THE FRIDAY INTERVIEW:John McKeon, chairman, Pathfinder Minerals
IT’S A long way from Dublin to Kyrgyzstan, but for exploration entrepreneur John McKeon, his life has long been one of contrast. McKeon made his name by founding Circle Oil in 2003, the £200 million (€227.7 million) oil and gas exploration company, which recently reported its first profit.
Since his departure in 2008, he has invested in projects around the globe, but is now on the cusp of what might be his best investment yet.
“It’s the biggest thing I’ve been involved in,” he says of his role as chairman of Pathfinder Minerals, a natural resources company which is listed on London’s AIM market.
Earlier this year the company acquired a titanium dioxide mine in Mozambique from global mining giant BHP Billiton, and McKeon is very optimistic about its prospects.
While BHP Billiton had worked the mine for the past 10 years, investing some $29 million in the process, current market conditions mean that the mine’s potential has soared.
According to McKeon, who owns a 14 per cent share of Pathfinder, there is now a “huge deficit” globally of the minerals mined there, such as ilmenite, due to the growth of economies like China. “It’s not a speculative product,” he says of ilmenite, which is used as a base pigment in paint, paper and plastics.
Indeed a pre-feasibility study put a value on the project of about $500 million, based on mining 1.3 million tonnes per annum, but with prices on the up, McKeon puts its potential at closer to $1 billion.
“It’s a very, very substantial project,” he says.
Earlier this week the company successfully raised £11 million (€12.6 million) from institutional investors, which should keep Pathfinder going until the end of 2012. After that, alternative sources of funding will be sought with production planned for the last quarter of 2014/first quarter of 2015.
But Pathfinder is not McKeon’s only business interest. “I get around,” as he says himself.
His success in Circle means his services are now in demand, and when he invested in Turkish exploration group Niche in 2010, its share price soared on the back of the news. Now the Turkish group has gone from exploration to production, and McKeon says it’s looking to increase its presence in Turkey.
McKeon has a preference for reversing oil and mineral assets into shell companies. Through former football management business Premier, he has some gold interests in Kyrgyzstan, the third-largest gold producer amongst the Commonwealth of Independent States after Russia and Uzbekistan.
And he recently sold some of his share in Crosby Asset Management, a shell company which is looking to acquire oil and gas assets, to Arkadiy Abramovich, son of the Russian oligarch Roman.
Networking is key in the exploration business, and McKeon has shown himself to be more adept than most at making contacts, pointing out that being Irish helps in Africa because we have “no colonial baggage”.
While his ability to bring people on board has led to some dubious link-ups in the past – when still involved with Circle Oil McKeon secured a £19 million investment from a Libyan sovereign wealth fund set up by Col Muammar Gadafy – these days he is moving in more distinguished circles.
During US president Barack Obama’s recent visit to London, for example, he had the opportunity to discuss Ireland’s current misfortunes with former chairman of the federal reserve, Paul Vockler.
And making the right contacts is also paying off when it comes to business. When asked whether proposed new mining laws in Mozambique might affect Pathfinder’s business there, McKeon is clear on how connections can clear the way.
“We know the minister,” he asserts, adding that the new rules will only affect new projects, and given that Pathfinder’s mine is 10 years in existence, it shouldn’t have an impact.
And the fact that Gen Jacinto Veloso, a local with a distinguished past and a current adviser to the president, sits on the board of Pathfinder, should also help in this regard.
While McKeon may have a good record when it comes to investing in businesses, not everything he touches turns to gold. Indeed, he wears his good fortune lightly. He escaped the Irish property bubble – “I could never understand why they were paying those prices” – but he has had investments that failed, including a UK radio station, and fibre-optic networks and newspapers in China.
Moreover, before he found success in the exploration business, he experienced some difficult times down and out in London, and found himself sleeping between cardboard boxes in a warehouse in the city, “with literally no money”.
“That was a dark period but I never gave up,” he says.
As a result, he is actively involved in two charities, including the Ireland Fund of Great Britain, and is helping the Forgotten Irish Campaign.
These days, when he invests his money, he likes to get involved in the business himself and is aware of the associated risks.
“I take the first risk and write the first cheque. I don’t walk away if something goes wrong,” he says.
Although based in London – when not travelling, that is – McKeon keeps a close eye on Ireland, and particularly on fellow mining and exploration company Kenmare Resources, which to some extent is paving the way for Pathfinder in Mozambique.
Many of the investors who came on board for Pathfinder this week have already invested in Kenmare, for example, which has a mine located just 50km from Pathfinder’s.
McKeon says his company is also learning from Kenmare’s “growing pains”.
But with Pathfinder’s Mozambique project steadily advancing, where is next on the agenda for this peripatetic explorer?
“Home, I need a rest.”
ON THE RECORD
Name: John McKeon.
Who is he: Chairman of Pathfinder Minerals.
Age: 52.
Lives: Chelsea, London.
Family: "Been there, done that, got annulled and looking for the next Mrs Right?"
Hobbies: Motor racing, cars, the arts. He is doing the Irish Cannonball run this year for Barretstown and is a collector of Irish artist Brian McCarthy.
Something you might expect: He spends a lot of time travelling and recently visited eight countries in 10 days.
Something that might surprise: He spent some years sleeping rough in a warehouse in north London.
