South Pacific Metals (TSXV:SPMC) - Funded, Drilling, and Chasing PNG's Next Discovery

Michael Murphy (0:00)

Hello, my name is Michael Murphy. I'm the Executive Chairman of South Pacific Metals.

South Pacific Metals has four large mineralized properties in PNG, either bordering or very near existing mines or large projects.

Crux Investor (0:21)

Like K92? Yeah. I think most people would know from this platform. Yeah. Well, Michael, lovely to have you on the platform. Thanks for coming on. We're here at Beaver Creek, lovely, sunny day. Lots of investors running around. What are you hoping to get from us?

Michael Murphy (0:34)

Just more exposure. We've got a pretty tight share structure in terms of number of investors, so try and broaden that out. We just recently financed, so it's nice to have all these meetings.

Your usual question is, is that a really good story? When are you going to finance it? Buy the financing and then...

Crux Investor (0:56)

Tick. Yeah, we've done it. Yeah, so that's 20 million bucks you've gone out with, right?

Michael Murphy (1:01)

Yeah, close tomorrow.

Crux Investor (1:02)

Right, okay. And before we get into who you are, tell us a bit about that money. Where does it come from? You want to change the register up a bit.

Michael Murphy (1:10)

Yeah.

Crux Investor (1:10)

But how much?

Michael Murphy (1:13)

So we brought in three or four, what I would call household, big household mining name funds, which is encouraging these funds to have a track record of as long as you keep delivering.

Crux Investor (1:26)

Yeah.

Michael Murphy (1:27)

They'll keep supporting you. Yeah.

I mean, it's good to shareholder register in this space as I've seen. Right, okay. So we're pretty happy about that.

Crux Investor (1:36)

But let's maybe jump on to what you have seen. Tell us a little bit about your background folks here, a little bit about your background, where have you been, what have you done?

Michael Murphy (1:42)

Right. Way back, I worked for Merlin She Critics, Swiss in London. Then, goodness me, some time ago, a friend of mine asked me to be the president of a shell company called Gleishen, which I thought we'd do for a laugh.

We bought Torex Gold. So we took a $9 million shell at the time. I think it's worth $6 billion today. Raised over a billion dollars, built it, produced just under 500,000 ounces a year. I sat on the board, I think, for 12 years, and I've been off now for two or four, I think.

Crux Investor (2:17)

So you made a bit of money along the way. So rather than sit on our beach and take it easy, you said, I'm going to go again, and here you are. So tell me how that happened.

Michael Murphy (2:25)

So I work with a fellow that's quite well known in the junior space, Andy Bower, and I worked with, partnered with him in his office.

An existing shareholder brought the company to him a couple, three years ago.

Really excellent assets, but a balance sheet that was suboptimal. It showed up with two and a half million dollars of debt. Another $500,000 had to be paid next week, and it had 20 grand in the bank. So they were in a spot. So Andy lent them the 500 grand to make the payment. And then he came to me and said, look, this company's got great assets, but the structures are shambles. The balance sheet was a mess. There was no governance, board management. So he said, make this an investible company. If you commit to two years to put a board governance, all the stuff, get rid of all the funky stuff in the balance sheet, we'll finance it. We'll give you money. So that was a pretty short conversation.

Crux Investor (3:29)

Yeah.

I remember the team that came to it. It was a fairly young team at the time, I thought, without necessarily the experience. It was, was it just money was the issue? That was the sole issue? Everything else stacked up as far as your diligence?

Michael Murphy (3:44)

The assets were excellent.

Crux Investor (3:46)

Right.

Michael Murphy (3:47)

But there were some governance issues. There were some board composition issues. So, you know, Alex Davidson was on the board. He used to be the head of Exploration for Barrick. He was the head of Corp Development for Barrick. Jeff Lawrence now used to be the biggest shareholder, builds power plants for the PNG government. So we've got some super government relations. You know, Simon Jackson was part of, God, I'm going to get it wrong now, read something or other, he's going to kill me, forget the name of it, that Lendean bought.

Jonathan's super experienced lawyer in the sector and whatnot. So put in some real people, hired Timo Jauristo as the CEO. He used to be the head of corporate development for Goldcorp. Geologist, lives in Brisbane, it's a three hour flight for him to get there. Worked with juniors all the way up to majors and everywhere in between.