Mike Beck: Highly Successful Resource Investor Shares His Latest Big Bet in Nickel
Mike discusses the structural changes that have occurred in the past few years and the implications for capital allocation in the juniors. The number of passive funds and ETFs has grown massively, and most of the smaller funds that used to invest in juniors no longer exist. These newer passive forms of capital can’t invest in juniors for several reasons and won’t subscribe to private placements. As a result, there has been nearly zero “trickle-down” to the junior sector. Eventually, some new form of capital will emerge to take advantage of this opportunity.
Mike’s team has a consistent approach to making investments, and they begin by examining the macro picture. Then they look at the demand picture for a metal or group of metals over the next two to five years. Once they are convinced by their thesis, they look for specific investments that provide them with leveraged exposure.
Their current metal pick is nickel, and while most nickel demand comes from steel, batteries are a rapidly increasing percentage. As the electrification of vehicles continues, the need for nickel will become unprecedented. Indonesia is set to take 15% of world supply offline this December and that disruption is being felt throughout the sector, and there is a scramble to find new suppliers. Mike thinks that nickel will increasingly be in deficit and will remain an excellent opportunity for investors.
After a long search they acquired a large scale nickel project in British Columbia and renamed it to Giga Metals (TSX.V:GIGA). Giga Metals economics will become re-rated as the nickel price rises. Mike discusses several other companies from which you can get exposure to the metal.
Time Stamp References:
1:10 – Juniors unable to obtain capital.
5:20 – The market for juniors has fundamentally changed.
8:40 – Mike’s investment style.
11:30 – Demand outlook for nickel.
18:40 – How to you gain exposure to nickel.
Talking Points From This Week’s Episode
• The starvation of capital in the juniors continues.
• Mike’s consistent approach to metals investing.
• He explains why nickel will continue to do well.
• How to gain exposure to the nickel sector.
Mike Beck is the founder and Managing Director of Regent Advisors LLC, a corporate finance advisory and investment firm. He has advised on equity and debt financings for private and public companies in the natural resources sector, including Signet Petroleum Limited, West African Minerals Corporation, Polo Resources Limited, Direct Petroleum Exploration Inc., Titanium Resources Group, Copper Development Corporation, UraMin Inc., Diamond Fields International Ltd., Weda Bay Minerals Inc., Regent Pacific Group Limited and CCEC Ltd.
Mr. Beck was a Managing Director at N M Rothschild & Sons with responsibility for the firm’s mining, oil and gas advisory and investment activities. Before that, Mr. Beck was the founder and President of Librion Group Inc., a corporate finance boutique. He also was with the International Finance Corporation of the World Bank Group, where he oversaw the structuring and financing of a large number of natural resource projects in Africa. Mr. Beck has also been a founder or co-founder of several companies listed on the Canadian, Australian, and London stock exchanges. He has an M.S. in Engineering from Princeton University and a B.S. (High Honors) in Engineering from Rutgers University.