NEW YORK There are a
couple of key investment "sweet spots" in mining projects, both
of which are prior to the production stage, Douglas Groh, a
portfolio manager and senior research analyst at Tocqueville
Asset Management LP, said.
These two key points are during
the initial discovery stage and then the development stage of a
"Its very much a judgment
call on people (in these early stages)," he said, referring to
management, engineers and geologists. "Of course, its
also a question of how much capital a miner has to execute a
strategy, but theres an important focus on making an
assessment of people."
Assessments change in later
stages, aided in part by the additional information available
on projects, Groh said at the Society for Mining, Metallurgy
and Explorations mining finance conference in New
"The earlier stages can
sometimes be a roll of the dice because you dont know
what mother nature is going to throw at you in terms of geology
and so on, but those stages also represent the investment sweet
spots," he added.
A focus on management, strategy,
price to cashflow and a companys asset base become more
important at later stages, Groh noted.