Recap & Outlook: 40 Meetings - 3 Days
This week, instead of our regular broad market discussion, we write about a follow-up to our Resource Fund due diligence process. Previously, we discussed how site visits aid our research process by allowing us to assess projects from a technical perspective. Equally important is to attend specialized mining conferences that give us exposure to a number of different exploration companies, top executives, and new deal flow. This ties into our overall strategy of meeting 500+ companies a year to filter down to the best companies in the market to have in our investment portfolio.
This year, we spent three days at the Beaver Creek Precious Metals Summit and met with 40+ companies of the 184 that attended. The aim of these conferences is to source out new investment opportunities in companies that are either private and going public or, companies that have been around for a number of years but have recently had a paradigm shift. Sourcing these types of deals and ensuring that we are investing early and recognizing these changes to business plan provides us a strategical advantage to capitalize on greater returns as compared to investing at a more mature phase (feasibility/development). This is illustrated in the diagram below which demonstrates the high torque offered by exploration stage projects during the discovery period.
- Discovery & Speculation: Attending conferences and obtaining 1 on 1 meetings with top executives in the industry allows us to build strong relationships with serially successful management teams offering us the opportunity to invest alongside management for maximum upside and a better risk/reward ratio.
- Paradigm Shifts: Continual meetings with companies allow us to track exploration success until an attractive entry point presents itself at which point, we can take advantage of our research to invest ahead of the market.
- Trust in the Process: Of the 184 companies at the conference, we were able to narrow our opportunities to a few companies that fit our research criteria and provide us the high conviction required for investment.
“This means that.” Our process allows us to be proactive rather than reactive. By keeping an open dialogue with companies, continuously assessing their progress, and building relationships with management, we can invest in promising companies ahead of the curve that are flying under the radar but offer real value.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder North American: Equity Portfolio (January 2011), Pathfinder North American: High Income Portfolio (October 2012) Pathfinder Partners’ Fund (April 2011), Pathfinder Real Return Plus Fund (April, 2013), Pathfinder International Fund (November 2014) and Pathfinder Resource Fund (May 2018).
Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.