Article about Gary NashAccording to the Edmonton Journal:
Edmonton boy makes good as physicist turned mining exec
After a lucrative foray into Bre-X shares, Gary Nash hopes to turn nickel to gold in Ontario operation
Gary Lamphier
The Edmonton Journal
Thursday, August 16, 2007
CREDIT: Rick MacWilliam, The Journal
Gary Nash, CEO of Liberty Mines, relishes his adventures as a mining entrepreneur.
EDMONTON - OK kids, gather 'round. I wanna tell ya a little story.
The main character in this tale is a kid named Gary Nash. He's a rock hound. You know the type. He just loves to kick 'em around, smack 'em with a hammer and study how they're formed.
Goes to the University of Calgary in the early 1970s. Studies chemistry. A prof convinces him to switch over to physics, so he does. He eventually graduates from the U of A with a PhD in physics. Smart kid.
Can't find a job in his chosen field, though. So he starts a little building outfit in Edmonton. Soon after, he lands a teaching gig at Ross Sheppard high school. It pays the bills. Teaches for 10 years, builds a few houses on the side.
But in his heart, he still loves rocks. By the mid-1990s, he's still building, and investing in junior mining stocks. Among other things, he puts some dough into a little outfit called Bre-X Minerals.
He's amazed by the consistency of the drill results from Bre-X's Busang property in Indonesia. Crunches some numbers. Decides his shares, the last of which were acquired at $5, are fully valued at $265.
Nash sells out. Makes a killing. Pours most of his profits into a new house.
Thinks this is easy. Decides he can do it all again, with the extra cash he's still got left. Oops. Big mistake. He loses it all. Decides he won't invest in another mining stock unless he truly understands it.
In early 2004, he stumbles on a junior explorer called Liberty Mines. It's drilling a nickel prospect near Timmins, Ont. He likes what he sees. But he doesn't see eye to eye with the CEO, who plans to sell a key property.
In early 2005, Nash orchestrates a shareholder revolt. With fellow investors, he forces out the CEO and takes control of Liberty. It has just $800 in cash. But it also owns the once-active Redstone nickel mine and some nearby prospects.
A lucky break: nickel prices are rising. They touch $7.50 US a pound in mid-2005, up from less than $5 two years earlier. Liberty manages to raise about $500,000 at 20 cents a share in an initial round. It does some drilling.
In October 2005, it raises another $3 million or so at 40 cents per share. It keeps drilling. Nash tells investors he plans to build a new mill and start producing nickel concentrate from Redstone by 2007.
Investors roll their eyes. Mills typically take four years to permit and construct, not two. But they invest anyway, hoping to flip the stock for a profit.
Meanwhile, base metal prices keep rising. Nickel hits $10 a pound by mid-2006, and $15 a pound by year's end.
Liberty secures all permits for its planned 2,000-tonne-per-day mill near Timmins in record time. It raises another $8 million or so in the fall of 2006.
It starts building its mill in earnest, raising more than $30 million in two further funding rounds in the first half of 2007. The last one is completed in May at $4.65 a share, as nickel prices soar to an all-time high of $24 a pound.
Nash and his pals have hit the jackpot. Liberty's shares touch a high of $4.80, briefly giving the company -- now based in a modest office complex on Edmonton's south side -- a market value of more than $300 million.
In July, Liberty finishes its mill. It now employs upwards of 100 people. It shipped its first nickel concentrate to China in early August. By year's end, Liberty's McWatters nickel deposit is also expected to begin feeding ore to the Redstone mill.
But it's not all roses. Since peaking in May, nickel prices have dropped by 50 per cent, to $12 a pound. Inventories are up. Chinese demand has slowed.
Meanwhile, stock markets are in turmoil. The major indexes have tanked. Some economists say the U.S. may face a recession in 2008. And Liberty's stock, which rode so high in May, has dropped to $2.20.
So where to from here? As always, that's the $64,000 question.
Not surprisingly, Nash sees further upside, once stock markets and global commodities markets settle down. With the Redstone and McWatters mines running flat out in 2008, he figures Liberty will be a cash-flow machine.
Salman Partners, which led Liberty's latest financing round, is also bullish on the company's prospects. Salman analyst Patrick Donnelly figures Liberty will produce about 8.6 million pounds of nickel next year, at a cost of just $5 per pound.
Based on a projected average nickel price of $15 for 2008, he estimates that Liberty will generate earnings of 95 cents per share next year.
"I think nickel is going to rebound by the end of the year. Most of the mineral demand now is from China, and I think the fundamentals there remain intact," he says. "With Liberty, most of my clients are really interested in the 2008 numbers. By then they'll have McWatters running as well. So 2008 is the year that everyone will be looking at as the litmus test for this company."
Only time will tell. But no matter what transpires, this much is certain. If his track record is any indicator, 2008 is sure to provide yet another exciting chapter in Gary Nash's excellent adventure.
glamphier@thejournal.canwest.com
© The Edmonton Journal 2007
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