Ontario Teachers’ Pension Plan Spent Months Doing Due Diligence On FTX, Still Invested $95 Million
What’s astonishing about FTX was how its founder and poster boy Sam Bankman-Fried was able to convince some of the world’s largest institutional investors to buy into the hype and pour money into the now-bankrupt company.
But really, the plot’s simple enough: institutional investor needing to take relatively small, high-risk investments in the emerging technology business meets an MIT-educated, Toyota Corolla-driving, t-shirt-wearing, effective altruism-babbling nerd with big hair and big dreams.
Did FTX’s investors and endorsers really do due diligence or was it just something along the lines of ‘oh, his crypto empire has gotten so big, so fast, and he likes helping people and donating to good causes and democrats — he must be legit, right?’
Well, as the past few weeks have revealed, it seems that he was not.
The Ontario Teachers’ Pension Plan, with its deep pockets, vast experience, and robust due diligence process, surely saw the red flags. Two are glaring enough to miss: the potential conflict with sister company Alameda Research, and the absence of a board of directors.
Still, perhaps chalking it all up to the nature of the emerging industry, pushed through with it. After months of due diligence, the fund put US$75 million into two FTX entities in October last year as part of a $420 million fundraising round. OTPP was also in good company, as other major investors for this round included Sequoia Capital, Lightspeed Venture Partners, Singapore’s state-owned Temasek Holdings, and Tiger Global Management. And then in January of this year, the fund put $20 million in FTX.US, the US entity of the Bahamas-based exchange.
Olivia Steedman, the OTPP 20-year veteran currently heading the fund’s venture capital arm, led the FTX investment. In 2021, her team of about 25 investment professionals based in Toronto, San Francisco, London, and Hong Kong generated a 39% return on its portfolio, with investments in other larger companies like Elon Musk’s SpaceX, according to Bloomberg.
“As a global, technology-driven innovator in the financial sector, FTX fits well with our mandate,” Steedman said in a press release announcing the October 2021 fundraising. A little over a year later, OTPP announced that they will be writing off the $95 million investment in the now-bankrupt crypto exchange.
Many others, including the celebrities and personalities that endorsed the exchange, are all claiming they did their due diligence, only to be spectacularly burned just months later.
The Globe and Mail reported yesterday, that the Pension fund ‘asked a long list of questions related to FTX’s financial affairs, but only received answers to a small fraction of them.’
OTPP’s exposure to FTX makes up a mere 0.05% of their fund. Most other institutional investors will also just write FTX off their balance sheets. But it won’t be the same for many of the FTX’s over 1 million customers, especially not for those who put in their life savings — all because they bought into not just Sam Bankman-Fried, but also these celebrities, these big-name investors, and their ‘due diligence.’
Information for this briefing was found via Bloomberg, Coindesk, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
After a little bit of contemplation ! Yes ,it does seem a massive neglect of due diligence! But I must be cautious in my approach to this issue as I am very heavily concentrated in a small mining company called Foran Mining in which the Ontario Teachers Pension is also quite heavily invested although not to the percentage I am based on total net worth.
So ! I hope the Ontario teachers Pension Board was a victim of fraud and not due to lack of knowledge of what they where buying into? As it is my believe that that made sound judgement when entering into agreements with Foran Mining in which Fairfax Financial is also involved as we all see this stock as a great investment.
Here is hoping that FTX commited fraud and it was not solely negligence on the Part of The Ontario Teachers Pension Board.As their investment directly and indirectly accounts for over $200,000,000 in to Foran Mining. And in that particular investment I think they made a sound wise and socially responsible investment.
The game is tough and the possibility of losses should always be considered it is the nature of capitalism .
All the very best
Edward HC Graydon
Graydon Investments Group LTD
Now, Sprott is in .
I was buying last week and adding to my position ,so lets hope this news is a contributing factor to its rise in price.
Foran Mining (TSX:FOM) has reported initial assay results from the 2024 winter drilling program at the Tesla and Bridge Zones, which are part of the company’s 100% owned McIlvenna Bay Project in Saskatchewan. The initial results from recent Tesla Zone drilling continue to confirm the continuity of mineralization along strike, currently up to 1,050 meters, beyond the limits of the modeled conductor.
Erin Carswell, Foran’s Vice President, Exploration, commented in a press release: “The 2024 Winter drill program has started on an exceptionally positive note, with results from hole MB-24-290 representing a significant strike extension of the Tesla Zone. Now measuring over one kilometre long and extending beyond the original EM target length, Tesla is rapidly expanding beyond our expectations as a zone of strategic importance for future growth initiatives. Additionally, two new up-dip intersections have extended Tesla towards surface confirming the potential for shallower mineralization, with assays from these latter intervals expected shortly. Of particular interest, the southernmost Bridge Zone intercept encountered elevated gold mineralization when compared to McIlvenna Bay reserve grades, highlighting the possibility of growing precious metal credits. We are looking forward to maintaining this momentum and provide updates on our developments from Tesla and the Bridge Zone as the important ice drilling season unfolds”.
The winter drill program began on January 11, 2024 with six drill rigs currently active. Four drills are focused on expanding the main Tesla Zone with step-out drilling along strike, up-dip and down-dip, while the remaining two drills are focused on definition drilling of the Bridge Zone. Foran plans to complete up to 20,000 meters of drilling during this winter program, with initial assay results from the first two holes reported here.
The Tesla Zone, discovered in 2022, lies adjacent to and approximately 300 meters north of the McIlvenna Bay Deposit. Since discovery, the Tesla Zone has been successfully intersected by 20 drill holes defining mineralization over a 1,050 meter strike length and 500 meters of dip extent. These holes have intersected multiple massive and semi-massive copper and zinc mineralized horizons and associated stringer zones that remain open in all directions.
The Bridge Zone occurs in a ~300 meter corridor between the current southernmost drilling at Tesla and the northernmost drilling at McIlvenna Bay. Discovered in 2023 and confirmed with three drill holes, the Bridge Zone typically contains multiple lenses of massive, semi-massive and stringer style sulfide mineralization. Detailed core observations and results from the ongoing McIlvenna Bay Orebody Knowledge Study have identified important geological markers within the Bridge Zone that link the two areas. This suggests a post-mineralization fold connects Tesla and McIlvenna Bay. Mineralization in the Bridge Zone appears to correlate with ore zones in the McIlvenna Bay Deposit.
The recently completed holes TS-24-17 and TS-24-18 targeted Tesla’s up-dip expansion potential from known mineralized zones. While assays are pending, logging, XRF and EM data confirm successful intersections of the main Tesla Zone horizon an average of ~160 meters up-dip from existing mineralized intersections in the central Tesla Zone. Significantly, EM surveys indicate mineralization continues at least 50-75 meters further up-dip and 200 meters along strike, providing a robust target model.
Figure 2 – Three-dimensional oblique view of the Bridge Zone, highlighting its location between the Tesla Zone and McIlvenna Bay Deposit. Red intersections reflect mineralized zones, purple are 2024 winter program minera. Source: Foran Mining Corporation
TS-24-17 intersected mineralization related to the main Tesla Zone approximately 179 meters updip from a 7.1 meter intersection grading 3.51% CuEq from 2023 drilling. TS-24-18, 100 meters southeast, also intersected massive and semi-massive sulfides with stringer zones related to Tesla, 171 meters updip from a 2023 intersection grading 4.11% CuEq over 34.3 meters. The success of these shallower holes has prompted more intensive updip exploration planning utilizing navigational drilling for the 2024 summer program. Historic northern McIlvenna Bay drilling, which intersected shallow copper outside current resources, will also be reviewed.
The current winter drill program is focused on Tesla and the Bridge Zone with two main strategies:
Continue assessing Tesla through wide-spaced step-outs to expand known mineralization along strike and up/down dip, increasing definition of known horizons.
Target Bridge Zone connections with Tesla and McIlvenna Bay to understand stratigraphic/structural relationships, fold/fault geometry and potential for upgrading mineralization in structural traps.
Drilling continues with six rigs. To date, ten holes plus one wedge have been completed encompassing 11,900 meters. Two rigs target the Bridge Zone, while four focus on Tesla step-outs. The ice-based program is anticipated to run until early April 2024, subject to ice conditions.
Following ice-based drilling, work will transition to land-based collars to continue Tesla Zone definition through summer. Several twinned wedges are also planned to provide mineralized material for early metallurgical testing. Expansion drilling will continue to focus on the target areas shown in the accompanying figure.
Foran will report further assay results from the winter program as they become available over the coming weeks. The success of the initial holes, particularly the Tesla Zone intersections and updip extensions, continues to demonstrate the potential for significant expansion of the deposit. The company remains well-funded to advance this large-scale exploration and development project.
Highlights from the results are as follows:
Drilling at Tesla encountered thick zones of mineralization, with the uppermost zone representing a 140m strike extension of the Tesla Zone to the southeast, expanding the strike length of Tesla to 1,050m. Highlight intercepts from MB-24-290:
27.4m grading 1.03% Cu, 2.17% Zn, 28.3 g/t Ag and 0.20 g/t Au (1.83% CuEq), including 8.3m grading 1.28% Cu, 3.62% Zn, 35.7 g/t Ag and 0.03 g/t Au (2.43% CuEq).
Mineralization has now extended beyond the original bounds of the 900m-long surface Electro-Magnetic (“EM”) conductor target.
Assays for lower zone are pending.
Drilling at the transition zone between the McIlvenna Bay Deposit and the Bridge Zone intersected two mineralized intervals, highlights from MB-24-292 below include elevated gold intercepts:
8.5m grading 1.56% Cu, 2.05% Zn, 24.3 g/t Ag and 0.65 g/t Au (2.52% CuEq), including 2.6m grading 0.85% Cu, 2.64% Zn, 19.5 g/t Ag and 1.59 g/t Au (2.58% CuEq).
Assays for the lower zone are pending.
Assays are also pending from two drillholes targeting Tesla up-dip extensions which intersected significant thicknesses of mineralization located approximately 160m up-dip of previously drilled mineralization, indicating a total up/down dip extent for the Tesla Zone of at least 500m in this location. Subsequent borehole EM surveys on these holes indicate that mineralization likely continues at least 50-75m further up-dip and at least 200m along strike in the up-plunge direction in the central part of Tesla.
Tesla remains open in all directions for expansion and increased understanding of the zone is the focus of the current program.
Table 1 – 2024 Winter Bridge Zone Assay Results1
Hole
Zone
From_m
To_m
Interval_m
Cu %
Zn %
Ag g/t
Au g/t
CuEq %
MB-24-290
MS/CS
1021.8
1049.1
27.4
1.03
2.17
28.3
0.20
1.83
Including
MS
1021.8
1030.1
8.3
1.28
3.62
35.7
0.03
2.43
And
CS
1030.1
1049.1
19.0
0.91
1.54
25.0
0.27
1.56
MB-24-290
CS
1050.8
1098.3
47.5
0.50
0.65
9.5
0.05
0.72
MB-24-290
CS
1103.8
1105.2
1.42
3.06
0.16
21.4
0.01
2.94
MB-24-292
MS
871.6
880.0
8.5
1.56
2.05
24.3
0.65
2.52
Including
MS
871.6
874.2
2.6
0.85
2.64
19.5
1.59
2.58
And
MS
878.1
880.0
2.0
2.33
1.14
38.6
0.47
2.91
Note 1: Composite widths are presented as core lengths. Additional drilling will be required to confirm the geometry of the mineralized zones, but generally true widths are thought to be 80-85% of core length. Intervals generally composited using a 0.5% Cu cut-off grade in stringer zones, except MB-24-290 from 1050.8-1098.3m that used a 0.3% Cu cut-off grade. Copper Equivalent values calculated using metal prices of $4.00/lb Cu, $1.50/lb Zn, $20.00/ounce Ag and $1,800/ounce Au and LOM metallurgical recovery rates derived from test work on blended ores for the McIlvenna Bay Deposit completed as part of our April 2022 Feasibility Study: 91.1% Cu, 79.8% Zn, 88.6% Au and 62.3% Ag (MS – massive / semi-massive sulphide, CS – Copper Stockwork/Stringer). To date no metallurgical test work has been completed on the Tesla Zone or Bridge Zone mineralization.
Table 2 – 2021 Historic Assay Results from MB-21-244a1
Hole
From_m
To_m
Interval_m
Cu %
Zn %
Ag g/t
Au g/t
MB-21-244a
107.5
114.8
7.3
1.79
0.01
0.12
0.00
Including
110.2
111.5
1.4
4.28
0.01
0.17
0.01
Note 1: Composite widths are presented as core lengths. Additional drilling will be required to confirm the geometry of the mineralized zones, but generally true widths are thought to be 80-85% of core length. Intervals generally composited using a 0.5% Cu cut-off grade in stringer zones.
One thing I have learned in my years of buying and participating in the game of stock , trades and the ability to make a living at it is try and set aside ego.And remember to some degree it is luck and everyone takes losses .And greed is a killer. I like freedom over jail time and it is for this reason we have never gone public as regardless of intent they will find fault.
Have a great day !
Edward HC Graydon
Graydon Investments Group LTD