#131 Robert Friedland Billionaire Miner

In "The Big Score," Jackie McNish chronicles the tumultuous career of Robert Friedland, a notorious mining promoter whose bold ventures often walked a fine line between dazzling success and dubious legality. Friedland's journey from a youthful LSD seller to a mining magnate is marked by his Midas touch in discovering the largest nickel deposit in North American history, despite his earlier environmental and financial debacles. His aggressive yet patient negotiation tactics, coupled with his ability to charm and manipulate, allowed him to sell his company, Diamond Fields, for a staggering $4.1 billion. Through Friedland's story, McNish explores the complexities of the mining industry, the art of the deal, and the paradox of a man who is both a master salesman and a deeply flawed individual.

• Robert Friedland was known for his daring persona and reputation as a penny stock promoter.
• His company, Galactic Resources, faced bankruptcy due to environmental and regulatory issues.
• Friedland's Venezuelan gold venture was failing, and his credibility with major investors was diminishing.
• Despite setbacks, Friedland remained confident in his ventures, including diamond mines and marine concessions.

"With typical impatience, he had been searching for a shortcut. Promoting a stock is like making a movie, Friedland said. You've got to have stars, props and a good script. Lately, good scripts had been hard to come by."

The quote highlights Friedland's approach to business and his search for quick success, likening stock promotion to movie production, emphasizing the need for key elements to attract attention and investment.

• Friedland's charisma and salesmanship were key to his success, particularly in convincing others of his ventures' potential.
• His ability to captivate an audience was demonstrated in his presentation of diamond potential, convincing even skeptics like Jean Bole.
• Friedland's influence extended beyond business, affecting individuals like Steve Jobs during their time at Reed College.

"By the time this stuff hits the water, 90%, do you hear me? 90 is going to be gem quality and over one carat."

This quote exemplifies Friedland's persuasive sales pitch, emphasizing the high quality of diamonds in his venture to assure and entice potential investors.

• The book "The Big Score" focuses on Friedland's accidental discovery of a massive nickel deposit, which he sold for $4.1 billion.
• The discovery and sale of the nickel deposit are central to understanding Friedland's business acumen and the book's narrative.

"Robert Friedland having a company, a mining company that accidentally discovers the largest nickel deposit in, I think, north american history."

This quote summarizes the book's premise, highlighting the serendipitous nature of Friedland's most lucrative business venture and its historical significance.

• At 19, Friedland was arrested for selling LSD, an event that contributed to his notoriety and charisma.
• His defiant attitude during the arrest and subsequent imprisonment added to his mystique.
• Friedland's past experiences with drugs and protest against the Vietnam War shaped his outlook and influenced his later business practices.

"Police confiscated more than 24,000 tablets of LSD, valued at $125,000."

The quote details the scale of Friedland's involvement in drug distribution, marking a significant event in his early life that would contribute to his complex reputation.

• Friedland's time at Reed College and his subsequent travels and transformation into a guru-like figure had a profound impact on Steve Jobs.
• Jobs' experiences with Friedland influenced his approach to life and business, including the naming of Apple Computers.
• Friedland's transformation from a communal leader to a money-driven entrepreneur mirrored the evolution of many charismatic leaders.

"Steve was the absolute opposite. When he came to Reed after he spent time with Robert, some of this rubbed off."

This quote from Don Kotke reveals the transformative impact Friedland had on Steve Jobs, showcasing Friedland's charismatic influence on those around him.

• Friedland's early ventures, such as the all-one farm and Siva, started with idealistic goals but eventually revealed a deeper preoccupation with money.
• His shifting motivations led to the disillusionment of his followers, including Steve Jobs, who recognized the materialistic turn and left.
• Friedland's pattern of idealism giving way to materialism is a recurring theme in his life and ventures.

"Robert walks a very fine line between being a charismatic leader and a con man."

This quote from Steve Jobs encapsulates the duality of Friedland's character, highlighting the thin line between his charisma and potential deceitfulness.

• Friedland's history of jumping between ventures raises trust issues.
• Despite personality defects, Friedland is financially successful, posing a moral dilemma.
• Friedland's transformation from a gold mining promoter to a venture capitalist and international financier is notable.
• His early career in Vancouver selling penny stocks and exploiting loopholes is critical to understanding his business approach.

"He's just not a very trustworthy individual." "On a financial basis, he's one of the most successful people in the world."

The first quote suggests a lack of trust in Friedland due to his inconsistent partnerships and ventures. The second quote contrasts his success with his untrustworthiness, highlighting the paradox of his character.

• The Vancouver Stock Exchange was a hub for penny stock speculation in the 1970s.
• Friedland's use of shell companies and penny stocks to start his ventures is a critical tactic.
• Regulatory loopholes allowed for the revival of dormant companies for new ventures.

"The easiest way to launch a public company in Vancouver is to revive an old publicly traded corporation that has lapsed into a coma."

This quote explains the process by which Friedland could start a new venture using the legal framework of an existing, albeit inactive, company.

• Sales skills are highlighted as valuable, timeless, and versatile.
• Friedland's ability to persuade without industry knowledge is emphasized.
• His charisma and intensity in sales pitches allowed him to succeed despite a lack of expertise.

"If you can learn sales, if you can learn the ability to talk other humans into cooperating with you, that is extremely valuable."

This quote underscores the importance of salesmanship and persuasion as key skills for success in any era.

• Friedland's approach involved creating and reinventing companies to maintain investor interest.
• His tactics included pump and dump schemes and leveraging shell companies.
• The discovery of a nickel deposit instead of diamonds exemplifies the unpredictability of prospecting and the importance of adaptability.

"He distracted galactic shareholders' attention in 1984 with a dazzling new gold play, the Summitville mine in Colorado."

This quote illustrates Friedland's promotional tactics and his ability to shift focus to new ventures to attract investment.

• Friedland's quick learning and photographic memory contributed to his success.
• His ability to narrate mining stories compellingly was a significant factor.
• Friedland's negotiation skills are commendable, but his personal relationships and ethical conduct are questionable.

"He's an incredible quick study... More important, he knows how to make the most boring mining story riveting."

This quote demonstrates Friedland's intelligence and his flair for making even dull subjects interesting to investors.

• Prospectors are crucial in identifying valuable mining opportunities.
• The work of prospectors is arduous and often goes unnoticed, but it can lead to significant financial gains.
• Friedland's focus on other ventures almost caused him to miss out on a significant discovery.

"Drilling for core samples is lonely, numbing work. Isolated and remote."

The quote describes the challenging work of prospectors, highlighting their role in the mining industry and their contribution to Friedland's success.

• Drillers work 12-hour shifts, operating 24 hours a day, essential for measuring deposit thickness and richness.
• The quality of the cores determines the financial success of a mining venture.

"They work 212 hours shifts. They're running 24 hours a day. Yet their work is one of the most crucial steps in mining exploration, because the cores measure the thickness and richness of a deposit."

This quote emphasizes the grueling nature of the drillers' work and its critical role in mining exploration, as the cores they extract are key to evaluating a mine's potential value.

• Freeland moved to Singapore from Vancouver amid a career low.
• His mercurial temperament and aggressive business tactics are highlighted.
• Despite past failures, he's known for pushing ventures that later stumble, and his reputation shifted with success.

"So I'm fast forwarding to the part of the story where they finally get Freeland's attention... He winds up moving to Singapore from Vancouver, kind of in shame."

The quote describes a turning point in Freeland's career, where a significant discovery reinvigorates his involvement in the mining project, following a period of professional setbacks.

• Staking claims involves registering land with the government to explore and potentially extract resources.
• It's crucial to stake enough land to prevent others from capitalizing on a discovery.
• Freeland insists on aggressive claim staking to secure the company's interests.

"You have to stake this thing to the horizon and claim all the land."

Freeland's insistence on extensive claim staking reflects his aggressive and strategic approach to securing the mining rights to a potentially valuable area, protecting the company's interests.

• Recognized the need for immediate action upon learning of a significant discovery.
• Despite personal conflicts, he demanded more land be claimed to secure the deposit.
• His aggressive stance on staking claims demonstrates his business savvy.

"Why haven't you kept me informed? He screamed, what do you know about the drilling? We have to find out if it's a real discovery."

Freeland's reaction upon being updated about the drilling results shows his aggressive approach to business and his demand for timely information to make strategic decisions.

• Freeland's negotiation tactics involve playing companies against each other.
• He uses incremental updates on drilling results to drive up the company's stock value.
• Freeland's goal is to maximize the company's value without the intention of actual mining operations.

"Freeland was outraged at the 300 million price tag the stock market was currently giving to Diamond Field stock... they could pump the value into the billions."

This quote illustrates Freeland's ambition to significantly increase the perceived value of his company through strategic negotiation and perception management.

• Freeland seeks strategic investors to maintain control and prevent hostile takeovers.
• He uses the term "slicing the salami" to describe selling small stakes while retaining voting rights.
• His negotiations with Keevil of Tech demonstrate his adeptness in deal-making.

"He's like, I'm going to sell you a piece of salami here, but we have to have an agreement that you're going to vote with me."

Freeland's strategy to sell a stake in the company while maintaining control is a calculated move to protect against hostile takeovers and retain influence over the company's direction.

• Freeland is described as both charming and tyrannical, adapting his approach based on the situation.
• His charisma is a key factor in his ability to persuade and influence others.
• The prospectors are initially taken in by Freeland's charm, reflecting his skill in personal interactions.

"Instead of the stern, tough talking opponent they had expected, the promoter was charming and sympathetic."

This quote captures Freeland's ability to switch between a charming and aggressive demeanor, using his interpersonal skills to navigate business dealings effectively.

• The book opens with a large number of characters, suggesting complexity and a need for memorization.
• The speaker emphasizes that remembering the names is not crucial to the understanding of the discussed events.

The book starts with a cast of characters. There's like 50 different characters you need to memorize in this book. The names I'm going to tell you are not important.

The quote indicates the speaker's view that the specific names of the characters in the book are not essential to grasp the key points of the story being told.

• Friedland is portrayed as impatient during a meeting with Mercado discussing drilling results from Voices Bay.
• Friedland's behavior suggests he values brevity and directness in communication.

The meeting in Friedland's office began with Mercado explaining drill results and ground surveys from Voices Bay. Why Friedland paced the room like a caged animal. Eddie, Eddie, get to the point. This is taking forever.

This quote captures Friedland's impatience and his desire for Mercado to be more direct and to the point in his presentation.

• Friedland warns of the risk of a company like Inco taking over at a small premium.
• He urges portfolio managers to align with him to prevent a hostile takeover.

You portfolio managers don't know anything. The biggest risk to your investment is that a company like Inco steals your company at a small premium to what it's trading at.

Friedland is criticizing portfolio managers for their lack of awareness about the risk of a hostile takeover by a larger company like Inco.

• Friedland boasts a sixfold increase in share price, shocking Deans.
• He expresses confidence in having leverage and insists Inco must buy because of their market position and cost advantages.

If you stay with us on this, I'll get you $150 a share. Deans couldn't believe what he was hearing.

The quote reflects Friedland's bold claim of a potential sixfold increase in share value, which surprises Deans due to its audacity.

• Inco's historical dominance in the nickel market is highlighted.
• Friedland's incorrect assertion about production costs at Voises Bay still plays a crucial role in Inco's decision-making.

Inco is the largest nickel producer in the world at the time. At one point in its previous history, for like 50 years, they controlled the entire world's nickel market.

This quote provides context on Inco's significant presence in the nickel industry, which is a key factor in the narrative.

• The speaker underscores the importance of cost management in building competitive companies, referencing industry magnates like Andrew Carnegie and John D. Rockefeller.

Watch your cost. Andrew Carnegie, John D. Rockefeller, they built companies you could not compete with because they could make profit at a price that you could not.

The quote emphasizes the strategic advantage gained by companies that manage their costs effectively, making them formidable competitors in their respective industries.

• Tech's simple and quick deal-making is contrasted with Inco's lengthy and complicated negotiations.
• The speaker highlights the benefits of simplicity in business deals, referencing Bill Gates and Steve Jobs as examples.

They were able to make the deal and faster than other people because they made it simple.

This quote points to the advantage of simplicity in business transactions, as illustrated by Tech's efficient deal-making process.

• Friedland exhibits aggressive negotiation tactics to maintain leverage over Inco.
• His actions during negotiations are described as unpredictable and forceful.

Friedland's negotiating says during negotiations, he had a way of making Inco's offers sound like an order.

The quote describes Friedland's assertive approach in negotiations, where he positions himself in a commanding role.

• Inco's team realizes Friedland's lack of interest in developing the mine, influencing their decision to purchase.
• The speaker notes the discrepancy between Friedland's words and actions.

The Inco team had their answer already in Friedland's lack of interest. The promoter was not in the least bit interested in the details of building a mine.

This quote reveals Inco's team's insight into Friedland's true intentions, which were not aligned with his earlier claims of wanting to develop the mine.

• A bidding war ensues between Inco and Falconbridge for Voise Bay.
• The companies consider a joint venture to avoid overpaying, but Friedland's behavior complicates matters.

Inco bids $3.5 billion, right? They're the number one producer of nickel in the world. Falconbridge is the number two producer. They bid 4 billion.

The quote outlines the competitive bidding situation between the two leading nickel producers for the Voise Bay acquisition.

• The speaker discusses the significance of cost advantage in market competition, specifically within the nickel industry.
• Inco's decision to increase their bid is driven by the need to maintain a competitive edge in production costs.

The reason Falcon Bridge does not win the bid at 4 billion Inco goes up to 4.5 billion is because they have to.

This quote explains the strategic necessity for Inco to raise their bid in order to secure a cost advantage over Falconbridge.

• Friedland's tactics are ultimately successful, leading to a lucrative deal with Inco.
• The speaker reflects on the rapid improvement and growth of Diamond Fields under Friedland's direction.

After months of saying no, Inco was bowing to Freeland's demand. The best part however, was the price at $43.50 a share, which the deal gets closed at his 13% stake, had suddenly become worth nearly $600 million.

The quote summarizes the successful outcome for Friedland, where his shares significantly increase in value following the deal with Inco.