Unlocking value: The role of exploration in natural resource asset valuation

Andor Lips, one of our Non-Executive Directors, discusses his career and background in geology, explaining the role geological exploration has in natural resource asset valuation and how his experiences led to him working with the Seventy Ninth Group.

Throughout my career as a geologist in the mining and minerals sector and later within the finance sector, I have seen first-hand the importance exploration has in the valuation of natural resource assets. Working all over the world, I have gained extensive experience that has led me to become a Non-Executive Director here at the Seventy Ninth Group.

My background is in geology; specifically mineral exploration. I studied geology straight out of high school, gaining both an MSc and a PhD, which combined my interests in physics, chemistry and geography.

My first job was in Australia, in a town called Broken Hill, where there had already been 100 years of historic mining activity. This is where I caught the bug for mineral exploration. It made me realise I wanted to stay in this industry and make my own contribution to it.

The valuation of land is an incredibly important aspect of mineral exploration, and geology plays a big role in this. The valuation report helps determine what minerals are present in the land, how much is present, and, based on this information, the potential for future extraction of these minerals. It’s a crucial exercise and learning tool for anyone investing in land assets for natural resources.

My journey to working with Seventy Ninth Group

I’ve worked in the resources sector since 1993, progressing from Exploration Geologist for several companies and the French government to Technical Director of Lydian International, a multinational corporation with gold mining interests in Armenia and Georgia.

Throughout my 25 years in the mining and minerals sector, I have worked across the whole value chain, from geological exploration to business development, mining finance, project risk analysis and Environmental Social and Governance analysis. This has allowed me to gather a wide range of expertise across the sector, and it’s this combination of experience that brought me to the Seventy Ninth Group.

I was first introduced to Seventy Ninth Group by an external party hired to look for new board members. I was introduced to Dave Webster and the Seventy Ninth Group, who told me more about what they had achieved so far and their work in Guinea. I was naturally impressed with what I learnt, and so, in February, I decided to join the board, which led to me visiting the office to meet the whole team.

What really stood out for me about the Seventy Ninth Group is that they have a very strong, clear focus and positive drive. Their ability to energise their team, the market and their stakeholders across the company is something I really admire.

My particular area of focus at the Seventy Ninth Group is their natural resources division, Seventy Ninth Resources. I advise on their operations in Guinea, a country where I have a lot of previous experience working on the ground.

Previous experience in Guinea 

A few years back, I was working for the French Geological Survey, which was hired by a client to do exploration for an iron ore site they owned in Guinea. So, in 2006, I was brought to Guinea to explore a large licensed area for this client to help them in the valuation of the land. I spent a good few months living and working in Guinea, exploring the land and getting to know the local communities.

Here I gained a lot of experience on the ground, living in the bush in Guinea, in a fly camp we set up at the end of 2006 and early 2007, where we stayed whilst conducting our exploration.

I loved the whole experience of working there. We had a great setup, building our own showers and sheds, and even had our own little power supply. We built a great relationship with the local community, which helped us to understand what drives the people in these communities.

This is something I know Seventy Ninth Group are also interested in learning more about, as they want to invest in the communities in which they operate. So, I’m more than happy to share my experiences with them to help them shape their ESG policies and organise their operations in Guinea. Indeed they recently sent their team to visit the local communities around their concessions in the Siguiri Basin to find out more about how the communities themselves would like to interact with them; to enable the ESG work they do to be centred around what the people in the communities actually want and need.

When I was there, Guinea was still a poor and largely underdeveloped country and was in political turmoil. Now there is certainly a lot more energy in the international system to help develop the country. So, I think the Seventy Ninth Group can do some great work out there to support the local community.

With resource exploration, you often travel to a variety of different places, some of which may not be the nicest of places, ones that you wouldn’t visit as a tourist. But the ability to work somewhere completely different to where you are from, with a different culture, is an incredibly rich experience and one that I treasure and enjoy. I enjoy my work, it’s my passion. If it didn’t energise me, I wouldn’t do it.

The importance of geological exploration in land valuation

Geological exploration plays a big part in the valuing of land and any natural resources present in it. Assessing the land through a detailed exploration process helps us to determine whether it’s rich in certain minerals, such as gold. Through testing and surveying, we then try to figure out the amount of minerals present in the land, helping to inform decisions further down the line regarding extraction and the means to do this.

When conducting exploration, you’re trying to integrate all your tools, knowledge, and available information together to get a better view of the potential value of the land. Part of this is an intellectual exercise, and part of it is just being there, looking at it, trying to read the country, feel it, experience it, and engage with the local people.

Often it is the case that people have been there before, looked at it through their lens and with their experience. But things can often be missed, and they may not have made the discovery they hoped for. Many mineral discoveries are not revealed by the first exploration team but by the second or even third. This is because you learn from each other’s mistakes. That isn’t to say we’re doing something wrong in exploration, but there is only so much you can do at one time. The different roles I held throughout my career have also allowed me to build up a wide skillset. Moving from geology to mineral exploration and then into the financial side, I utilise all those skills to determine the value of an asset. I look at not just what is technically possible but also what is financially possible. I think the combination of these skills has helped me to maintain my focus when assessing assets and provide a more rounded picture and clear direction. Right now I’m bringing this experience to the Seventy Ninth Group, to provide advice and guidance on their work in Guinea and the current exploration they’re undertaking out there.

In Guinea, we are embarking on a long journey. It’s not something that can be achieved in a few days or weeks. But I’m confident that in 6-12 months, we’ll be able to update our stakeholders on the developments in Guinea. It’s an exciting process and one that I’m enjoying being a part of.

Looking ahead to the future, I believe that the Seventy Ninth Group’s dynamic environment – an environment of growth – where the whole company is prepared for a journey across various sectors, makes it clear that the company is ready to discover and unlock value. Where the discovery leads us, let’s say with the assets in Guinea, we still have to see. It’s a work in progress, but already being part of that dynamic environment, it is a very nice place to be.  

To hear more from Andor Lips, our Non-Executive Director, and learn about him and his experience, you can listen to his episode of our podcast, Seventy Ninth Live

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