To catch up on all things construction in Cayman Islands, Finance Monthly reached out to Samuel Marcus Menzies-Small, the Founder and CEO of Small Engineering Limited and SEL Consulting Limited.
Can you tell us about the products that Small Engineering Ltd. offers?
The products and effects that we offer our clients are firstly 28 years of Civil and Mechanical Engineering knowledge and experience. My concentrate degree is in Civil Engineering. As for our Civil Engineering (construction firm), we are the first of our kind to provide Quad-lock ICF - a panel type ICF wall system consisting of panels, ties, metal track and metal brackets. Quad-Lock Panels are made with high density, fire retardant expanded polystyrene (EPS) which uses no formaldehyde, HFCs or CFCs. Seven panel types and eight types of plastic ties allow virtually limitless design options, using standard components. R-values range from R-22 to R-59 and more - the highest in the industry.
In what ways have your offerings advanced over the years?
From concept to distribution - from a small office in my home after a devastating hurricane (Hurricane Ivan in 2004) and after complete mass building inspections, I was able to analyse an affordable, safe and lightweight system that would get the Island to its usual efficiency.
What are the main challenges that you and your firm face? How do you overcome them?
The main challenges I face is separating business with pleasure, as life does need balancing.
The challenges that my firm faces at the moment are connected to the market – I think that every business can agree in this capacity. Every problem has a solution and my piece of advice for finding the solution to your specific problem is to try to be futuristic and realistic, read a lot and don’t underestimate the power of networking.
Where do you see the company in 2-3 years?
In 2-3 years, I envision our company expanding into the other Cayman Islands and Jamaica, providing products and services to compliment the issue at hand, whilst offering affordable problem solving.
Why should your clients choose Small Engineering and SEL Consulting over your competitors?
We are in a class uniquely by itself. The web of qualifications, knowledge and experience that we obtain along with our clientele fee(s) are slim to none. We are the Ritz Carlton and Audi of our trade.
What’s your involvement in the community?
We support The Maple House of the Cayman Islands in respect to the late Joshua J Bodden, The University of the Cayman Islands, as well as local artists and special great minds that are on the rise in the community.
For more information, please go to: https://www.facebook.com/SmallEngineeringLimited
Dickerson Wright, PE, is the founder, Chairman, and CEO of NV5 Global, Inc. (Nasdaq: NVEE), an infrastructure engineering and environmental services firm with over 2,000 employees and 102 offices internationally. He has 35 years of uninterrupted experience in the engineering sector and previously founded US Laboratories, took it public, and sold the company to Bureau Veritas in 2002. Mr. Wright then served as CEO of Bureau Veritas US where he grew operations to $280 million in revenue. In 2009 he started NV5 (then called Vertical V) through the acquisition of Bureau Veritas’s construction quality assurance practice in the US and shortly after, the acquisition of Nolte Associates (the “N” in NV5). NV5 went public in March 2013 at $6.00 a share with a market capitalization of $25 million and today trades at $37.00 a share with a market capitalization of over $400 million.
Could you tell us a bit more about NV5 – how did it develop into the company that it is today?
The roots of NV5 are really in our management team, which has been together over 20 years through the founding and sale of US Laboratories, through Bureau Veritas, and the founding of NV5. We’ve done over 50 acquisitions together in this time, and we believe in running a very flat, vertically structured organization (the “V” in NV5 is for vertical) where entrepreneurial leaders are given an opportunity to grow the specific business in which they are experts. We also believe in having partners, not key employees, so we drive stock very deep into our organization. NV5 has five service verticals: construction quality assurance, infrastructure, energy, environmental, and program management. We achieve organic growth by cross-selling our services among these verticals, so we are able to continually decrease sub-consultant fees by doing work in-house. We also grow through strategic acquisitions, which expand and deepen our service offerings within these five verticals.
What goals are you currently working towards with NV5?
We are aiming to reach $600 million in revenues by the end of 2020 and 12-15% EBITDA margins. We exited 2016 with 8% organic growth, which is well above the industry standard of 5% and we plan to keep growing organically through synergy, cross-selling, the scalability of our back office, and the integration of strategic acquisitions. The struggle, as our company gets larger, is to maintain a flat organization with many points of entry and resist the tendency of large companies to become organized geographically or in a matrix fashion. We don’t want our expert practitioners to become highly paid administrators. If someone is an expert in energy services, she or he should be working on expanding our energy services business, not running a region of the country that provides many services.
You have over 35 years of uninterrupted experience in managing and developing engineering companies - what have been your major achievements to date?
I think over the years our team has developed a really strong business strategy that we’ve learned through trial and error, and so now our experience has taken us to a place where we are not perfect but we make very few errors. This is especially important if a company is as acquisitive as we are. We’ve become known in the space for doing deals in the range of $5 to $50 million, and we won’t do a deal if we don’t perceive a cultural fit - our culture is one of growth and value for our shareholders. We also insist on our shared services platform. The acquisition has to be on our financial and IT platforms, so we can measure and track everything the same. They have to use our in-house legal counsel, so we don’t take risks on big contracts or projects and risk is managed in every single contract. They have to use our HR services, because we want everyone to have the same benefits structure, to have an annual performance review, and to have the same opportunities to advance within our organization. And they have to participate in our M&A program. We often get some of the best leads from our operators. If any of these changes seems onerous or undesirable to the acquisition, we won’t do the deal. There are over 140,000 engineering companies in the US and we have as many deals as 10 in the pipeline at all times. There are plenty of opportunities and it is a very fragmented industry.
Website: https://www.nv5.com/
AMC is a firm of independent consultants offering expertise and professional advice to the exploration, mining and mining finance industries from our offices in Adelaide, Brisbane, Melbourne, Perth, Toronto, Vancouver, Singapore, and Maidenhead. AMC provides consulting services in the fields of Geology, Mining, Geomechanics, Feasibility studies, Mine optimization, and Mining Business Improvement services, among others.
Mark Chesher is a Principal Mining Engineer, who’s worked on feasibility studies for AMC clients for the past 17 years, which follows his 18-year experience in operational roles.
Mark has managed feasibility studies in Australia and other countries (including Finland, Russia, Fiji, Mozambique, Eritrea and Central African Republic) for gold, platinum, base metals, uranium, magnetite, phosphate, potash and mineral sands projects. Interspersed between these major pieces of work, he has also conducted operational reviews and valuations of many operations.
He’s also worked in Russia for the past 3 years, seeing significant mining opportunities there, as well as in other FSU countries. Mark is about to back this confidence by moving to Moscow later this year to pursue an expanding AMC client base. Here, Mark tells Finance Monthly about AMC Consultants, the mining industry in Australia and his experience in the sector.
Australia is well known for its mining industry - what are currently the hottest topics being discussed on mining in the country?
The end of the mining boom has dominated the Australian media commentary for the last 4 years. Reduced commodity prices, leading to reductions in jobs and royalties received by State governments, iron ore in particular, has brought the impact of the mining industry on the general community sharply into focus.
Behind the scenes though, mining operations have been pushing hard to overturn attitudes of the mining boom, where advice to companies was to expand production at any cost. This of course led to overcapitalization of operations and higher unit costs. They subsequently found it very difficult to adjust once the downturn inevitably arrived.
Mining operations have been concentrating on productivity improvement over the last 4 years – basically a return to good mining practice. More proactive companies are well advanced and we have been helping to achieve some of their goals.
With the emergence of “Big Data” in recent years, the mining industry started to think differently about its business models, and concepts like disruption, autonomy and centralised control entering common language. A mining operation generates an enormous amount of data, which can support many productivity improvements leading to improved unit cost performance. AMC holds a competitive advantage in this space, offering clients “Online Mining Intelligence” and “Performance Benchmarking” services from experienced professionals.
What attracted you to the field of mining engineering?
Growing up in Brisbane, Queensland exposed me to the impact of mining through coal and base metals operations – particularly at Mt Isa. My older brother also moved into Metallurgy, so I became aware of opportunities afforded by the mining industry.
I found that mining engineering suited my desire for overviewing mining operations and integrating separate disciplines to provide better overall outcomes for projects. Managing feasibility studies, in particular, requires overall understanding of geology, mining, processing, infrastructure, transport, environmental, social, economic, project implementation, and government factors.
Can you tell us a bit about your career path prior to joining AMC Consultants?
My early career involved moving to a variety of operations around Australia. I spent 12 years in three gold mines and a bauxite mine gaining a basic grounding in the design and operation of these mines. Experience that has been particularly important in later years of managing and planning operations.
I then moved into management of a mid-sized gold mine, rising to the role of operations manager, and then on to the Mining Manager’s role at the large Murrin Murrin Lateritic Nickel operation.
In all these roles, I generally had overall responsibility as Competent Person for the reporting of Ore Reserves. This gave me a growing insight into factors such as equipment selection and specification, dilution and ore loss estimation, pit design, scheduling and budgeting and operations management.
In 2000, I joined AMC and really enjoy the ability to work on a variety of projects without having to move companies. I have seen several industry cycles and have a great respect for the Australian mining industry’s ability to change and adapt each time there is a downturn.
Tell us a bit about your role as a Principal Mining Engineer for AMC Consultants? What are the most common projects/operations that you work on?
The most common projects are gold feasibility studies at varying levels of confidence (Concept, Pre-feasibility or Feasibility). There is always the challenge in this environment of falling grades and increasing difficulty of deposit exploitation.
Being a Principal Engineer in the AMC Open Pit group provides an opportunity to work on a diverse range of projects with 14 engineers (six of them Principals with more than 30 years of experience). I find this a very collegiate environment with a wide variety of opinions and approaches available to apply to our projects. There are often well-trodden paths for metallurgy, mining and development, or there can be difficult projects that are at times very challenging, requiring novel approaches and use of all our skills to ensure the best possible assessment for our clients.
What motivates you about your role?
I enjoy the reward of seeing projects come to life after starting as several sets of data collected at different times and with a variety of techniques. Turning that data into usable information and then developing viable plans takes planning and forethought to provide the development plans at the right times. Even if the study shows a negative result, I find great satisfaction in understanding the problem and providing objective advice to our client on the way ahead.
Having been in the industry for many years, I now enjoy helping others at AMC achieve the same sort of satisfaction that I receive. Mentoring takes a long time to show results, but seeing my colleagues grow and develop their experience is very gratifying.
What are the challenges associated with managing feasibility studies for precious metals projects?
Many study teams lack a clear idea of the study objectives and lack direction on the important features of the study and the outcomes required. For example, a pre-feasibility study is the opportunity to assess trade-offs relevant to the project and determine a project Basis of Design before conducting a costly feasibility study (where the focus is on detailed design of all project components). It is also the time to optimize the project to achieve the goals (perhaps maximum value, minimum capital cost, maximum reserve etc).
Precious metals projects have their own set of challenges. I think they are most prone to public expectation and the temptation for being “fast-tracked” to achieve a certain window of development opportunity. Early conceptual plans are prepared on limited data and for low cost, but often form the basis for early release to the public, sometimes with much fanfare, only to find that more rigorous study does not support the expectations already made public. This can force the project team to confirmation bias and a “making it feasible” approach, rather than satisfying the key question “Is it feasible”, and then developing an optimum solution.
What are the most common types of issues that arise during a feasibility study for precious metals projects and how do you help resolve these swiftly?
The Feasibility Study stage is usually the most expensive, where the focus is often on the infrastructure and plant equipment design, cost estimation and financial analysis. However, analysis by AMC over the last 20 years showed that around two thirds of project failures are due to: poor resource estimation; poor mine design and scheduling; or poor metallurgical testing and scale-up. So it seems to me that we should be focussing our efforts on collecting reliable data in these areas and then developing a robust Basis of Design at Pre-feasibility stage before moving to Feasibility study.
An Independent Audit of a Feasibility study, and the underlying data, is an essential check on the study logic and provides a useful “circuit-breaker” enabling problems to be highlighted and discussed before a final commitment to the next stage.
Over the years, which would you say has been your most successful and rewarding project, and why?
Probably the Pre-feasibility study for Cannington Silver and Lead Mine extension. Two AMC teams studied, in parallel, open pit and underground mining methods for the same orebody. My responsibility for the Open Pit area encompassed surface hydrology, ground water hydrology, geotechnical, and environmental factors, as well as mining. The company chose the underground option to take forward for further study and ultimate development. While it wasn’t the open pit option, I felt satisfied that the options were well-researched and the grounds for development were sound.
Is there anything else you’d like to add? (OR something like: What is your message to our readers about the mining industry?)
The mining industry is certainly becoming more global and I think we will see increasing mobility of people and companies. This provides a great opportunity for us all to take advantage of improvements right across the global mining industry. Thus, we all need to be alert for these opportunities as they arise.
Website: www.amcconsultants.com
