How to Value Mining Stocks with Canada’s Top Gold Stock Fund Manager Kevin MacLean
Kevin MacLean is the best gold stock investor in the history of Canadian long-only funds. In this interview, he reveals how he analyzes and values potential mining investments. If you are serious about mining stock investing then this MSE episode will be one you will re-listen to many times. So make sure you grab a pen and paper to take notes as you listen to this 1-hour masterclass.
Kevin’s approach to mining investing was so thorough that mining company executives were afraid to come ask him for money when he was a fund manager. He shared: “One of the greatest compliments I’ve had was from the mining sales guy at the Royal Bank. He said, ‘I’ve got companies that are afraid to come see you.’ They are afraid to come see me because I’ll politely disassemble their arguments if they are not making sense to me.”
Kevin MacLean is the Chief Investment Officer of Star Royalties. He has over 30 years of experience specializing in precious metals and mining investments. He was the senior portfolio manager heading the resource investment team at Sentry Investments until 2017, with peak assets under management of approximately $2-billion. Mr. MacLean received 13 Lipper awards over multiple time periods for best risk-adjusted returns in the gold mining sector and was the recipient of seven Brendan Wood International Top Gun awards for recognition of being a leading mind in the gold mining sector. Mr. MacLean is a Professional Engineer, holds a Bachelor of Applied Science (nuclear engineering) from the University of Toronto, and is a CFA charter holder.
0:00 Introduction
1:45 Kevin’s journey to becoming a gold stock fund manager
6:25 The key quality you possess which produced your successful career?
9:02 Incorporating a macro analysis into bottom-up investing
10:53 How to value a producing mining company
20:49 Why do generalist money managers buy gold stocks?
24:42 Harvesting gold sector volatility
26:53 How to value developers
30:07 Role of site tours in due diligence
32:51 Developers’ feasibility study cost inputs are inaccurate now
34:30 How to value an exploration company
40:42 Explorers and warrants
43:04 Appropriate management compensation
46:16 Role of royalty companies in mining sector
49:46 Non-traditional questions you ask mining company management?
55:20 Your biggest mistake and what did you learn?
1:00:56 Macro-view of current gold stock investing opportunity
1:04:16 Carbon markets
