Peter Brown has contributed to the growth and prestige of Canada’s mining industry by helping many resource entrepreneurs and emerging companies gain access to venture capital. This capital has enabled countless mining entrepreneurs and professionals to acquire, explore and develop promising mineral prospects and open new mines.
Since 1960, Peter Brown has been a dynamic force in the Canadian capital markets. He joined Ted Turton in 1968 to purchase control of a small Vancouver brokerage firm for $23,000. By focusing on the small to mid-sized resource and junior industrial firms, long ignored by senior investment firms, he transformed Canaccord into an international force and Canada’s largest independent investment dealer.
Mr. Brown’s work at Canaccord helped build a vibrant junior finance market with a particular emphasis on and expertise in mining and exploration finance. These efforts gave birth to successes stories like Hemlo, Eskay Creek and Dia Met Minerals at home, and, Arequipa, Aurelian and Wheaton River abroad.
What factors will drive the mining markets over the next 12 months?
What will drive mining is demand and very low valuations. While I believe commodities are cheap and will do well over time, that thought must be tempered by the likelihood of slow growth and persistently high levels of unemployment for some time to come – together with the aging populations and unfortunate demographics.
I have no short term view on precious metals prices other than to note that the financially reckless destruction of the confidence in the currencies of the developed nations (combined with a global trend to civil disobedience mainly from a very connected youth) should have substantial impacts sometime in the future.
What should investors be doing right now?
For years it seemed that the markets for mining stocks were at the high end of the range relatively and now, with the severity of the correction, the reverse is true. I believe the best strategy is to build positions in those oversold and undervalued equities with high value in their “resources in the ground per share” and enough capital to avoid dilution at the bottom.
I think patience will bring substantial gains. Overtime I believe the biggest gains for the patient investor will be in the emerging and developing mid-cap mining and energy stories.
What are your top picks and why?
My favorite sector in the short term is food and agriculture and my first pick would be MBAC Ferilizer (Stock Profile – TSX:MBC) and second Potash Corp. (Stock Profile – TSX:POT & NYSE:POT) on a longer term basis.
My number one pick in traditional metals mining is Atna Resources (Stock Profile – TSX:ATN) with over 5 million US ounces valued at less than $30 an ounce in the ground and a projected cash flow almost equal to the market capitalization.
I also like Pilot Gold (Stock Profile – TSX:PLG). The company has an excellent management and geological team. Pilot Gold has two very good high grade discoveries – one in Nevada and one in Turkey which is in joint venture with Teck (Stock Profile – TSX:TCK.B & NYSE:TCK).
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