- Opportunity,
- Patience, and
- Good luck or avoiding bad luck!
His investment philosophy isn’t about complex algorithms or trendy investment theories, it is about seeing value where others don’t.
“You’ve got to steal value,” Mr. Sprott told the packed conference room, “when you steal value, you have time on your side.” He also added, “If you have a winner, press the bet.”
He recommends focusing on the ore body, commodity price, and management’s skills and previous successes. Are the assays “cut” or “uncut”? Because the uncut assays could be a better reflection of the actual head grade.
He highlighted companies such as Kirkland Lake Gold and Free Gold Ventures. He saw the potential at Kirkland Lake Gold’s Fosterville mine. With Free Gold Ventures, he purchased shares at just six cents, seeing the potential of 20+ million ounces of resources when others overlooked them.
Market Manipulation: The Elephant in the Room
Mr. Sprott didn’t shy away from calling out what he sees as systemic issues in financial markets. Major banks’ naked shorting practices came under his sharp critique. He referenced a recent South Korean investigation that found multiple global banks engaging in short-selling breaches.
“The major banks of the world are seriously short gold,” Sprott said. His evidence? Unprecedented physical gold movements and massive silver delivery demands on COMEX.
One audience member asked why banks continue shorting despite overwhelming evidence against them. His response was telling: banks have grown comfortable with a system that allows them to sell without delivering, with minimal regulatory pushback.
Investment Opportunities
A key Sprott investment strategy? Read everything, especially the fine print. He emphasized the importance of digging into resource reports, understanding recovery rates, and calculating potential values using current metal prices.
“Most companies are trading at 1/10 of net asset value,” he noted. “You have to look around and do your homework.”
With gold trading near $3,000 and silver showing signs of breaking manipulation patterns, he sees massive potential. He referenced analyst Michael Oliver’s prediction that gold could reach $8,000, a number that would make many investors sit up and take notice.
“When you buy a gold stock, you’re not paying for $8,000 upside,” he explained. “Your risk-reward is stunning.”
Mr. Sprott is bullish on metals like manganese, particularly for its potential in solid-state battery technologies. He sees these niche markets as potential goldmines for investors willing to do deep research.
When asked about advice for younger mining professionals, Sprott was characteristically direct. “There are immense opportunities for someone who can think well, get brave, and handle potential losses,” he said.
Looking Ahead
His outlook isn’t just optimistic, it is grounded in decades of experience. He sees significant potential in gold and silver, driven by increasing global demand, particularly from countries like China and India.
Eric Sprott believes in doing the work to find the opportunities, but it requires patience and understanding that in mining investments, conventional wisdom often falls short.
For investors willing to dig deeper, literally and figuratively, his approach offers a roadmap to potential success in an industry known for its volatility and potential.
Notes: All numbers in CAD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
