O3 Mining’s Jose Vizquerra has tough act to follow
When Jose Vizquerra was considering working full-time on exploration projects in Canada with Osisko Mining (TSX: OSK), the first thing he needed to know was whether he had the blessing of his grandfather, Alberto Benavides de la Quintana.
Benavides founded Buenaventura (NYSE: BVN) in the early 1950s and built it into the largest mining company in Peru and one of the biggest in South America.
“When I told him I was going to leave the family business and asked him if he would be OK with that, he said, ‘Yes, I’m fine with it, but I would like to make a bet with you — I want to see if you can build something bigger than what I have built,” Vizquerra recalls. “And I said: ‘I’m 32 years old, game on!’”
Vizquerra, who drops the Benavides portion of his surname to avoid favouritism when he’s in Peru and build his own name in the business, is the first to admit he has an enormous mountain to climb to fulfill the wager.
Benavides created Buenaventura in 1953 when he was 33 years old and built it into a powerhouse that today has nine mines and thousands of employees. In 1996, the company became the first Peruvian mining company to list on the New York Stock Exchange, initially raising US$170 million. Today the company has a US$3.9-billion market capitalization.
Benavides joined Forbes’ list of billionaires in 2013 but it wasn’t wealth that motivated the Harvard-educated geologist.
“He never wanted to find mines to become popular or rich,” Vizquerra says. “He was always a very simple and humble man. He would never drive a car better than a Toyota, and he never moved from the house he had when he was married. He never had a private jet or took astronomically expensive holidays. His purpose was to look for mines to develop the Andes of Peru.”
Many of Vizquerra’s fondest memories are of the many hours he spent at his grandfather’s side as a boy and later teenager, soaking in Benavides’ vast stores of knowledge about geology and mine building, his passion for rocks, and his easy leadership style.
Vizquerra visited his first mine, Orcopampa, with his uncle Raul when he was 12, and from the age of 18 spent every Saturday morning at his grandfather’s office in Lima, where the patriarch met with the company’s vice-presidents and geologists to talk shop over coffee and plates heaped with cookies.
“People were encouraged to go in on Saturdays because it was the moment when they could talk directly with him,” Vizquerra recalls. “It was on their own time, and they could talk about everything from metallurgy to engineering to geology.”
When he was old enough to drive, Vizquerra would pick up his grandfather and drive him to the morning meetings at 8 a.m., and then drive him back home at 1 p.m., when the entire family gathered for lunch at a table that sat 18.
One of 17 grandchildren — Vizquerra tried to attend those luncheons every week, as did Benavides’ five children, two of whom worked in the family business.
Vizquerra’s mother, Mercedes, spent many years as CEO of Buenaventura’s Colquijirca unit, while his uncles Rocque and Raul served as Buenaventura’s chairman and vice-president of business development, respectively.
Today Vizquerra likes nothing more than to reminisce about his grandfather’s career and the kind of person he was.
“He always had time for everyone,” Vizquerra says. “I don’t think I ever asked him for a meeting and he said he didn’t have time — and I’ve heard the same thing from everyone I meet.”
The son of a lawyer on the Supreme Court and mayor of Lima, Benavides grew up in the capital city and studied engineering at the School of Mines in Peru — now known as the National Engineering University — and graduated in 1941.
He received a one-year scholarship from Cerro de Pasco Copper Corp., an American company, to study geology at Harvard University, and became the first Peruvian graduate of the Harvard School of Arts and Sciences in 1942. At the end of the year, his professors urged him to complete a master’s degree at the university and paid the tuition.
After finishing his graduate degree in 1944, Benavides returned to Lima and started working at one of Cerro de Pasco Copper’s mines as an assistant geologist. Two and a half years later he was promoted to head of geology overseeing all of the company’s mines. By the time he turned 30, he had become the company’s head of exploration.
Seven years after he started working for the company, however, he decided to create his own company — Buenaventura — in 1953. The company’s first asset was the Julcani mine in Huancavelica, which he bought from a Swiss businessman for US$300,000 in cash and a 20% stake in the company.
Benavides’ former employer, Cerro de Pasco, offered him a US$200,000 loan to be repaid in minerals from the mine, and also took a 20% stake in the company. Benavides raised US$400,000 from his friends and family for a 60% stake and used US$300,000 to pay for the mine and the other US$100,000 as working capital.
The Julcani mine is still operating today and produces about 2.5 million oz. silver a year.
Benavides’ most notable deals included a joint venture with Newmont Mining, now Newmont Goldcorp (TSX: NGT; NYSE: NEM), and Bureau de Recherches Geologiques et Minieres, in the Yanacocha mine, which they built in Cajamarca.
Buenaventura also secured a 10% stake with Cyprus for the Cerro Verde copper mine and struck partnerships with Gold Fields (Moquegua) and Teck Cominco (Colquijirca). The company also discovered the Conga, Tambomayo, Trapiche and Chucapaca deposits; and developed the La Zanja, Tantahuatay, Orcopampa, Uchucchacua, Shila, Mallay and Antapite mines.
“He was a combination of an entrepreneur, a very passionate geologist and a very compassionate human being,” Vizquerra says. “He was very special in that sense.”
In 1964, Cerro de Pasco asked Benavides to become president of the company’s Peruvian operations, which he did for seven years. In the early 1970s, at the age of 51, he completed a four-month advanced management program at Harvard Business School, where he often drew on Buenaventura as a case study. He also spent five years building the mining department at Peru’s Catholic University — Universidad Catolica del Peru. In 1993, he became head of Peru’s Central Reserve Bank, where he served a seven-year term.
For the last few decades, Buenaventura has been run by Benavides’ children — his sons Rocque (a civil engineer) and Raul (a mining engineer). After serving for many years at Colquijirca, Vizquerra’s mother left to start up her own business providing employment to more than 1,000 women in the Andes. Her company, Wayra, makes handwoven Christmas tree ornaments, as well as blankets, scarves and throws, for export. She has retired from the business and now is chair of the Vizquerra Family Office.
Benavides stepped down as chairman in 2010 and retired as president in 2011.
In his later years — Benavides worked until the age of 93 — he concentrated on developing new ways to irrigate Peru’s deserts.
“The biggest challenge we had with the mines in the Andes and even along the coast was the perception of lack of water,” Vizquerra says. “Two days before he died he was sitting down with my uncle and talking about building a channel that would bring water from the jungle to the coast to irrigate the desert.”
Vizquerra notes that his grandfather, who died in 2014 at the age of 94, was married to his grandmother for 68 years. Over that time he read to her daily and often described her as the “love of his life.” In the early days of his career, she would accompany him to some of his exploration camps.
In an interview with the Harvard Business Review in 2013, Benavides said his father had tried to talk him out of studying geology.
“When I went to Harvard and he learned that I would study geology, he asked, ‘What’s that? Who would want to be a geologist … studying geology is absurd.’”
His father died when he was in his late twenties and his mother when he was 15.
Like his grandfather, Vizquerra started his career at the age of 32 in 2011 when he became the president and CEO of two mining companies — Oban Exploration and Braeval Mining — which had assets in Peru, Colombia, Honduras and Mexico.
But unlike his grandfather’s early home runs, Vizquerra faced a series of crises in his early years.
Within months of going public in November 2012, six employees of Braeval Mining were kidnapped in Colombia. It was Jan. 2013 and within no time the bottom fell out of the stock — taking the company from a market cap of $50 million to $3 million.
The kidnappers — part of the Ejercito de Liberacion Nacional, a Marxist terrorist movement in South America founded by Fabio Vasques and Camilo Torres Restrepo, Jesuit priests — dug in their heels.
It took Vizquerra and his team two and a half months to liberate five of the workers and eight and a half months to free his vice-president of exploration and friend Gernot Wober.
“With that, the company was destroyed and we thought, how do we recreate this?” Viquerra remembers. “At that time, the thought was, ‘Why don’t we do exploration in Canada?’”
Vizquerra was no stranger to Canada, having worked for Goldcorp as an underground geologist at the Red Lake mine for three years after graduating with a master’s degree in geology from Queens University in Kingston, Ontario. (He studied civil engineering as an undergraduate at Universidad Peruana de Ciencias Aplicadas, Peru’s university of applied sciences.)
Oban Exploration and Braeval Mining merged in 2014 and the new entity was called Oban Mining. Shortly after that, the company picked up its first asset — Miller — on the eastern side of the Archean Round Batholith in Ontario.
But the real break came in November 2014, when Vizquerra staked 700 sq. km of unclaimed ground around the Windfall project in the Urban Barry district — an underexplored area of the province.
In 2015, Oban Mining put together a business deal that involved merging with four other junior mining companies to create a leading gold exploration and development company with assets in Ontario and Quebec. Oban Mining changed its name to Osisko Mining in June 2016.
Earlier this year, Osisko spun out O3 Mining (TSXV: III) with a portfolio of assets in Quebec and Ontario, including the Marban and Garison projects, spanning more than 4,600 square kilometres.
In February, O3 Mining raised over $18.6 million to launch the venture, which some describe as “the third iteration of Osisko.”
Today the junior has combined resources of 5.1 million oz. gold.
“My dream is to build something bigger than what my grandfather built, by myself, in Canada,” says Vizquerra, who in 2018 was awarded one of two mining professionals of the year by The Young Mining Professionals.
The company’s strategy is to consolidate and explore the Val-d’Or camp, one of the more important greenstone belts in the world, and where more than 30 million oz. gold have been mined.
“It’s a very prolific belt itself, but most of the ounces were found on the western side of the Val-d’Or district and very few ounces have been found on the eastern side of Val-d’Or,” he says, explaining that there are fewer outcrops in the east compared with the west, and no one drilled systematically on 250- or 300-metre centres.
“We’re being very systematic and proving that the east side of Val-d’Or is as prolific as the west,” he says. “How we’re doing that is very simple: we take the resources that already exist that we bought from other companies and expand them down-plunge, while we also look for new discoveries.”
In July, O3 Mining merged three companies — Chalice Gold, Alexandria Minerals and Harricana River — and spent over $45 million on acquisitions. Today O3 Mining boasts over 600 sq. km in Val-d’Or, or two-thirds of the camp, and all of its properties lie over the Cadillac Break.
In 2019 the company drilled 9,000 metres. Highlights included 18.8 grams gold per tonne over 1.3 metres in hole 19-11 at the Central Cadillac Group of properties, 5 km east of Val-d’Or, where it is earning an 80% stake; and 6 metres of 9.3 grams gold, including 2 metres of 25.7 grams gold in hole 19-106, at its Alpha property, 5 km southeast of Val-d’Or.
Importantly, the company has had success finding mineralization in the contact with the sediment.
“The nice part of that is for years everyone said there was no mineralization in the sediments — that they were barren — but just by being systematic we’re finding mineralization,” he says. “The only mine ever found in Canadian sediments was Malartic, which was discovered by our founding company. So maybe we are repeating that story!”
(This article first appeared in The Northern Miner on December 17, 2019)