If you are a current shareholder or interested in considering an investment in our company, we think it is important to give you a clear picture of how we run our company and how we communicate with shareholders.
We want to share with you our fundamental management and decision-making philosophy; so that you, our shareholders, can make an informed decision and confirm that we are aligned with your investment philosophy.
Our approach to running our business does not rely on the status quo, but actually the opposite. Western Magnesium treads where others have not, we set ourselves apart from the crowd – this is from where our opportunity grows. We are true to our values, our employees, our shareholders, and all stakeholders – these fundamental beliefs are what guide us.
Our quality shareholders see themselves as part-owners and permanent owners of a business. They work to understand the company, its managers and their philosophy. They focus on business results, not short-term stock price.
We have an investor first mindset – we continuously strive to align our interests with shareholders. We act like owners because we are owners. Simply put, we eat our own cooking.
We will not go into a business where we will be #2. We will make bold rather than timid investment decisions where there is a high probability of gaining the market leadership position. In other words, we will swing at fat pitches in our strike zone.
We will continuously analyze our programs and the effectiveness of the initiatives we pursue and will abandon those that do not have clear prospects of market dominance.
We can promise, we will continue to learn from both our successes and missteps.
At Western Magnesium, we understand Capital allocation decisions should be made using the idea of opportunity cost – all possible uses of capital should serve as an opportunity cost for every other use, necessitating a comparison among all options in order to pick the optimal course.
We are aware that capital allocation decisions are part art and part science and that the future always remains uncertain. Every effort will be made to recognize this – that is why we remain flexible in our decisions, stubborn in our long term vision.
Our focus is on the growth of per-share intrinsic value over time. This is essential to value creation – not living quarter to quarter but rather measuring success over rolling five to seven year periods. This sets us apart from the competition as they continue to focus on the short term.
We will plant seeds and allow them to grow, until one day we are looking at a Sequoia.
We believe in open, transparent, and meaningful communication with all shareholders – not simply because it is in fashion or the calendar lands on a certain day. We will only communicate important company specific information emphasizing the pluses and minuses of the ongoing developments of the business.
Despite our policy of candor, we will never report for the sake of reporting, and we will not give away proprietary information that could tip off competitors or that could erode our competitive advantage.
We believe that a fundamental measure of success will be the shareholder value that we create over the long term. This value will be a direct result of the ability to extend and solidify our current market leadership position. The further we build our market leadership position, the more dominant our economic model becomes.
This market leadership will correlate to strong future returns on invested capital
Circumstances change, being adaptable and flexible allows the company to remain nimble when new information arises.
Our decentralized structure allows nimbleness – we recognize that bureaucracy slowly crumbles great businesses. Engaging in an uncertain world with an open, flexible mind allows for adaptability on a whim, especially in the face of adversity.
We live, work, and play in nature. Protecting the natural world in which we live is the cornerstone and foundation that Western Magnesium is built upon.
We are committed to improving the local environment in our communities and country by fostering sustainable and clean technology that makes the planet a better place for our children’s future.
We will continue to be thrifty spenders and promote a lean culture. The importance of continually reinforcing our cost-conscious culture emphasizes the progressive ability to invest in the future and capitalize on the opportunities when they emerge.
We will continue to focus on hiring and retaining dynamic and talented employees. We will largely balance their compensation to stock options rather than cash – our success will be affected by our ability to hold on to these exceptional employees while incentivizing them to think and act like owners of the business. This is paramount to our success.
Promoting the skin in the game mentality allows us to align ourselves with the success of the company and our shareholders.
Communicating the economics of the business allows us to create a bond of open communication with our shareholders. We think of shareholders as long term business partners – communicating rational outcomes stems from the rational expectations we convey to them.
Realistic expectations from our shareholders allow rationality to take precedence over emotions, especially in times of panic or undue manic states.
We understand share price is a reflection of numerous actors within an auction-driven market, the manic nature of such can be utilized as an opportunity rather than a hindrance. As Benjamin Graham, Warren Buffett’s mentor and teacher reminds us,
“The market is there to serve us not to be our guide.”
In the pervasive here and now culture of today, the long view stands out – we utilize this as our competitive advantage. By lengthening our time horizon, we harness the ability to seize opportunities that we could never otherwise pursue.
Forecasts and guidance make for a difficult bar to jump over. Unreasonably Wall Street loves guidance and frequently encourages corporate management and IR departments to engage in the fanciful behavior of predicting, estimating and fortune-telling.
We will resist this practice as too often predictions can lead to trouble – inevitably, a one-foot hurdle will arise and be insurmountable to jump over, do to previous sometimes lofty expectations.
When a guesstimate is necessary, we will be consistent and conservative in our approach.