Steve Parsons Profile picture
Former sell-side analyst in metals & mining - CEO of explore co - Focused on mining cycle (pitfalls & opportunities) & stocks that can navigate it - DYODD
Feb 17, 2022 13 tweets 3 min read
My interpretation of how the conversation between Senior Au Miners, Investment Bankers, and Generalist Investors has evolved in recent yrs… Banker to Senior Au Miner (2017-18) - “We live in a winner takes most/all world where the big get bigger. Passive investing rewards size. Look at Apple, Amazon… they dominate. On this basis, we advise you to merge w/ another senior Au miner to deliver size.
May 31, 2021 8 tweets 3 min read
Supply side of #copper narrative is awash w/ comments on lack of discovery. I can point to plenty of large disc from prior cycles that sit undvp- Galore Creek, Cerro Casale, Caspiche, Reko Diq, Haquira, El Moro, Relinchio, Taca Taca, Pebble, Tujuh Bukit, Mes Aynak, Agua Rica etc. Finding Cu porphyries hasn’t been the problem. Finding strategically large high-quality deposits that are developable is the challenge. We can point to permitting timelines, social license, geopolitical, water, met, etc. All that’s true and well documented.
Aug 7, 2020 7 tweets 2 min read
1/7 Scale & scalability. Beyond the usual project metrics (NPV, IRR, capex intensity, etc), Scale and particularly project SCALABILITY figure prominently into my investment decisions for gold developers. $MAI.v, $MKO.v, & $RIO.v. 2/7 Scale: early in a cycle (now) when Au prices are rising & industry congestion is benign, investors seek out assets/cos that offer resource scale (leverage to Au). In an industry short on multi-mln oz discoveries & lack of depth in dvp pipelines, this works… until it doesn’t.
May 19, 2020 5 tweets 1 min read
1/5: In 2008-11 senior Au miners traded at ~16x P/CF & ~1.7x NAV. Presently, according to broker comps, they trade at ~11x 2021 CF (at consensus Au of ~$1660/oz) & P/NAV of ~1.5x. Val'ns remain well below 2008-11 levels & that's before normalizing for today's higher Au prices… 2/5: Yes, Au equities have gapped higher, especially the producers & royalty cos. However, the upside, as presented by equity analysts - notably those using valuations of the last several years to benchmark the opportunity, appears to me to be understated.