Jeff Clark & Jamie Keech: GOLD Stock PUMP and DUMPS Exposed! TWIM Ep 4

Jeff Clark & Jamie Keech: GOLD Stock PUMP and DUMPS Exposed! TWIM Ep 4

[Music]
welcome to this week in mining where we
focus on making money in the metals and
Mining sector I’m your host Jay Martin
this is normally a live show I’m going
to begin this week with an apology today
we are not live I am in Las Vegas at a
conference um learning a bunch of stuff
on video content strategy which I’m
super pumped about but today I’ve got
two amazing guests so just for context
this episode was recorded on April 17th
so about six days ago and a world can
change in six days so we’re going to
keep this as Evergreen as possible and
my mission today is to offer a boot camp
in uh picking winners in the junior
mining business so what I’ve done today
is invite two good friends of mine who
have been some of my go-to brains that I
like to steal ideas from if I’m excited
about a thesis or an investment concept
you know I’ve got two gentlemen on the
show today who have just crushed it in
every gold market and so I’m very very
excited to share their brain Capital
with you guys today um and and they are
Jeff Clark uh whichever side of me he is
on right now of the Pay Dirt prospector
um longtime guest on my show and you
know you’ve been on a handful of times
Jeff and also at my my events in
Vancouver in January so thanks for
making the time today to join me I’m uh
very grateful for that yeah thanks for
having me Jay I’m looking forward to
this and Jamie ke is back for his second
Tour on this week in mining Jam’s the
author of resource Insider close friend
again somebody who’s crushed gold
markets of the past made me a bunch of
money I appreciate that Jamie and uh
thanks for coming on today thanks for
having me so let’s let’s start here um
Gold’s ripping and it’s catching
headlines on mainstream media and and
I’m watching programs like NBC and Yahoo
finance suddenly and you know how how
this happens right when there’s movement
in the market media pundits then add
logic to it and they say oh gold is
taking off because of all the global
conflict or it’s taking off because of
the economic turmoil you know as if that
wasn’t the case like two years ago these
things have been going on right now gold
running but we’re meaning making
machines we got to apply logic to it
Jeff I want to throw it to you right
away here because you’re in this market
good Mark good good uh you’re in this
industry good markets and bad right
you’re allocating cash all the time uh
what are you paying attention to right
now you know gold sector macro what’s
real and what isn’t what are you
watching uh I’m not paying attention to
any macro right
now interesting okay I say that tongue
and cheek because uh so back in the day
when I started at Doug Casey’s firm he
you know one thing he really impressed
upon us is is look you don’t make
predictions and you don’t make
predictions with a timeline and you know
being new back in the day I started
doing that and of course you’re wrong
most of the time most people are wrong
most of the time even analysts who do
this for a living are wrong a lot of the
time so I pulled back from that and I
realized that if I would just focus on
gold itself and the best mining stocks
that I could find that nine times out of
10 the macro picture did matter now of
course at times it did during the you
know 2008 crash the the co crash in 2020
um but even then um I use those uh
especially in 2020 I use that to really
load up on stocks uh and on gold and
especially on Silver at the time and
that was very profitable for me um so
I’ve learned from that and so I’m really
focused just on gold Even in our letter
we don’t even talk about you know the
commitment of Traders rep what the
economy is going to do what the fed’s
going to do is there going to be a
recession oh my gosh you know no we’re
just focused on the very best mining
stocks that we can find and making sure
that you own enough physical gold
outside of the banking system so I found
that by doing that that 90% of the time
I’m going to be better off financially
my portfolio is going to be better off
than if I try to worry and fret and
guess and predict and and forecast
what’s going to happen next with this or
that that and you know actually that’s
the good thing about gold is you know it
can respond to so many different factors
you know that that’s a lot of the the
media thinks they’re experts now with
all these you know uh articles that
they’re coming out but these are
basically journalist journalists that
are looking for content and they uh you
know are not really familiar with the
gold market and they’re pointing at this
and that and it’s really not doing us
all a good service um the great thing
about gold is you can own it and and
it’ll protect you against almost any
kind of uncertainty whatever that
uncertainty may be even black swans and
so that’s what I’m focused on and that’s
why I’m not paying attention to many
macro factors right now now of course I
watch what the fed’s going to do and the
economy and interest rates and all that
jazz but it doesn’t really at the end of
the day impact some of the decisions I
make about what I’m going to invest in I
find that so refreshing
because there is a there’s a there’s a
media mission that exists every day and
then there’s the investor mission right
that and those things do not serve each
other and even Publications that I
really appreciate I mean I read I read
the Wall Street Journal I think it’s
quite good but they have a job and their
job is to find headline news every
morning and every afternoon and as we
know there isn’t headline news every
morning right and every afternoon
they’ll find something and they’ll sell
it as news you know and then we respond
to it and as a consequence investors are
hyper hyper reactive right which does
not serve uh go ahead because we’re
we’re long-term value investors in this
sector Jeff please well I was just GNA
say not to hog the time here but you
know I was at a conference this was
right before Co hit and I was uh at a
company dinner uh we’ll leave them
nameless but they invited you know some
hedge fund managers family office
managers some newsletter writers like my
myself and I struck up a conversation
with a gentleman who was a hedge fund
manager and uh we started talking about
gold versus being invested in in the the
main uh uh stock market the S&P and I
said well come on you know he was kind
of debating me a little bit because he
knew it was kind of a gold bug and he
said well come on the S&P is
outperformed gold and I said are you
kidding me I said gold has outperformed
the S&P Century to date you know and
again this was 2020 but still 20 years
he didn’t even know he actually started
laughing at me and this is a hedge fun
manager someone who’s managing money for
a living he didn’t even know that gold
was trouncing the S&P it still is and he
didn’t know that so I’m I’m really
curious if he still has his job but that
that points that shows you like a lot of
misunderstandings that are out there and
he’s he’s a broker he works in the
industry and he didn’t even know that
Jamie I want to pass uh the same or
similar question to you um when it comes
to macro signals macro news you know do
you have your head up and eyes open what
are you watching or are you detached
from that and you focus on your thesis
similar to
Jeff so you made a interesting point in
your introduction where you said what
people are just waking up right now to
what’s going on in the world with with
changing events uh you know during covid
and since that time we’ve had War we’ve
had plague we have had talk of famine
there’s been you know the seven Horsemen
of the Apocalypse and gold is only
starting to move now and you know the
question of why that is I think can be
answered with four letters
a i s
c and for anyone that’s ever read
anything about a gold company or any
mining company that stands for Allin
sustaining costs which is the
measurement of how much it costs to mine
1 ounce of
gold and that has been going up and up
and up with inflation unsurprisingly you
know the biggest input for most mining
operations is diesel cost as Energy
prices go up it gets more expensive to
mine as wages go up it gets more
expensive to mine as commodi and
infrastructure and all the inputs you
need go up in price it gets more
expensive to m 1 o of gold and the way
what I see happening this escalation in
price is like just an escalation in
price of gold is a reflection of an
increase in the cost of mining an ounce
of gold and I think that’s what’s
driving it right now because there are
many many mining companies major mining
companies right now that are making less
today at what are we at now $2,400 an
ounce gold than they were at $1,800 an
oun gold several years ago
yeah does that what does that tell you
about the market meaning like would you
could you qualify today’s gold market as
a supplier’s market or a buyer’s market
because you know one typically drives
the other and if there’s enough demand
then suppliers can name their price
it’s good to take a step back and think
about that right because you know when
you invest in most businesses uh you’re
looking at their margin right and you
you think of like what a great Tech
business can do and it can be 80 90%
margin a great uh you know manufacturing
business or sort of traditional Business
40 50 60% margin traditionally you know
in Commodities particularly in mining
you see about a 15% margin on average
across the site cycles and that’s a
really shitty margin so to make 15%
profit so to put that into perspective
Costco which Prides itself on being the
cheapest operator on the planet has a
mandate that they can only have a 14%
margin so basically the commodity
industry uh operates like a Costco and
no one has to buy a membership to be
part of the commodity industry so it’s
traditionally not a great business which
is why so many people lose money in
Commodities but what’s unique about
Commodities is it’s an incredibly
inelastic business right so you all know
this most of your listeners will know
this too that when price escalation
starts or when demand comes on you can’t
turn a new mine on tomorrow right you
can’t just bring in that you know e
extra million or 100 million ounces of
gold or pounds of copper or barrels of
oil whatever oil is a little less
elastic but but particularly mining it’s
very very inelastic so what you have
then when that Supply crunch actually
hits all of a sudden you get massive
escalation in price to bring on that
supply and that’s when investors can
make a lot of money so that’s all kind
of a convoluted long answer to I think
it is a buyer market today of gold uh
and gold equities and the reason I think
that is because gold companies are not
making the profit margins they should
and at some point price of gold has to
escalate to incentivize that that’s my
view so this is the beginning of that
process if I’m interpreting what you’re
saying correctly you think that
Reckoning is coming we’re seeing you
know the gold price rally but you know
how far down that Runway if you were to
speculate Jamie I’m gonna uh heed Jeff’s
advice there which don’t make
predictions and don’t put timelines on
them but uh listen I’ve been buying gold
stocks just this week or last week
rather uh the reason I’m buying them is
because I think gold price is going to
be going up so I know I’m directionally
right I don’t want to put a timeline on
it yeah I thought I could bait you there
with a timing question even though I
never give forecast myself I appreciate
I’ve got it wrong so many times in the
past so I think I’ve learned my lesson
at this point it’s the best an you know
what it is the best answer to that
question uh is is that that on time
markets and I I think that’s so
important is it’s a long-term game right
and and typically in as a gold Equity or
silver Equity investor you’re wrong
before you’re right I mean most of the
time right and that’s part of the game
and especially where the three of us
play which is in the early stage you
know the early uh stage companies right
expiration development companies Jeff
Jeff talk about this right is being
wrong just part of the game and then how
do you manage that from a portfolio
standpoint as a gold and silver Equity
investor
well a long-term investment is basically
a failed short-term investment right
so that’s uh uh more true than I think a
lot of us in the junior sector would
like to admit but I think Jimmy makes a
good point you know we got the direction
right we we know the direction that gold
is headed um and it’s got to go higher
how many risks have been uh washed out
of the system because of the recent
Rising
gold literally none of them they’re all
still there the all these risks are
still right in front of us the system is
still very vulnerable uh in many ways
and so I think gold has got to go higher
for the gold stocks um they will follow
and they haven’t been as of yet um now I
I say that but I I should point out that
both GDX and gdxj have outperformed gold
since gold ignited which was on the last
day of February I forget what the date
was 29th I guess um that’s when gold
took off on that Friday and since then’s
done very well since that day GDX and
gdxj have actually outperformed it uh as
of the time we
talk um so they’re they’re doing okay
it’s just that the Juniors haven’t moved
like a lot of us thought they would um
so the good news is that is still ahead
of us that’s how I look at it um I still
have an opportunity
uh to buy what I think are some of my
favorite stocks some of the ones I think
are to be the stronger performers in
fact that’s my biggest fear Jay is that
this thing’s going to take off and I’m
not going to have all the positions that
I want or the full allocation in those
positions that I want that’s actually a
fear of mine because at some point it’s
going to happen history shows us this
history demonstrates this that gold
moves first then the producers then the
smaller producers developers and that
and then
finally uh money tricks down to the
Juniors so that’s still ahead that’s the
good news you still have time to to
Really uh get involved in the market get
what you want uh before it really takes
off because I I really do think that’s
going to happen so where are you putting
cash right now Jeff what part of the
market are you most focused on well I I
certainly like gold I think you got to
have some gold stocks in there in fact
that’s I don’t know what percentage but
that’s a a fairly sizable percentage of
my portfolio is gold mining stocks and
and specifically the Juniors um but I’m
also looking at Copper um some people
are scared off by copper because they
think we’re going to have a recession
we’re going to have a stock market crash
maybe we do the recession is debatable
at this point we’ll get another
recession someday but it doesn’t appear
to be imminent knock on wood um and a
stock market crash but you know if you
look back through history um stocks in
general the S&P the Dow and that sort of
thing they usually rise during election
years so we have that historical
precedent then the second thing is you
have the fact that the FED has said
they’re going to lower interest rates
and that is bullish for not just gold
but for the general uh stock market as
well so it’s debatable if they really
will lower three times at this point but
that’s going to be the direction they go
right so there’s evidence that think
that we may not be having a recession
very soon and we may not be having a
stock market crash very soon at least
how I see it and so therefore I want to
be long um and and be in this market uh
and and by that I mean the Juniors which
are very volatile and so how do you how
do you counter that what if we what if
I’m wrong and we do have a recession or
we get a stock market crash next month
what happens if I’m wrong well that’s
why you have a big cash back balance it
doesn’t mean be out of the market it
doesn’t mean be fully in the market it
means that you’re balanced so you have
exposure to stocks in case they take off
and you also have cash to balance that
um irrespective of all that I’m still
focused on what I think are the best of
best and by focusing on the strongest
stocks I think I have a better chance of
winning than by waiting on the sideline
and thinking oh no is there going to be
a recession there’s going to be a stock
market crash I don’t want to own
anything well buy best of best have some
cash and that’s your strategy that’s the
best we can do because we don’t have a a
crystal ball so okay I’m gonna pull on
that thread and ask you to Define best
of best a little bit before I do uh
Jamie same question over to you when you
look at the value ladder inside the
precious metals equities are you up with
the producers right now are you looking
at cash flow are you looking at
developers or are you going to the
highest risk
area the Explorers what are you looking
for right now so when I think about this
I’m taking into account a few factors
so Jeff is right that producers tend to
move first uh as gold price Rises and I
would say for the average person
listening to this you should be buying a
basket of major producers and royalty
companies and you’re going to get
General exposure to to gold swings um
the challenge producers are having I
would say right now again is this
inflation and is this rising cost so
there’s some challenges that it’s not
it’s not that they won’t rise in a
rising environment it’s that it’s not
optimal and then on the other hand we
have the very Other Extreme we have the
early stage exploration companies which
I’ve invested heavily in in the past and
I’ve had some big Winners and I’ve had
some big losers there and I would say
now is not the right time to be
investing in early stage exploration
companies uh in average they’re burning
cash too fast they’re getting results
too slow and when they are getting
positive results they’re not getting
those are not getting rewarded by the
market and for to make money an
exploration company you need people to
believe in that company and to continue
to buy the shares at higher and higher
prices and that is not happening now
it’s going lower and lower and they’re
diluting and diluting and diluting that
will change presumably at some point but
I wouldn’t say today where I’m currently
focusing and currently investing is in
the development stage so this is a
project that has a real asset that has a
resource in the ground uh maybe has a
reserve in the ground is starting to
wrap economics and Technical reports
around that either in the form of a pea
or pre feasibility study you know you
have something real and you know you
have something in theory if you’re doing
your due diligence right that someone
will want to buy at some at some point
because right now you have the majors
that have prioritized
nothing but saving cash and returning
cash to shareholders for the last 10
plus years and they are running out of
gold ounces and eventually there’s going
to have to be an m&a spree and they’re
going to have to buy these later stage
development companies and if gold
continues to rise you’re going to have
to buy them at a premium in addition to
that the development companies are
relatively inexpensive to operate you
know they don’t have huge teams of
people on site they don’t have equipment
operating they typically just have some
Engineers working in an office somewhere
and some drills turning all of which can
be shut down very quickly very cheaply
if they have to so where I think I’m
going to get the biggest bang for my
buck the most Leverage is in those
development stage stories that’s what
I’m doing right now okay I’m gonna stick
with you for a minute Jamie what can you
share with us today on your diligence
process um is there any kind of a
uh red flag checklist that you might
walk through I mean I always tell people
when they ask you know how to begin
doing diligence on the ocean of
companies that are available to a retail
investor like at my show in January we
have 350 companies in the trade show
floor I often get people asking me how
do you begin talking to these companies
how do you begin finding you know the
best of the best as Jeff said and I kind
of take a different approach I say I
don’t know how to pick a winner I’m far
better at deleting the probable losers
and that’s an EAS game right it’s like
so I I I I identify the red flags and
then cold-hearted nose really quickly
and whatever’s left I take a look at uh
what’s what’s your process
Jamie so I would say well first of all I
would say I feel for your listeners and
anyone sitting at home who kind of has
this idea hey I want to invest in gold
companies or I want to invest in early
stage gold companies companies because
there’s about a billion options out
there and how you find the good ones and
sort through them is is an overwhelming
task and I would say I have a really
unfair Advantage uh because I’m here in
Vancouver and I’m from Toronto
originally so two nexuses of the mining
industry I have a huge Network in both
of those and I’m a mining engineer uh as
well too so my first step is I’m mostly
and most people can’t do this I most
talk to people that I know I talk to
other Engineers I talk to geologists I
talk to Bankers Brokers Etc and every
day I’m inundated with investment ideas
and investment pitches so I kind of do a
first pass of who is this coming from
what do diligence have they done on this
and then what uh track record do they
have at either investing in good deals
or running companies or whatever it is
that person does so at this stage in my
career I am looking at very few things
that do not come to me from someone that
I would consider competent and reputable
so that’s step one and that’s you know
unfortunately for most people not
something they can easily do if they
haven’t spent a career in the mining
industry the next step is I I do my own
due diligence uh you know it there’s a
large checklist but it’s not an easy
checklist so it’s it’s in-depth
Financial due diligence it’s in-depth
technical both from a geological and an
engineering perspective uh I do a lot of
research and ask a lot of questions on
the people and who they are and what
their plans are and what they’re going
to be doing and what they’ve done in the
past uh I try to conduct site visits
when applicable and when possible um and
so it’s it’s a large long complicated
process before we decide to invest so
that’s on average what we do um and uh
on that for the whole it’s it’s worked
fairly
well Jeff same question over to you uh
what can you share on your diligence
process and maybe I’ll just I’ll
emphasize here you know I I gave a a
talk at the conference in January five
simple rules for any mining investor I
think rule number three very important
to me was build your team and when I say
build your team I mean find the
Personalities in the sector who are
doing all that work that Jamie just
discussed that Jeff is about to discuss
it’s the full-time job and they’ve been
doing it for decades and you can
unofficially partner with people via
their businesses right you guys both
have um you know individual publishing
companies where you share your diligence
and your portfolios with your
subscribers and to go It Alone is quite
frankly I’m just going to say it foolish
it’s foolish it’s too too risky of a
game Jamie you we gonna jump in there I
was gonna say I mean there’s often this
like the five simple rules or the 10
things you look at and well that’s a
good highlight it’s you make a good
point is that if you fall into the Trap
of thinking that’s all you need to do
you’re at severe risk of getting burnt
very very badly you know mining is a
hard business to make money in it’s very
opaque and very few people do
consistently make money very few people
who have spent their entire careers in
the industry make money and you know I
would say even for myself I’m pretty
well-rounded technical person but I do
not rely on my own expertise in every
area that I look at if I’m looking at
Metallurgy I’m not the person to make
that decision I talk to a metallurgist
if I’m looking at uh you know anything
more advanced than moderate geology
again I talk to geologists that are not
geologists but geologists in that
specific type of of deposit
so don’t underestimate the complexity
the technical complexity of these things
and I think you make a very good point
Jay which is it’s like find the people
that can help you on that because it’s
you know there’s a reason the biggest
investment funds in the Min industry
have hundreds of people working at them
and not
two yeah Jeff same question over to you
what can you share in your diligence
process well Jamie makes a a good point
mining is a a different business than
evaluating Apple stock or Microsoft um
uh most people don’t uh aren’t familiar
with it even many in the Main Street
uh even many that comment uh on mining
stocks uh in the mainstream don’t really
know what they’re doing I can say um but
there are certain things that you can do
to to to Really reduce the risk and it
kind of goes back to what you were
saying Jay of of finding the Fatal flaws
in each of these to get rid of stocks
and and you’re right there’s so many of
them that you know our initial goal is
is to eliminate them not to try to
include them and so you’re looking for
fatal flaws all the time and you know uh
I I do use a method that has worked for
me um and I share that in in the book
it’s very detailed uh but it’s to give
the retail person a Fighting Chance um
uh to actually succeed in this uh
complex and sometimes daunting industry
um and I think by doing so it’s worked
for me all I can say and it worked for
Doug Casey you know I pass along a lot
of things there that I think can work
and I think most people in this audience
know you can start with the three legs
of the stool is the people the politics
and the and the uh uh project itself and
just doing that you can eliminate you
know 90% of the stocks and the first one
being the people it has to be in that
order we’ve talked a lot about this
before but uh one thing you can do uh
that’s very specific that can tell you
if you have have something or not and
that is to ask the CEO a very specific
question what did the stocks do under
your prior
tenure in other words did they create
shareholder value of the prior companies
they ran you can also do that with the
geologist the lead geologists you know
uh I don’t want to give any names but
you could pick someone out that that has
had five discoveries in his career well
you’ve already got some who you’ve got a
a good shot at investing in um whereas
the person who was running a marijuana
Farm last year that’s not the best
person to invest in but just look at the
stock of the pr companies they ran do
they create shareholder value and then
as far as a politics go I’m very
conservative because we’re already
risking you know uh investing in the
most riskiest sector in the planet
practically so why take on more risk so
I’m I’m very selective about where I
invest politically you can eliminate a
lot of companies just on that basis and
then the projects themselves they’ve got
to be like my grandma’s chocolate chip
cookies that got to be big and rich or
have the potential to be so um so there
is a lot involved Jamie’s right about
that but I think a retail investor can
learn enough to to uh Identify some
potential winners as long as they have a
basket because even Jamie and I have
we’ve been saying we’re not going to be
right all the time time and we do this
for a living and so you have to have a
basket you have if you’re going to
invest in the Juniors you have to have
10 doesn’t mean go out and buy 10
tomorrow but it means at some point you
have to be able to identify 10 and and
not just one and uh and of course I
think that’s what Jamie and I do in our
publishing business is try to help
investors that want specific picks from
all the research that we do um so those
are the that’s a good starting point I
think um and that’s why I wrote the
book yeah which you can pick up at the
Gold advisor.com the gold advisor.com
you can pick up a copy of Pay Dirt um
and look I I I may come across guys as
I’m like I’m pushing you know Jeff and
Jamie’s products and I’m not but what I
am pushing is the value of community and
as like you know if you’re a regular
viewer here you know that’s the mission
behind this show this week in mining is
that building a junior mining portfolio
is really tough most people do get wiped
out so why do it alone that’s what we’re
here for normally live every Wednesday
so you can hit the live chat ask the
questions and let’s do this together
because like let me give you an example
I’m I don’t have a great demeanor to be
an investor like I’m too optimistic
right I learned that early in my career
like I’m more entrepreneur built and so
I’ll look at a problem and say oh all we
have to do is fix a b and c and this
will work but as I began looking at
deals with career investors we would see
the same thing and where I would see a
problem and say oh all they have to do
is fix a b and c they would say there’s
not a chance I’d touch it because of ab
andc you know they would rush to the no
whereas I would try to find a way to the
yes and it took years to like develop
that cynical muscle right and I had to
surround myself with cynical investors
whose mission at every pitch was to get
to the no and then in the cases where
they they didn’t right away that was
something that would stay on the desk um
and in hey J I sorry to interrupt I want
to I want to say you know it’s a great
thing that you’re saying we should build
a community and we should whether
someone subscribes to our letters or not
building a community is great because we
can all compare notes as long as we’re
honest with each other um because think
about this our community is is is a
natat uh eyelash on the hump of an
elephant I mean our community is very
very tiny and so while a lot of the rest
of the world doesn’t think like us
they’re going to come into this sector
at some point many of them will and that
is frankly what’s going to push up a lot
of our stocks is when the mainstream
when Wall Street and and Main Street and
and uh the generalist investor gets
involved that’s what’s going to push a
lot of our stocks up and getting
educated and have a community before
that I is a great thing so I applaud you
for pointing that out Jay yeah no 100 %
I mean that’s that’s what worked for me
and so now we’re we’re doing that here
on the channel um you you hit on a
really interesting point there you said
this the first question you should ask
the the CEO who you’re vetting is you
know what did the previous company’s
performance look like under your
leadership you know in so many words um
and the second one maybe is how many
shares do you own yeah exactly you took
the words right out of my mouth this has
come up a lot and you know it came up in
the last like two episodes of this show
and I heard really interesting
perspectives on this where it’s a it’s a
really easy way to get to the no the
entrepreneur in me wants to say but you
know maybe this is a young guy who
hasn’t made any money yet they haven’t
been able to build a position and except
for that red flag they’re doing
everything right they’re working
tirelessly they’re surrounding
themselves with good people and maybe
this is different right uh I
recently I recently looked at an opport
that was brought to me by a good friend
that I trust uh the the the supp the
industry fundamentals look pretty strong
and I just couldn’t get around the fact
that this on this CEO owned very little
stock and the rationale explain to me
was no they’re just they’re taking a
very small salary they’re very modest
you know they’re not greedy uh that’s
why and I just thought I don’t I just
couldn’t WP my mind wait they have a
little bit of stock and they’re taking a
small salary correct correct correct
okay that seems weird to me right
because those should be on either side
of the Teeter Totter there right it
tends to be one or the other because you
want to see them incentivized right you
know what that sounds like to me
immediately when I hear that that that
CEO is a bag holder and he doesn’t
realize that he’s a bag holder yet that
means somebody else some promoter
probably in Vancouver owns 10 million
shares of that thing and he’s
about to spend $20 million on Mark Mar
and then blow out all those shares and
that CEO is not going to realize what
happened to him until it’s too late I am
almost I don’t know what company you’re
talking about but I’m yeah that’s what’s
happening there well you know and here’s
validation that you’re probably right
when I asked you know who owns that the
38 million shares outstanding I got a
very non-committal response and it was
like ah mainly retail you know a couple
guys that I know and it was very like it
was non-answer right and it was very
clear to me not only do you not own very
much but you’re not really sure who does
which you know obviously okay easy easy
Del leete right right there um yeah
happens often that’s the thing right
it’s like a lot of the CEOs like they
don’t know what’s happening to them here
like this is I think what people don’t
understand is like people always assume
it’s like the CEO that’s running a pump
and dump or screwing them over or
whatever more often than not that’s not
the case right because the CEO is not
the position you want to be in if you’re
running the pumping dump because the CEO
is a reporting shareholder the CEO can’t
sell his shares into the pump so he’s
trapped what you want to do if you want
to run a pumping dump is you find a
great geologist or engineer or some
likable guy that doesn’t really
know much about Capital markets but has
some sort of reputable quality with
respect to a Mining stock and make him
the CEO and pay him some great whatever
$100,000 a year salary but then you own
all the shares and then you’re not on
the board you’re not on the management
you get all the upside no one no one
knows you’re involved that’s what
happens to most of these CEOs they’re
often as much of a victim here as a lot
of the shareholders and I don’t think
people always know that well no I think
most retail investors have no idea I
think you hit on something very
important and I want you to expand on
that a little bit because it’s a very
real scenario in our industry and
something that retail investors should
be aware of and at least can look for so
we walk through one scenario that is a
bit of a red flag there I mean it’s it’s
a red flag for a handful of reasons the
CEO doesn’t own much stock that that’s
curious if they don’t know much why
should you it’s it’s an easy know um
Jamie that that is a common scenario
that you know everybody knows the term
pump and dump I think most retail
investors probably don’t understand the
mechanics of what actually occurs there
you guys understand how deals are
structured you understand why people win
why some people get screwed over um you
know what could you arm my audience with
with in terms of insights beyond what
you’ve already shared to uh yeah okay
let me think it’s hard it’s really hard
because it’s actually easy to hide right
so people would think early on like okay
well you just go to SEI SE Di and you
can find who the major shareholders are
is anyone that owns 10 over 10% of a
company is a reporting shareholder in a
Canadian company that doesn’t really
work because what pretty easy to just
spread those shares amongst a bunch of
different people right like if I wanted
to own less than 10% of a company but I
had 10% of the shock I could put half of
it in my wife’s name and half of it in
my name if I had kids I could put it in
their it’s easy to spread that share so
no one’s a reporting shareholder so it’s
hard to catch them there but the game of
this business of the the promote
business in Vancouver is you don’t buy
shares you find a way to create them and
there’s two sides you can create shares
on you either create there’s actually
there probably a third side I could
think of it’s on the asset side the
business side or on the Shelf side so so
many of these companies are created by
vending an asset into a shell you’ve
heard of things like a vend or an RTO
one of these things in Canada there will
be a bunch of guys that have an asset
and they want a list instead of going
through the IPO process they do an RTO
which is a reverse takeover which means
that company gets bought by effectively
an empty listed shell so some smart
promoters will create shells well in
advance of this and they own all or most
of the shares of those shells that are
sitting on the tsxv or CSC or some other
uh sort of Venture Stock Exchange and
they built their position into that
right
away and it’s really hard and then
they’ll acquire a company and they’ll
rename the whole thing and it’ll become
XYZ gold and no one will know that they
already owed owned all that show shares
of the listed company and they’ll will
not have a four-month hold period on
their shares post trans action so
they’ll be the only ones that can
actually sell into the market at that
stage so that’s like that’s the tried
and true classic way to do that the best
way to see what’s happening okay the
best way to see what’s happening there
is what is the company buying the shell
for what are they valuing the Shell at
right are they typically shell will have
some money in it so if the shell has $5
million on it but the company’s valuing
the Shell at $10 million that’s like $5
million of created money right but now
if they’re have $5 million in the bank
and they buy it at5 a half $6 million
you’re saying okay well they’re putting
an extra half the million dollars on
there that’s kind of what it costs to
list a company anyways and like maybe
you’re you’re paying a little bit more
for to expediate that’s less egregious
right so the number one thing I would
look for is are they paying a massive
premium for a shell meaning is the
acquiring company being valued more than
it is objectively worth that’s that’s
number number one on the asset side is
very hard it’s very hard to know who
owns what most of the time it’s all been
done privately it’s almost impossible to
know what’s happening well another way
you can tell uh that promoters are
getting positioned in things or people
is if they acquire a bunch of other
assets that are non-core assets that are
like kind of like peripherally involved
like oh you know we’re going to get some
other lithium thing over and some blah
blah blah Grassroots thing often they’re
just acquiring these assets that are
owned by someone they want to position
in the stock they know they’re never
going to be able to or never going to
want to explore or drill or whatever it
is they say they’re going to do on that
property they’re just getting it so to
give somebody else shares so like these
kind of random ass Acquisitions that are
like non-core properties that’s another
thing to look out for I have to put some
more thought into this there’s a lot of
different tricks uh that people can do
that you have to kind of really keep an
eye out and if you know if you’re here
in Vancouver I know people that have
done all these things I know I know
companies that have done this so I know
how it works because I know people
who’ve done it but it’s super hard to
find this information if you’re not in
it and you don’t know what’s going on
it’s like there’s no book written about
this there’s no like there’s no re
there’s no resources for this no learn
this but thank you for expanding on that
because I think it’s really important
for investors to realize that that’s a
real scenario um yeah and you know that
the other way to approach this might be
honestly the way I approach it which is
kind of what what Jeff shared as his
initial qualifying question to a CEO is
that I begin with people over everything
every single time and by just isolating
a small percentage of entrepreneurs
Executives advisor you know and sticking
with your small team of Professionals in
the business who have a track record
doing what they say they’re going to do
creating shareholder value having a plan
C and plan A and B fail because it’s
probably going to or it’s likely and you
know they have their resilience and
energy to hunt down plan C and keep
protecting your shareholder dollars till
they get to the finish line or do their
damnest trying you know that is the
other way to safeguard against that
because you just know you’re in good
company and good company typically keeps
good company Jeff any comments on
that well yeah I think you you if you
focus on the top 10 people if you want
or top 20 whatever that may be that’s
Rick rules formula right if I just
invested with my top 10 people I would
have made more money and had less stress
so that’s one way to do it and you
should focus on you know the the top
people so um one thing I’ll point out
about what Jamie was saying is it is
those tactics aren’t just beholden to
the junior mining sector they’re in
every industry there no matter where you
invest if you’re going to invest in
individual stocks in some industry it is
probably happening in that industry as
well it happens in S&P stocks um you
know probably the the biggest competitor
for our industry would be um the prea
stocks the ones that are in the
experimental stage and things like that
so um you can bet your bit be that’s
happening in that industry so it happens
a lot you want to be aware of it and
like Jamie says it’s going to be
impossible to always track this stuff
down but your buffer against that is
having a system that you’re going to
stick with meeting the top people in the
top jurisdictions with projects that are
a go Bigg or go home type of thing if
you just did that you would be ahead of
90% of of retail investors out there so
um I think it’s worth it I’m I’m uh
investing heavily right now in juniors
uh because of what I said earlier I’m
afraid this Market’s going to take off
and at some point it will you know I
don’t know if it’s month or next year um
but history tells me that this is going
to happen so I’m positioning fairly
heavily now in this sector to benefit
what I think is going to be huge in one
two three four years who knows how long
from now I wanna I want to pull on that
thread a minute Jeff So Jamie Sher is
looking at the developer stage right now
for for his reasons you’re looking at
Juniors can you elaborate a bit Junior
how Junior do you like to go right now I
think I know but I’d love to
with my audience well I we do have
developers in the portfolio and Jamie’s
right they’re very undervalued and they
have value there right now um we we do
focus a little bit more on the
pre-produced the one that’s actually in
construction because there’s a r rating
that can be reasonably expected over the
next year or two for those companies um
in juniors that already have a resource
and they’re looking to expand that
resource and then I have a fair amount
of prediscovery plays where um it’s
basically looking for a discovery and
when you get down that far down the
ladder it’s really important you stick
to whatever strategy or rules you’re
going to have because um uh that’s your
riskiest play right is the prediscovery
played so it’s it’s really important you
have people that have been through this
before in PR Mining jurisdictions and
that um have projects that can be big
they may not be big yet but they have
the potential to be big
so that’s where we’re
focused okay I appreciate that now i wna
i w to um push people to both of your
sites so Jeff the pider prospector still
at the Gold advisor.com
correct yeah it’s still the gold
advisor.com but it’s it’s actually a new
paid letter that we just started in
January um uh you know I was having
picks that I I was seeing companies at
at conferences like uh VC for example
example of companies that I would like
and uh you know on mining tours and
other conferences and like wow I’d like
to recommend that I’d like to recommend
that I think I’m going to buy that but I
had no Avenue for that because the gold
advisor site is more conservative right
um but if you’re going to have riskier
stuff you really shouldn’t put that on a
free site and that’s what led to pay
prospector which is the paid newsletter
um I got to be honest I’m having a lot
of fun with it it’s a blast I wait wake
up every morning and can’t wait to see
what I’m going to be writing about that
day whether it’s in the gold advisor the
free site or in the the paid newsletter
um but I will tell you I I’m going for
it I am going for it in payer prospector
this is my personal portfolio if I don’t
own it I give people a chance to buy
first but I’m going for it in that in
that uh uh uh newsletter because I saw
what happened in 2008 the huge bounce we
had I vow I would miss out on that
opportunity again so in 2020 the co
crash rolled around uh you know I bought
hand over fist the scary as it was I
bought Handover Fist and uh you know by
the end of the year my portfolio was up
my entire portfolio was up 4X so you
know I love big dips and I cannot lie
that’s that’s my theme when it comes to
big crashes like that so uh but history
tells me that I I need to be long here
and so that’s what I’m focused on and I
do expect to have some very see some
very nice gains in there before all this
is over you know one more reason to uh
to go in with somebody like jeffre Jamie
on your team is because you realize that
Forex gain if you’re so lucky to be
right but then you’re faced with the
harder part of the trade which is when
to sell right and how to sell you know
how you sell is the same way you buy we
we we buy in tranches right so at least
I tell people to buying tranches you
know um that’s a good way to kind of
ease in and build a position um we’re
going to sell in the same way in my
opinion we’re going to sell in tranches
because we’ll never know when the top is
just like we don’t know when the bottom
is in a stock right so we’ll be selling
in tranches you know I think there’s a a
reasonable chance we’ll get a Mania in
this sector at some point especially
golden silver and uh these stocks could
really run then it’s going to be very
tough to know when the top is in
there’ll be some big draw Downs then a
run back up again so um selling in
tranches is is going to be the way to go
I think I like that I like that it’s a
it’s a realistic approach Jamie same
question over to you you’re at resource
insider.com what can people find on the
site and behind
Services I mean most people can’t buy my
newsletter uh and even fewer people
probably should by my newsletter so we
only sell our newsletter to accredited
investors uh we primarily focus on
private investment opportunities and
private placements in the public market
so uh our our subscriber list the people
we work with tend to be very high net
worth individuals uh we have some
trading firms we work with we have some
small institutions we work
with I fill a very specific role in the
market I look for two things cash
flowing commodity businesses so we’ve
bought Frack sand terminals in the
United States we’ve invested in cash
flowing uh oil and gas companies uh
We’ve invested in carbon credits and
we’ve also take positions in high-risk
Commodities this is these are the gold
exploration stocks this is uh copper
development in Colombia things like that
the vast majority of what we’ve done
over the last two years has been in
private businesses uh most of which are
planning to list in the medium to longer
term um and so that’s that’s our Niche
we focus purely on that that’s where I
put the majority of my money that’s
where I am I would say expert and I like
to stay in doing what I want so for most
people that is not a good fit for their
Investment Portfolio but for people that
are looking for private cash flowing
businesses and very sort of early stage
investment opportunities and natural
resources and I don’t necessarily mean
early stage in terms terms of
exploration I mean Inception of new
companies and the focus on that that’s
where we’ve really kind of um built our
expertise and had a lot of success so
you’re interested in that you can go to
Resource
insider.com okay look I appreciate both
of you gentlemen thanks so much for
coming on the show uh very much
appreciate your time for everybody who
tuned in thank you I love you guys I
love the supports as we grow this uh
community of Junior mining investors
let’s ride this Market together here
every Wednesday at 2 p.m Pacific time
5:00 P p.m Eastern Time right here on
the VC YouTube channel new guests each
week just to sit here and jam on the
industry and jam on our portfolios to
answer your questions in the live chat I
will uh see you next week live Wednesday
at 2 pm Pacific I look forward to it
thanks so much everybody
[Music]

My name is Jay Martin, and welcome to This Week in Mining.

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