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Listed|Mining PDAC 2017

 The Directors Chair
Daniella Dimitrov

Fresh eyes on old problems

In The Directors Chair with David W. Anderson: When youve worn as many different hats as mining
director and corporate adviser Daniella Dimitrov, you always see the big picture
Photography by Jeff Kirk

Daniella Dimitrovs mining rsumas a director, board chair, CEO, CFO and
COO at an array of small- and mid-cap companieswould qualify as an
impressive lifes work for many in the industry. Yet in Dimitrovs case, this is
actually her third career. As a lawyer, she started out in real estate, before
moving into, and up the ladder, in financial services. Upon arriving in the mining
industry, she quickly realized her knowledge of capital and equity markets,
coupled with an outsiders perspective, meant she could bring fresh perspec-
tives to the challenges and problems many mining firms face. Here, in con-
versation with governance and leadership adviser David Anderson, Dimitrov
outlines some of those convention-busting ideas, discusses their relevance to
her own industry experience and challenges her peers to rethink their approaches
to company financing, corporate structures, cost control, reporting and
guidance, board composition and more.

Daniella Dimitrov
Primary current role
Corporate adviser
Additional roles
Director, Excellon Resources Inc.; director, Aldridge Minerals Inc.; chair, diversity/inclusion committee, Canadian Institute
of Mining, Metallurgy and Petroleum
Former chair
Commonwealth Silver & Gold Mining Inc.; Baffinland Iron Mines Corp. (vice-chair)
Former director
Baffinland Iron Mines Corp.; Orvana Minerals Corp.; Alloycorp Mining Inc.; Commonwealth Silver & Gold Mining Inc.;
Ombudsman for Banking Services and Investments; Centre for the Financial Services OmbudsNetwork; Federation of
Independent Mutual Fund Dealers; Investment Industry Association of Canada (industry representative)
Former executive roles
CEO, Orvana Minerals Corp.; CFO, Orvana Minerals Corp.; executive vice-chair, Baffinland Iron Mines Corp.; COO, Dundee
Securities Corp., Dundee Private Investors Inc., Dundee Insurance Agency Ltd. and Dundee Mortgage Services Inc.
Education
Global Executive MBA, Kellogg School of Management & Schulich School of Business; Year I and II, Securities
Industry Institute Program, Wharton Business School; Bachelor of Laws, University of Windsor, Ontario; Bachelor of Arts,
University of Western Ontario
Honours
kCanada Diversity 50, Canada Board Diversity Council, 2016

kTop 100 Global Inspirational Women in Mining, Women in Mining (UK), 2016

Age when first became a director
41
Years of board service
8

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David Anderson Having come from outside the mining industry,
youve made a remarkable contribution within it in a relatively
short period of time. How did you get to this point in your career?
Daniella Dimitrov Ive worked in three industries, with mining being
the most recent. The first twolegal, with a focus in real estate and
financial services, and then financial servicesprovided me busi-
ness experiences that built my skills and honed my judgment in ways
that became critical to my work in mining. With the background of
a corporate and securities lawyer, I started work in REITs access-
ing the capital markets. I then worked in financial services in corpo-
rate development, participating in the consolidation of the industry
through leveraged M&A. I was involved in integrating many back of-
fices and systems, having acquired consolidators with unintegrated
systems and processes, as well as building out our team. Working in
these industries I came to appreciate the demands and dynamics of
capital markets and the complexities in equity financing and M&A
along with operations, optimization and talent management. It was a
good foundation for my transition to mining, particularly in my work
at Baffinland Iron.
David Anderson As an outsider, what struck you as unique and
worthy of special attention about minings basic business model?
Daniella Dimitrov Were in an industry where our assets get smaller
every day. We take them out of the ground. Think about that. This isnt
a recurring revenue situation. We have to invest just to maintain the
asset. Growth is necessary. If you dont grow youll be in trouble, run-
ning out of mine life. Due to declining commodities prices, the indus-
try has focused on cost reduction, not asset growth. Shareholders need
a longer-term view than looking for that catalyst in the next quarter. As
an industry, our focus needs to be on the declining reserve balance. If
investors take out the money in good times, you may not have the pipe-
line. You need accretive growth that generates a proper margin while
investing in your business.
This requires innovation in how we think about our business.
Things that we thought were a competitive advantagesole owner-
ship of infrastructure, for examplemay not be. We need a fundamen-
tal rethink of our value chain and we need to be better stewards of our
capital.
We should also be asking why we still see juniors holding projects
that are economical only at higher commodity prices. Should so many
juniors be public, having their own management teams, out raising
money to pay for G&A? More consolidation should have happened,
but boards are concerned about taking risks in M&A and sharehold-
ers are short-term focused, looking at optimization not growth, thus
putting pressure on companies to manage to shorter horizons. With
a number of balance sheets that have been fixed and longer-term ho-
rizons, boards may be better positioned to consider growing reserves
and resources through M&A.
David Anderson Youve felt the pressure from the capital markets
for accountability to deliver results, including in the short term.
Whats a productive response to short-term pressure?
Daniella Dimitrov To begin with, I wonder if guidance is useful.
Should you be putting out guidance, as an issuer, that drives the
attention of the market to a shorter-term time horizon than youre
managing to? Guidance on production 12 months out focuses the
market on quarterly production, not a longer-term view of the
The Directors Chair
Daniella Dimitrov
company. Be open with your stakeholders about your long-term
strategy and how youre assessing opportunities. Being more trans-
parent in where youre going and how youre assessing a project
allows the market to make its own determination as to their objec-
tives on capital deployment. Being more communicative allows the
market to know what youre doingthey dont have to like it, but
can make a decision as to whether it aligns with their investment
objectives.
For a company needing to access the capital market to meet
milestones, this approach is harder. As a producer, youre gener-
ating cash flow and the short-term view of What have you done
for me this quarter? may affect your share value. But if you dont
have to access the market for capital, you need to tell your value-
creation story.
Its more difficult for a junior because it takes about 12 years
from that first discovery hole to generating that first dollar of
revenue. The time frame for generating a return doesnt always
match the time horizon for the pool of capital sitting across the
table. Different shareholders are needed at different stages in the
companys life. Being able to tell your story helps get you the right
shareholders when you need them, with risk-reward time horizons
in line. Of course, directors need to be aware that as the milestones
are achieved, management may need to change as well, with differ-
ent skills sets being required from exploration to capital-raising to
developing to operating.
David Anderson Based on your experience with Baffinland
which at one time had a market capitalization of only about
$150 million but needed in excess of $6 billion to address the
infrastructure challenges of working north of the Arctic
Circlehow do you suggest directors of junior mining com-
panies think about their assets?
Daniella Dimitrov As a director of a junior, monitor your asset, market
capitalization and Capex as you go through your milestones. How
are you going to achieve the next milestone? Is it achievable to cre-
ate value for your equity holders? What are your alternativesis it a
joint venture, shared infrastructure, selling the project to a major?
Do other companies have stronger capabilities, skill sets and opera-
tional experience in your environment? What is your defence strat-
egy? Who is serving as your advisers, bankers and on your special
committees? I encourage directors to talk about these things as your
company continues to de-risking the project. Think through who are
your potential white knights. Be ready for something else to come at
you. And at each milestone ask, Does it still makes sense for us to
be the team to take it to the next level? Can we create value for our
shareholders in other ways than building the project at all costs?
Its hard to set egos aside to make the best objective decisions for
stakeholders.
David Anderson Your first piece of advice to boards and executives
is to be ready for growth. What does that mean in practical terms?
Daniella Dimitrov You must make sure youre ready for growth and
that means having in place a disciplined approach to systems, pro-
cesses, reporting and people. You need a stable management plat-
form upon which the company can run, without constantly putting
out fires, so that the CEO can dedicate time and energy to reviewing
opportunities and bringing in another producing asset. You need an
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M&A team to focus on this and a board to be prepared in advance to
react quickly. A board thats open-minded and agile in its processes
will significantly shorten critical time frames.
The board needs to ask itself if management has the skill sets to
grow. If youre changing strategy, growing by acquiring rather than
growing by exploring, you will need different skill sets. You need
the right mix of people and business platform prior to advancing
your growth strategy.
David Anderson Diversity can mean many things. How do you
see value being realized in diversity?
Daniella Dimitrov I look to business outcomes as the evidence for di-
versitys value. I see better outcomes when there is a diverse range
in experiences and backgroundsin skill sets and education from
life and from careers as well as education. This kind of diversity is
even more important for small and mid-cap companies, because
they dont have the financial resources to attract the best talent in
each discipline nor to have all of the disciplines represented So the
people you do have around the table as your management team and
as your board of directors carry a heavier burden to do what needs
to be done in strategy, financing, operations, talent management,
culture creation and execution. Directors are called upon more to
bring our networks to the table and use a wider range of skills than
may be typical in a large-cap company board.
In working with diverse groups both in my career and in my
EMBA, Ive thought at times, I wouldnt have come up with that.
Embracing different perspectives at the table gives you better
strategies, a more solid operation and results in a higher likelihood
of achieving that social licence to operate, earning ourselves the
right to be there.
In what has become known as a VUCA worldvolatile, uncer-
tain, complex and ambiguouswhat skill sets do you need? Its not
good enough to say theres nothing I can do about the volatile com-
modities and political environment, the uncertainty of permitting
or the complexity of operating in certain jurisdictions. You need to
operate to advantage whatever the circumstance. Diversity of ex-
perience and thought and the agility this brings is what will allow
you to navigate through this environment.
David Anderson As a CEO, how did you come to view the interac-
tion of your finance and operations teams and integrate the dif-
ferent perspectives on corporate priorities they represented?
Daniella Dimitrov Finance and operations are the right and left
hand of the CEO. Perhaps because Ive been both a COO and CFO,
I believe finance and operations need to work together. It is more
difficult to be productive and drive innovation where the team
operates in silos that value their turf. I like to see the finance team
get out of the office and talk to mine and maintenance managers
and use a service-oriented approach to adding value to the busi-
ness. Financial and operational leadership needs to build bridges
in process and among people. I have come to expect much more
value from controls, risk management, cost optimization and
capital management as a result. Discipline in overall decision-
making is what I like to create. At a junior level, decision-making
can be more flexible, but as you advance, you need more structure
in decision-making to remove unnecessary risk and provide ac-
countability.
The Directors Chair
Daniella Dimitrov
David Anderson How useful was your formal learning via an
EMBA to your career?
Daniella Dimitrov I chose the global EMBA route specifically to get an
international perspective. Through the Kellogg-Schulich program,
I went to school in Toronto, Chicago, Miami, Hong Kong, Tel Aviv
and Dusseldorf. This proved useful to my leadership in mining, given
the international aspects of capital markets, operations and multina-
tional boards and teams. I learned how to manage different skill sets
and build teams with colleagues from different industries, countries
and cultures. The EMBA team was made up of people from cultures
around the world in remarkable current roles. I saw firsthand what
it was like to be part of such a diverse group, experiencing how per-
spectives, approaches to problem solving and decision-making and
solutions varied by culture. I also learned you need to stereotype at
times, because they come from reality. Culture is real and you need to
understand it and manage your process with these realities in mind.
If youre in a negotiation or crisis management, you have to know the
likely response of others to be efficient and effective.
David Anderson As governance has become mainstream, inter-
est in being a director has risen. Whats the role like and what
does it take?
Daniella Dimitrov Its great that theres such interest and aspiration
to join boards. Being on a board does take time and, of course, it
comes with responsibilities and liability. It takes time to get up to
speed. When youre on a board, youre on a board; its a commit-
ment. If things arent going well, you have stick with it. Being a di-
rector is complex and one of the hardest things Ive done. You are
the stewards of a company who get together periodically, without
having worked together, to make important decisions with far less
information than management has, and much less time to study
it. You need to create relationships, understand the board culture,
other directors communications styles and determine how you
will make decisions constructively and productively, manage risks
and controls, ensure you have the right talent and so on. You need
to have a strong chair to create the right culture and mutual trust.
Collectively, you have to figure out how youre going to operate ef-
fectively, all the more so when youre in different countries.
Certainly, the impact on the life of a director and the ability to do
good work is affected by the talent and capacity of management.
While things like pay and board calibre are factors to consider, Im
attracted to the experience of working with a management team
that is ambitious and open to ideas, and who expect the board to
push them rather than viewing the board as a required governance
and compliance function. Between the board and management
theres a balance to find in experience and innovation, patience to
think and analyze, and drive to get things done. Getting this right
allows a board to focus productively on corporate strategy, capital
markets and talent management.
David W. Anderson, MBA, PhD, ICD.D is president of The
Anderson Governance Group in Toronto, an independent
advisory firm dedicated to assisting boards and manage-
ment teams enhance leadership performance. He advises
directors, executives, investors and regulators based
on his international research and practice. E-mail:
david.anderson@taggra.com. Web: www.taggra.com
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Mining PDAC 2017|Listed