Ed Cowan (00:55):

Bill Beament grew up in a working class family out of Esperance in Western Australia. He dreamed of being a general manager of a mine one day instilled at a young age with a deep work ethic and an acute commercial sense. He achieved much, much more than this as CEO and executive chair of Northern Star, he reshaped the underground gold mining industry and built from scratch a $16 billion ASX 50 behemoth not resting on his laurels, though he has more recently turned his attention to wrapping up all his learnings about mining, about people and about leadership to his own venture developed global, which is on the precipice of replicating Northern Star’s success in Critical Minerals with its unique business model of both mining services and mine ownership. This is one of Australia’s great stories, largely unknown and untold outside the resource community so heavily centred on Perth, but the scaling lessons, as you’ll hear, are applicable to all sectors and leaders of businesses, of all shapes and sizes. This episode takes you underground into a world unfamiliar to most, but applicable to all. I hope you enjoyed this episode of Scaling Up with Bill Beament, CEO and founder of Develop Global.

Bill, welcome to Scaling Up. Your career reads a little bit like a boys’ own adventure and I hope I bring it some justice right through this episode. I think a great way to get through this is probably just to walk through your career chronologically trying to elicit the stories and lessons from such an eventful and tremendous career. Maybe we can go way back to the start. You grew up just out of Esperance, which is, I don’t know, probably 850 kilometres outside of Perth, which is the most isolated capital city in the world. What were some of the values that were instilled in you growing up, both rurally and in a really rock solid working class family?

Bill Beament (02:57):

My first 10 years I was on a farm at east of Esperance and grew up in a farming community called Condingup and I learned how to be self-sufficient. Pretty early on living out there and then I moved into Esperance and Esperance and the surrounds and the town and the community of Condingup was an awesome community to grow up in and my dad was a mechanic by trade and worked around that district fixing tractors and harvesters for the farmers and then created a business, wrecking them and selling the parts back to them. So got a good education of the farming community and probably farming and mining are very similar that a lot of hard work. It’s not an easy industry, agricultural, the long hours and how hard my dad worked in his business and that work ethic and those long hours, you do get rewards sometimes it takes a few years Ed, but you do get rewards and I don’t know, I saw that firsthand at a very early age and obviously I was the only son, so I was the only one. The old man dragged down to the yard and help him out. So I had no choice but to work from a very early age and work long hours, but he did give me cash, so that’s good. I got paid for it.

Ed Cowan (04:09):

If I was to join a common thread through your career, it would be one of hard work certainly. And the old adage, the harder you work, the luckier you get, certainly rings true to me here. And so it’s no surprise this thread really began to emerge in your upbringing. I guess to roll the story forward a little, you attended the School of Mines, a technical school in Kalgoorlie, largely with the intent of becoming a mining engineer and eventually a mine manager. At that point in time though, you made a pretty career defining move actually and went and worked underground for Barminco getting dirty both literally and metaphorically. Tell me what you learned underground at Barminco about yourself, about the industry. Really keen to hear more and get in the nitty gritty so to speak, because underground mining certainly isn’t a world that I’ve lived and breathed.

Bill Beament (05:00):

I’ve always been a very driven person of where I want to get to and I know that the hard work and the time and effort will produce results and in the resource sector, especially as a mining engineer, there is quite a defined career path that you have to do if you want to get into the upper echelons of where myself and others sit at the moment. You’ve got to get certain time on mine sites, get certain certificates, exams you have to complete, you have to go underground to get that time. So for me it was just a journey to get the time underground and I just wanted to go with the best of the best underground operators and that stage that was the mining contractors because they’re all run by ex western mining, general managers, underground managers that have gone through a really good training system and management system themselves. So I knew once I got that experience and got those certificates that my journey into management ranks and the upper echelons would be escalated and happen quicker. Bloody fortunate to work some amazing talent both at an operational level management level and the owner of Barminco was still to this day, probably one of the smartest mining engineers I’ve ever come across in my career and I was very fortunate to work for his company and under his banner for a number of years and that gave me a huge headstart for my next part of my journey.

Ed Cowan (06:19):

Yeah, there’s no doubt that the time you did on the front line has enabled you to succeed both as an executive and as a leader. Having both that operational grunt and know-how coupled with your technical background as an engineer really gave you an advantage of earning the respect of your workforce. What about the people you are working with and some of the lessons from leading these teams underground? It wasn’t long into your career that you were three IC at Barminco, which was by now a dominant underground mining services business in the industry.

Bill Beament (06:51):

I was managing people very early on at a very early age and yeah, look, you can ask some of those old miners. They probably thought I was an absolute idiot to start with. I think I got their respect after a period of time, but you got to be at the coalface, and I say this time and time again, but at any mine site, 90% of your workforce is what I call blue collar workers. So they’re tradespeople or they’re process operators or they’re open pit or underground miners. The other 10% of people like me, they’re mining engineers, geologists, metallurgist surveys and we let the odd bean counter on site, not many of them hopefully sorry for accountants out there, but it’s the 90% workforce. That’s your blue collar worker, that’s your culture. That’s the people that work night shift. The white collars don’t work night shift, they’re on day shift, so they’re on the night shift protecting your bum as a manager and all that sort of stuff and they’re breaking the rock and they’re pouring the metal.

It’s that blue collar workforce that I love and I’ve spent my whole career with and I still do now. And that rounding I had underground working hand in hand for that blue collar workforce. There is still a number of those people that I’m still working with today. Businesses like sport, there’s so many parallels and I guess that honest locker room happens with the blue collar workers very different to 30 years ago. They wouldn’t tell you what they think, whereas now they’re very empowered and you know where you stand and I love that honest locker room and blood, sweat, tears type stuff and the respect you get from that and that grounding at the coalface is what I think a lot of management teams in any sector don’t get, right. It’s a hugely important piece and the only way you can do it in resources is get your bum off the bloody CBD seat.

You’ve got to get your bum into the coalface that’s out in the bush, down underground or in the pits at the coalface with your workers or in the process plant and talking to them in their environment. And I was just very fortunate, I spent a lot of time at the coalface and it’s a different workforce. You do have to talk to different workforces. How I articulate to a fund manager in Sydney or London is very different to how I speak to people out underground at the coalface, it’s a different sort of tone and how you communicate, but I love that blue collar workforce. They’re the heart and soul of any business.

Ed Cowan (09:11):

It’s a great point you make around drawing parallels to any sector because the great retailers right through time always talk about walking the shop floor and having that connection with their salespeople and the lessons can be drawn as you say, right across sectors to move the career timeline along a little bit from Barminco, let’s focus in on your time building Northern Star and this in itself is just an insane story in your time as CEO, you took it from essentially nothing to a $16 billion business. Keen to zoom this timeline into the late two thousands. I think the share price of the time was something like 10 cents, and I’ve heard you joke that when you’re announced as the new CEO it fell to 7 cents, for those that know the story during the global financial crisis, I think the share price bottomed at closer to 2 cents and for context, it now trades around $13. Take us back to the GFC, the lessons that you learnt from such a tough period of time.

Bill Beament (10:08):

Yeah, look, it was it, to be honest, it was an absolute shit period. I was very fortunate, I had a really amazing journey in that earlier part of my career coming through the contract ranks in particular Barminco. And that really gave me a massive grounding because in Baco age of 28, I was running two thirds of that portfolio over a thousand people, 350 mil a year portfolio, making a lot of money for the a hundred percent owner. And you don’t survive in contracting unless you focus on your costs and your revenue. A lot of people focus on revenue, but you’ve got to get the balance between costs and revenue, right? This was a private business and in fact one of Australia’s biggest privately owned businesses at the time, owned by one person. Every dollar you waste is two you’ve got to make and also that dollar you waste is actually the owner that you are seeing on a regular basis.

So that DNA of you treated it like your own, that’s gone through me all the way through my career and no different when I hit the GFC. I’ve always treated shareholders money as the same as my own. It’s the same principle. So in the heights of despair of the GFC, that was a horrible journey for me on a number of different fronts. But did I beg, steal, borrow, pinch, scratch fight? Yeah, absolutely. And it could have been really easy to walk away and take on a different job, but I caught up with one of the major shareholders and just said, keep the thing alive. And we did. And that wasn’t easy keeping a shell of an expiration company alive, which had basically no assets. And my non-exec chairman who’s still a mentor to this day, Chris Rowe was amazing in that early phase of Northern Star and he was there for a long period of time, but to keep it alive, he was the non-exec chair and we tried to recap it a couple of times.

We had some deals that fell over that would’ve got us going. In fact, one of those deals now I’ve got a $400 million contract at Bellevue Goldmine, so it’s quite ironic I missed out on that deal back in 2009 by the little fraction of skin. But my chairman kept me saying, look, there’s always another deal around the corner Bill, so don’t get disheartened because you can easily take your bat and ball and go home mate, everyone, there’s a lot of people, 99% of people will do that, but he convinced me to just get over it and I had some pretty shitty moments where I was throwing the toys out and very upset. But I’ve learned corporately in business that there’s always another deal around the corner and sometimes, as you know, the deals that you say no to end up being the best decisions of your business career.

So the thing I’ve always really focused on in my business career and doesn’t matter what entity, it’s all about people. It doesn’t matter what sector people your number one resource. I’ve had that all the way through my career being in a mining services at the start for probably the first 10 or 11 years or 12 years, mining services is all about people I don’t get when companies go and buy another mining services business, buying people that are fluid and they go with their manager. But to me, I learned about people, people, people. I took that into Northern Star as well and we started with one person, which was me, grew that into over 6,000 people and I think it’s probably six and a half, seven now since I’ve left. But you can’t grow a business in less than 10 years. We went from one to 6,000 and can’t do that without having that people focus. And that was my number one lesson is just look after people, do the right thing, be open and honest, have the hard discussions, kick people up the backside when they’re stuffed up and pat them on the back and reward them when they’re good. And if you look after people, they’ll follow you wherever you go. You’ve got to have a team and a team’s not there without having the right people in it.

Ed Cowan (14:03):

There’s some lessons in that and some basic principles to follow without doubt. Let’s pick apart the scaling journey though quickly of Northern Star. You touched on the dark times but eventually did find an asset. I think 2010 you bought the Paulsen mine. I think there was $50K in the bank at that point in time. This was still a very entrepreneurial venture, shall we say, but from that point on the in-house underground mining expertise, the talent that you brought in from Barminco, it really led the transition of the Australian gold industry as a standard from open cut to underground. I’m keen to really unpack what makes a world-class underground mine and the benefits of this both from a dollar point of view but also environmentally. I know you are very ESG focused now at Develop. Can we just kind of try and unlock an idea of the underground mining industry and how you shape that?

Bill Beament (14:55):

The underground industry, it’s a little bit of an enigma, it’s a unique culture and a unique workforce. And I’ll make this general statement, I think Australian underground mining industry is in my view by far the best in the world. It doesn’t matter which commodity you’re talking about, if you want to build an underground mine, it is all about how quick you can get that mine into production and what size that production is. And you can’t do that without getting the capital development in. And this is the part where I’ve spent the bulk of my career is building these mines. And when I talk about capital development, I don’t want to get too technical here, but you’ve got to excavate tunnels underground, you’ve got to get tunnels and then get into the ore body and then you can start drilling and blasting and getting in production, but the quicker you can get those tunnels in and also the infrastructure like ventilation pumping to get the water out and power so you can run away your electric drills and fans and ventilation.

The quicker you install those tunnels in that capital infrastructure, the quicker you get in production the way better the MPB is. That’s the secret to building a mine is getting that capital development and as quick as possible, and it’s not necessarily about price. Just getting it into production a year or two ahead of anyone else is far better than worrying about a 10% margin to a contractor or anything like that. That’s what I’ve always prided my career on is that high speed development to get that critical infrastructure in. And that’s the secret of building any mine. And the Australians have got a monopoly on that performance and that was generated out of the western mining days who basically changed how we did underground development using certain type of machines. Then those managers went in and created the Byrnecut’s and the Barminco’s, the two premier mining contractors in the globe.

In my view, and I do believe mining contractors make amazing mine owners. So Australians have got that expertise and that high speed development and there’s not a lot of it to be honest, but the smart mine owners in the world have recognised that. That’s the core DNA and a lot of people don’t appreciate how important that is. And there’s not a lot of management teams that have got that skillset to run that high speed development. And like I say, it’s the key performing talent. They are. They’re the mercenaries, they’re the Lionel Messi’s of the soccer team, they’re pre Madonnas to a degree. We pay them a lot of money, but without that high-speed development, we don’t get mines built and we don’t improve MPVs and get production happening sooner rather than later. So the real secret is nurturing that talent. And that’s one thing we did extremely well in Northern Star and it’s not just the jump operators.

You’ve got to have the maintenance team, you’ve got to have the electrical team, you’ve got to have the people behind the jumbo, you have the shift bosses, you’ve got to have the managers and the foremans that get all that. So there’s a whole suite of people involved in that side of the business. But I put some amazing quality management together and the underground workforce is really different. They really work for the person in the shirt, they don’t work for the shirt. And that’s how I built Northern Star is we’d started off and we were no one, but we had a lot of people that used to work for us. So hence I recruited Barminco management and operators and once I got the right management and I call them the generals and you get the generals in, they get the colonels and the sergeants and the sergeants bring the armies in and we did it in Northern Star and that’s how we grew from one person to 6,000 really quickly. And we’re buying at one stage in 2013, 2014 we’re buying a mine a month and everyone thought we’re crazy, but we just kept picking the phone up and the armies and the sergeants and all the corporals and the privates come with it. But unless you’ve got those generals, you don’t have a workforce

Ed Cowan (18:48):

So much to pick apart and great colour on the secret source and IP involved in being a best in class underground operator. One thing to bring to life that you alluded to was given this operational advantage that you had built was the ability to buy mine sites much more cheaply than your competitors. And in turn this let you deliver really high returns on capital in these sites. It was a great capital allocation strategy but underpinned by operational excellence and it really is what built Northern star into what it is to you. Took this same philosophy, packaged up all your experiences and lessons from 25 years in the industry and wrapped it all in a bow, funded it largely yourself and brought it to market in your own little baby that is Develop Global. What were the key lessons at Northern Star that have been crucial in these early years at Develop

Bill Beament (19:41):

The operational DNA that the team I had we created throughout our careers come from the contract and we took that into mine ownership in Northern Star and we could lower costs, increase productivities and obviously make better returns and better cashflow than prior owners. That was now DNA. We’d done that course of our career and we’ve built so many mines and turned around so many mines that was not a walk in the park, but we understood that. But the other part of Northern Star, there’s probably three elements is that operational excellence. The other one was we really understood the value of what the geology team was and I still have to bash miners in particular get out of the way of the diamond drills, let the drillers drill, let the geos get the information and then they can give you a model and the engineers can design and then give you an execution plan.

But the one thing we did extremely well is understand geology and I say people’s your number one resource and when I talk resources, your number two is your geology without metal on the ground. Doesn’t matter how good a mine you are, you won’t make money. So the metal has to be in there and you need to know where it is. And I learned pretty quickly the geologists, and I hate to say it with geologists, geologists are a little bit different on which side their brain sits to an engineer and I’m glad it does because it’s not an exact science. There’s a bit of black art to it and we need them to think left of centre and geologists are a different breed to an engineer and that’s why we need them because like I say, it’s not an exact science and I learned really quickly they need money and they need a board and a management team that understands that they need that to execute.

And also very importantly, they need time. They need time to analyse that data, think about it, circle back, spin the screen 20,000 times. Anyone that’s worked with me knows that when I go to site, I put the biggest bloody TV screens that you can ever buy out of Harvey Norman into each mine site and I spent hours and hours with the geos spinning around the geological models and the raw data to understand the all body and what’s happening and the opportunity and where we can grow it, yada yada yada. So that was a lesson, not a lesson, but a real key takeaway is understanding geologists and what they need to do to get stuff done. And geology was in an acquisition phase, was our number one gateway. I’ve bought 15 mines over 13 years now and I haven’t got an obsession. There are times where three or four years I’ve bought nothing.

We haven’t bought one dud and geology is the number one gateway, one of the classic gold mines I bought Jundee, which is an amazing asset for $82.5 million bucks and we paid off in basically four or five months and now it makes that probably in a month with this gold price. Bought it in 2014 with a two year mine life and fast forward 10 years now and it’s still got a 15/16 year mine life ahead of it. So that was the key lesson I learned on the geology. And the third part was the entrepreneurial side and that’s the merger and acquisition capability. And mate, there’s no playbook for that. I probably put that back to my dealings or my background of going around to all the auctions with my old man bidding on parts and tractors and harvesters and buckets of scrap that he knew there was a $5,000 partner there and you get it for carton a beer and the dealings of how to cut a deal.

I probably learned that from my dad. And then obviously with contracting you’re negotiating all the time and that M&A background that myself, Stu Tonkin, others like crazy of the world, we were dealing and negotiating on a regular basis in our contracting careers and that was a key component of the success of Northern Star key component developed as well is the M&A piece. We created it with operational excellence, which include the geology obviously being able to spot a bloody good deal and spot an asset that we knew had a lot of value and we could execute on. Again, I can’t sit here and tell you the playbook on that. You just know what’s good and what’s not. And that was probably the three key elements of success in Northern Star. And like you say, it’s replicating that on to Develop now and coming back to I’ve got an amazing team together. I think one of the skill sets that I’ve been able to do is spot talent. Spotting talent is I think a lot of people don’t take the time to do

Ed Cowan (24:23):

Without doubt across industries as well. You would say that the number one job of A CEO is to build a great team and time and time again when that happens, magic can occur and obviously the inverse is true as well. It’s probably worth talking about Develop more broadly. You say there’s no playbook, but the playbook was 25 years of bloody hard work and experience to be able to spot a deal and that you’ve been able to do at Develop. The joy of the Develop business model is that you are using this high cashflow generation from the mining services business to buy mines often very cheaply and use that operational excellence inside the services business to ensure those mines are in turn highly profitable. Unlike Northern Star though, you’ve really turned your attention to critical minerals such as copper and zinc as opposed to gold where previously your attention had been.

Bill Beament (25:16):

To go back a little bit of history, I saw this real change about seven years ago, probably about seven or eight years ago. I was going through London, my biggest share, I was still the biggest share of Northern Star based in London. So I’d get over there probably three times a year and I got hit in the face with ESG and this was before anyone was even talking about ESG and it was driven out of Europe and in particular London, the UK funds in resources were right onto it and sector leading. And I’ll never forget, I just got hit in the face by one investor meeting where I normally catch up with one person, there was like seven in the room and there was the environmental, the safety and training person and we spent 10 minutes on the business and 50% on ESG and it was like wow.

And then the next meeting two hours later was the same. And I went, whoa, things are changing. And this is before Rio divested their coal business and others. And I was like, whoa, this is going to hit coal really quickly. This is going to hit oil and gas next, then it’s going to go on Illumina. And then obviously unless you’re digging stuff up that makes the world a better place, you’re going to come under scrutiny. And I could see this writing on the wall of society’s expectation from miners with changing communities. You operate in traditional owners as well need much more of a say in what happens on their country. And I’m a huge advocate of that. But I was also conscious that the world needs critical minerals and I look at the critical minerals. We need copper, we need zinc, we need silver, we need nickel, we need lithium, we need rare earth, we need cobalt.

They’re the building blocks that society’s going to need in the future. And this is going back three or four years. People back then I used to laugh, they think we’re just going to transition to renewables in three years and shut down all the coal fired power stations. And I was laughing at people on their face, but they’re like, no. I’m like, no, it’s going to take way longer than you expect. You’ve got to find this stuff, you’ve got to finance it, you’ve got to build it and you’ve got to operate it. I said, this ain’t going to happen overnight. And in a nutshell, my view was we’re in a 30 to 40 year structural bull market on critical minerals. We’ve been hooked on oil and gas and coal for 150, 170 years as a society around the world. We aren’t transitioning off out in three or four years.

That’s mainstream now. People realise that, but we’re going to need these critical minerals and it’s going to take us 30, 40 years to get there. A lot of these new discoveries and all this stuff are at depth, they’re underground. We’ve found everything about crops in the world. There’s not many new surface discoveries of any commodity, but when you start talking to other commodities, it’s underground. That’s where the discoveries are. So that’s in my wheelhouse. And also with that, the world needs really efficient and productive miners. It’s getting really hard to permit any open pit anywhere in the world. So I knew that was coming and even the president of Mexico a couple of months ago come out and said he does not want to permit any new open pits. So this is happening all around the world. So I just thought I’ve been waiting this moment where these commodities are underground.

Also in underground mining, there’s not a lot of expertise across the globe. So that’s going to be a skill set that’s highly sought after. You need highly efficient and productive miners and they’ve got to be underground and you’re going to need that underground mining services and you need critical minerals. So hence the formation to Develop, which is a really unique business model because it is mine ownership in critical minerals and underground mining services. And the only business globally doing what I’m doing is Mineral Resources, but they’re open pit. It’s hard for people to get their head around the actual business model because there’s not many reference points, but amazing to have a mining services business that provides culture, capability and cashflow to go and build your mine ownership business on without shareholder dilution.

Ed Cowan (29:14):

There’s no doubt that there is a very strong comparison that you could draw between your journey and Chris Ellison, the CEO and founder of MinRes that we know so well here at TDM, both from upbringing, from operating mines, right through to that entrepreneurial spirit to start their own company and have this entrepreneurial flare to understand the unique business model of both the services and then the mine ownership and how those capital allocation decisions can be made within that. The secular tailwinds are there and the IP and experience have all come together over the course of your career. So it’s all there for the taking.

Bill Beament (29:55):

But in earnest, we’ve only been going pretty much two years. So mining services two years ago had no contracts, no people, no revenue. Fast forward now we’ll do it in excess of 200, easily over 200 mil this year and I reckon we’ll be 4 to 5 hundred mil in 3 or 4 years. Our mine ownership, we only basically settled our Woodlawn mine, which is our first mine we’re going to commission and start building later on this year and commissioned early next year. We only acquired that literally two years ago. So for us, we’ve built our mine ownership, we’ve got our Woodlawn, copper and zinc mine, we’ve got our sulphur prings zinc and copper deposits could be built in the Pilbara and a couple of years and we’ve got our lithium deposit all be a mine in due course in Western Australia. So our mine ownership’s been done, we’ve done all the feasibilities, we’ve done all the valuations, we’ve grown resources, we’ve grown reserves, we’ve de-risked all the operational mine plans.

So that’s been a lot of heavy lifting for two years and we’re now into the finance phase of that. So we’re getting right to the pointy end of offtake and project financing to bring Woodlawn online. And we said at the market we want to have all that squared away by the end of July. So pretty excited that we’re going to debt fund that asset. People think we’re going to use equity, it’s not so sorry to disappoint any shareholders out there or future potential shareholders. You’ve got to get on market and buy us unfortunately. And our mining services, like I say, two years ago we had nothing. We’ve now got three contracts we’re working on our fourth and that’s an amazingly powerful business that’s given us, as I said earlier on culture, capability and cashflow. So we’ve built an amazing team. I think I’m at 400 people now.

We’ll be 750 probably mid next year and probably 1500 within two years. So now it’s just the execution of our mining ownership, our mining services is going really good. We’ve got amazing clients that have given us a crack and an opportunity on their assets. We don’t want to be big in mining services. The mine ownership is the value creation and we’re about to embark on that hopefully very soon once we get our financing squared away later on this month. So like any MD will say is we’ve put a suite of assets in three or four years time. We, we’ve basically got cashflow around about 500 mil a year and there’s no more shareholder dilution. We’re going to debt fund Woodlawn and then bring the assets later on in life out of the cash flow and debt. So 500 mil market cap today, that’s all we are in three, four years time, we’re actually going to spit out 500 mil cash flow operationally per year. So year I think we’re bloody cheap and hence why I’ve put in nearly 50 mil of my own money.

Ed Cowan (32:34):

If there’s anyone who has built a core culture of delivering on operational excellence and promises, it’s you who I’d want to bet on. I do want to touch on Woodlawn quickly because that’s a great example of using your operational expertise and IP to operate an asset that has previously been heavily invested in, I think you paid 30 or $40 million for it. It’s already had hundreds of millions of dollars of CapEx invested in it by a previous owner, and yet you can take on that asset and derive a large amount of cashflow just based in your operational expertise in IP.

Bill Beament (33:08):

Absolutely. It is an amazing asset and again, it’s the combination of how you look at these things and every single asset I’ve bought in my career, I say I’m up to 15 after 13 years. One thing that’s really appealing if you go back and I’ll give you a bit of IP away on this, is I’ve bought assets that have installed infrastructure. Don’t underestimate how expensive it is and time consuming to get stuff permitted, financed and built and tell me who brings projects or anything in any sector, commercial buildings or a mine or a bloody house. No one comes on time on budget ever. Bloody rare and mining’s notoriously bad for that. So I love buying installed infrastructure because you quite often pay cents in the dollar for it, which is what I did. So Woodlawn brand new everything, they spent $340 million to bring that mine online and basically went bankrupting commissioning and that’s a whole big conversation.

That’s another podcast part two for you Ed. But in a nutshell, the other part was geology, amazing geological system there. And we’ve proven that two years now we’ve had it, we’ve invested $60 million in two years. A lot of that went into the geology and guess what, we actually grew reserves by 94%. The resources by 55% grew the mine life from bloody three years to 10 years. We backed ourselves, backed the geos. Luke Gibson, his team done a fantastic job to identify that and execute. And then we derisked it from a mining perspective operationally and now we’re about to finance and turn it back on and everyone wants to throw a knife at anything you do in life if you’re successful. And I love the tall poppy syndrome. I reckon it’s frigging great, but it’s like everyone always wants to see the negatives in a person or in life or an opportunity.

Whereas I look at the positives and Woodlawn had some historical issues, but they’ve been sold with technology a way of difference and how you tackle things. The way we do things now under grand mining is way different back then. This went into administration in 2020 because a number of errors we’re not doing that. We changed the mine plan everything about it, we’ve changed, we’re upgrading and doing the mill properly and we’re putting in some accommodation facilities there so we don’t have to rely on trying to get high performing talent that can drive in, drive out, which is non-existent in the area. Just little things where bring in that operational DNA and then all of a sudden you debunk the miss of a project. And I love it when people say, well what about this? And you’re like, yeah, that’s great, but we’re not doing that. I’ve had this on every asset I bought, whether it was gold mines or what I’m doing now, every single acquisition we’ve ever done, we haven’t bought one dud yet. So you can get lucky once in life with a good deal. But I think when your team and yourself have been involved in 15 over 13 let history dictate in a couple of years time what that looks like.

Ed Cowan (35:59):

One thing I do want to touch on, and it feels like it’s been interwoven right through this entire episode, is the importance of people and culture. And to get into the nitty and gritty, it’s not so much just the importance but the lessons along the way. Obviously from a leadership point of view, the ability to be an executive that understands the operational needs of a business, the empathy and understanding the front lines so to speak, the ability to deliver on these operational promises and know what that looks like. Keen to get into the nitty gritty of hiring and training and retaining the best and what this looks like. I know you’re a big advocate of promoting talent from within and the importance of that culturally

Bill Beament (36:41):

Your manager needs to recruit and bring their own team. That’s how I’ve always operated. I never had an HR manager in Baco. We never had HR manager in Northern Star don’t have an HR manager and Develop too often you see these management teams rely on HR managers, then they use recruiters and I’m sorry, but my fiance owns a recruitment business in resources, but I’m not one of those people. I don’t use recruiters. Use your networks. That’s super, super important. I learned that really early on. And again, that’s probably the DNA at the coalface with operators and just having those networks and those relationships, you knew who was good and who was bad or you pick up the phone to one of your old bosses and say, what’s this person like? I used to have the three tick rule one, two or three ticks and unless they got three ticks I didn’t employ and no one gets three ticks off.

Five referees too, by the way. I’m sure I get one or none off some people that worked with me in the past, but there’s always someone I know that knows where that person worked at a mine and how they operated. So even when I was executive chair of Northern Star running 6,000 people, I spent so much time out in the field at the coalface also networking industry things heavily involved in a lot of alumni committees, chamber of minerals and energy, all that. So you got to meet and experience and see a number of different people. And the way I’ve always done a bit of recruiting as well is a little bit of a Wesfarmer’s model here. I always research and look at great companies, how do they build amazing teams and what do they do that was special or what sporting club did that so bloody well?

How have they been able to be in the top four for 15 years and what’s the secret? I spent a lot of time on understanding that cultural element, that management element. And I’ll never forget listening to Michael Cheney at Wesfarmers talk at the hundred year anniversary and he was talking about coming across special talent that he spotted in other sectors or other businesses and he’d just get them into Wesfarmers and create a role and he knew that within one or two years they’d have a role for him. But just don’t let that good talent go. And I’ve always taken that view as spot good talent, put them in the memory bank and keep connected with them because when the opportunity comes like bang, you can pounce. You’ve already got a relationship with them, you’ve sold them the vision for a couple of years of what your businesses are doing and then there’s a weak moment where they get pissed off at work or they hate their boss or they’re bored or whatever and you get them on a bad day and they’re like, well yeah, I’ll come and have a coffee and entertain a discussion.

So I always do that a lot. I keep connected with a lot of people monitor where they are in their careers and their journeys and pounce at the right times. And a HR manager can’t do that. They’ve got no frigging idea. So for me, you have to do your own recruiting. That’s the success of any manager or executive in my view is being able to spot talent, put the time and effort, court them. One of the best decisions I made in Norton Star was I missed out on some amazing assets that Barrick sold to my opposition and I had a management team that the company had sort of moved past and we missed out. I didn’t get pushed hard enough to go that extra 10 or 20 mil to buy those assets and they’re amazing assets still going now. So I did a management change out and I managed to recruit Stu Tonkin who’s now the MD of Northern Star as my CEO back then.

And it took me two years to get him to come on board and my board was really patient, they understood it. My chairman Chris was like, yep, you’ve raved about this person. It did. It took two years until he had a really got him at the weak moment and he joined me and took a step backwards. To be honest. The rest is history. But I dunno, again, there’s no management playbook for all this. It’s just comes back to relationships, treating people well. I made some pretty bad career decisions early on that probably hurt me in a financial and an accelerator basis in my early years. And when I say that is I got an amazing opportunity in a mining company, but I hung around in Barminco because I just recruited 20 people and I thought, well if I leave after one year, these people never work for me again.

And that was Stu Tonkin was one of them and a number of other people. If I walked out the door and just recruited him three months ago, there’s no way he would’ve joined me in Northern Star about six years later, seven years later. So being disciplined and staying true to yourself, it’s people work it out. And very fortunately though, they’ll join you in your next venture. And probably the best thing that I’m enjoying at the moment is just seeing my alumni that I’ve worked with that are now all in the equivalent positions of myself. So I can’t get them to work for me because there’s only one MD, but I’m just loving seeing some of my colleagues or my alumni that have been with me and helped me build my career now and be super, super successful. And that’s probably my proudest thing is just watching people evolve.

Ed Cowan (41:47):

So many great lessons for CEOs and founders in regards to recruiting there. One thing I do want to touch on is your philosophy around remuneration. I’m always fascinated in the mining industry, given the volatility of earnings, how CEOs think about remunerating their workforce. I know that you roughly sort of have two options, high cash, low equity or high equity, low cash, but just the role of remuneration as a motivator of your workforce. I know you touched on the Messi of tunnel machinery earns big money and various roles can certainly command that. But how you manage that both from a principle point of view and then the methods involved to make sure that people are well remunerated.

Bill Beament (42:30):

It’s really hard in the public listed space, and I despise proxy advisors, I just think they should be regulated. I think they’re one of the worst invention for investors and unfortunately good intentions but outcome poor. And they get very frustrating. Like my last couple of years as exec chair of an ASX 50 company, it wasn’t enjoyable. And when you’re dealing with non-core business for 60% of your time, then your shareholders are missing out and unfortunately proxy advisors create that. So it gets really hard to remunerate executives and I think this is a really burning platform that probably needs to be addressed because talent is mobile, there’s a lot of cash around the world. You’re seeing private equity increase. And I take an entrepreneurial view of this. My view is pay the best, expect the best. So I’ll pay the best in the underground miners and maintenance and industry.

I want the best of the best. If I’ve got the best of the best, I get the productivity, I get the medal or I get the result from my client and we all make money, pay peanuts, get monkeys. I’ve had that view all the, always through my career. And I’ve been fortunate in all the organisations I worked with, they had that same philosophy. So for me, the way I always work is I’ve got two views. If you wanted to come and join me, I’ll give you a high salary and no equity or I’ll give you a low salary and high equity back yourself, back to vision, back to company back, your people that are going to work for you. And if you create value, you’ll make way more off that equity position. That’s really like the owner’s mindset. And unfortunately in the current landscape of the ASX, there’s not really an owner’s landscape fullstop.

I’ve seen a lot of other companies and management teams and proxy advisors. It’s really hard to be entrepreneurial, especially when you get above a certain size and I don’t really want to be ASX 100 ever again. That’s not fun. It’s horrible. And I’m seeing a shift away now. I’m seeing non-exec directors now that are in those ASX 50,100 companies. They’re actually leaving that arena and going to smaller companies and also private equity. I think that’s one of the big things. There’s so much money around the world and it’s got to get placed somewhere and the private side is growing and you’re going to see more and more executives and management teams switch to the private arena where they can get remunerated accordingly. And it’s like me, I’m a business owner. I’ve got a number of private businesses as well. It’s like you give a share of profits in the private light.

It’s just if you want good management, and I’ve got a number of my best mates that have got multiple businesses and they share profits with their senior management, but that’s frowned upon on the public listed companies. But when you own it and you can’t get staff and you can’t get management, well you’ve got to give something away. And for me, you’ve got to be generous on that profit or equity share. And I’ve set my staff up here and you give an equity upfront for five years. So that means they get no more annual issues or anything like that. It’s upfront because I don’t want any proxy advisor voting against it in five years time. It’s all done upfront. And if we achieve what we want to achieve, they’re life-changing figures. But I still don’t get, if executives and senior management, if they make eye watering prices, well it’s only because the share price has gone up and it doesn’t everyone win with that. But unfortunately in the current landscape that’s frowned upon, which I find extraordinary as an entrepreneur and business owner

Ed Cowan (46:01):

Bill, that’s been an incredible walkthrough of what has been an incredible journey both as a leader and entrepreneur. I think it’s been a bit of a 101 for many of our listeners into the world of underground mining. Thank you so much for joining this podcast. There are just so many lessons to pick through there for operators of all businesses, of all shapes and sizes. So thank you.

Bill Beament (46:22):

Thanks Ed. And thanks to the listeners for jumping online and hearing the story.