Mining company’s CEO a precious metals whiz kid
The title, the background, the income, the designation by Forbes as one of the most powerful young CEOs in all the land — they paint a very stark and stuffy picture of Mitchell J. Krebs.
For the past year, he’s been president and CEO of Coeur d’Alene Mines Corp., a giant in the precious metals world with revenue growing from $100 million a decade ago to $1 billion now. In just the past year, net revenue from metals sales has doubled.
Krebs earned his bachelor’s degree in economics at Penn’s prestigious Wharton School, then topped that with an MBA from Harvard. His business background has been nothing short of blessed, especially, he says, when he crossed paths years ago with a man from Coeur d’Alene named Dennis Wheeler.
Businessweek calculated Krebs’s 2011 fiscal year total compensation in the seven-figure range, somewhat above the median annual income in North Idaho.
And in February, Forbes compiled a list of the 20 most powerful CEOs in the U.S. who are 40 or younger — Krebs turned 41 last month— and Krebs weighed in at No. 6. That’s Mr. Mitchell J. Krebs, president, chief executive officer, director and member of the executive committee for Coeur.
But the minute that boyish grin flashes? And it does, regularly and brilliantly. Why, that’s Mitch.
Now he’s the guy who just enjoyed a hike at Mineral Ridge with his golden retrievers, Buddy and Buster — “Between the two of them I think we have one good golden retriever,” Mitch jokes; his wife, Debby; and his 1-year-old daughter, Emma. Emma may have been happily strapped to her daddy’s back, but Krebs would be the first to admit that as the head of Coeur, he isn’t carrying the company alone.
The preparation of Mitch Krebs to head Coeur began 41 years ago in Storm Lake, Iowa. More precisely, it began in the farmlands around the rural community of about 8,000 Midwesterners.
“It’s amazing how many similarities there are between agriculture and mining,” Krebs said of the earthy commodities that provide livelihoods for many and sustain life itself. Not that he was particularly enamored of life in Storm Lake: “Wherever you grow up, you think that’s the worst place on Earth.”
Krebs knew western Iowa wasn’t really so bad, but he was eager to start the next stage of his life in college. He landed at the University of Pennsylvania in west Philadelphia “in Levis and flannel,” he said, “definitely square peg, round hole.
“I brought my bike. I think it lasted about 20 minutes before it was stolen.”
The road to prosperity hit more than that yield sign, too. Krebs became well-acquainted with panhandlers, a big-city phenomenon he’d been spared in the land of corn and camaraderie.
“I didn’t know it was optional [to give],” he said, laughing. “A thousand dollars later, somebody clued me in.”
But Krebs was definitely on his way to a career in finance, and after graduation he took a job in investment banking in New York City.
“I also met some people there who wanted money,” he said.
Krebs worked. Boy, did he work. He’d arrive at the office around 9 a.m. and wouldn’t get out until 10 or 11 most nights.
“That was not a sustainable lifestyle,” he acknowledged.
Nor was it his goal. The way Krebs planned it, he’d continue his education but only after working for a year or two in a second job. That way, he understood, his chances of being accepted to a good grad school would improve. So in his search for Job No. 2, he learned of a mining company based in Coeur d’Alene, Idaho, and he met the company’s CEO, a Silver Valley native named Dennis Wheeler. Job in hand, Krebs moved from Manhattan to the mountains, and he worked for Wheeler from 1995 to 1997, applying to grad schools — with Wheeler’s blessings — when the time was right.
One night Krebs pulled into his Hayden rental and, he said, the headlights rested on a package at the doorstep. It was the acceptance package from Harvard University, where Krebs would go on to earn his MBA.
“The best part of Harvard was the relationships I made and the alumni network, people all over the world,” he said.
After Harvard, Krebs joined Allied Capital in Chicago, but he never lost touch with Wheeler. Eventually, Wheeler hired Krebs again, and for seven years Krebs remained based in Chicago and handled Coeur’s business development. Not only did he see the world, but he became increasingly familiar with the company’s inner workings. And in 2008, Wheeler brought Krebs home to Coeur d’Alene, appointing him corporate CFO.
Krebs concedes that the idea of succeeding Wheeler in the big boss’s seat appealed to him, but he never took it for granted. And at times, he may have wondered if it would ever happen.
“Working with Dennis, with his energy, I thought he’d never retire,” Krebs said with another trademark grin. “Dennis was such a force, larger than life. He would drag everybody across the goal line. Fearless guy.”
Here Krebs paused a moment before concluding: “I learned everything from him.”
So when Wheeler retired a year ago, Krebs’s time had come.
“What I fell in love with here was a commitment to a group of people and seeing things through,” he said. “The follow-through was something I was always serious about. That’s what I wake up every day thinking about: Seeing things through.
“What’s rewarding for me is accomplishing things, succeeding together.”
Krebs points out that while he’s new to the title, he’s an old hand with the company.
“I’m the guy who’s been here since ‘95,” he said. “My job is to get the people, get the team to do things better than I can do.”
So far, so good. A year into the new job, Krebs — and Coeur —are thriving. He’s overseeing the company’s largest single-year investment ever in exploration: a whopping $40 million, with most of that taking place near the company’s four primary “assets.” Coeur operations are focused in Palmarejo, Mexico; San Bartolome, Bolivia; Rochester, Nev.; and Kensington, Alaska.
His goals are crystal clear, if not easy to attain.
Primary personal goal: “Operational consistency, quarter in and quarter out. That’s the basis for everything else.”
And everything else, Krebs said, has to do with “finding ways to fill the hourglass. Every day, we’re shrinking,” he said, referring to finite deposits being mined and the need to find new ones.
Challenges are everywhere, Krebs said. For example, he refers to the threats of “external forces,” which include the impetus of increased taxation levels in Bolivia and Mexico. The more metals prices increase and Coeur d’Alene Mines profits, he said, the further the grand hand of taxation extends.
That holds true at home, too, where a “fiscal cliff” is looming, Krebs said. If Congress allows the Bush tax cuts to expire, he said, Coeur’s corporate tax rate will jump to 43 percent.
One ongoing challenge that might qualify as an internal force has to do with safety and sound environmental stewardship. Mining companies are under constant scrutiny — sometimes, Krebs said, for good reason.
“The industry has brought a lot of this on itself, especially in communities where the industry hasn’t been a good citizen,” he said.
Great corporate citizenship is what Krebs strives to maintain with Coeur. “It’s good business and it’s the right thing to do,” he said.
Safety, he added, is always the company’s highest priority.
“I wake up every morning thinking, ‘Did everyone go home safely at every one of our operations around the world?’” he said.
While it might be an unsavory silver lining to some, the worse U.S. and global economic conditions grow and worries mount, the better things can quickly become for those in the precious metals business.
“I don’t hope those [bad] things happen,” he said, “but if they do, I hope they’re good for precious metals prices.”
Spoken like a true CEO — with a great big boyish grin.
Coeur financial snapshot, 2011
• Record production of 19.1 million ounces of silver and 220,382 ounces of gold
• Net metal sales topped $1 billion — nearly double previous year’s total.
• Operating cash flow increased nearly 150 percent over previous year to $454 million.
• Cash and equivalents increased 165 percent to $175 million at year-end.
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