Although the junior mining sector began crumbling in May, savvy investor Mike Halvorson, president of Halcorp Capital, still ended up having a very busy summer. Welcome to the world of a substantial investor in mining stocks, who gets in early and then enjoys sizeable profits as, one by one, his companies become takeover targets. “I’ve been fortunate,” the humble Halvorson told us, “I’ve gotten associated with top explorationists, the people who do know a quality project.” And because they have credibility, quality projects come to those geologists. Halvorson claims his wealth-building strategy comes from investing in the projects of these credible geologists.
On May 3rd, Glamis Gold acquired Western Silver. “I recognized the project and the main geologist behind it, Tom Patton,” Halvorson explained. “I was a director of Western Silver. I didn’t stay associated for the whole run, but I was there for the best part of it.” August has been his busiest month. As a director of NovaGold, Barrick Gold recently announced a hostile takeover of this company, and which is now being disputed. In mid August, Yamana Gold made a bid to take over the shares of Viceroy Exploration, which has proven and probable gold reserves in excess of seven million ounces in Argentina.
So how does someone emulate Mike Halvorson’s success in picking major winners in the mining sector? “The average investor is going to have a tough time,” he commiserated during our phone conversation. “If I were an average investor, I would rely on some sort of advisory service, or two or three, to help me pick my stocks.” We both agreed some of the uranium projects weren’t going to make it. “So many of these uranium projects will never see a shovel to the ground, they will never see anything close to production,” he cautioned.
But many advisory services look out for themselves first, then their subscribers, maybe if at all. He advised us to avoid the self-serving ones. “I have a long record with a couple of guys that are honest and have good abilities,” Halvorson said. He subscribes to Bob Bishop’s Gold Mining Stock Report. “I like Bob,” Halvorson told us. “He covers people. He knows a lot of individuals in the industry. One of the gifts, a guy like Bishop has, is he doesn’t try to fit the same model over every company, like a lot of analysts do. He just tries to figure out whether the stock is going up. What makes Bob Bishop better at picking stocks than most of the guys is that he doesn’t walk around with a model. He walks around with instincts and the ability to judge the people involved. He has a great network to check facts out with.”
“I guess for the average person, if they don’t rely on an advisory service, they should go to the (resource) conferences,” Halvorson recommended. Such conferences occur throughout the year. One resource conference takes place this week in Las Vegas. Another popular resource show will be held later in September in Toronto.
Valuing Uranium Mining Stocks