Disciplined investors must carefully test geology, location and people while remaining alert to industry “shenanigans” and psychological traps across cycles, according to the head of a mining consultancy.
Geology is the one thing investors can’t “fix” when assessing projects but they must understand basics such as core length and width, Donovan Pollitt, president of Pollitt Mining told The Northern Miner’s International Metals Symposium.
Even so company management should spell out precisely how value is created per share instead of just production targets, Pollitt said. And investors should be willing to change their minds as new data arrive.
“You can find a good asset and you can be sure of it and you can still not have a good stock,” he said. “Sometimes you’ve done all the work, you like the drill results, you like the value proposition, you like the people, you like the jurisdiction, and the stock just doesn’t move or it goes down.”
Watch the full presentation below:
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