With inflation, resources used in electrification, and for new technologies, there may be more appetite for mining stocks from investors who normally avoid the sector. Here, Richard Greenfield, CoFounder of Tamesis Partners, specialists in global mining and natural resources, shares how newbies can evaluate mining stocks.

This is a fantastic overview that may require a few listens; everything from the market overview, where we’re at in the cycle, to how to dip your toe into the sector. Some great nuggets such as, ‘mines are made, not found’, the people are key; and he recommends that the mine should be large enough to attract institutional interest. Of course, the investment hinges on NPV, IRR (greater than 20%); and as with all investments CAPEX, margins and returns.

Richard ends with three examples of mining sector stocks that he likes using the evaluation criteria outlined. This is superb. A sector not without risk, but with Richard’s guidance, you should be better armed to understand those risks and the factors you need to evaluate.

00:00 Start
00:18 Introduction
01:00 Richard’s background & Tamesis Partners
03:30 What’s the composition of the global metals and mining industry?
05:06 How important is London v other exchanges?
07:00 Where should we look to make money in the current climate?
09:53 Why have equities lagged commodity prices?
10:45 Commodities are highly priced at the moment, will that continue? And what are the drivers?
14:45 How do commodities and equities move with each other?
18:17 What’s the best way for a newbie to play the sector?
22:39 When do you want to get into a mine?
25:57 What makes a good mine and how do you value it?
30:29 What is a good margin for a mine?
32:48 What’s the returns and success rate?
37:57 What are the risks to look out for?
40:41 Richard’s picks of the sector for your further research:
44:04 Tridant Royalties (TRR)
50:04 Shanta Gold (SHG)
55:07 Capital (CAPD)

About Richard Greenfield
Richard qualified as a chartered accountant with PricewaterhouseCoopers in 2003 before commencing an investment banking career in 2005, almost all of which has focused on the mining sector. While at Ambrian Partners Richard worked alongside Charlie Bendon as part of that firm’s Extel #1 ranked mining team, acting as Nominated Adviser to a large portfolio of junior and midtier companies and concluding a wide range of IPO, secondary financing and M&A transactions. Richard joined GMP Securities Europe LLP as a partner in 2010 as part of a significant expansion of GMP’s London operations, with a particular focus on dual and overseas listed companies and crossborder advisory transactions.

www.tamesispartners.com
LinkedIn: www.linkedin.com/company/tamesispartnersllp
Tamesis Partners research on Research Tree: www.researchtree.com/providers/tamesispartners