We called up Brent Cook, economic geologist and editor of Exploration Insights, for a quick conversation on the junior resource sector as we head into the summer doldrums yesterday (MP3 download link).
Mining stocks are cheap but Brent’s not calling the bottom yet. “If you buy something in this market, be prepared to buy the same number of shares at half the price and have enough money to do that again, assuming your thesis holds together,” he told us.
Brent is optimistic for the good projects, however: 100 of the 1800 TSX-V companies are undervalued, he believes. Eventually, larger mining companies will need to acquire their deposits. He sees acquisitions picking up in the next 6 to 24 months.
Cook’s main theme was simply for investors to take a longer view of investing in mineral deposits and ignore the short term market volatility. “All we need to do is identify the discoveries that are going to offer a high margin deposit that one of these mining companies is going to have to buy, and if we do that, I don’t care what the gold price does this week.”
In Brent’s mind, there’s good times ahead for companies with real deposits, and it’s his job to figure out just which those companies are. In 2012, an otherwise horrible year for junior mining stocks, his Exploration Insights portfolio was up over 50%. “Brent does an anomolously good job as a newlsetter writer,” Sprott USA Chairman Rick Rule told us.
An MP3 recording of our conversation with Brent is available for download here, with our apologies for the quality as this was our first effort at audio.
Companies mentioned include Colorado Resources (5:30), Lydian International (8:15), Fission Uranium/Alpha Minerals (14:30), and Denison Mines (19:30).
Learn about Brent’s extraordinary newsletter at ExplorationInsights.com ->