RE:RE:RE:RE:RE:FSX and GBR comparative chartsyeap
Given it's Sunday, we could continue with this extract from Financial Post, Dec.19. It's about why Sprott has an important stake in FSX, among others:
Peter Grosskopf, chief executive of Sprott Inc., the asset management firm Sprott founded and a mentee, said Sprott is always covered as being this “unbelievable gold bug,” but there’s a lot more to it than that. “I mean, he’s a savant at what he does,” said Grosskopf, who added that it’s not easy to explain how Sprott does what he does.
That’s mainly because Sprott is investing in companies that have no revenue, which means standard investment metrics, such as internal rate of return, aren’t necessarily useful, never mind that he said they’re not something he would use. Instead, he attempts to value companies based on whether they are likely to discover a deposit of precious metals.
Of course, even if a company discovers a deposit, it would still need to figure out whether it makes economic sense to extract the deposit, including how much it would cost to build and operate a mine, which requires further calculations about energy costs, transportation, processing and refining, and so on.
Sprott said he focuses solely on the deposit and how big it could be. Though he has no education in geology, he said he has devised his own valuation method, which involves looking at a few variables to determine the potential size of a deposit.
“I want to turn it into numbers, like, okay, what could this thing earn?” he said. “You know, you multiply the strike by the depth by the width by 2.7 specific gravity times the ounces — it’s just four or five things you’ve got to multiply, five things.”
People close to him said he studies junior mining companies and can recall the details of his investments better than most fund managers.
“The guy gets up at ungodly hours, he might get up at 2 a.m. studying,” said Conor O’Brien, a former capital markets manager who joined Sprott in May to help with the investment blitz. “Neither one of us are geologists, we’re just financial people that can do mathematics, as opposed to the geology. We more kind of conceptualize, and dream and kind of multiply.”
GLTA