Fotios spreads his wings
Fotios spreads his wings

Michael Fotios was always destined for the mining industry.

His father George helped float Goldstream Mining in the 1980s. On mother Betty's side, his great-grandfather Bertie Moore was a renowned metallurgist and mining engineer who became director of the Kalgoorlie School of Mines after starting as a lecturer in 1908.

Tagging along with his father on field trips to the Pilbara and the Goldfields sharpened the young Fotios' interest in mining. Still, with the industry in the doldrums in the 1970s, a friend of his father was sceptical when he heard of Michael's intention to become a geologist, advising him to also get a taxi driver's licence because he wouldn't get a job on graduation.

Nearly 40 years later, however, Fotios is doing all right.

Flushed with the success of a wildly successful bet on Northern Star Resources, the 50-year-old now has about $100 million invested in the junior sector across gold, copper, zinc, oil and lithium through Investmet, the investment syndicate he controls in partnership with the Wyllie Group and a group of high net worth individuals.

Investmet's portfolio includes copper hopefuls Pegasus Metals, Horseshoe Metals and Genesis Minerals, US-focused explorer Target Energy and General Mining Corp, which is exploring for coal and base metals in Mongolia.

Fotios is also an investor in his own right in Tanzanian gold play Liontown Resources through his management company, Delta Resource Management.

Further action is afoot as Fotios, works to recapitalise Michael Kiernan's collapsed Swan Gold Mining and resuscitate its moribund associates, Stirling resources and Redbank Copper.

"We are within weeks of tidying up the last few issues, mainly tenement-related," Fotios said. "If all goes according to plan, we'll proceed with a recapitalisation over the next three or four months and relist all three companies."

Investmet typically takes equity stakes of 15 per cent to 20 per cent at a premium for an initial outlay of $1 million to $3 million. The plan is to incubate the companies and bring technical and corporate support to bear through either Investmet or Delta Resource Management.

Fotios says, however, Investmet is often backing the people rather than the assets.

He cites the example of Northern Star managing director Bill Beament who transformed the explorer by buying the Paulsens gold mine in the Pilbara in 2010.

Investmet famously made a mint after helping recapitalise Northern Star in mid-2009 with $758,000 at 1.2¢ a share. It took some cash off the table in February, selling 25.5 million shares at 90¢, but remains Northern Star's biggest share- holder with a 9.8 per cent stake valued at $35 million.

"If Bill hadn't found Paulsens, he would have found something else," Fotios says. "Sometimes it is more about people. Northern Star was a company without a project when we bought in, all it had was people."

Fotios says Investmet was initially seeking a shell for a float of its lithium interests when it looked over Northern Star, but after talking with Beament, decided to back him into an operating mine.

"We think there is the same potential in Horseshoe and Target and these other investments as there was in Northern Star," Fotios says. "They have got high quality assets that just need some funding, TLC and some advice, as well as a bit of luck, to get to the next level."

Industry insiders who have dealt with Fotios describe him as well-grounded, considered and pragmatic, with an encyclopaedic memory of WA mining projects.

"He's got no ego, he's been through the wars . . . and been around for ages," says one. "He's very good at what he does, but he doesn't wear it on his sleeve.

"And when it comes to his dealings with people he errs on the side of leaving something on the table."

Fotios graduated from the University of WA with honours in geology in 1983 and took up a job with Homestake Australia.

"It was a great company to work for," Fotios recalls, with the US-owned company's exploration successes in the 1980s giving him plenty to cut his teeth on.

A stint at Sons of Gwalia followed before he went out on his own, emerging in 1992 with management control of Australasian Gold Mines and setting about building a land position in the Norseman district.

Fotios remains a believer in the benefits of regional consolidation "You can't live on a postage stamp block of land. It just doesn't work, unless you are very lucky."

Australasian was initially successful, producing its first gold in 1994. But it also provided some testing times for Fotios, with weak gold prices forcing the company into administration in early 1998.

Australasian survived, emerging within six months after an asset sell-off and later rebuilding value as the tantalum producer which morphed into Galaxy Resources.

"If you have a good management and the right projects you can survive most of the traumas you are going to experience in a mining company," Fotios says. "And if you are good enough, you will always find another project to make money for your shareholders."

He left Galaxy in 2008, having kick-started his next corporate phase with the launch of Investmet a year earlier. He says the syndicate has grown from an initial asset base of $5 million or $6 million to $100 million in the past three years, and without calling on debt.

"Most of that, obviously, is Northern Star, but we made money out of a few of the others as well."

Fotios is one of five directors sharing the Investmet board table. The others are South African-based Alan Still who oversees the group's privately held exploration interests in Africa; former BDO managing partner Stephen Mann; Perth realtor Peter Farris and Wyllie Group chairman Wayne McGrath, who joined when the family investment company hooked up with Investmet last year.

Fotios says Investmet will quit investments "at the appropriate time", even the Northern Star stake, though any deal involving the miner would have to have Northern Star's support.

He admits to being surprised, though "not disappointed", that no-one has approached Investmet over buying its Northern Star holding. "You would have thought someone would have tried."

Northern Star was without a project when we bought in, all it had was people."

Michael Fotios

The West Australian

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