Part of our plans in 2012 is to open offices in Toronto and Calgary. We did quite a bit of work to identify what we should focus on in order to grow the company, but my recent trip to both cities confirmed for me that we are definitely on the right track.
The biggest take away from the trip was just how big the difference is between mining and the oil and gas worlds.
On the oil and gas side, drilling a hole might cost $5 million. But because of a number of factors, the odds of success are high - 50-75% is what I’ve been told. If successful, getting the product to market and getting paid can be very quick. Tapping into a local pipeline is work, but something that happens in months, not years.
On the mining side, drilling individual holes costs much less because it is not going as deep. But many, many holes need to be drilled to define a deposit. Which typically takes years, with no guarantee of success. Then to develop and build a mine will cost millions or even billions more and take years and years. The timeline to cashflow is so much longer than it is for oil and gas. But of course, the upside can be much more significant on the mining side.
So both industries offer interesting investment opportunities with multiple potential entry and exit points and investment strategies. But the differences are vast.
As we continue down the path of building a presence in Calgary, I look forward to having our editorial dig into the differences to help our investor audience understand and be equipped to take advantage of the differences in these industries. Having editorial on the ground in Calgary will continue to increase the value we bring to audience and advertisers alike.