From The Gold Report:
It is difficult for retail investors to sift the wheat from the chaff in the junior miner sector. In this interview with The Gold Report, Rick Winters reveals how RMB Resources, a resource merchant bank, figures out what projects to invest in and those to pass over and talks about some of the companies that made the cut.
The Gold Report: Rick, RMB Resources invests in resource companies throughout the world. Why is RMB flocking to resource companies when most investors seem to be running in the opposite direction?
Rick Winters: RMB Resources is the resource merchant banking division of the FirstRand Group, one of South Africa's major financial institutions. We've been in the business of providing finance to the junior resource sector for 18 years. We look at junior resource opportunities everywhere in the world outside South Africa.
As resource investors, we're always in the game, even when the market doesn't seem to care. Our product mix may change with market conditions, but we stay in the market and are always active.
TGR: With the risk-off sentiment that's prevalent in the market right now, are you making changes to your overall strategy?
RW: As a merchant banking operation, we look at junior resource finance and focus on relatively higher-risk, higher-return opportunities. In times like this, when junior resource equities and mining equities aren't in favor, we look more toward quasi-equity and quasi-debt investments as a way of providing finance to companies. We do this when we have confidence in their projects, using their projects as security for a debt structure. This saves companies from dilution in a time of very low share prices...
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