In the eight years since graduating from Ryerson University in Toronto with a bachelor of commerce degree, Ian Ball has made a major silver discovery in Mexico, claimed the title of senior vice-president at McEwen Mining (MAQ-T, MUX-N) and become a millionaire — all by the time he turned 30.
It’s the kind of career trajectory many can only dream of. But if you ask Ball the reasons for his success, he’ll tell you it all boiled down to perseverance and hard work.
“I’m not the smartest person, I just work harder,” he says. “If you want to be successful you have to give up your work-life balance.”
A little luck, and making a good first impression, don’t hurt, either.
The story begins in his third year of business school when Ball, the son of entrepreneurial parents who ran their own catering business in Bowmanville, Ont., started reading about Goldcorp (G-T, GG-N), the wildly successful company founded by Rob McEwen, who is now chairman and chief executive of McEwen Mining.
When a snowstorm cancelled classes one day, Ball’s mother called from their home, 75 km east of Toronto, and asked if he’d mind picking up a check from her brokerage downtown. He didn’t realize it when he agreed to run the errand, but his mother’s brokerage on King Street West was in the very same office tower that housed Goldcorp.
Luck intervened twice that day when Ball spotted McEwen in the building.
“When I saw Rob waiting for the elevator while I was in the lobby across the hall I thought to myself: ‘Here’s my chance,’” Ball recalls. “I walked over and while he was waiting for the elevator I told him that I thought he had built a great company. He thanked me and went down in the elevator. I didn’t think I had left a great impression.”
Later that day, after trying to guess all of the possible configurations of McEwen’s email address, he finally stumbled upon the right combination and sent a message to the mining magnate, telling him that it had been a pleasure to meet him and that he hoped he would see him again one day. “He wrote back saying it was nice to meet me as well, and that maybe we might meet each other in the future.”
That opportunity came sooner than McEwen probably had expected.
Ball tracked Goldcorp and McEwen’s speaking engagements more closely and in the first week of his fourth year at Ryerson, found out that the entrepreneur and philanthropist was delivering a corporate presentation over lunch at Goldcorp’s offices. After his class ended at noon, Ball ran all the way there. “I was late, but after his presentation he came up to me and told me to wait,” Ball remembers. “I told him I wanted to learn more about his company but that I was headed for law school. He said: ‘If you don’t go to law school, give me a call.’”
When Ball went home to Bowmanville that night and told his mother what had happened, she told him to forget about law school. But when he tried to make an appointment to see McEwen he couldn’t get past his secretary.
Like the 1987 film Wall Street, in which the fictional character of Bud Fox (Charlie Sheen) tries everything he can think of to score a meeting with the infamous corporate raider Gordon Gekko (Michael Douglas), Ball realized he had to resort to more drastic measures.
“I was quasi-stalking him for awhile,” he jokes.
When he learned that McEwen was giving another presentation to institutional investors at the King Edward Hotel in Toronto, Ball showed up, but was turned away at the door. So he went downstairs and sat across the street in a coffee shop waiting for his moment.
“When I saw him coming out of the building, I ran across the street and gave him my resume and the study I had done in my spare time about Goldcorp,” Ball says. “He emailed me that night and said he’d meet me.”
The interview lasted three hours and culminated in a job offer.
“I was drenched with sweat and I didn’t want to push my luck, but I told him that I was in my last year of college and was neck-in-neck with another student for the highest GPA, and asked whether I could join his company after I graduated,” Ball says. “He said yes, and gave me the name and number of his head of human resources and told me he’d set me up with a desk.”
Men at work
The day Ball arrived for work at Goldcorp in 2004 there was no one in the HR department. Two people had quit the day before and a third was on maternity leave.
“He’s not known for being easy to work for,” Ball explains.
Later that morning McEwen dropped by his desk to see how his first day was going.
“He said he had a management meeting that maybe I wanted to attend, so I did. I started attending his talks and presentations. We went up to Red Lake and he left me there for two weeks to immerse myself in the business.
“It was a huge education and an eye-opener,” Ball continues, referring in particular to the three 10-hour shifts he spent underground.
“Not too many CEOs would take someone at [twenty-three] and give them that kind of training. He is different than most other CEOs, I think. But he saw someone who was very eager to learn . . . he saw someone willing to work hard.”
Ball says he offered to work for free, but McEwen told him to come up with a figure and he’d let him know. They agreed on a starting salary of $30,000, which within a few years climbed to about $60,000. And with his Goldcorp stock options rising in value, Ball, still living at home to save money, started developing a pool of cash with which to invest.
Some of the more successful investments that helped parlay his savings into more than a million dollars included Rubicon Minerals (RMX-T, RBY-X) and Lexam Explorations, both of whose shares increased significantly from Ball’s initial purchase price. Rubicon’s flagship Phoenix gold project is in the Red Lake gold camp of Ontario, which also hosts Goldcorp’s high-grade Red Lake mine, and McEwen was chairman and chief executive of Lexam, which later merged with VG Gold.
Needing a discovery
In 2005, McEwen left Goldcorp over a dispute concerning its proposed takeover of Placer Dome’s Canadian assets and moved on to take the helm at US Gold. Ball and several colleagues working at Goldcorp joined him a few months later.
After what he describes as two unsuccessful years trying to find the next Cortez Hills mine in Nevada — discovered by Placer Dome, and now owned by Barrick Gold (ABX-T, ABX-N) — Ball volunteered to go to northwestern Mexico and oversee exploration on a 500,000-acre property in the Magistral district of Sinaloa that US Gold had picked up in its acquisition of Nevada Pacific Gold in 2007.
“No one else wanted to go down to Mexico because many had families in Nevada, so I was lucky that way,” Ball elaborates. “And Rob always told me that if you want to make it in the industry you have to make a discovery.”
Ball made his first trip down to the property in December 2007, and in less than a year led the team that made the grassroots El Gallo silver-gold discovery, which was made public in November 2008.
dits the discovery to several innovative exploration techniques he promoted as team leader. The first, he says, was developing a relationship with Moises Gallardo Cuevas, a 60-year-old prospector from the area. When Ball asked him how much money he was paid, the prospector told him $30 a day.
“I asked myself how motivated would I be to make a discovery if I were working out there in the intense heat and difficult working conditions for that amount of pay,” Ball remembers. “So I came up with a scheme that if the prospector came back with a rock sample with a metal value of $1,000, I would give him a bonus equal to that amount.”
The sample couldn’t be float, it had to be in situ and each sample had to be 200 metres apart. Within days, samples started pouring in and the number of prospectors working for him shot up from one to 10. “I remember we had an engineering firm doing some work for us at the time, and they were appalled at my bonus scheme,” he shrugs. “But those prospectors have done very well.”
Ball also recommended to McEwen that the prospectors be granted stock options, and McEwen agreed.
With an initial exploration budget of just US$3 million, however, Ball’s focus was on how to explore cheaply and efficiently. “I had watched our Nevada team blow through a lot of money drilling,” he says, adding that the cost of a geophysical survey alone can easily run to three quarters of a million dollars.
He also took a few pointers from Moneyball: The Art of Winning an Unfair Game, a book by Michael Lewis about how the low-budget Oakland Athletics baseball team and its general manager Billy Beane achieved a spectacular winning record while having the smallest player payroll of any major league baseball team. The book detailed how Beane used new statistical analyses such as on-base and slugging percentages as better indicators of success when picking players, than the historically more valued metrics of speed and contact.
“I had just read Moneyball — long before it was made into a Hollywood movie — and I thought: ‘How do you take a small budget and make a discovery?’” Ball says. “From reading the book I knew it was just a numbers game.”
One answer came to him when he started thinking about an unused blast-hole drill the company owned. He knew it could drill down to a depth of 20 metres at a cost of just US$125 per hole. But when he asked his senior consulting geologist John Read, Ball says, he was told that a blast-hole drill shouldn’t be used for exploration drilling.
Ball persisted with his line of inquiry and pushed the team to modify the drill so that it could drill at an angle to depths of 90 metres.
“Nobody was using these drills for exploration,” Ball says. “But to drill one hole would only cost US$300, compared with diamond drill holes in Nevada that were costing the company about US$80,000 each. We didn’t have the money to punch a bunch of holes in the ground and make Swiss cheese.”
Ball also upgraded the company’s in-house assay lab so that the exploration team was getting drill results back in about 24 hours.
“I was implementing strategies about how to reduce administration costs,” he explains. “I had this vision about how exploration should be done just by listening to Rob. It should be faster and cheaper. It’s a game of numbers. You have to do it differently.”
Ball concedes that the first six months in Mexico did not go particularly well. The prospectors were bringing him silver samples instead of the gold samples he wanted and he was putting the silver samples on the shelf. It wasn’t until they had run out of gold targets that he gave the silver samples another look.
He returned to an area where some of the rock samples had delivered strong silver assays. It was in a dry riverbed, Ball remembers, and he had stopped to deal with several painful bee stings up and down his arm. He chose a spot nearby and the crew drilled down — coming up with an interval of 17 metres grading 1,500 grams silver per tonne and 15 grams gold per tonne.
Just 26 years old at the time of the discovery hole, Ball brought in the core drill next, and over the next two years as vice-president of Mexico operations, oversaw the entire exploration program, from selecting drill holes to helping establish quality-control procedures.
The first phase of production at the El Gallo complex is expected to get underway in July 2012 with production of 30,000 oz. gold a year. The second phase is scheduled to start in 2014 and could produce 5 million oz. silver and 40,000 oz. gold a year.
An updated resource estimate is due before the end of April, but measured and indicated resources currently stand at 7.46 million tonnes grading 110.6 grams silver per tonne for 26.54 million contained oz. silver and 0.09 gram gold per tonne for 20,470 contained oz. gold. Inferred resources add 3.53 million tonnes averaging 97.2 grams silver for 11.01 million contained oz. silver, and 0.06 gram gold for 7,326 contained oz. gold.
The majority of the silver resource is close to surface, with roughly 93% of the measured and indicated and 91% of the inferred located less than 100 metres below surface.
Ball says he hasn’t stopped challenging assumptions or questioning conventional wisdom. “Many juniors just hand over their projects to engineering firms, but there’s no one who questions their assumptions,” he says. “I want to know why every decision is made . . . [and] where we can go wrong.”
When one engineering firm designed a mill and a flow sheet for El Gallo that Ball didn’t think made any sense, for example, he refused to accept their views. “If I cannot see an economic reason for a decision, I challenge it,” he explains. “We found another firm that agreed with my vision of how it should be built.”
“Rob always says we’re not in this to mine, we’re in this to make money,” he adds. “An engineer just wants to move tonnes. But how do you maximize your open pit — do you mine all of the high-grade material first, for example? This is a financial exercise. It’s not something you learn in an MBA program. Rob wants higher returns, a higher share price.”
When asked if McEwen has been happy with his performance, Ball pauses and grins.
“He hasn’t fired me yet.”