At the Vancouver Resource Investment Conference last week, veteran junior mining analyst John Kaiser described the scene as a survivor’s ball.
“This is the cream of the crop assembling into this place,” Kaiser said. He continued, “We will never, ever again see such an assembly of management talent, inside juniors with good projects, a lot of them still with money, and at an incredible valuation level where the retail investor has never, ever, in my 30 years of experience, had a chance to get access at this type of price to this type of upside potential.”
Kaiser was not alone in seeing explosive potential. Rick Rule, Chairman of Sprott Global Resource Investments, also weighed in.
“What I can tell you is that four or five years from now we are gonna look back and say these were the good old days, these were the days that a newsletter writer, or an investment manager, or a conference promoter could expand his market share, just by showing up,” he said. “Because the competition is folding this is the point in time where an investor could radically increase his or her wealth just by showing up.”
One such survivor that hasn’t folded is Millrock Resources (TSX:MRO). Millrock CEO Greg Beischer spoke to CEO.CA’s Carter Smith and gave an upbeat outlook for an industry set to turn.
Here’s a transcript:
Gregory Beischer: Millrock is a prospect generator company. We’re based in Anchorage, Alaska and we explore that state as well as British Columbia and Sonora State, Mexico.
I’ve actually never been quite as optimistic as I am now. After 8 years of diligent work and 5 really bad years, the cycle is going to change, and I know that our company is going to be the first out of the chute when the tide starts to turn.
We’re building out our property portfolio right now. We’re able to get bargains like I’ve never seen before so we’re amassing a much larger portfolio of properties at very, very low cost, getting ourselves ready for the change in the cycle.
I’ve been able to do deals that I’ve never been able to do before. Recently in British Columbia we acquired three huge projects. It took us the ability to sign 9 different deals on the same day with the individual land and royalty holders. That never would have been possible in any other market. These down cycles are great for generative companies like ours that have the staying power to get through these bad times to get ready for the good times.
Exploration is a high-risk game. Not many exploration projects successful find an orebody. So if we have 8-10 active projects at any one time, then our odds should be 8-10 times better. But it’s virtually impossible to finance 8-10 exploration projects simply by selling stock in the company so we only spend our shareholders money developing the projects to a certain point, and then we bring in a partner company to fund the first $5-7 million of drilling.
I think a prospect generator model is always the smart way to go whether down cycle or up. The reality is, it takes a consistent systematic effort effort over a period of years to be successful in discovering orebodies. Our business model gives us that ability to be consistent, to always be exploring, and not at the whim of the venture capital markets.
Millrock Resources Inc.
52 week range: $0.15-0.49, last at $0.25
Shares outstanding: 31,804,758
Market cap: ~$7.95 million
Cash: Approx $2.5 mil at Dec 31
*All figures approximate
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