Bowood Energy Inc (BWD)

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'A word from Michelle Gahagan, managing director of Intrepid Financial.'
Michelle Gahagan Article

Michelle Gahagan is managing director of resource exploration project investment specialist Intrepid Financial. A firm fixture gracing the boards of numerous resource houses, she has been a driving force behind a host of companies including Suparna Gold Corp., Bowood Energy Inc, RPT Resources Ltd, Cellstop Systems Inc and EShippers Management Ltd. Since 1986, Gahagan has practised corporate law out of Vancouver, Canada. She is a Queens University Law School graduate and a member of the Canadian Bar Association.

NG: Let’s look at how your career path led to working in the extractive industries. Was this something you focused on during study, and where was your initial interest sparked?

Michelle Gahagan (“MG”): I’d practiced corporate law for a long time (20 years). For the last 15 years of that, everything I did focused on corporate finance and I spent a long time doing this in the film and television business. At first blush, it sounds like the two industries couldn’t be more different but in fact, they are quite similar. At the exploration end of the mining continuum, it’s all about getting ready, financially and technically, for a concentrated effort to prove up a resource. A lot of money is needed, finding a suitable structure can be complicated and the money gets spent in a short period of time. Precisely the same as film production.

I got into this area after spending some time talking to our founding partner about my skill set and how that might fit with what his group needed. This early stage work is exciting, very entrepreneurial. It suits me down to the ground. I help out where I’m needed—overseeing our investments by sitting on boards, or getting more actively involved in the day-to-day operational elements, as I’m doing with Suparna in Suriname.

NG: I read that Intrepid Financial has been instrumental in raising more than US$850 million in equity financing for private and public companies, from start-ups to those with market caps of over $400 million. Perhaps with this in mind, you can tell us a bit about the ‘Intrepid Approach,’ and any notable successes that demonstrate the team’s capabilities?

MG: At Intrepid we incubate natural resource companies; there are approximately 12 companies in the stable at various stages of development. They are either very early exploration such as Suparna Gold in Suriname, or near production such as American Bonanza in the U.S. The Intrepid model is simple and effective. The due diligence we do and the significant investment at the private stage reduces the non-geological risk at the front end. If we are satisfied that the play could be of interest, we will then list the company on the TSX, and introduce the company’s proposition to investors in both Canada and Europe. We stay with the company through to a liquidity event, even though our own shareholding will necessarily be diluted over time. We will have a seat on the board to maintain oversight. Our interests are aligned with the less actively involved shareholders. We’re all in this together. If it becomes necessary to refocus or redirect a company we’ll work with management and other shareholders in a proactive way to do that.

NG: In working around an investment profile of $3 million to $10 million, filling board seats and proffering plenty of vital expertise, I read that you cover the entire natural resources market, including gold of course. I wonder if there are any observations you might make, given the breadth of industry catered to, in terms of board make-up when it comes to seeing more women captaining resource houses.

MG: There are certainly opportunities for women to sit on boards of resource companies. More companies are interested in considering qualified women than ever before. More than 50 per cent of the membership of WIM (UK) is in the service sector side of mining such as legal, accounting, economic, financial, marketing and HR—these are all vital skill sets when it comes to board positions. It’s best if you can find someone to mentor you; I find that men are quite happy to have women colleagues once you’re in the room. The key is to find that person who encourages you to come and take a seat at the table. Keep your eyes open for those people. There are more of them than you think.

NG: Can you give us a snapshot of your current role?

MG: My week is enormously varied. From travelling thousands of miles a month to trek into the centre of Suriname for Suparna Gold Corp, to board meetings in Calgary and Vancouver, no day is ever the same. With Suparna, I’ve taken a very hands-on role. At Intrepid, we feel very encouraged about the potential in the country and as such I’ve warned my partners that I’d be a bit of a micromanager at the beginning. We want to ensure that we get all of the right people in place, get the right relationships in-country and ensure that communication with the shareholders is both timely and insightful. My board memberships are obviously not as granular—with companies such as Arpetrol and Bowood Energy, it’s really about encouraging management to provide the board with the right information to be an effective board member. Intrepid board representatives insist on staying close enough to the action that initiatives and guidance can be implemented in a timely fashion.

NG: Let’s also look at how you became involved in WIM UK and what the community offers to members stemming from your area of expertise?

MG: I’m a fairly recent member and was encouraged to get involved as a result of a colleague’s participation in the organisation. I found that she’d made some very useful business contacts as a result. Networking is possibly the most important element of the organisation. The events are also very useful; especially those that focus on political risk and governance. That assists us in making our assessments—at Intrepid we consider projects in so many diverse countries. My involvement is also a function of my age; having been a lawyer working pretty much exclusively in male-dominated industries for 25 years, I feel like if I can help other women, it’s my duty to do so.

NG: What advice would you give to any graduate or undergraduate following a similar path to you?

MG: I’ve had a fairly circuitous route to where I find myself currently. Having said that, indirect career paths are more common than one might imagine. The one observation I’d make is that if you want to be in the thick of it, make sure that you develop a wide range of skills that will allow you to keep moving through the ranks. For instance, law is a very flexible degree. If you come up through the technical side, keep thinking about how you might broaden your skill set. Be open to learning about the financial and business side of things. It’s good for geologists to understand that nothing will happen without the money and that being a good custodian of the money is essential.

ABJ thanks Gahagan, managing director, and Emma Nicholson, director of corporate development at Intrepid Financial for their insights and assistance with this interview.