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Stockhouse Movers & Shakers: Why mine financier's strategy includes Larry King

Peter Kennedy Peter Kennedy, Stockhouse
0 Comments| March 22, 2012


In an era when coveted resource assets are increasingly being found in far flung regions of the globe, it doesn’t hurt to have high profile help to open doors and make the right connections.

It is why Canadian mining financier Stan Bharti has been hanging out with Larry King (yes that Larry King), taking the celebrity interviewer on business trips to Russia, the Democratic Republic of Congo, and Kazakhstan.

Stan Bharti and Larry King

In an interview with Stockhouse, Bharti said government support is vital to anyone who is looking to gain access to mineral rights in so-called emerging nations in Africa and Asia. So it helps to be accompanied by someone as instantly recognizable as King, a man who spent 25 years at CNN and has interviewed everyone from Paul McCartney to Russian President Vladimir Putin.

“When you go outside North America and Western Europe, he is more like Tiger Woods and Mohammad Ali,’’ said Bharti. “They may not know who George Bush is. But they know Larry King. Every day for 25 years, he was in their homes on TV.”

Getting celebrities and famous politicians to open doors is nothing new in the Canadian mining game. Barrick Gold Corp. (TSX: T.ABX, Stock Forum) (NYSE: ABX, Stock Forum) recruited former U.S. President George Bush in the mid 1990s when it was eyeing expansion in Africa and Indonesia. Four years ago, Financier Frank Giustra made headlines in the New York Times when he made his private jet available to another former U.S. President, Bill Clinton.

During a trip to Kazakhstan in the company of Clinton, Giustra company UrAsia Energy Ltd. signed agreements in September 2005 that gave it the right to buy three uranium projects controlled by the country’s state-owned uranium agency, Kazatomprom. (UrAsia was swallowed by Uranium One Inc. (TSX: T.UUU, Stock Forum) in April 2007).

Like Clinton, King had no direct experience in mining when he was introduced to Bharti. That was just before King retired from his Larry King Live hosting position on CNN in June, 2011.

But after a fact-finding mission to Toronto, he agreed to join the international advisory board of Forbes & Manhattan, the merchant bank that Bharti founded in 2001, and which now sits at the top of a diversified resource group that includes 30 mining companies, 300 employees, and interests in metals, agriculture, energy and finance.

Forbes & Manhattan’s biggest win so far came in May 2011 when Consolidated Thompson Iron Mines was scooped up by Cliffs Natural Resources Inc. (NYSE: CLF, Stock Forum) for $4.9 billion in cash.

A 59-year-old mining engineer, from the Punjab region of India, Bharti began his career in Sudbury, Ontario in the 1970s, working initially with Falconbridge Ltd. before starting his own engineering contracting firm BLM Bharti Engineering Inc.

BLM went public in 1994 when it was acquired by William Resources.

Shortly after Forbes & Manhattan was launched, Bharti found initial success in 2002 when Desert Sun Mining optioned the Jacobina gold mine in Brazil, and later brought it back into production at a rate of around 100,000 ounces annually.

In 2006, Desert Sun was acquired by Yamana Gold Inc. (TSX: T.YRI, Stock Forum) (NYSE: AUY, Stock Forum), which paid $735 million for the asset.

In the last 10 years, Bharti has built Forbes & Manhattan to the point where it can now contemplate the launch a $1 billion private equity fund that will be used to finance resource deals in emerging markets.

Billed as an owner operated fund, it will finance new projects that fall under the Forbes & Manhattan umbrella. “The idea is to find bigger assets and keep them private longer,’’ said Bharti, who is targeting oil and copper projects in the Democratic Republic of Congo.

In keeping with the expansion strategy, Bharti took King on a trip to Kazakhstan last November.

“We met the Prime minister, the president’s son in law, and we opened an oil and gas conference,” Bharti said. Future plans include a trip to Moscow in May and meetings with African leaders at the UN General Assembly in New York in September.

“Larry is going to interview [the African leaders] and the tapes will be shown in the countries where they are from,’’ he said.

But taking business trips with a celebrity like Larry King isn’t just about opening doors. It is also about protecting existing assets. “When you have a bond with somebody like that, the chances of your project being taken away or having someone screw it up are less,’’ said Bharti. “They are not zero. But they are less.”

And having assembled such a large portfolio of companies, Forbes has a lot to protect.

The merchant bank employs roughly 100 people in Brazil, maintaining offices in Belo Horizonte and Rio de Janeiro, providing support to Belo Sun Mining Corp. (TSX: T.BSX, Stock Forum), for example,  a junior that is working to develop a gold mine in Para State.

Belo Sun traded this week at 97 cents, giving the junior a market cap of $204 million, based on 210.4 million shares outstanding. Recently Belo Sun said it expects to announce an updated resource estimate soon for the Volta Grande project that will be the basis for a pre-feasibility study to be completed in the third quarter of 2012.

“The first thing we do when we go to these countries is to establish an office and local partners,’’ Bharti said. The next stage involves networking with government officials.  He said it took three years to build a network in Mongolia, where Forbes has 60 employees and interests in oil, gas, and agriculture.

In Russia, another Forbes company Silver Bear Resources Inc. (TSX: T.SBR, Stock Forum) is hoping to secure a mining license that will enable the junior to put its Mangazeisky silver property into production. Silver Bear has outlined a NI 43-101-compliant resource of 18 million ounces, plus another 30.6 million ounces in the inferred category.

“The challenge in Russia is finding good projects with infrastructure at a decent value,’’ Bharti said.

So can Larry King really make a difference as Forbes looks ahead to the Moscow visit in May?

“Absolutely,’’ Bharti says. “He is very well recognized. When we were in Moscow last year, he did a live interview with three top guys from Russia. So that connection is worth a lot.

Just prior to his retirement, President Putin got in touch and said he wanted to be on one of King’s last shows.

“So he is close to guys like that.’’

 


Tags: INDUSTRIAL METALS & MINERALS GOLD MONGOLIA GOLD MINE

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