Veteran geologist Brent Cook, editor of the Exploration Insights newsletter, describes why he’s feeling optimistic about the mining industry in 2015, especially gold and zinc. He also mentions the types of mineral deposits he likes as well as three Canadian gold juniors that he bought recently, all of which have solid management, decent deposits, and are located in safe jurisdictions.
Narrator: Live from the Vancouver Resource Investment Conference, it’s the Small Cap Power Expert Interview featuring Brent Cook.
SmallCapPower: Welcome Brent. What are your thoughts on the current state of the mining industry?
Brent: Well, I’ve been pretty negative the past three years. This year, I think we’re going to do all right. I match myself against the GDXJ, the Junior Gold Miner’s Index. It’s down over the past two years, 86%. I think with the Swiss action, I think we’ve formed a floor, and I expect this year to be positive. I don’t know how positive, but I think it’s going to be generally positive for companies that are competent and know what they’re doing anyway.
SmallCapPower: Are there any commodities that you like in particular?
Brent: I try to focus on economic mineral deposits. I’m looking for in any commodity, a high margin deposit that is good enough that it will attract a major to come buy it. My preference right now is gold. I think gold looks pretty darn, pretty good. Copper longer term, I like the looks of zinc for sure. But really, it’s all about finding a deposit that is high margin enough and profitable enough to attract a buyout. That’s what I’m after.
SmallCapPower: Can you mention any favorite stocks that you might like for our viewers?
Brent: Well in December in my newsletter, I bought Kaminak Gold (TSXV:KAM). I bought Premier Gold Mines Limited (TSX:PG) and I bought Lake Shore Gold Corp. (TSX:LSG). I bought those because good companies, solid management, honest, decent deposits, in a safe jurisdiction. My expectation was that they will move up into this year, if it’s a good year. So far, we’re doing all right.
SmallCapPower: What red flags do you personally look for when investing in juniors?
Brent: Certainly you want to look at this stage, if you’re looking at the juniors their cash position, the obvious management. Are they competent? Are they honest? And I think you also have to evaluate management based on what their target is, what their mental target it. Is it reasonable? Do they understand what they’re looking for? Do they know what it looks like when they see it in a drill hole? And more importantly, do they know what it doesn’t look like? Do they know when it’s a bust and to get out of it. Because probably the biggest problem with this industry, junior explorations industry, is they don’t know when to quit. People continue plowing money into projects that don’t stand a chance. So that’s the real fatal flaw you got to watch for.
SmallCapPower: Thanks. So how can viewers find out more from you?
Brent: Ah, good question. My Web site is ExplorationInsights.com. There’s lots of information there, articles I’ve written, links to informative papers. So it’s all there.
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