INVESTING IN EARLY STAGE PROJECTS & PROSPECT GENERATORS
Tips for investing in early stage projects and companies, with John-Mark Staude
Doug Hadfield: You are watching Resource Intelligence and right now I am speaking with John-Mark Staude who is the president of Riverside Resources. Today we are talking about early stage companies. First of all, what do you see as important in looking at these early stage companies and projects?
John-Mark Staude: Early stage companies really need to be in the right location. If you are in the right location that is where you can find something that other people will want to buy and geologically it has the potential to make a lot of money.
Second thing I really look for is with people. I’m looking for people who have succeeded before, people that know what they are doing and people that honestly are doing the best thing for the shareholders and for the company. Get those two things right and you have a great chance for a hit.
Doug Hadfield: It seems a little odd almost that you talk about location and people but what you are really looking for is rock.
John-Mark Staude: First off, three ways to look at it: Nearby mines, elephant country we often say. If you are around places that other people are mining and operating that’s good.
Second is the actual types of alteration or style of deposit. One thing you really get with that is by understanding or listening to newsletter writers or geologists to see what types of deposits these alterations form.
The third thing is grade. It’s really important to have high grades. So, when you have high grades around, maybe with trench results or with other sampling that have shown high numbers that is money, that is quite valuable.
So the grade, the overall rock type and geology, and then knowing you are in elephant country, those three things are very important in finding good early stage projects.
Doug Hadfield: Here in Canada on the TSX and the Venture Exchanges, companies are required to fulfill 43-101 technical reports. Is that something that an investor can use?
John-Mark Staude: You know I have to wear glasses now I’ve been reading those so much. They are so helpful and one of the sections that is most helpful is actually the disclosures. If you read the disclosures, you get a feeling for how much time is this qualified person actually been on site. You also can see any caveats, is it in a park, did it actually have any other concerns, maybe the underlying agreements, the payments that people have to make, the net smelter royalties. So it goes beyond the geology and it is all in one simple document that is available. It really helps investors and it only goes with public companies. I get reports everyday, seven days a week and I find the ones that are coming from the public companies because of the 43-101 because I can go online helps a lot.
Doug Hadfield: What else can investors look at in these early stage projects?
John-Mark Staude: Websites are very good for getting a feeling for where is the company, is it organized, is the information organized, have a look at the photographs of the site, also looking through any reports that may have any analyst coverage, maybe any other type of writers that have followed it up, that really helps a lot. Maybe a third party that has visited the site. Some may actually be getting paid for their coverage, so you cannot be completely trusting of the information, but at least you get another sense for it.
Doug Hadfield: Finally, what is the potential for upside in these projects?
John-Mark Staude: They go 500 or 1,000 percent overnight, over a month, quite often. Just last month GoldQuest, they were trading some place around 10 cents, boom then it is 70 cents a share. That is seven times your money and I do not care what market, particularly in this market, those types of discoveries happen. Caliber Resources earlier this year, a great discovery with a few drill holes, even with one drill hole, you see these great things, Seafield Resources, drilling these long intercepts right now, it is grade over a long thickness, that continuity, in the right type of body, boom, it really makes value.
Doug Hadfield: John-Mark, thanks a lot of talking to us today.