Thom Calandra: Stock Picks and What to Look for on Site Visits

Thom Calandra of The Calandra Report took the time to speak with the Investing News Network after his presentation at the recent International Metal Writers Conference in Vancouver. In his talk, Calandra provided an overview of his visit to Newrange Gold’s (TSXV:NRG) Pamlico property in Hawthorne, Nevada and his trip to Riverside Resources’ (TSXV:RRI) projects in Sonora, Mexico.
In the video above, he speaks further about those excursions, noting that Pamlico is one of his top three high-grade exploration plays. He also explains that most of his investments are in exploration companies, and says that site visits are important to him for a number of reasons:

• He gets to know the people involved in the project and ensure that they are professional, competent and thorough. Plus he learns whether the company has good hiring and disclosure practices.

• He needs to see the exploration program, learn how the drill targets were chosen and get a sense of the timeline to prefeasibility or economic assessment.

• Calandra can ask where the money for the project is coming from and how that money is going to dilute shareholders.

• He said he will take a stake in a company if the experts can explain the air surveys, IP studies and the geochemical and geophysical studies to him in a way that makes him see the value of the project.

Calandra also says he is interested in the following companies and explains the reasons why he likes them:

• Ivanhoe Mines (TSX:IVN)
• Newrange Gold (TSXV:NRG)
• Kasbah Resources (ASX:KAS)
• Pasinex Resources (CNSX:PSE)
• Riverside Resources (TSXV:RRI)
• Eurasian Minerals (TSXV:EMX)
• Golden Predator Mining (TSXV:GPY)
• Angkor Gold (TSXV:ANK)
• Abitibi Royalties (TSXV:RZZ)
• Alexandria Minerals (TSXV:AZX)
• Nouveau Monde Graphite (TSXV:NOU)

The transcript for this interview can be found below.

INN: I read about your visit to Newrange Gold’s Pamlico Property in Nevada, and you mentioned after the visit you’ll be adding more shares to your holdings in Newrange Gold. What are you most excited about in terms of that project?
TC: Bob Carrington and Gloria Carrington are the people who own on the company so that’s important to me. I’m a more of a people person, but I like the fact that its high grade gold and there is what you call twinning – I call it fraternal twinning. The drill holes that the previous owner put in there about five years ago, and it’s extreme high grade gold in a part of the great basin of Nevada that could show three, four, five ounces per ton of gold and if that’s correct then we see that happen and the numbers come out over the next three to four to five weeks into the summer of 2017. I think the stock will keep moving from its 30 cent 35 cent commuting level to 45 50 cents. Remember I used to own this company when Newrange used to be Colombian Goldfields, and Colombian still has assets in Colombia that Bob and Gloria are right now in discussions to sell or joint venture.
So it’s a two-part thing. People in Vancouver where we’re sitting today Melissa are very much invested in the company. Golden Predator, which is another very successful high grade gold company in the Yukon, they’re an investor in Newrange. I’m a believer. As much as I can be a believer it’s probably one of my top three high great exploration plays.
INN: I noticed on your website as well it mentions that you visit a lot of these properties about 40 of them around the world every year. It’s probably safe to say that most investors don’t actually get that close to the decision makers and the actual projects. Can you talk about what you look for in the typical site visit?
TC: Yeah you know it’s funny that you asked this question because I saw you in the audience there earlier. I decided just to do a rougher kind of images from Nevada and Mexico a presentation instead of usual PowerPoint fact, fact and if you can see the photos that there’s a lot of high desert there’s some low desert. There are mountain peaks. You can be underground. You can be over ground. You can be in a helicopter; you can be in the Yukon. You can be in Nevada, Ghana the former Gold Coast. You can be in Cambodia. These are all places that have gold, copper, and silver you can be in South Africa in the DRC Congo with copper and zinc. But for me, after I’ve gotten past the people quotient because I’ve been burned so many times in the past 25 years by not getting close enough to the people are – you have to remember you’re a lot younger than I am, and when you get to be my age one you make every mistake in the book, and two you meet everyone. The good the bad and the not so handsome, and those good bad and not so handsome folks out there even the good people sometimes make mistakes. I at least have to know that the people I’m involved with are professional, that they’re competent, that they’re thorough. They have good hiring practices and good– What I call publishing practices or disclosure practices people call this corporate governance. After you get from that you get into more touchy feely things. I’m not the technical geologist writer that we have out there in Canada that others are. I’m not a geologist but I’ve written about geology for 20 years.
For me, do I need to see the core? No. Do I need to see that that a company is sticking to its game plan when it comes to the publication of other assays? Yes. Why? Because mostly I’m an exploration investor. Do I own companies that produce? Yes. I happen to be lucky enough to own one or two companies that produce. It’s a whole different set of questions and it comes down to the safety of the mines. I guess Melissa when you’re on site you are bombarded with information. Most geologists say they’re going to keep you for a day and they wind up keeping you for two days or three days, and you’re surrounded by other geologists who are asking very smart questions. I need to see the exploration program how that program became a program who picked out the drill targets. Why those still targets came into being. Is this a new deposit or is it an old deposit. Are there early indications if it’s a true mine. What the timeline is to feasibility, or a pre-feasibility, or an economic assessment. I need to know– and this is where I get burned all the time, I need to know where the money’s coming from, and how that money’s going to dilute us as shareholders which almost always happens, and how that dilution will be a accretive, which by the way the CEOs and CFOs and the geologist will always tell you of course it’s going to be accretive and it almost never is.. So you have to be a financier. You have to be part geologist. You have to know that people are engaged in excellent groundbreaking practices whether it’s the magnetics, the air surveys, the IP studies, the geochemical and geophysical studies. These are all things that these so-called experts have to take you through even if it takes hours and hours. If they take the time to take me through them and make me understand them in a way that makes me believe there is value as in this company is undervalued. This exploration prospect is undervalued then I’ll take a stake in the company.
INN: It’s not a bad time to revisit gold properties. Gold’s been rallying for the past couple of weeks. Can you talk about your predictions for the gold price?
TC: I’d like to say that probably the biggest mistake I’ve made in that 35 years of covering markets and writing about markets for newspapers, magazines for marketwatch.com and CBS Market Watch for the Calandra report and your network is trying to predict the future. When we’re young it’s kind of an ego thing it’s an adrenaline testosterone-driven. I’m going to tell you exactly where the gold price is going to be tomorrow the platinum price. These days I look back and I say I wish I hadn’t been so definite in my forecasts. I remember in 2001 saying that the gold price is going to go over $500 or $400 an ounce. I was in London at the time working on our European product at the Financial Times saying I’m going to dye my hair gold and it actually happened then I had to come home with my hair dyed gold and I got my hair dyed gold in the Camden right in London.
These days I have a world view my world view is that right now commodities are in this middling phase after going too high. They haven’t crashed yet here in 2017, but if you look at the price the industrial metals like zinc, nickel, copper, tin, tungsten, steel, iron, ore and if you look at the precious metals my favorites being gold, platinum, and palladium and then to lesser extent silver, you see that we’re at kind of like a waiting point. I think this summer and fall are going to be glorious I really do and I think everything that’s leverage to gold everything while the institutions the big van x of the world and their indexes continue and the ETFs continue to move away from junior exploration companies – that’s a mistake. I think the junior exploration companies and the junior production companies that are all levered for the prices of their underlying commodities are going to go through the roof again and again and again over the next few years.
INN: You mentioned some other commodities as well zinc and palladium. Moving away from gold do you have any other companies that you’re interested in terms of other commodities?
TC: Yeah I’m interested in very esoteric companies. But of course the lead is Ivanhoe. I love Ivanhoe. I’ve now been an investor in Ivanhoe Mines, the Ivanhoe Mines that owns the copper and the zinc in the DRC Congo, and the platinum palladium on the Flatreef. I want to say it’s a three billion dollar company IVN in Toronto. So that’s an easy one that’s a flagship for me. But some of the lesser known ones obviously Newrange Gold on the exploration side. I own a small tin company T-I-N was an element? Who knew? Called Kasbah who trades in Australia K-A-S-B-A-H but the actual tin product and project is in Morocco of all places. What are some other esoteric unknown things I own? Pasinex. Pasinex really needs a marketing push here but the stock has been terrific. It’s an actual producing zinc company in Turkey. PSX on the CSC it also trades in Germany where 80 percent of its trading is. I like it because it’s actually profitable. It’s truly profitable Zinc production direct short shipping of ore. I’ve mentioned Riverside over the years, and Riverside’s my favourite and Eurasia are my two favorite what you call prospect generators. I own some companies that have done terribly. I own Golden Predator in the Yukon, which will continue to have news throughout the summer of high grade gold. I own 35 companies not counting the blue chips that we own thanks to my wife having inherited a very nice portfolio of companies from her father. But life is good right now. I write about it for the TCR network. If it’s an obscure exploration play I probably own it.
I happen to be very hot right now in Nevada. Ghana I still own Angkor Gold in Cambodia and have high hopes for that. I have high hopes for a few of the things that I own in Quebec. Abitibi Royalties. Alexandria Minerals is a good one that’s cheap and they are in Quebec along the Abitibi gold belt, I own Graphite in Quebec, graphite is a metal that goes into batteries, lithium ion batteries I own Nouveau Monde. Nouveau Monde is a very little known graphite company that I think is going to get bought in the next six to nine months. NOU trades in Canada obviously on the venture.
INN: Great and my last question is a bit of a fun one. So you travelled around you obviously seen a lot of things. Is there an experience that stands out to you or a moment that you would like to share?
TC: Well I’ll tell you something it’s having my wallet returned to me and my passport returned to me whenever– like I’m in Columbia. I lived in Medellín in Colombia as an English teacher a very long time ago. I’m not going to tell you because I’ll be embarrassed to say how long ago and I return there regularly and people have this vision of Columbia being dangerous. It’s not, it’s the kindest nicest place in the world, and being as forgetful as I am I’ve lost my wallet once and my passport twice in Colombia. I’ve actually had people chase me down or return those things to me in Colombia either the next day or that same evening and it’s a beautiful thing when that happens. It’s also happened to me in Phnom Penh in Cambodia I swear I don’t know I get this kind of rush. For one because I realize how lucky I am for being such a klutz, and two because I get to be in some of these beautiful places and not have to look through the tint of media of which of I was one and now no longer am.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Angkor Gold, Golden Predator, Newrange Gold and Pasinex Resources are clients of the Investing News Network. This article is not paid-for content.
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.
Related reading:
International Metal Writers Conference 2017, Day 1: Notes from the Floor
International Metal Writers Conference 2017, Day 2: Notes from the Floor