Top Mining Sector CEOs To Invest In

by: Simit Patel

A common strategy in investing, and one I myself prefer to employ, is to invest in the top executives. Indeed, one of the first things I'll look at before making an investment is a review of the management team, and assess whether or not they are the kind of people that can create real value. While part of this is a review of their resume, a larger part of such analysis, in my opinion, is rooted in intuition: executives that exude the right mix of charisma, trustworthiness, street smarts, and combine it with visionary thinking is what I am really looking for. Nothing beats meeting the executive and having a face to face conversation with them, although in instances where that is not feasible - which is the usual scenario for individual investors like myself will face - watching executives on YouTube and interacting with them via social media is a useful substitute or complement. I sometimes wonder how anyone assessed management prior to the Internet.

Anyway, for me to really commit to the company, I have to be a believer in their management team - specifically their CEO. Below are the top executives in the mining sector, the area where I focus the most on, that have earned my trust - and as a result, my dollars:

Amir Adnani. Amir Adnani is the founder of Uranium Energy Corporation (NYSEMKT:UEC), a firm that managed to become the first new uranium miner in six years in the United States. There are a few reasons why I'm sold on Amir's capabilities. First, like many creative executives, Amir has a diverse background; an Iranian-Canadian operating a uranium company headquartered in Texas is impressive in and of itself, but becomes even more noteworthy when one considers that Adnani has a marketing background (prior to founding Uranium Energy, he founded Blender Media). Secondly, the team he's assembled at UEC is outstanding; Harry Anthony, the firm's COO and a pioneer in ISR mining (the style of low-cost mining UEC engages in), serves as an example of the kind of talent Adnani can attract. When an executive can build a great team, they probably have the charisma to attract investors and execute JV deals as well.

Jim Sinclair. Jim's track record in the gold market speaks for itself, as he has shown an uncanny ability to forecast the price of gold a decade in advance. Presumably being the son of Bert Seligman, a wildly successful trader and the partner of famed trader Jesse Livermore, is of some relevance here. Jim's reputation is a good reason to invest, although his market foresight reflects street smarts and an ability to spot a deal when he sees it. To wit, Jim authored a book on the coming rise of Africa in 1995; he saw what was developing in the gold market at the turn of the century, and put both of those opportunities together to launch Tanzanian Royalty Exploration (NYSEMKT:TRX). This is the kind of foresight characteristic of a great visionary entrepreneur.

Rob McEwen. Rob McEwen is perhaps the easiest executive to invest in on this list, simply because he's done it before: he led Goldcorp (NYSE:GG) from a market cap of $50 million in 1993 to over $10 billion. That Goldcorp remains a great company even after McEwen's departure - indeed, I regard it as a "must own" stock for any well-rounded gold mining portfolio - is also a testament to McEwen's ability to build a company that is built to last. Can he do it again with McEwen Mining (NYSE:MUX)? I think it is certainly worth a speculation, doubly so in light of how much MUX has sold off of late. It should also be noted that McEwen takes no salary, has invested $110 million of his own money into MUX, and owns 25% of the shares; this is the kind of behavior that aligns his interest with that of shareholders, and thus is the kind of behavior that displays the trustworthiness characteristic of many great executives.

Pierre Lassonde. Pierre co-founded a game changing company in Franco-Nevada (NYSE:FNV), pioneers of the royalty business model. A track record of building new business models is what great visionary entrepreneurs do; Steve Jobs is perhaps the most celebrated example. Pierre is currently involved with some other companies, like New Gold (NYSEMKT:NGD), and was previously a director at Newmont Mining (NYSE:NEM) from 2002 to 2007. Between Franco Nevada and Newmont, Pierre has played critical roles at two of the largest and most gold successful mining firms in the industry, and has done so from 1982 - a particularly tough time for the industry as a whole, as it had just come off the bubble of the late 70s and was about to begin a 20 year period of limited upwards movement - till present day. This kind of experience is unrivalled, and puts Lassonde in a league of his own.

Nolan Watson. There are a number of companies I'll never forgive myself for not buying in the crash of 2008 - and one of them is Silver Wheaton (NYSE:SLW), a company founded by Nolan Watson. At 32 years of age Watson is much younger than many of his fellow executives, though he is already on his second company - Sandspring Gold (SNDXF.PK). Sandstorm, like Silver Wheaton, is a streaming company, meaning that it operates as a financial organization that invests in mines with joint venture partners and reaps a dividend in the form of metals over the life of the mine rather than actually engaging in mining itself. Successfully executing this model requires being a great dealmaker, which means it requires street smarts and charisma - which Watson has an abundance of.

Although I always favor doing an exhaustive study of a company before putting a single penny into it, investors who do not wish to do this much work can succeed just by finding the right people and investing in them. The folks mentioned here, as well as people like Bob Quartermain of Pretium Resources (NYSE:PVG) or Brian Dalton of Altius Minerals (OTCPK:ATUSF), are folks worth investing in. Moreover, many of them are focused on several companies. While this is a potential red flag in terms of them spreading themselves too thin, if you do a cursory amount of investigation to see which companies they are committed to - and this can often easily be determined by finding out their ownership percentage in various companies - you'll have identified the stocks you need for building yourself what is likely to be a very nice portfolio.

Disclosure: I am long MUX, UEC, TRX, GG, FNV, NEM, SLW.

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