Insights on the resource market with Brent Cook and Joe Mazumdar

In January of this year, I attended the Metals Investor Forum and heard a presentation entitled, Entering the Twilight Zone, given by Joe Mazumdar of Exploration Insights. Exploration Insights is a highly respected newsletter publication within the junior resource sector.

Brent Cook, the letter’s founder, is an economic geologist who has worked in the mining industry in a number of different roles. As an independent consultant, he provided advice to numerous mining companies around the world such as, Newmont Mining (Santa Fe), Freeport McMoran (Cyprus-Amax) and Rio Tinto Mining, just to name a few. Cook also worked for Rick Rule at Global Resource Investments, providing analysis and commentary on a host of different junior resource companies.

Exploration Insights added a key component to the team in 2015, with the addition of Joe Mazumdar. Previously, Mazumdar was a Senior Mining Analyst at both Canaccord Genuity and Haywood Securities. He has also worked for a number of mining companies over the course of his career, which include Newmont, IAMGOLD and Rio Tinto.


Entering the Twilight Zone

The title of Mazumdar’s presentation reflects where we stand in the current resource market, as most aren’t quite sure where we’re headed. One thing is for certain, however, the road ahead will be volatile as President Trump attempts to execute the promises he made during his campaign.

Here are a few notes on what Mazumdar had to say about some of the metals. These comments are summarized from my notes, please don’t take them for verbatim. If you would like to watch the presentation, you can check it out here.

Copper – Days of inventory are dropping versus a rising real copper price. Mazumdar believes this is a real trend and that an event such as the 2013 Binghamton Canyon landslide disaster would certainly lead to a price spike.

Uranium – The supply overhang is still very large, it’s going to take a couple of years to unwind. Mazumdar believes that if you want to participate in the uranium sector now, buy a good uranium explorer, as most of the producers can’t make money at this U3O8 price.

Gold – The gold price is rising in all of the world’s major currencies, which is a very good sign for the future of gold, and a glimpse into how much uncertainty still exists in the market. Trump is expected to add $5 trillion to the American debt total, and real interest rates could stay negative; all of the makings of an inflationary environment, which would be great for gold.


Current Exploration Insights Portfolio Position Percentages:

  • 45% Prospect Generators
  • 42% Explorers & Developers
  • 13% Producers

To further summarize Mazumdar, we’re positioning ourselves in high risk / high reward companies, as there aren’t a lot of high quality assets out there and the majors aren’t exploring to replenish their reserves. Therefore, the highest pay back is going to be with those that are exploring for new discoveries, which will eventually be taken over by the major mining companies.

Finally, Mazumdar finishes off his presentation with what Exploration Insights uses for its criteria in picking companies and keeping them within their portfolio:

  • Solid management team
  • District size land packages
  • Companies that have a high potential for M&A activity versus leveraged / optionality
    • Majors are looking for at least 15% after tax IRR
  • Find the fatal flaw as soon as possible and then sell



I recently had the opportunity to ask Cook some questions about the current gold market, and how he thinks the average investor can tilt the odds in their favour when buying companies in the junior resource sector. Check it out:


A Conversation with Brent Cook of Exploration Insights

Over the last ten years, I’ve used a number of different financial products to try to give myself an edge in junior resource speculation. I believe it’s tremendously important for people to match their own investment persona with the financial product that they’re going to be using.

What do I mean by matching your investment persona with financial products? Specifically, in the context of the junior resource sector, which is about as risky as it gets, various financial products offer varying risk levels to the investor.

Last fall, I wrote two articles on this concept. The first article, Risky Business, reviews the varying levels of risk by company type in the junior resource sector. They range from the highest risk, which is an exploration company, to the lowest risk, which is a metal streaming company.

The second, Financial Products & Your Investing Persona, covers five questions that I believe people should ask themselves before purchasing a financial product, such as a newsletter.


The Exploration Insights team is very strong and I believe it provides great bang for your newsletter buck. Without further ado, here’s my conversation with Brent Cook:

Brian: When I recently attended the Metals Investors Forum (MIF) and the Vancouver Resource Investment Conference (VRIC), I was pleasantly surprised by the amount of optimism currently circulating among company personnel and investors. One company executive said to me, “financings are being over-subscribed and investors are responding positively to good news releases…these are the hallmarks of a bull market.”

Most of 2016 was very good to those invested in gold and gold stocks, but by August, some of those gains started to be eaten away by a correction. Now, at a historically strong segment of the year for gold, in your opinion, will the gold market begin its next march up?

Brent: There are two driving forces behind the gold price right now. The first is, unfortunately, global tensions and political uncertainty. The gold price is tied to the US dollar and my suspicion is that as Trump reels out of control, confidence in the US dollar wanes pushing the gold price higher in US dollar terms.

The second catalyst Joe and I see is that the mining companies are becoming increasingly anxious to replenish their reserves. On the whole, the gold mining industry has been producing in the order of 90 million ounces a year, yet finding less than half that per year. This is a long term issue that we think will positively impact the more competent junior explorers.

So I expect the gold price to be higher by year end.


Brian: At the VRIC, I was able to catch the Newsletter Writer panel with yourself, Louis James, Frank Curzio and Benj Gallander. During the panel, you mentioned that you are passionate about mineral discovery and that finding the best exploration companies is your specialty.

For the average investor, picking an exploration company is a daunting task because, statistically, exploration companies have a 1 in 1000 chance of finding an economic discovery. With the odds seemingly stacked against us, in your opinion, how does the average investor tilt the odds in their favour when picking an exploration company?

Brent: Good question, but not an easy answer. The stated odds of 1 in 1,000 take into account all the prospects that are receiving any attention. The majority of these prospects are worthless and can be screened out with a minimal amount of due diligence. So the odds are really not that long.

Our job is to narrow the 1,500 or so exploration companies down to about 100 using some basic geology, looking at management, share structure and the ability to fund exploration. From that 100, it comes down to finding the fatal flaw in a property or company.


Brian: News Releases with drill results, soil sampling, tilling or geophysical surveys can be confusing for the average investor, however, some still want or need to digest the information themselves.

In your experience, is there a straightforward way (or a checklist of sorts) for the average investor to synthesize the information and identify what’s most important?

NOTE: The Exploration Insights website does have a Drill Hole Interval Calculator here.

Brent: Some basic questions any speculator should ask are: Does the geologic setting offer the potential for a significant discovery, meaning can the conceptual target realistically cover the exploration and capex costs. Usually it can’t.

Metallurgy, or metal recovery, is also a big question that has to be answered as soon as possible. If you can’t get the metal out of the rock economically, the property is of no value. There are of course many more red flags and fatal flaws to watch for. We have a free report on Fatal Flaws available to anyone interested—just contact us via our website,, and request the report.

I have found that too many companies or geologists don’t have a real sense of what they actually need to find in terms of grade/tonnes to cover the exploration and development costs. There is too much “dreaming” in this industry.


Brian: In many presentations, you have stated that we are losing the equivalent of a Carlin Trend in gold production each year, and the odds of replacing these lost ounces is almost hopeless, at this rate.

Is there a frontier left in the world that has yet to be explored, or an area that still holds a lot of potential for economic mineralization?

Brent: It is getting harder and harder to make an economic discovery. Most of the politically accessible ground has been explored pretty well, and outcropping ore bodies are few and far between. That means that the industry has to look under cover, drill deeper and spend more time analyzing the data. Because most new discoveries are going to be deeper, all the costs of exploration through development are higher, therefore, your hurdle to profitability is higher and odds of success lower.

Regarding places to look, most new deposits will be found in known belts like the Andes, Tethyan belt, Canadian and Australian shields, Western US and West Africa. The most prospective ground in the world, for the most part, resides in countries that end in –stan.


Brian: For the average investor, I think the geological side of the junior company analysis is the hardest to understand and put into practice.

For the investor looking to increase their knowledge of economic geology, are there any resources that you would recommend (books or videos)?

Brent: Our letter tries to educate subscribers on the details of geology and mining and the Fatal Flaws report is useful. The Northern Miner has a good introductory book. We have listed a number of sites and books under the “Links” section of our website


Brian: I, personally, feel that the Exploration Insights newsletter is the BEST bang for your buck in the industry.

When someone subscribes to Exploration Insights, what can they expect? In  your opinion, what are the greatest takeaways? And where can someone go to find more information on subscribing?

Brent: Thanks, Joe and I try.

Exploration Insights is about what we are buying, selling and avoiding with our money. We only receive money from subscriptions and our trading. Because it is our money on the table, we are very cautious in this very risky sector.

Exploration Insights comes out every Sunday and we put out comments and alerts if something notable happens during the week. When we buy a stock we lay out our investment thesis and expectations. We track the company’s progress and continually re-evaluate our thesis. We also discuss various aspects of the industry that we think will provide context and background to help subscribers with their own speculations.


The gold bull market will be full of volatility, but investors who are able to control their emotions and buy during the dips will see tremendous success in the years ahead. Controlling your emotions is just one way to tilt the odds in your favour. Cook covers a few other important questions to ask yourself, both when examining companies for possible speculation or reviewing the news releases put out by the companies you already own.

Cook and Mazumdar have a tremendous amount of knowledge and experience to share. Arming yourself with top notch financial products like Exploration Insights is key to maximizing gains in the most volatile sector in the world – junior resources.