Luc ten Have – Best Practices For Investing In Junior Exploration Stocks
Luc ten Have, private resource investor and Founder of www.GoldDiscovery.com, joins me to review some of the best practices for investing in junior exploration stocks, some lessons he’s learned over the years, and which of these companies have his attention at present.
We start off looking at the volume and interest coming back into the commodities and into the TSX Venture Exchange, and how he goes about filtering down the large number of companies into the ones that pique his interest for their value proposition. He mentioned Targa Exploration (CSE: TEX) (OTCQB: TRGEF) as a company exploring for lithium, that just made an interesting gold discovery in their till sampling, that caught his attention, but presents an analysis of what are the upsides versus the downsides. This leads into discussions about share structure, the warrants in a deal, and how aligned a company management team is with shareholders based on their stake holding in a company and continued participation during capital raises. We also discuss the nuances around a strategic investor coming into junior resource stocks, and why he liked the setup in Montage Gold (TSXV: MAU) (OTCQX: MAUTF) as an example, where the Lundin family came in as strategic shareholders.
Next we talked about opportunities that may get overlooked by the market due to jurisdiction or because there was a period of no news, with a prime example being the Sun Peak Metals (TSXV:PEAK) (OTCQB:SUNPF) story, where they had to pause drilling for a few years in Ethiopia, but now have multiple drill targets on a large project to follow up on, picking up from the knowledge and experience they already had working on this project from before they had to pause operations a few years back.
We also circled back around to the ongoing developments with Aurion Resources (TSXV: AU) (OTCQX: AIRRF), where their JV partner B2Gold (TSX: BTO, NYSE: BTG) agreed to accept an offer, from Rupert Resources (TSX: RUP) (OTC: RUPRF) to acquire B2Gold’s 70% interest in the joint venture between B2Gold and Aurion, which owns properties located in the Central Lapland Greenstone Belt in northern Finland. Aurion decided not to exercise their Right Of First Refusal (ROFR) on this portion of their JV project, but Luc was keen to point out that the deal is not closed yet between Rupert and B2Gold, and that there still are a few different strategic alternatives and options between Rupert and Aurion that may surface from this deal. It is going to be fascinating to watch how this prospective mineral endowment in Finland will be consolidated over time.
Luc also mentioned a few other companies, like Lavras Gold (TSX-V:LGC, OTCQX:LGCFF) and Azimut Exploration (TSXV: AZM) (OTCQX: AZMTF) that are doing compelling drilling on multiple targets, but have a solid management teams that have made him more comfortable with the overall strategy to keep executing on their exploration plans. With all of the companies we discussed, Luc reinforced the idea of serious investors getting to know the management teams and speaking to them periodically to better understand the thinking behind the decisions they were making, and to occasionally challenge the choices made, to see how they respond and if they really have conviction in the path forward.
We wrap up with Luc ten Have getting an overview how his platform at Gold Discovery can assist resource investors in their due diligence, as well as some upcoming changes on tap for analyzing opportunities in junior mining stock investing using his platform.
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