Over his 40+ year career spanning the US Marine Corps, Nesbitt Thomson, Salman Partners, and now Salman Capital Inc., Terry Salman has become an icon of Canadian mining finance and public service. Here, in an interview with Arash Adnani of PrivatePlacements.com, he delves deep into his life, philosophy, and investing strategy.

Transcript

Arash Adnani:
This is Arash Adnani from PrivatePlacements.com. I recently had a chance to sit down with Terry Salman. Terry is a true legend in the mining industry. He spent about 22 years as the chairman, president, and CEO of Salman Partners. 

Salman Partners helped raise over 20 billion dollars for more than 400 companies here in Canada. He's worked with some of the best and biggest names in the industry, guys like Ross Beaty, Robert Friedland, Lukas Lundin. And it's not just his business accomplishments that makes Terry a true legend, it's his sense of civic duty, something that he's done and been committed to for his entire career and still is to this day. 

Terry has served on the Vancouver Public Library Foundation as its chair. He's also been the chair of the St. Pauls Hospital Foundation, he's sat on the financial advisory board to the World Health Organization, and this is just to name a few.

This interview covers a lot and we've really tried to touch on most of Terry's career. There's a lot to cover, but we cover things basically from the beginning where Terry got started, which was with the US Marines, and his time spent at Nesbitt Thomson and what led him to start Salman Partners from there. We touch on what he looks for when he's backing different entrepreneurs, what he looks for when he's investing in different deals, and really talk about his philosophy on life. 

If you're an investor, if you're an entrepreneur or a founder or you are interested in business or if you just need some inspiration, you will love this video. I walked away feeling so inspired. I hope you do too. Without further ado, here's my conversation with Mr. Terry Salman. Please enjoy.

Arash Adnani:
In your career, you've basically been two places. That's pretty uncommon, right? People move around. What I ask myself is, "Okay, well, is this just like a generational thing?" Is it just like the generation now that feels like they need to move around and always look for a better opportunity, or is this really unique to Terry, and does any of it have to do with your commitment and discipline that you gained from spending your years in the Marine Corps and actually being in combat in Vietnam?

Terry Salman:
I think the Marine Corps is the core of my value system because they... other than my parents which were of course paramount, but the Marines taught me that it's not about you, it's about the Marine Corps. And you're just one part of it. But it's so hard to get that designation and such a sacrifice to be called a US Marine that when you achieve that, you never forget it, and so loyalty's a big part of it. You can tell that there's that picture of that Marine on the right hand side, he was Secretary of the Navy under Reagan and he wrote Semper Fidelis, Semper Fi, which means always faithful to Marine Corps. So, faithful to the organization, faithful to your friends, faithful to the work that you do, a great deal of that. And don't cancel. Marines don't cancel meetings and anything like that. You have to be somewhere, you have to be somewhere.

I was telling my granddaughter the other day, the only thing that I didn't like doing was jumping out of an aircraft on a rope. You know, a helicopter. And I said to her, if I could find a way to go to sick bay on that particular day I would. But I said... I was trying to explain to her. She has a fear of sort of ending up in a bad place of skiing even though she's a very good skier. But I was trying to tell her that I had the same phobia in the Marines but I got over it. So it was sort of an interesting discussion with a 10 year old.

Arash Adnani:
Do you almost find that, because of that experience, do you almost find it that it's unrelatable to some of the things that you might see as far as behavior from other people that you come across in work or life, but you almost have to catch yourself where it's like, "Okay, well, hold on a second, they weren't in the Marines so they're not wise like I am," right?

Terry Salman:
Well, I don't know about wise, it's just a different experience that taught you. The Marines take care, they do things that have a lifelong impact. Like they always go back and get their dead even though there's a risk that they'll get shot themselves. That's a profound way of teaching you loyalty. So if you have that experience and you see people acting up or haven't had that discipline, it's really hard to tell them that you should do this and do that. It's just an experience that helped me a lot through my life.

And you see people, giving back is the reason for me, what's the meaning of life? You can collect things, you can have cars, you can have planes, but what can you do with your life that makes a difference? You can't be just focused on yourself. In my view, a friend of mine just died. He dedicated 25% of his life to civic activities. I don't know what percentage I spent, but I'm always believing in new ways. My New Year's motto this year which I've fairly told anybody is to help as many people as possible.

In whatever way possible, because how many years do I have left? Five, six, 10, whatever. So for me it's important to do that. In business, in charity work, it's something I want to do.

Arash Adnani:
So let's talk about that civic duty because you've spent 16 years as chair of the Vancouver Public Library Foundation, eight years as chairman of the St. Paul’s Hospital Foundation, and these are Vancouver and BC landmarks, right? So you just said you don't know what the percentage is that you've spent, but those are just two things out of a whole page here of community involvement that you spend time on, so obviously it's a high percentage. You just explained to us where that sense of duty comes from, but with your approach it hasn't just been a little bit here, a little bit there, it's been a true commitment where it's a fixed aspect of your daily life. How do you explain that and where does that come from?

Terry Salman:
I think my sense of civic duty came as a result of watching other people who made a difference. Like Mr. Louie at London Drugs. Why would a man so successful as him spend so much time on helping St. Paul's Hospital, which he did. And so I said, "Well, if Mr. Louie can do it maybe I can learn something from this experience." So I picked up on other people like him who really want to make a difference and had a civic duty that I hadn't thought of. 

So watching him, I got involved. And because of that somebody who was aware of what I did at St. Pauls, they asked me to help the Vancouver Library years later. And here again I did that because libraries are good things. The more people read the better off we are. And so there's a movement in some circles to do away with libraries, but libraries are a living thing and people from all walks of life benefit from libraries, so I think “yeah” I can get involved in this.

But it was a struggle because we have civic minded governments. Some governments are pro business, others are not, and so we had struggles in early years getting recognition and "why should people donate to a library?" was a common question when in fact it should be paid from your tax base. And so I said, "Whatever, there are reasons for incremental funding." and there are benefits to children, to people who can barely walk.

If you go to the Carnegie branch you see the Asian, East Asian and Asian culture people waiting in line for the Chinese periodicals that they read there daily in a small little library that was once a major library, a small section of that. And sometimes they get ripped off by people when they wait in line because that's a tough neighborhood. And so think about how those periodicals get worn and used by these wonderful people who have access to this library free. And they take a chance by waiting in line with somebody bothering them and trying to pickpocket them and whatever. So the small amount of funding for something like that goes a long way. So they're not all central libraries. There's some in remote places or less traveled places, more difficult places, and it makes a difference.

On the other hand I've been involved in BCIT too, because I have an honorary degree from there. None of these organizations that I've been involved with had foundations when I started. Or they just had a very small one. St. Paul’s, BCIT did, St Paul’s and the Vancouver Public Library Foundation did. But small. So we're treading on new ground and now they're both very successful - hugely successful. And they helped many, many people from all walks of life. So immigrants, non-immigrants, everybody's an immigrant in some way or another, so these institutions help a lot of people.

But I like grassroots as well. I mean, I have a small foundation called Essential Needs Foundation and we show up on the website of the Veterans Transition network as one of their major donors. There’s a number of hours we help for treatment for people who suffer from PTSD and other issues from the military background. And yet we show up with Boeing, London Drugs and other places because we've made that a focus. We also, for a long time, gave food to the downtown East Side. So there's many ways to become involved, it doesn't have to be large entities. So why do I do it? Because I get huge satisfaction doing that. It makes a difference. And I feel good doing it. I feel like it goes a long way. A small amount of money goes a long way.

Arash Adnani:
So a lot of times there's people in business and they're recognized as business leaders and so they're approached a lot to help with different causes and foundations. What advice do you have for younger people that don't have that profile yet where they get approached, and let's say they still want to help and support, what's the best way for them to get involved? For example, have you ever given advice to your grandkids or even your own kids about how to get started, get your foot in the door with civic duty, with getting involved with causes and a community?

Terry Salman:
I think the best way is to be part of a committee, some sort of committee that does charity work. There's all kinds of opportunities for small events that you can partner with, smaller entities need people who are well educated to be on their boards, make a commitment. So as a board member, as a volunteer, there's huge opportunities.

I wouldn't do it because it helps your resume. Do it because it'll help you be a better business person. Because you will see many different aspects of life that will help you in business, I think.

Arash Adnani:
So this is actually a good transition going into business. A lot of people know you as Terry Salman from Salman partners, the investor, and we're going to get into that later on but you're also a businessman. You spent 20 years with Nesbitt Thomson, you started out as a senior analyst and worked your way up to executive vice president. And having spent 20 years, started as not at the bottom, but working your way up to EVP, is very significant. Tell us from your experience as a businessman what were the main lessons learned that allowed you to then go off and start your own business in Salman Partners and what were the key takeaways in being able to do that?

Terry Salman:
I think the key takeaways was that I had mentors. I had people that helped me. The man who's one of my closest friends, Brian Aune, was chairman of Nesbitt Thomson and he gave me an opportunity. He's the only one that would see me on a Saturday. Everybody else in investment business, which when I was going to graduate school in Connecticut wanted to see me during the week but I didn't want to miss a class. I didn't want to take off school and go up to Montreal or Toronto. So if you work with good people that'll create opportunities. And I was blessed by having somebody who believed in me.

And his comment to me was... this is Brian Aune I'm talking about, "If I can't hire a US Marine Corps veteran who's a Canadian, a Vietnam veteran," he said, "What good am I?"

This guy did a deal with the Bank of Montreal where we sold Nesbitt Thomson to the Bank of Montreal, created 50 millionaires in the 90s. And then he went on to become a founding director of Constellation Software. That’s a thousand dollars stock. But he was very humble, didn't really focus on himself but he created opportunities. If you can associate yourself with people like that which I try to. I tried to. I still do, actually. Just for the rest of my life. So the more successful I was in business, the more of an opportunity I had to help these charities that I'm involved in.

Arash Adnani:
Right, right. It's all connected.

Terry Salman:
They work together, yeah.

Arash Adnani:
So we're going to jump around: like we're saying, is connected, this idea of people, right. Surrounding yourself with the right people. It also comes into play in your philosophy as an investor in backing the right people. And I think the number is, you guys at Salman Partners is over 20 billion dollars of financings that you're either behind or acted on, and when I look at the list of companies that you guys supported it's like a greatest hits of Canadian mining deals and mining leaders, from guys like Ross Beaty to Lukas Lundin to the who's who of the mining business. What do you see in people, when you're at that point where you have to make a decision in whether you want to get involved or not? Are there common characteristics that you see in guys like that and leaders like that, that you know are a kind of a sign for you to get involved in and help support them?

Terry Salman:
Yes. One characteristic I look for is, who are the people involved in these companies? Are they committed to the long term? Are they going to be an investor when I'm an investor or are they going to leave, sell the company over time, are they going to be with this company for a long period of time? Because it takes years to build a public company, a successful public company. And those who stay with it, from the junior mining company for example till the end are very, very few. And those that have been very, very successful, and they're the Ross Beatys or the Robert Friedlands, these kinds of people have one common characteristic. They basically leave when you leave. That's a comforting thing. And they're interested in building. And they nurture. In spite of the times they don't really move in circles that are short term. Very long term.

They surround themselves with very good, solid, technical people. They have good governance and financial skills in their organization. They don't constantly create new public companies, or private companies. And they stick to their inning. If their geology is the most successful ones, if their geologists... Take a look at Ross Beaty. When copper, porphyry copper wasn't in vogue he was acquiring them. He wasn't going to develop them, but he was going to move them along geologically, do as much as he can, prove up a big significant resource and then sell it. He did this Northern Peru Copper, Global Copper. He never wanted to be an operative in these companies but he took the opportunity looking at these things when no one else did.

And so a number of people like him and Rui Feng at Silvercorp, John McCluskey at Alamos, these are all people that I was associated with from a very, very early stage in their companies. And their work ethic, their dedication, their belief in going beyond a short-term volatility in the market by looking longer term... Bob Quartermain when Rick Rule invested in and Ross Beaty invested in Silver Standard was a penny stock. He came to me with all these assets in the silver space. My analyst looked at it and said, "Well, silver is seven dollars, none of them are economic." I said, "I know, but they will be someday." He had the vision to keep acquiring these assets. And was a great storyteller, could articulate and it became... the stock has never recovered to what it was. It went from nothing to over 40 dollars.

So I learned from these things, I learned from people like that because they believe in themselves. And so it was a life lesson for me. So I try to look at these kind of people that have been very successful, and there's a lot of young people that like Amir for example. You know, he's constantly believes in spite of the market in what he's doing, and he doesn't deviate from what he's doing, he has a plan and he's constantly articulating that. All the good ones. Robert Friedland, enormously successful, but what he's passionate about is what he actually believes in and his companies. In spite of the markets. And so we have that kind of upside with somebody who has that kind of passion, it generally turns out to be a really good investment, but they're very hard to find.

Arash Adnani:
Yeah.

Terry Salman:
Incredibly hard to find. And if you find one of those every two, three years, you're lucky.

Arash Adnani:
And when you do you just stick with them and then you support them all the way.

Terry Salman:
Yes.

Arash Adnani:
So how did you find them and how do you find them now? You must get approached a lot, but what's always been successful for you in finding these, let's say the next generation of the next Ross Beaty, the next Robert Friedland?

Terry Salman:
You know, so I've met Sean Rosen. He's a relatively newcomer when these others companies that I talked about, he wasn't around in those days. We talked about Amir, we talked about what Steven Dean did with Atlantis Gold. He had difficulty raising money but he believed in what he did, and that's one I missed, but I should've looked closer.

Terry Salman:
And these are a bit younger generation and so there's a number. I look for a good grade. I look for good management that is going to stick with it for a long period of time. I look at those who have the respect of others and people want to work for them. I look for these characteristics, and I want to make sure that they're not doing too many things in a public space because it's really hard to focus on a multitude of companies because inevitably if you have too many companies under your wing they won't all work out.

Terry Salman:
Right now, I'm particularly excited about gold because I think it has an incredible future because of the uncertainty in the world that we're seeing now. At some point the US dollar will correct, when it's less of a safe haven, and gold has a role that we haven't seen in a long time in my view. So I like the fact that it's moving up slowly.

Arash Adnani:
It's moving up in a healthy way.

Terry Salman:
Yes. A healthy way to reflect the uncertainty and the relative store value that it has vis a vis.

Arash Adnani:
So let me ask you that actually, about gold, because it's “becoming” with the recent rise in gold prices it's becoming mainstream now, and I usually notice based on what happens with so-called pundits, right? All of a sudden everyone is a gold expert and everyone's publishing gold information and gold investing ideas. When a sector gets hot, okay, like gold is right now, as an investor do you look at a volume approach where it's, "Okay, you know what, let's put some money into a lot of different deals, right?" Kind of like that Eric Sprott model maybe, or is it more of the, "Hey, you know what, I know who the guys I like or who the leaders I like are and I'm just going to stay with them and ride this out," or does it change?

Terry Salman:
It changes somewhat. In a sense I'm trying to identify earlier stages companies as one part of my... a very small portion of what I like to invest in, but I think we live in... there's not too many mines being created so exploration is a real key here. And so I think being selective in a number of exploration stories I've been doing lately and I've had some success in it and I feel comfortable in that. I think we do have a much better precious metals market. And I think we have some serious people that are on the ground looking at some very good projects and some of the results are promising. I said when you look at New Pacific where I was an advisor to an investor it went from nothing to a market capital of almost 900 million dollars, that originally was started with two drill holes.

Arash Adnani:
And so with discovery it's obviously a risk game and a lot of people shy away from it because of how speculative it can be, do you have a methodology where it gives you a certain level of certainty or comfort? Like for example, you said grades are really important to you.

Terry Salman:
Location.

Arash Adnani:
Location, okay, what else?

Terry Salman:
The country. The country that-

Arash Adnani:
So high risk, low risk, do you like safer jurisdictions?

Terry Salman:
I like moderate risk jurisdictions. I think there's some major discoveries that have happened in Africa, not everybody is interested in Africa but I think there's some real opportunities. I think in Canada, certain parts of Canada.

Arash Adnani:
Sure. Are there jurisdictions you don't like, either because it's overly regulated or because it's just too high risk?

Terry Salman:
I'm uncomfortable with Russia for example, not because I have anything, it's just that it's difficult. There's much better, more places, more comfortable that I feel more comfortable with like in Australia, Canada, for sure.

Arash Adnani:
So you mentioned something about how a CEO or founder's focus is so important. In this business, being that it's so cyclical, what we've seen from the ones that are focused is they're almost more active during a bear market, whether it's acquiring cheaper assets or just making more favorable deals, than in a bull market. So for you personally, do you have an approach where if there's a sector or commodity that's down, like uranium for example, right? Do you have a philosophy or an approach where it addresses the timing of it? So it's down right now, it's prices are down, sure,  so it's a good buy, but how long do you hold? And could that money be deployed towards other investments where there's more movement and more activity?

Terry Salman:
Well I think both, a little bit of both. I think in a mining space, I look for good assets that I can acquire at an entry level very, very cheap, or attractive pricing. And I think that's really crucial to most investing. But then on the other hand, you're right, if you're in a sector that is dormant for an awful long time it's hard to be patient for most of us, even though I generally take a long term view of whatever I invest in. So I think it's crucial that, as I said, I focus with the right people, really good property in the right address that has potential. It doesn't really have to have much drilling or anything on it, but something that has been overlooked in the past.

Terry Salman:
But then on the other hand, there's an old adage you'll find gold and silver where somebody else did. And that was the case in Bolivia. The Spanish had been there for a hundred years, from 1500 to 1600. So when I saw all these old workings, I felt really comfortable with the environment. Why were they there a hundred years? When I saw buildings in the background that were crumbling down I said, "Well, what's in the middle" and it was something called a bank and they made currency there. So the surrounding geology and geography was compelling to look further. It's always about looking further in the mining business.

Terry Salman:
I looked at something in South America the other day that is overlooked perhaps, surrounded by major, major mines, so I like the possibility of finding something significant because the majors aren't finding new assets, somebody else is. Buying, to answer your question, buying things that are out of vogue, one thing that's inevitable, every commodity has a cycle. So buying at the right time in the cycle is really wise. But then on the other hand, gold is on an upswing here and there's some opportunities to participate in that upswing by discoveries.

Terry Salman:
And so I'm just trying to find the right people with a really good asset base that can take it to the next level and aren't focused on too many things at once and won't constantly dilute themselves to the point where it doesn't make sense. The best stories are those that donate a lot of stock. They're very careful because they don't like dilution. They only do it when they have to and when needed to move a project along. They're not serial issuers of paper. I think that's really something to avoid, companies that issue too many new issues consistently.

Arash Adnani:
Is there, as far as obviously with cap structure you want something that's healthy with good insider ownership for management and you want people to have skin in the game. With looking at let's say exploration companies or companies that are in the business of making discoveries, are there companies that you're looking at or you're behind or you're involved with now that you like, that you'd care to share with us? Are there management teams that you like that you've worked with in the past that really excel in the business of discoveries?

Terry Salman:
I mean, I like Ivanhoe Mines because it's cheap, has a world class number of world class deposits, some of the best grades of copper in the world. Hasn't really been doing much in the marketplace, incredibly undervalued. I like Equinox, I think it's very interesting. I like Liberty, it looks like a really major discovery. I missed it but I like it, I'm watching it. I think it's attractive. I think Silvercorp is incredibly cheap. The last couple of weeks it took a 25, 20% hit in its marketplace. I don't know why. Some of it could be the coronavirus, some of it could be China, whatever. But it's one of the most profitable mining companies in the world. And I'm looking at that as an entry level, another position in something that I think I've financed and I've invested in and it's dropped significantly.

Terry Salman:
I like GoldMining because Amir doesn't create flavor of the month. He's building houses on the ground. He's not getting the kind of recognition that he deserves for what he's doing, that the asset base is growing, and the fact of the matter is when you have somebody like Amir as the spokesman you can't go wrong. So it hasn't really realized its value but it will, it will. And don't forget it was a much, much higher stock price. Really good board, really good governors, and it will realize its value. And he's young enough to really run with it.

Arash Adnani:
I guess the one great thing right now is that even though gold's been going up a lot of these companies that you mentioned are still bargains.

Terry Salman:
Yes.

Arash Adnani:
And so you're able to acquire proven companies and proven management teams really on the cheap, so you don't really have to go out of your way to overextend yourself and try to find new deals, which is really exciting for investors. We have a lot of investors that aren't used to looking at mining deals or they haven't yet, right? What's Terry Salman's, let's say, pitch on why mining, right? Why investing in mining is good, it's important, and maybe you can also touch on one of the things I know keeps a lot of people away from mining is because they think it's bad for the environment or they don't like the practices. As someone who's been in business long enough who I know has a very strong opinion on this sort of, how would you address that?

Terry Salman:
I think, you know, one of my closest friends is Ross Beaty and he's a huge environmentalist in terms of commitment to the environment. Huge. So there's an example. Not too many mining people make that kind of commitment but inevitably the Canadian industry is second to none in terms of quality of concern about the environment. So we as Canadians don't recognize that enough.

Terry Salman:
But for me it comes from my background. My father was a mining engineer and at my daughter's wedding, one of his students was a professor at UVC who recently passed away. So he showed up at my daughter's wedding with two gifts from the mining industry. One was native copper which my father believed in from Michigan, almost pure copper. And then feldspar which is waste rock - beautiful stone. And his point was, to my daughter and he said this at the wedding, he said he believed in the environment but also the valued waste rock.

And one of his students was president, was the superintendent of Brenda Mines and if you drive up to Okanagan and see how it's been reclaimed, and it looks all grass. It doesn't look like there was ever a mine there. The guy who ran that was a student of my father's at McGill. He barely made the cutoff at McGill. And the only reason he did is that my father said, "Yeah, he stays when other professors want to move on." He became superintendent of Brenda. If you look at Brenda today it's been totally reclaimed and it looks amazing.

So you mine it environmentally safely, you do reclamation after, restore it to where it was, and extract it in a really safe way. Because with the population growth we've got in the world today, we need these chemicals, these resources. We can't live without them. Even in climate change you're going to need more batteries, you're going to need more electric cars, and you're going to need more lithium, you're going to need more silver, you're going to need more gold, because that's all part of making the environment. Aircraft, you want them safer, you want them cleaner, you're going to have to use these copper, silver, platinum, palladium, because not enough people are mining for them. And more and more addresses, because of becoming much more environmentally focused, people aren't doing it any more.

I heard on the news, on the CBC program As It Happens, they had a precision drilling, they moved to the United States. But he was pointing out to Ottawa, many times he said in this interview, he said, "You know, we are the safest, highest standard of protection of the environment in the oil business in the world." He was talking about Canada. He said, "But nobody cares." So he moved his operations to Houston where his budget is much more, we're spending much more, get much more of an opportunity for him. So we've lost another company and we didn't have to do that. We could've embraced what we have as the strongest conditions that we have for governors and practice of mining in the world in this country.

And that's why so many of these companies that we finance have operations all over the world. Canadian standards are very high. So we miss an opportunity if we don't recognize that and the politicians don't do enough of that, in my view.

Arash Adnani:
That's really well put, and yeah, I mean, you're right that the Canadian standard seems to be the highest, and unfortunately within Canada we sometimes don't acknowledge that. I have a question for you and this is because of what we're doing with PrivatePlacements.com, which is the idea with the website and the platform was to really empower investors. What we're doing is aggregating all the data and simplifying for investors, saving them time. As a result, we're hoping that investors or people that are thinking about investing can use the data to discover opportunities. As someone who's been involved with 20 billion plus dollars of financings, why do you think it's important to look at private placements as a form of investment?

Terry Salman:
I think it's very, very important and your website is beautiful. It's very clean. When you've got people like Rick Rule and Eric Sprott and Ross Beaty investing in a broad sector of this and encouraging people to invest in private placements, particularly in the mining space, it's really important to have a platform where you can see it all at once. And they're investing by example, and others will follow, because if they're doing it and they're recommending it, there'll be more of it and opportunities for many of us to look at new opportunities that come in the door, all of which show up on your website.

So I spend more time looking at brand new companies than I ever have had, in fact even creating one of our own. Because it encourages people to look at an industry in a positive way, and listen, if you make money in a private placement you'll have a positive view of the mining industry, if you lose money you won't.

And those who are anti-mining will obviously not invest in mining companies. But more and more generalists are looking at the same view, maybe we should have a small amount in this mining space. All of a sudden you attend these conferences and there's more people than you used to see in the past.

Arash Adnani:
Sure, yeah.

Terry Salman:
So the platform that you have, the format is excellent. I mean, I look at it and say, "Oh, I didn't know that company, maybe I should call them." and that's what I do. That's what my assistant does.

Arash Adnani:
I didn't know you were doing that, but that's amazing.

Terry Salman:
Look at them and say "oh, this looks interesting." and somebody will call me and they say there's good grades there, so I'll dig in further and look at the material. That's how you find good ideas.

Arash Adnani:
It's lead generation for investors like yourself that need to look at a large amount of deals and don't want to waste too much time doing it.

Terry Salman:
And you have people like Rick Rule looking at it and investing in these. These are people who've made an awful lot -  Ross Beaty, Robert Friedland made a lot of money in transactions. So they're not promoting me to look at it, I'm just looking at things that-

Arash Adnani:
Sure, yeah. So why invest in a private placement versus just buying in open market?

Terry Salman:
That's a very good question.

Arash Adnani:
I know it's an obvious answer for you, but for a lot of people it might not be.

Terry Salman:
People should be aware of this, really, really important. Private placements are four months hold, so you're investing in a private company. And so I think it's a good thing to do both. Buy some of the free trading and invest in a private placement, but don't exclusively just invest in private placements because there have been times when you've been locked in for a long period of time and the stock price disappears while you're waiting, so I think it's wise to do a little bit of both. And if you miss a good deal that you couldn't, and it happens to me all the time, and I say, "Okay, maybe I'll buy a little bit to see what happens."

See how it performs. And sometimes, lately I've been successful because there have been a lot of good stories but there's a downside to this. You get into a bad market and you're locked in. It's sort of like buying pre-sales on real estate. It's fine to buy them when the market's going up, but when you're committed when the market's going down.

Arash Adnani:
You just want out of that place.

Terry Salman:
You want out of that thing. I think you have to do both. Invest in liquid stocks. Or even not liquid, take positions, diversify a little bit, it's very important.

Arash Adnani:
All right, so the four month hold could be a negative but what are some positives for investing in private placements? Obviously warrants, sometimes a discount on the market.

Terry Salman:
It's usually the warrants, or half a warrant that you get that's a sweet thing. That's really valuable, especially long-life warrants. Everyone wants five year warrants. But remember that there's a flip side to that too, if there's too many warrants outstanding there's too much dilution. 

So get back to my discussion about dilution, so I like private placements, I think they're a great way to go but make sure that the ones you're buying, people aren't constantly cranking out new issues and it's their focus. Not two or three different ones, or five different ones. It's fine to have two different companies in different industries, but remember the ability to manage a company past two is quite limited so unless you have really good people, there are only so many hours in a day.

Arash Adnani:
Sure, yeah. Okay, so the themes so far have been focus. Focus is very important. And I think focus and discipline kind of go hand in hand, right?

Terry Salman:
Yes.

Arash Adnani:
One other one has been people, right? Surrounding yourself with good people, whether that's your team or mentors. I'm very lucky because of the work we do with PrivatePlacements.com and Blender I'm able to meet and become friends with great people such as yourself, and I see the value in it. It's like a form of education being able to spend time with someone who's done things that you're striving to do. Not everyone is lucky to be in that position where they can easily pick up the phone and call someone like yourself or Rick Rule. But they should have the same luxury of surrounding themselves with good people.

Arash Adnani:
Do you have any thoughts on how someone can go about doing that, if someone's unproven and let's say they don't have anything to provide? Let's say someone new comes along and they want to spend and learn from you, but they don't have anything to offer as far as they don't have a business for you to invest in, what would you recommend they do? What are some qualities they can demonstrate so someone who values their time will look at them and say, "You know what, I'm going to give this person my Saturdays," like your mentor did?

Terry Salman:
You know, I had breakfast in Whistler the other day with a friend of mine who owns a private business. I'm so impressed with what she's done with that private business all by herself. She bought an existing business by someone else and she's looking at expanding and that's what we were talking about. And she's created a high monetary business, one of the most unique stores in Whistler, and it's constantly profitable. What is the character, why was she successful, why is she successful? It's her entire focus, that's what she does. She's there all the time, she's on top of it, she hires good people, and she pays her taxes and is committed to doing what good people do. She stays with it a long period of time, she's not an absentee owner and she's building a business.

Arash Adnani:
So it's the little things that get overlooked.

Terry Salman:
Yes, yes.

Arash Adnani:
For lack of a better term, it's the “boring stuff”, right? It's not the flashy, exciting stuff but the fundamentals, let's say, that get overlooked.

Terry Salman:
Yeah. And the big thing is from a public company point, do they have the ability to get past the public market cap of anywhere from five to 50 million, do they have the ability to get beyond that. And they won't have that ability if they're constantly creating new companies or if they're constantly diluting.

Terry Salman:
Take a look at B2Gold. I mean, I know Clive but I've never done any business with him, but his focus is B2Gold. I never hear of him in anything else. But I admire somebody building a gold company, and he's done it before, he's totally committed. People criticize the way his people do things but he's constantly there. He believes in what he does. Nolan Watson at Sandstorm, there's many examples of that. But of those private placements that show up on your PrivatePlacements.com, go through all of those, very few of them will be successful.

Arash Adnani:
Oh, I know, yeah.

Terry Salman:
So I'm trying to find, I don't know what percentage it is, is it a 10%?

Arash Adnani:
I think it's probably less. But it's also how we define success as far as the growth or the value created at shares. But I'm actually laughing because you mentioned Clive and in an interview we did with Rick Rule we were talking about the same thing, about people that are obsessed with their business and Rick said, "Take Clive for example, you could say, 'Hey Clive, it's a nice day, isn't it?' and Clive would say. 'Yeah, it's a nice day to buy some B2Gold.'" So yeah, always having the deal you're working on, it's always in front of you, right? It's always your focus. Nothing else matters, if it's a good day or a bad day, it's what you're riding on.

Terry Salman:
Take a look at this young friend of mine, Scott Gibson. He invests in early stage companies. He runs a conference. Constantly gives an opportunity to people to present their story at a very early stage. That's all he does at an early stage. But he does it well. So following a guy like that which I tend to do is not going to hurt you.

Arash Adnani:
Yeah.

Terry Salman:
So again, go back to people, but of that list of private placements, very few of them will be successful. Good geology but if they're constantly creating private placements you want to be leery of that.

Arash Adnani:
Yeah, yeah. And sometimes with a lot of these financings, it's not the use of proceeds, it's based on the amount and the cap structure you can tell it's to keep the office lights on and maybe pay for some wifi. But I think you're absolutely right, I think understanding how to source the data so that you're finding the quality ones is the trick, and sometimes following the people that have had success in the past almost as a filter, it's not a bad idea.

Terry Salman:
There's a Marine Corps slogan that constantly shows up, "The Marines are looking for a few good men." They advertise that, right?

Arash Adnani:
Yeah.

Terry Salman:
The Marine Corps constantly says that. The word is few, right? They're looking for a few good men. Because they want the best. So it's the same thing with these private placements, we're looking for a few good investments.

Arash Adnani:
We're looking for a few good investments.

Terry Salman:
It's not going to be easy.

Arash Adnani:
Yeah, if it's worked for the Marine then it should probably work for us as well, that's not a bad idea. This is great, we've touched on everything we want to talk about. Are there any final words of advice, whether it's in business, investing, civic duty, life, family?

Terry Salman:
Just try to do more with your life. Don't get in a rut, try to get out. We all get in ruts. Try to move beyond that. Try to build something, however small it is, and give back. Constantly give back, don't worry about giving back. And ask, I ask people all the time to give back. 90% of them turn me down, but it's okay.

Arash Adnani:
It's the 10%, it's the few good ones you're looking for.

Terry Salman:
Yeah, just and be thankful, you know? We live in an amazing country. We've got to go beyond the short term problems that we have, and we have many, so it's one of the better places to live. We are fortunate and we have a rule of law country, although it's being tested at the moment, and just my take on it is don't be satisfied with just the status quo.

Arash Adnani:
Push the limit.

Terry Salman:
Yeah.

Arash Adnani:
Thank you from all of us, and thank you from everyone that's going to watch this.