Doc Jones – Looking For Unseen Opportunities And Potential Red Flags Within Resource Company Economic Studies
Doc Jones, Private Investor and editor of DrJonesResourceInvestor.com, joins us to discuss some of the unseen opportunities and potential red flags when digging into resource company economic studies and their proposed plans for the early years of mine life. Starting off Doc Jones shares a critical look at a few critical minerals companies in the nickel and copper sector, contrasting his interpretation of the available public data and market assumptions on Magna Mining (TSX.V: NICU) (OTCQB: MGMNF), Canadian Nickel (TSX.V: CNC) (OTCQX: CNIKF), and Emerita Resources (TSX.V: EMO) (OTCQB: EMOTF).
The conversation then shifts more into past and present gold and copper developers and producers that had both good and poor reconciliations with their stated development strategies and economic studies as they then went into production. The conversation covers a number of examples of companies, with old names like Cardinal Resources (TSX: CDV), Exter Resource (TSX: XRC), Alexco Resources (TSX.V: AXU) (NYSE: AXU), and Pure Gold (TSX.V: PGM) (OTC: LRTNF) and also current companies reinterpreting prior producing projects like West Red Lake Gold Mines (TSX.V: WRLG) (OTCQB: WRLGF).
This is a nuanced conversation getting into metals price assumptions, the importance of co-credits in metals equivalent ounces in economic studies, the potential for grade to be higher or lower than in resource block models, the impact of currency fluctuations, and the importance of staying current with additional drilling or model interpretations from companies in concert with the macroeconomic forces in the commodities, and changes in the lending rates of capital markets. Another key takeaway is the importance of the first few years of any new producing mine in the operating team’s ability to hit stated goals for throughput, grade, having enough stopes available, having a good resource block model, the debt repayment, and getting the mine launched properly.
- In full disclosure, Doc Jones holds positions in Magna Mining, Emerita Resources, and West Red Lake Gold Mines, at the time of this recording. The views and opinions shared are not investment advice.
- In full disclosure, Shad holds a position in West Red Lake Gold mines at the time of this recording.