David Stein: Three Reasons Why I Am Investing in Silver Miners Right Now
David has a background in both the technical and financial. He is an engineer and a geologist who has also worked on bay street as a financial and investment analyst. He started his own firm a year ago so he can invest in niche markets and specific commodities.
Currently, he is very focused on silver since developing a silver mine can be a great business. Many of them are small and high-grade, so you can get excellent results with minimal capital investment. Most silver mines have secondary metals which help greatly to make a mine profitable.
He likes the fundamentals of the metal however many find that it’s a tricky sector to analyze. There is a lot of demand for silver for various industrial uses and very few alternatives.
Most silver is mined as a by-product and these larger producers are not growing. Silver has similar fundamental features to gold. If you can find a pure silver play it will likely do very well in the coming bull market. Mr. Stein discusses several companies that are primarily silver miners.
He is currently active in private equity and has found a private silver mining company in Peru. Currently, they are working on a plan to optimize the company which is currently under-capitalized.
There needs to be a catalyst to get the precious metal markets moving. On the plus side building, a long-term and methodical base will inevitably result in better upside potential.
Talking Points From This Week’s Episode
• Silver has very good fundamentals and often follows gold.
• The market needs a strong catalyst to rally.
• The long base that has been building will bring a strong move up.
• Pure silver plays have much potential.
David Stein, CFA, MSc. is founder and managing partner of Aerecura Capital. He has been involved in finance and investment in the mining sector since 2001, most recently as President and CEO of Aberdeen International, a publicly traded mining-focused investment company. He remains a consultant to Aberdeen.
During 7 years with Aberdeen, David spearheaded a number of important investment initiatives, generating strong returns during the last bull market, and capitalizing on opportunistic transactions during the recent downturn in natural resources. Among those many deals was the spin-out of Ore Acquisition Partners LP in 2015, a private equity mining fund that he manages today.
Prior to Aberdeen, David started his career in finance with Cormark Securities’ predecessor, Sprott Securities Inc. where over 9 years he worked on both the investment banking and research teams as an Analyst, and later a Director and member of Cormark’s Executive Committee. While a research analyst, David achieved a strong reputation as an innovative stock-picker and was in many cases the first analyst to pick up coverage of small and micro-cap stocks that would later be acquired or have grown to be large-cap stocks on the TSX today.
Both of these phases: research analyst and investment manager; have helped David shape his mining industry network, valuation and diligence skills and transaction capability making him a leader amongst the next generation of mining finance.