Normally, Dr. Wei Qian is a very busy man. But these are anything but normal times. The spread of the Wuhan Virus otherwise known as COVID-19 has most of China locked down. Bloomberg calls it the World’s Largest Work-From-Home Experiment and Dr. Qian is among its millions of reluctant partici- pants. For now, Dr. Qian has been wiling away the hours speaking with clients who are as marooned
as he is. They are, by government decree, allowed outside to get groceries or to perform other essential duties – on a very limited and highly monitored basis. “I am lucky”, he says, “the weather has been quite warm so I can also work in my garden”.
As the co-founder of Suzhou, Jiangsu, China headquartered NTC or New Tigers Consulting, Dr. Qian is among the Middle Kingdom’s more successful corporate match makers. His years as a high rank- ing State Council official laid the groundwork for a Country-wide network of business connections. Years more spent as a Western scholar (London School of Economics and the University of Limerick) honed
his deal-making skills. Doggedly persistent, with a disarming boyish charm, his New Tigers has since 1988, guided more than 1400 Western Companies that wished to do business in China. No one trick pony, Dr. Qian’s organization is spread across the country
in 5 offices, which enables it to cover a wide range of industries from manufacturing to mining, where it brokers joint ventures, project finance and long term sales contracts.
Dr. Qian maintains part of his success comes from being highly selective about which companies he will work with, and, without exception working exclusively with one company per industry until the client is well on its way. Resource development is a core business. Regarding what that means, he is quite specific. “We avoid pure exploration companies, Dr. Qian points out, “They are too risky, and there’s no interest over here”. Instead one of NTC’s specialties is arranging off-take agreements, – contracts where
a miner sells a portion of future production and uses the proceeds to finance the development of the prod-
Home Alone: New Tigers Boss Works from Home while Authorities Tackle Wuhan Virus
ucts’ production facilities. NTC also offers an exten- sive well-vetted network of cash-rich investors and Chinese companies looking to develop established deposits into revenue generating businesses. The goal is to help the client evolve from an asset holder to a revenue generator. “The risks” Dr.Qian advises, “should be much lower and the profits are usually very good – especially for shareholders, because once the company is making money to finance its growth, it’s pretty likely a whole new shareholder universe will open up to them”.
NTC’s latest mandate is to assist in the devel- opment and debt financing of the Cerro Caliche, a proposed pilot heap leach gold operation in Sonora, Mexico that is owned by Sonoro Metals Corp. (TSX.V SMO). NTC first learned about Sonoro from a Singa- pore-based engineer who had done some work on the Cerro Caliche. Dr. Qian subsequently showed Sonoro to two of China’s largest mine engineering, procure- ment, and contracting (EPC) companies. After sub-
mitting it to their respective engineering and geology departments for a preliminary review, both indicated it was a project they would be interested in providing EPC services for, together with project finance.
Dr. Qian says and important consideration for him and the EPC companies is the quality of man- agement because not only is it a critical component
of a project’s success but effectively they would end up working very closely together over the coming years. The fact that Sonoro’s management (who are also the company’s largest shareholders), has collec- tively discovered major deposits, or built or operated more than a dozen mines, is an important consider- ation. “They really have a great track record.” Dr. Qian observes, “And they have a gold resource that the EPC’s over here think should be relatively straight forward to develop. I think Sonoro should make a good partner for any of the EPC companies here in China. And this is the way it appears to be evolving”.
Four of China’s leading EPC companies have been studying the Cerro Caliche project since Septem- ber 2019. They are experts at building mines all over the world. One EPC already knows Sonoro’s working environment as it recently supplied and installed a processing plant for a sulfide deposit only a few hun- dred kilometers from the Cerro Caliche. According to Dr. Qian, “All Four EPCs have come back to say that their engineering and geological departments have recommended proceeding. They are starting
to prepare detailed proposals regarding the detailed engineering work, supplying the equipment and pro- viding the project finance.” Dr. Qian emphasizes that “Everyone is really motivated to do Sonoro’s project, even with the virus, progress may have slowed, but
it has not stopped the process at all, like me, they are also working from home.”
The week of February 16th Dr. Qian, John Darch, Sonoro’s Chairman, and your writer were scheduled to meet with all four of the EPC com- panies. that was until the virus hit. “Everyone is so motivated”, Dr. Qian laments, “Now just going for groceries is a problem.” Elaborating further, he says, “Not everyone has ID to justify to the police that they should be in their neighborhood. So they are really stuck, and can’t go out. Some are eating only once a day to make what food they have last”.
Despite the latest surge in deaths and new cas- es in Hubei, which Dr. Qian, suspects, is related to the replacement of the former officials, (the new bosses may prefer to get any bad news out while it can still
be blamed on their predecessors), he expects that the worst of the pandemic is over. “Already”, he notes, “some factories are starting to open and the number of new virus cases are actually going down in Beijing, Suzhou and Shanghai – think of it Shanghai has 35 million people, that’s Canada’s population, and yes- terday it had only 8 new cases reported”.
The Key development, according to Dr. Wei is what the authorities are doing is visibly working out- side of Hubei. From his experience, the bureaucrats in Suzhou are “very good”, and the same is true for Shanghai and Beijing. “If the Wuhan virus had start- ed in Shanghai I doubt the outbreak would ever have happened” he says, adding that, “the The medical system is very good here and so are the government officials.” “In contrast the bureaucrats and police in Wuhan ignored the outbreak and then tried to cover it up. They seemed more worried about not disturbing the celebrations… You have to understand China has 31 provinces and not all are the same. What hap- pened in Wuhan is a local failing which unfortunately resulted in a national and then international crisis.”
Fortunately for Sonoro, its’ Chinese partners, and countless others, the crisis appears to be dimin- ishing. Critically this should translate to a lifting of travel restrictions in Shanghai and Beijing, where So- noro’s previous meetings were planned. When they are, Dr. Qian says, New Tigers will then redouble its efforts to turn Sonoro into a gold producer. “Everyone is really excited to get moving” he emphasizes. “It’s a great project”.
From the Sonoro Metals Blog written by Neil Maedel who is a venture Capitalist with an extensive back ground regarding the analysis and finance of resource focused companies. He sits on the board of Sonoro Metals as its director of Finance.
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