Steve Thomas: Building A Strong Junior Mining Portfolio
Tom welcomes a new guest to the show Steve Thomas. Steve is a private investor whose primary focus is on gold and silver miner equities for the past ten years.
Steve discusses the recent drop in gold and why this is another buying opportunity. He believes that it’s a great time to be a gold bull, and he has a policy of posting all of his trades for transparency with his subscribers.
Steve talks about the lessons he has learned over the past ten years of trading miners. He cautions that one should be wary of experts that are perma-bulls. He says, “Gold miners are underappreciated, undervalued, and overlooked, but their day is coming.”
Miners get a lot of leverage both up and down from the movement of gold. He discusses his favorite types of miners and the key things he looks for in these companies. He rates miners and only revises these ratings when there are fundamental changes at a company. He says, “Most gold mining equities are trading at three times lower valuations than most other stocks.”
He likes NewFoundGold since it’s in a region with already known gold deposits. Their recent drill results are quite encouraging, and some big names are backing the project. He discusses the potential pitfalls of buying stocks on OTC Markets since they often have low trading volumes.
He gives an overview of how the HUI works and why he expects it to move 400% higher by the time gold reaches $3000.
Steve does like silver since it has enormous upside potential; however, it’s harder to trade as there are very few pure silver plays on the market today.
Lastly, he discusses the incredible potential of juniors being acquired by mid-tier and large mining companies.
Time Stamp References:
0:00 – Intro
0:45 – The recent move in gold.
3:20 – His service and transparent trades.
4:15 – Lessons from the last crash.
7:45 – Portfolio weighting in miners.
15:30 – Rules for trading miners.
17:30 – Focusing on fundamentals.
21:00 – Jurisdiction and NewFoundGold
22:30 – TSX vs. OTC listings and currencies.
24:40 – HUI to Gold Price ratio and value.
28:00 – Tracking insider buying.
30:05 – Thoughts on silver and silver miners.
32:25 – Buying opportunity or risky period?
35:00 – Keeping a cash position.
36:30 – Selling on strength and buying the dip.
37:05 – M&A Potential in this sector.
Talking Points From This Episode
- Another buying opportunity for gold.
- Lessons from investing in miners.
- Leverage and what to look for in juniors.
- Merger and Acquisition potential
Steve Thomas is a private investor with 10+ years of experience investing in commodities and hard assets, mainly gold & silver miners, royalty and streaming companies, pure exploration companies, as well as oil and gas producers and MLPs.