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Hey hey! It’s Sunday so let’s grab a cup of coffee* and dig in.
All mines have a finite life, also called life of mine -LOM-.
This implies the industry is always racing to replace production with new reserves. And this is hard work that takes years (and sometimes even decades). Thus, the mining lifecycle is a complex, multi-year cycle that involves many steps and activities, ranging from high to low risk, focused on exploration to engineering and more. Ultimately, the cycle is aimed at producing for as long as possible.
‘Extending the mining life cycle translates to an investment that creates value for much longer than would otherwise be expected.’ —Albert Lu
Understanding the cycle will help you define an investment horizon that matches your investment goals, and gives you the best chances for success.
I believe all mining investors (or those wanting to enter the sector) need at least a basic understanding of the cycle, including:
- The ideal outcomes
- Which activities will be in focus
- The typical duration & sequence of each phase
- The main processing methods available to developers
- The type of information you can expect the company to report
Ultimately, this knowledge will also help reduce the gap between expectations and reality, limiting frustration that causes so many investors to exit a position prematurely.
If you already are clear on this, you’ve got a huge advantage in the game. What a legend!
If you don’t, I’ll tell you a little secret… I recently covered these in the featured thread below. Dive right in and tell me if it helps!
That’s it for today. Happy Sunday!
PS: If you still have some coffee left, I’ve included a few extra pieces that you may also enjoy reading below.
Every week I publish a new thread with actionable tips, ideas, or concepts for investors. Here’s a good one:
Mining is a multi-year endeavour. At times, decades can go by. Understanding the process may help define your hold… twitter.com/i/web/status/1…—
Paola Rojas 🐝 (@paola_rojas) October 01, 2022
Last week on my blog
You may have missed this piece – so here you go:
We live in a mineral-intensive world, yet many investors are on the fence about the sector. If that’s you, here are 5 reasons why you NEED exposure to mining and metals.
Last week’s most popular tweet
I tweet daily and love keeping track of what resonates the most as I feel it’s a great indication of investor sentiment. This tweet got the most engagement overall:
$GS global head of commodities: "To do green investment you need metals. You need copper, nickel, lithium, cobalt,… twitter.com/i/web/status/1…—
Paola Rojas 🐝 (@paola_rojas) November 24, 2022
A gem from the archives
Here’s one from the vault. Still 100% relevant so here it is, in case you missed it or want to read it again:
Given recent developments, I feel fitting to bring back this piece by Benchmark Mineral Intelligence in response to Goldman Sachs. Minor edits for brevity.
*or your drink of choice!
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