The Maven Letter: April 19, 2016
Hello all!
Apologies for missing last Monday. I did my very best to take a week off, which for me meant running a 50-km trail race in the Columbia River Gorge and then spending a week in Portland running, biking, and eating with my fiance before heading to central Washington State for his 25-km trail race.
It’s hard taking time off at this stage in the game. Gold is holding its ground, companies are raising money and doing deals, drills are turning – life is returning to the mining sector and that means opportunity abounds.
But you have to work for it. I met with the president of a Maven portfolio company today.
His company has cash and wants to deploy it, as a strategic investment in another pubco or by buying a project. He said the hardest part is that “there is still so much crap out there.”
Crappy projects that only ‘work’ at US$1,400-per-oz. gold or US$4-per-lb. copper. Assets where ownership issues fragment the parcel of interest. Geologic intrigue where tenure is unreliable or infrastructure non-existent. And companies (this one really gets me) where management is really only interested in cashing in on lofty change-of-control payouts. These teams aren’t interested in a project deal, even if that might put cash in the bank, or in a joint venture, even if that would advance their asset and create value. All they want is a takeout offer that triggers management payouts.
I wish I could say that bear markets strangle out the crap, but crappy exploration projects and greedy management teams have unfortunate staying power.
That is why it takes such care to invest successfully in this sector. There are many ways to do it: you can day trade on news events or metal price moves, you can track promotion efforts and ride the ascent, you can put your money with people or teams who have proven their ability to create value, you can work area plays or specialty metal bubbles, you can limit your mining risk but retain metals exposure through streaming and royalty companies, you can play the high risk-high reward game of exploration, and on and on.
The Maven portfolio is structured to balance the best upside opportunities with a range of risks and timelines. Some stories I expect to play out in short order; others will require longer time lines. Some are very high risk; others are more reliable. A few are bets on promotion efforts or specialty metal bubbles.
Each newsletter writer has his or her own system. All have merit, as long as the writer is not being paid by the company in question for the recommendation.
Newsletter writers who do not take money from companies are Subscriber Supported. We earn our living selling subscriptions to our ideas and knowledge (and from successful investments!). That is how I operate: the Maven Letter chronicles what I am buying and selling and thinking in mining and the Maven portfolio is my own portfolio. Coverage is not for sale. My recommendations are not biased by payments of any kind, be it cash or options.
It’s the structure that makes sense to me. And it’s the structure that several letter writers I respect also use.
In a few weeks, a group of us are getting together in Vancouver to talk shop and trade investment ideas. Hosts Eric Coffin of HRA Advisories, Brent Cook and Joe Mazumdar of Exploration Insights, Brien Lundin of Gold Newsletter, and me the Resource Maven are excited to also welcome two special guests: Jay Taylor of his namesake Gold, Energy, and Tech Stocks newsletter and Jordan Roy-Bryne of The Daily Gold.
We’ve each invited our Top Pick investment companies to present their stories and answer your questions.
If that sounds like too much perspective to pack into one day – you’re right. That’s why we decided to extend the event through the weekend, making the third Metals Investor Forum a two-day event.
It’s happening May 14-15 in Vancouver. We’ve moved to a new, larger location at the Rosewood Hotel Georgia. And we would love for you to join us.
Click here to reserve your tickets.
Each company will give a short presentation. Each letter writer will also speak, conveying their thoughts on gold, silver, copper, uranium, zinc, interest rates, exchange rates, inflation, economic growth, jurisdictional risk, options for accessing development capital, share structures, and all things mining.
And just as important as the official sessions are the lengthy catered coffee and lunch breaks, which give attendees ample opportunity to ask management teams and letter writers all of your questions.
We are still finalizing the list of presenting companies.
We’ll be able to share it with you soon, but for now take my word that it is a stellar list. If you’re looking for new exploration, development, and mining investment ideas, if you want updates on some of the hottest stories in the sector direct from management, if you’d like to spend the day talking mining with like-minded investors and professionals – this is the event for you.
Tickets are selling out fast. Reserve yours today!
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