this time of unchartered territory communication could not be more important. Reputations are made and lost in times like these. Clients are adapting very quickly to video conferencing. The most obvious and easily embraced is virtual meetings or roadshows and they will likely be utilised more in future, now that some first timers have been forced to use it," Jos Simson, CEO of corporate communications advisory firm Tavistock, told Mining Journal.
For New York-based non-deal investor marketing firm O&M Partners, the changes COVID-19 is forcing on miners' IR marketing have been coming for years as active money management has become increasingly scarce. It has also exposed how little most companies understand about marketing and who they need to be marketing to.
"Companies are now forced to try it and are realising how effective it is. It is going to kill the roadshow"
"IR is a marketing function and a lot of companies don't realise that. The traditional model for marketing mining companies has been the road show as the paradigm for attracting non-deal investors was that the potential investor had to see the whites of your eyes to buy your stock. We have proved that this is not true and that it is less about meeting management than having an investment idea brought to them at the right time," president and founding partner David Mandy—who has a Madison Avenue (advertising) background rather than Wall St or Bay St—told Mining Journal.
O&M's approach is to bring marketing principles to a sector that has rarely bothered with them. With the realisation that active fund management was becoming a thing of the past, long before COVID-19, O&M began town hall webinars as a replacement for physical road shows, formerly its core business, and focusing on marketing metrics such as CPM (cost per thousand views) to show their effectiveness. "The whole business has changed with the internet. Compared to a road show, the CPM [of a webinar] is in the pennies. Companies are now forced to try it and are realising how effective it is. It is going to kill the roadshow," he said.
For Jennifer Rankin, director of engagement & development at O&M, the marketing sophistication of the mining sector falls way behind sectors such as automotive and hotels. "Miners generally don't have systems in place for taking in volume [of views] and converting them into their stocks. They don't know what to do with the hits they get. There is a lot of opportunity to take the volume of potential investors they would never have been exposed to before and convert it to investment in their stocks," she told Mining Journal.
While digital tools are freely available and many companies are hosting their own webinars, Mandy believes they often fail to cater for generalist investors by focusing too much on geology and technical aspects, rather than what the investment opportunity is. "You sell the sizzle, not the steak, so a generalist with no geology can get comfortable buying a mining story. People don't buy what they don't understand," he said.
O&M's webinars typically include people from the buy-side questioning a mining company which allows generalist investor participants to obtain information they would never have thought of asking for. "It is about curating trust. For the generalist, thanks to the internet, it is as if they were overhearing a buyside meeting in New York or Boston," said Mandy, who in addition to new mining clients, has received calls from IR companies looking to "pick our brains" during the COVID-19 travel lockdown.
Twitter is also being harnessed more seriously as an investor engagement tool. "I started to use Twitter as a marketing tool about a year ago, and through my personal analytics (aka "gut feeling") it really was clear to me this was infinitely more effective in terms of reach and efficacy than retail marketing," Akiba Leisman, CEO of Mako Mining, told Mining Journal.
Another company rethinking how the sector undertakes marketing is Vancouver's VRIFY, where connecting with investors remotely is what the platform was created for. "Remote marketing and the ability to do it effectively is what we have built this business around. In two years, we have grown from five clients to 120 now and I believe it is part of a long-term shift in how companies do marketing. The Vrify platform is built for this kind of environment and the COVID-19 has accelerated uptake. Miners are changing the way they use the tool from providing content on their webpages to having a more interactive conversation with investors," CEO Stephen de Jong told Mining Journal.
VRIFY differs from webinars due to its interactive nature. "Our platform is more like a video game in that the investor downloads a 3D model which the company executive controls, taking the investor to relevant parts and leading the conversation. In the 3D model we can add photos and geological sections, which the leader can annotate in real time to highlight information, which means content can be focused on the requirements of each investor. It changes things from a presentation to a conversation," said de Jong.
Calibre Mining uses VRIFY. The company's VP corporate development, Ryan King, said: "During a conference call, listeners get distracted. With VRIFY, we can control the presentation from our end. We can capture attention and point to important details as well run our 3D models while discussing each slide. It is the truth serum as investors can see where drill holes are and what they mean. We are adding Vrify links to our news releases so people can see drill holes and sections. I think most fund managers will eventually ask for it."
For de Jong, a paradigm change in investor communications is underway. The company is beta testing an interactive investor dashboard with about 20 institutional investors to get a clearer and data-supported idea of what information investors are really looking for.
"Presentations in six months will be very different to what we see today"
"VRIFY aims to change the way companies engage and communicate with investors. Companies want to present the information of most importance to investors and so we are gathering information about this. We are looking at what investors spend time looking at and I think the structure and content of company presentations will change as a result of this. We are creating interactive tools to allow investors to change input assumptions on economic models and guidance forecasts and use those to drive a conversation with a company. Presentations in six months will be very different to what we see today," he said.
Conferences, the backbone of investor outreach have been severely impacted by travel and meeting restrictions imposed around the world. Leading conference companies are responding through the deployment of technology to provide a virtual meeting space via video conferencing.
The Denver Gold Group cancelled its European Gold Forum in Zurich in April and instead has enhanced its proprietary meetings tool for virtual one-on-one meetings. It will host its first virtual conference April 20-23 and replicate the one-on-one meetings, company presentations and keynote speakers its events typically provide precious metals investors.
Investors and precious metals companies will be able to arrange virtual meetings using the DGG meetings tool, which is being amended to include high-quality video- and audio-conferencing capability for desktop and mobile devices. "Instead of showing a meeting location there will be a button to join your meeting, and it will work like a call with Skype, Zoom or other services but working off our platform. Companies will be able to show their screens and presentations. Many investors want to hop onto a call but scheduling calls with 50 companies on their own is a challenge, so this tool is the best way to do it," executive director Tim Wood told Mining Journal.
To further emulate the traditional conferences, DGG is dispatching video teams to key mining finance cities London, Toronto, Vancouver and Denver to prerecord company presentations and keynote speakers. These will then be available for download from its website.
A similar approach is being taken by 121 Mining Investment Events which plans video-based meetings for Americas, Asia and Europe, Middle East and Africa in lieu of its London and New York events. "With the move online, investor participation is no longer constrained to individual cities. Instead for the first half of 2020 our events will be time-zone based," 121 said in a statement.
Cambridge House, organiser of the Vancouver Resource Investment Conference, is also looking to lever its existing platform. "Our traditional trade show model isn't viable right now, but we do have a large digital audience we've built up over the years through our conference footage. Between our newsletter subscriptions and Youtube audience, we reach about 120,000-plus investors around the world. We hosted an investing seminar [recently] with Ross Beaty, Marin Katusa, Randy Smallwood and Grant Williams which was a big success with high engagement. We have weekly speaker and company continent scheduled for the next few months. As long as we can still deliver high quality content to our eager retail crowd, we are going to," VP sales, Steve Davidson told Mining Journal.
The IR function is continuing, albeit with changes, despite COVID-19. The more proactive companies are finding that a digital approach is capable of building and maintaining relationships, while reducing travel and other costs, which hither too may have been substantial given that even modest-sized junior explorers often had annual IR marketing budgets in the C$250,000-500,000 range with larger companies having million-dollar budgets.
The financial benefit from a digital approach to marketing may be seen on the bottom line, but it also promises ancillary benefits. Reduced travel reduces the carbon footprint of companies, an increasing concern as investors focus on ESG performance. More importantly, travel restrictions mean CEO's and other executives will spend less time on planes and more times managing their businesses. CEO's typically spend 40-60% of their time travelling to meet with investors, and some CEOs will surely see a reduced need to do so as a result of practices adopted during the COVID-19 outbreak.
Face to face is how you build trust
So, is face time dead?
Before CFO's slash IR budgets, many still value face-to-face meetings.
"I don't see virtual replacing face time. For a quick update, a chat via Zoom or GoToMeeting can be helpful, but you will never establish the same type of personal relationship with a person," said Soar's Hoffman.
"This will not change how we do things in the future; we are very much looking to things to return to normal as we like to meet our investors face-to-face," said Low at GoGold.
"You don't want to miss out participating in the main events and the potential of meeting a new investors. Face to face is how you build trust," said Calibre's King.
"What this really shows is the importance of face-to-face meetings with stakeholders. Nothing can replace being in the same room, and so the sooner we can bring people together again the better," said Tavistock's Simson.
But some will look to utilise them more sparingly.
"Web meetings will offset a lot of marketing and we might not ever go back to old school one-on-ones. This might cause a paradigm shift," said Bluestone's Williams.
"When the pandemic subsides, the chances are low for me to do steak-lunch presentations for old ladies looking for a free meal," said Mako's Leisman.