Jul242011

“Starting a business is significantly harder than people think, and the key is to go in knowing how challenging it will be and then persevering through all of those challenges to ensure eventual success.”

Nolan Watson - Sandstorm Gold
Nolan Watson
Sandstorm Gold
President and CEO

Today, we had the pleasure of interviewing Nolan Watson, the President and CEO of Sandstorm Gold (TSXV: SSL) and Sandstorm Metals & Energy (TSXV: SND). At the age of 31, Nolan certainly has an impressive list of achievements including being the youngest CFO (at age 26) of any company listed on the New York Stock Exchange.

Nolan began is career working for a startup company employing a unique business model under the direction of mining guru Ian Telfer. The company was called Silver Wheaton and as the first employee, Nolan was instrumental in the company’s dramatic success, helping it grow to a multibillion dollar market capitalization in under 5 years. It was at this time that Nolan was recognized as a rising start in the North American business community.

In 2009, Nolan decided to leave behind the stability and success that he built at Silver Wheaton and start his own company called Sandstorm Gold. In two years Sandstorm Gold has grown to a $300 million dollar market capitalization, spun out a sister company called Sandstorm Metals & Energy (currently a $125 million market capitalization) and was recently named to a list of the 50 Strongest Companies in British Columbia (there are 10 full-time employees between the two companies). At 31 years old it is Nolan’s drive, innovation, intelligence and leadership that continue to cement him as a leading entrepreneur in Canada.

Sandstorm Gold

MO:
We hear your father also started his career as an accountant, can you tell us how this influenced your academic and career paths?

Nolan Watson:
My Father was an entrepreneur and ran a number of companies while I was growing up. I remember him discussing business with my brother and I from a very young age. He had a significant influence over my career path, especially early in my academic career. After one year of business school I proudly announced to my Father that I would be quitting school and that I wanted to work with a non-profit/charitable organization. My Dad convinced me that I would have a greater impact if I got an education and understood how the dynamics of economics, business and charity work. Without the influence from my Father I wouldn’t be where I am today.

MO:
When did you decide to pursue a career in the investment mining industry?

Nolan Watson:
After completing my CA designation, I was working as a Senior Advisor in the Corporate Finance department Deloitte and Touche. Although I had provided financial services to a number of mining companies, I hadn’t considered mining as a career option until I was approached by Goldcorp (the parent company of Silver Wheaton at the time) and given an opportunity to be the first employee for Silver Wheaton. At the time I was 25 years old and things were going well at Deloitte, but the chance to development an innovative idea like streaming finance into a real company was very appealing to me. As I began to learn the world of mining, I quickly realized that it was an industry that I would be working in for a long long time.

MO:
How did you first get involved with Ian Telfer and Silver Wheaton?

Nolan Watson:
I was approached by Rohan Hazelton, a Harvard graduate and senior executive of Goldcorp (the world’s second largest gold mining company) and was told that at the age of 25 I was going to be given the chance to manage the finances for Silver Wheaton, which had 0 employees and a $300 million market capitalization. In addition, I would have the chance to work closely with Ian Telfer (who is now the Chairman of Goldcorp and Chairman of the World Gold Council). Obviously, the chance to work with someone of Mr. Telfer’s calibre was very appealing to me. Silver Wheaton was an idea for mine finance that had never been tried before and as the first employee I was able to use my entrepreneurial skills and build something tangible out of great idea.

MO:
Can you tell us more about your role at Silver Wheaton, how did you contribute to the company’s dramatic success in such a short timeframe?

Nolan Watson:
The streaming finance business model was new to the mining sector with Silver Wheaton so the main challenges were to sell companies on the benefits of silver streaming and to raise the money necessary to complete the streaming deals. While I was at Silver Wheaton I raised over $1 billion in debt and equity financing to grow the company. As the Chief Financial Officer, I also had approximately 60% of the companies employees reporting either directly or indirectly to me.

MO:
How did being the youngest CFO (at age 26) of any company listed on the NY Stock Exchange affect your life and career?

Nolan Watson:
It was definitely a catalyst for the rest of my career, and an important factor in me eventually becoming a 31 year old CEO of a company worth half a billion dollars. However, to be candid, at the time it was challenging and the learning curve was steep, so I spent nearly 90 hours a week in the office to ensure I was doing a good job for Silver Wheaton shareholders.

MO:
What made you decide to leave your stable, and successful career at Silver Wheaton and start your own company?

Nolan Watson:
Myself and my partner David Awram, who also came from Silver Wheaton, love the streaming business model and we identified an opportunity to expand it beyond silver. I am an entrepreneur and the idea of building Sandstorm into a multi commodity streaming finance company was very appealing to me.

MO:
Sandstorm Gold (TSX-V: SSL) has had immense growth in its first couple years, what do you think was the critical success factor in Sandstorm Gold becoming one of the 50 strongest Companies in BC?

Nolan Watson:
There are a number of reasons for our success so far. Primarily I think it is due to the fact that we have been able to assemble a talented, experienced management team and group of directors that are deploying a fundamentally strong business model. In less than two years we were able to close six gold deals and now four of those projects are producing gold and generating cash flow for Sandstorm. We expect gold production and cash flow to increase as these mines ramp up which we will reinvest to complete additional deals and continue to grow the company.

MO:
Sandstorm Metals & Energy (TSX-V: SND) was spun out of Sandstorm Gold in the last year. Tell us about your plans for that company?

Nolan Watson:
The vision for Sandstorm Metals & Energy was to create the world’s first base metal, bulk commodity and energy streaming company. We launched the company in December 2010 with a $100 million financing and two coal streaming deals and have since added an oil and gas deal. We have a strong cash position and an aggressive growth plan and we are actively pursuing base metal opportunities in copper, lead, zinc, nickel etc. as well as more energy deals.

MO:
What were some of the most difficult challenges you faced as an entrepreneur?

Nolan Watson:
We started Sandstorm Gold during the recession and the capital markets were such that it was extremely difficult to raise money. It was challenging enough to convince companies that we could actually raise money to do a deal with them, but the greater challenge came when we actually went out to raise the money. My partner and I went on the road and met with financial institutions all over North America for weeks and weeks before we were able to close our first deal. There was one point where I honestly thought we weren’t going to be able to do it. However, we persevered and obviously the markets and the climate for investment have changed dramatically since that time and we have been able to add a number of additional deals.

MO:
How would you encourage others to pursue their entrepreneurial dreams?

Nolan Watson:
Cautiously and with full planning and knowledge of the challenges you will face. Starting a business is significantly harder than people think, and the key is to go in knowing how challenging it will be and then persevering through all of those challenges to ensure eventual success.

MO:
We understand you have been involved in some humanitarian work, can you give us some insight into some of your recent projects and their impacts?

Nolan Watson:
A few years ago I started a humanitarian organization called Nations Cry. The organization is focused on education based development in West Africa. We recently purchased a ten acre property in a town called Waterloo in Sierra Leone and in that community, children who attend Junior Secondary School have to walk up to 7 miles to school and 7 miles back home every day. Nations Cry is in the planning stage of constructing a Junior Secondary School that will service three local communities and allow more children to continue their education.

MO:
Thank you Nolan for taking the time to speak with us, after seeing what you are capable of after only 31 years, we can only imagine what will be in store for you over the next 31 years.  For more information, visit:

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