Stockhouse.com: Taking
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It may be one of the major players in what could be this year’s most exciting gold exploration story.
But Atac Resources Ltd. (TSX: V.ATC, Stock Forum) isn’t planning to keep investors in touch with its Yukon drilling plans by posting regular updates on social networking sites such as Facebook, Twitter and Youtube.
“It’s a disclosure issue,’’ said Atac chief executive officer Graham Downs. “I’m not interested in opening a door that might get me into trouble”.
Media relations consultants say Downs is not alone in taking the view that posting drill results on social networking sites may contravene Canadian disclosure regulations which impose strict guidelines on how public companies report scientific and technical information about mineral projects.
Experts in the corporate communications say it explains why the mineral exploration sector has been slow to embrace social networks as part of an overall communications strategy that could help companies to reach a wider audience.
“Companies have difficulty explaining to investors why it is that they should be interested in their company and more fundamentally how can they best connect with investors,’’ said Marcus New, President of Stockhouse Publishing in Vancouver.
“A recent report from the Bank of Montreal (BMO) sited that nearly two-thirds of Canadian investors take financial advice from social media websites such as chat rooms and blogs, and of those, 40% are using financial community forums.This is a major shift that has been occurring over the last number of years as the internet has taken a preeminent position with respect to how financial information is disseminated and consumed,” continued New.
“Investors are looking to stay ahead of the curve and want the most current information available. We would like to think that Stockhouse is one of the very best platforms in the world for investors to share insight & information and conversely where public companies can engage a focused investor community in this discussion.”
While mineral explorers are sticking to tried and true methods of communication, including press releases and annual reports, many are keeping an eye on the major companies such as Goldcorp Inc. (TSX: T.G, Stock Forum) and (NYSE: GG, Stock Forum) and Barrick Gold Corp. (TSX: T.ABX, Stock Forum) which appear to be using Facebook either as a recruitment tool or to explain what they are doing in the corporate social responsibility area.
In a March 28, 2011 posting on Facebook, Barrick explained that its closure plan for the El Indio mine in Chile will be used as a model for other ageing mines in the region. Barrick is also using Facebook to explain how it is helping farmers in Peru to deal with the challenge of farming at high elevations above sea level.
But communication at this level remains far beyond the scope of the vast majority of early stage exploration companies, who tend to hire investor relations staff and get them to devote about 90 per cent of their time to attracting investors to the company.
As a result, they are not necessarily communicating well with all stakeholders, including Aboriginal groups, local communities and government, said Robert Simpson, President of PR Associates in Vancouver.
“It’s a capacity issue,” Simpson said, explaining that junior exploration firms generally don’t have the personnel that are required to launch a full scale communications program.
Still, there are a number of companies who are doing a good job of communicating with investors, said Martin Livingston, a partner with BreakThrough Communications Inc. in Vancouver.
They include juniors who have embraced social media to clear up misconceptions about their press releases, making exploration results easier to understand, and attract viewers to their websites.
Here are some of the companies on Livingston’s list:
Commerce Resources Corp. (TSX: V.CCE, Stock Forum) Vancouver junior that has won praise from the IR sector by using social networks such as Facebook, Twitter, Youtube and Slideshare.com to educate investors about Tantalum and Niobium, the rare metals it is hoping to mine from its Upper Fir project in British Columbia.
The company has used social networks to point out that while rare metals are being mined to finance wars in Central Africa, they are also being extracted in more stable political environments, including Canada.
Shaun Ledding, a consultant to Commerce Resources, says the company usually posts something on Facebook and Twitter every day. Recently, for example, it posted a 2002 picture of its Upper Fir property after a number of trees had been blown down by a wind storm. On the same day it posted a notice on Facebook to alert investors about an upcoming conference on rare metals.
TVI Pacific Inc. (TSX: T.TVI, Stock Forum). TVI is a Calgary-based company with oil and gas and mining assets, including a copper mine in the Philippines. Rhonda Bennetto, a spokesperson for TVI, said the company uses Facebook to host discussion forums about the technical aspects of its press releases.
“When shareholders understand your business, they are a lot more patient,’’ Bennetto said. TVI has also used social networks to find out who the company’s shareholders are. This was a challenge, she said, because company shareholders are live in far flung parts of the globe. “The whole idea is to bring people back to your website so that they are getting the facts,’’ said Bennetto.
Miranda Gold Corp. (TSX: V.MAD, Stock Forum). Livingston says he likes the fact that this company has made an effort to communicate with a wider audience by attaching video images to news releases, which it then posts on Youtube.
NovaGold Resources Inc. (TSX: T.NG, Stock Forum) and (AMEX: NG, Stock Forum). The Vancouver-based company is using Facebook to communicate with community partners who likely don’t read the company’s press releases, but who use social networks to communicate among themselves. It is also using social networks to create dialogue and show the personality of the company.
Taseko Mines Ltd. (TSX: T.TKO, Stock Forum) (AMEX: TGB, Stock Forum). The company has faced opposition from Aboriginal communities to its proposed Prosperity mine in B.C. Livingston says he likes the way that Taseko dealt with media interest in the controversy.
“They used a very measured response that was appropriate for the situation,’’ said Livingston. “They never got down in the mud and tried to fight it out with people. Instead they used a measured response every step of the way, which I thought reflected well on them.’’
Livingston said mining companies must deal with the fact that investors are being bombarded with information and most don’t have the time to wade through press releases that often fail to put important facts in context and can only be understood by qualified geologists.
It is why companies should include social media as part of their communications strategy, he says.
“If you can peak their interest thought a Twitter Tweet or a Facebook posting, then drive investors to the company website, there is a greater chance that investors will read and digest all of the information that you want to get out,” he said.
Bennetto agreed. “When I started with TVI [about a year and a half ago], we were getting about 50 website page hits per month. Now we are getting 55,000,’’ she said.
Still, industry officials say social networks should be used in moderation.
“You don’t want to create expectations by letting investors know on Facebook that the drill core is on the way to the assay lab,’’ said Ledding of Commerce Resources. “As long as you follow proper disclosure guidelines, you shouldn’t’ get into trouble,’’ he said.
BISON GOLD - is a Canadian public company focused on exploring for high grade gold with property assets in Manitoba.
