Portfolio Size and Concentration Strategy

Your host Stijn Schmitz welcomes Jeff Phillips to the show. Jeff Phillips is Private Investor and President of Global Market Development. Phillips discusses his extensive experience in the natural resource market, having witnessed three bull markets over his 30-year career. He believes the current market may be entering a significant commodity super cycle driven by multiple factors, including currency devaluation, under-investment in resource exploration, and geopolitical shifts toward securing strategic mineral supplies.

Phillips emphasizes two critical criteria when investing in junior mining companies: structure and people. He looks for companies where management owns a significant portion of shares and has a proven track record of success. The ideal investment, in his view, involves well-structured companies with experienced leadership who have previously built or sold successful ventures. His investment strategy focuses on commodities like gold, silver, copper, uranium, and rare earth elements. Phillips is particularly interested in jurisdictions like North America and parts of South America, avoiding regions with high political risk. He sees emerging trends of tech companies and governments increasingly investing in mineral supply chains, which he believes will drive the resource super cycle.

Jeff cautions that the junior mining sector is extremely high-risk and not suitable for most investors. He recommends a disciplined approach, including maintaining a focused portfolio of 8-14 carefully selected positions and seeking advice from experienced professionals. His investment philosophy centers on finding companies with potential to develop tier-one assets and create meaningful value. The interview highlights Phillips’ belief that successful speculation in the junior mining space requires understanding company structure, management quality, and geological potential.

He advises investors to conduct thorough research, seek expert guidance, and remember the industry adage: “The best way to make a small fortune in the junior mining sector is to start with a large fortune.”

Timestamp References:
00:00:00 – Introduction
00:00:48 – Thesis of the resource super cycle
00:04:10 – Drivers of the super cycle
00:05:29 – Role of under-investment
00:10:00 – Jeff’s background and current focus
00:14:22 – Evaluating management expertise
00:18:10 – Skin in the game and share types
00:21:54 – Preferred business models
00:28:05 – Geological criteria for projects
00:29:50 – Luck vs. positioning
00:32:03 – Commodities of interest
00:36:40 – Jurisdictional preferences
00:38:49 – Valuing junior explorers
00:41:32 – Jeff’s role and value-add
00:44:44 – Wrap Up