Simon Popple uses his BRIDGE system to evaluate stocks, honing in on balance sheet, resources, infrastructure, diversity, grade and exploration.
Picking winners in the junior resource space is notoriously difficult. Significant finds are elusive, and it’s even more rare to take a discovery all the way to production.
Simon Popple, who writes the Brookville Capital Intelligence Report, has devised a way of identifying potential winners, and he sat down with the Investing News Network to explain what he looks for.
His system breaks down into six main parts: balance sheet, resources, infrastructure, diversity, grade and exploration. Together they form the acronym BRIDGE, and when looking at possible investments, Popple evaluates each factor to help make his decisions.
For example, he likes to see companies with cash on hand and ideally wants them to already have a resource in place. Infrastructure is also important to look for, because if it doesn’t exist the company will likely have to solve that costly problem in the future.
Popple, who has an investment banking background and previously wrote the non-US version of Jim Rickards’ Gold Speculator, also noted that while grade is important, it’s key to put it into context.
Above all, Popple emphasized that investors need to make sure to have a diverse portfolio.
“One of the main things about investing in the sector is the returns can be jaw dropping … but what you need to do is not be too greedy,” he said. “You’ll get some winners, you’ll get some losers, but through a diverse portfolio you’ve got a much better chance of finding what you’re looking for. So if you are looking to invest in the space, please have a diverse portfolio and don’t stick all your eggs in one or two baskets.”
For more from Popple on investing in the junior resource space, watch the video above. You can also click here to watch part two of the interview, where he discusses Chalice Mining (ASX:CHN,OTCQB:CGMLF), a company where he used the principles discussed above to great success.
The website for the Brookville Capital Intelligence Report can be found by clicking here.
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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.