Lawrence Roulston of WestBay Capital Advisors shares his thoughts on the resource space and the companies he’s involved in at the moment.
Speaking at this year’s PDAC convention, Lawrence Roulston of WestBay Capital Advisors said he believes the smart money is “now very much back” in the mining industry.
“We’re seeing the players that really know the industry and understand the cycles aggressively investing right now. The retail crowd hasn’t come back yet. They’re being distracted by the blockchains and the marijuana deals, and right now that’s kind of where the excitement is,” he explained.
Roulston, who founded investment newsletter Resource Opportunities, now run by James Kwantes, also took the time to speak about some of the companies he’s involved in right now. Those include Fiji-focused Thunderstruck Resources (TSXV:AWE) and Metalla Royalty & Streaming (TSXV:MTA).
He noted that when he chooses which companies to invest in his top priority is to look at the people. He explained, “are they capable, are they experienced and do they have the energy and the commitment to make something happen with the company?”
Watch the video above for more insight on the resource space from Roulston. You can also read the transcript below or click here to view our full PDAC playlist.
INN: We’re at PDAC, and it’s the final day of the show. How did it go for you?
LR: It was very, very productive. PDAC is always a great get together. You know, so many people here from the industry. It’s just such a great opportunity to meet up with people and … make new acquaintances and keep up with what the various companies are doing. Really productive.
INN: Tell me a little about your work and what you were hoping to accomplish coming here.
LR: A large part of it is keeping in touch with people and, you know, learning new things. I’m involved in several different companies, so it was great to just keep in touch with people.
INN: It’s quite optimistic here — do you feel it’s justified? How is the resource space feeling to you right now?
LR: It’s kind of a mixed bag. There are some people who are quite optimistic on it, feeling a buzz and that it’s turning to the upside. And there’s still others who are a little bit pessimistic. I think what’s happening quite frankly, my view of it, is the smart money is now very much back in the industry. We’re seeing the players that really know the industry and understand the cycles aggressively investing right now. The retail crowd hasn’t come back yet. They’re being distracted by the blockchains and the marijuana deals, and right now that’s kind of where the excitement is.
But I think in due course, as the mining industry starts to tick upward again and we see that momentum building on the upside — I think these people are going to come back in and realize there’s something really solid about a mining deal, where you’ve got a gold deposit or silver deposit or copper deposit, and they will come back.
INN: Hopefully we do start to see that. Are there any commodities in particular you are interested in or think people should be looking at right now?
LR: I’ve always said — for the 15 years that I wrote the investment newsletter, my message was: don’t get hung up on the commodity because so many people think of the mining industry as really a play on a commodity. I’ve always encouraged people to look at companies, and don’t worry so much about what’s going to happen to the commodity. If there’s a reasonable outlook on a commodity, you really want to focus on finding the best companies in that space.
So in the gold sector — in my heart, gold prices are going to go higher over time. But is that a basis for investing in the gold space? I think not. I always invest with a perspective that over time we’re going to see a higher gold price. But now, let’s look at a company that’s adding value. A well-managed company that has decent assets that can add value for shareholders. Whether it’s gold or silver or copper or some of the other metals. That’s really the way I look at it.
INN: So adding value, decent assets — any other things that are on your list of criteria for a good company?
LR: The biggest challenge in the industry right now is people. [There are] a lot of people like myself that have been around for a long time, but there’s not very many young people coming into the industry. And so when I’m looking at companies, for me the biggest challenge is looking at the people that are involved. Are they capable? Is there enough depth in that management team to really carry the company forward? Really for me, the number-one criteria is who are the people? Are they capable, are they experienced and do they have the energy and the commitment to make something happen with the company?
INN: This is maybe a good chance to discuss the companies you’re working with right now. Would you like to mention a couple of them?
LR: One of the ones that I’m very excited about right now, and it’s a very well-run company, is Thunderstruck Resources. They’re exploring on Fiji, and I was really attracted to the company because I spent some time on Fiji during my newsletter period looking at the Lion One Metals (TSXV:LIO) project. So I got to understand the geology of Fiji and the politics and the economic environment. When I had a chance to work with Thunderstruck on a Fiji-based project, it was just a natural fit. That’s a great project, great people involved in it.
And I’m chairman of a royalty company called Metalla Royalty & Streaming. That’s been a very exciting situation. Tremendous management group involved in the company. Again it is just a real pleasure to work with those guys. And in a year they have accomplished so much. It’s just — it’s really, really exciting to be with that company.
My biggest involvement actually is the Golden Triangle of BC. I’ve got involvements with four different companies that are up there, and I see that as geologically one of the most exciting areas on the planet to be involved in. Just huge potential, and with Pretium Resources’ (TSX:PVG,NYSE:PVG) mine now in production it just validates the whole geological model, [and] also the fact that you can get things done in a remote location in BC.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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