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I recently had the chance to interview Brent Cook of Exploration Insights. Cook is an economic geologist and one of the most respected newsletter writers in the business, so it is no surprise that every time I get the chance to speak with Cook I learn something or am reminded of a key aspect of investing in this risky junior resource sector.
This conversation was no different, as among other things, Cook highlighted one key to success for these junior exploration companies, which is to turn through as many prospects as possible, with minimum dilution to early shareholders.
Currently, I think there is only one business model in the sector which can give you this, the prospect generator model. Those prospect generating companies which do it well, have tight share structures and the ability to make a dollar go further than most in the junior sector.
All business models have positive and negatives, prospect generation not being excluded. However, in my opinion it give investors the highest chance of being right over the long haul.
Along with some discussion about prospect generation we also covered:
- His outlook on gold
- A rising zinc price and its affect on the junior zinc companies
- The electrification of the world and its affect on the resource sector
- Major mining companies, why and how they invest in junior companies
Without further ado, A Conversation with Brent Cook