Issue link: http://resourceworld.uberflip.com/i/517266
j u n e / j u l y 2 0 1 5 www.resourceworld.com 39 Rw: Since many investors who lost money in the last downturn are now hesitant to jump back into the market until they can confirm that a recovery is under way, thereby putting themselves at risk of being "Johnny-come-latelys" and missing out on capital gains, should an investor wait until a recovery is obvious or identify great stocks and buy them now? RR: My own success as a mining stock investor has been to anticipate market turns. I think one needs to know oneself as an investor. The problem is, and this is critical, just as an investor's outlook can be formed by bad experiences in a bear market in the immediate past, an investor's outlook can be formed by good experi- ences in a bull market. The thing that passes for market confirmation for many investors that don't study the sector is when their neighbors have made a lot of money. That seems to pass for investment research. That being the case, most retail inves- tors get in way too late. It takes far too much confirmation to tempt most of them into the market. By the time they come into the market, company valuations are extraordinary and they have set them- selves up for the subsequent decline. As a consequence, they fuel their own dislike for a market that could have treated them differently had they been prudent. Rw: After you have analyzed a mining company and like what you see, do you immediately buy its shares or wait for what appears to be a favorable technical analysis of its stock trading pattern? RR: My technical analysis track record has been almost unblemished by success. When I find a company with good fundamentals, the first thing I try to ascertain is when they will need to raise money. My favorite way to participate in juniors is with negotiated private placements that include warrants. With junior mining investing, most of them don't work out, so the good investments have to make enough money to justify those investments and to amortize those that failed. The best way to do that is with a warrant which magnifies your wins but doesn't decrease your risk of loss. Rw: At present, there are many mining companies that have developed significant resources in the ground, yet their share prices are pathetic. I know you look for high-quality assets, so how do you iden- tify the ones most likely to succeed? RR: Companies with high-grade depos- its will attract the most attention. Consequently, I am returning to what I did in 1999 and 2000 and looking at com- panies with large deposits that may not look so great at current commodity prices, but will look much better in the future at higher commodity prices. You are seeing companies with a $300 million market cap that now have $30 or $40 million market caps. I am reminded of the success we had with companies like Silver Standard, Pan American Silver and Lumina Copper where we financed the acquisition of large mineral resources that were uneconomic at the time that became highly economic in the commodities mar- ket we enjoyed in the last decade. While my competitors might be looking for what