I don’t invest in companies, I invest in entrepreneurs

Photo: I don’t invest in companies, I invest in entrepreneurs

Anyone who reads my letter knows by now that I put people over everything else when it comes to small cap investing.

Smart entrepreneurs won’t chase bad projects. Smart entrepreneurs will surround themselves with other brilliant people who fill in their blindspots. Smart entrepreneurs will have the respect of industry titans and vets, and have the influence to pull them into their organization.

Smart entrepreneurs understand that Plan A rarely works out the way you hope. They understand that tough days will outnumber the easy days 10:1. They will have the energy, resilience and foresight to pivot and keep swinging when the turbulence hits.

Investing in the right people will insulate you from poor management decisions. It will insulate you from reckless G&A spending. The right people will know more about their industry then any amount of due diligence could enlighten you.

Brilliance Attracts Brilliance

The best people in any industry become magnets for each other. Either through competition or collaboration, the best of the best will find themselves on the same shelf.

We are heavily influenced by our immediate circle - the analogy that you become the average of the five people you spend the most time with is one that I have proven true many times over in my life, and likely why I am such a people focused investor.

In the words of Ross Beaty:

“If I had advice for anyone, I’d say as soon as you realize that there’s not a good chemistry between people, chop, move on and find a better person, because it’s just painful having to deal with that.”

Ross is the Chairman of Equinox Gold, a company that has sprinted from inception to owning six producing mines and having a portfolio of blue chip investors from Lukas Lundin and Richard Warke, to Blackrock and the Sovereign Wealth Fund of Abu Dhabi.

It is no surprise that Equinox became one of the top stories in the mining sector this year. At this point in his career, the minute Ross Beaty puts his name on something, the cost of capital goes way down and the opportunities go way up.

But Equinox began before Ross Beaty. Investors who were paying attention to the right groups were able to invest before they had attracted the likes of Ross, and way before the street was paying any attention.

The genesis for Equinox began with two lesser known financiers from Vancouver - and one of the greatest legends in the business - Pathway Capital and Marin Katusa.

Pathway and Katusa teamed up to form JDL Gold (named after the late and great David Lowell) and complete an early financing. The subsequent purchases of Christian Milieu's Luna Gold and Ross Beaty’s Anfeild Resources were the original building blocks of Equinox Gold.

It’s these initial founders I pay the most attention to.

Pathway Capital is a group I have not spoken about in my letter - so let’s spend some time on them, because they are a team worth watching.

Founded by Marcel De Groot and Dave De Witt - Pathway became the playground where Marcel and Dave could merge their talents of corporate finance, securities law, capital raising, and M&A expertise into a venture capital firm focused on value creation.

Pathway was the first team at the table for what has now become Equinox Gold ($4B Mcap).

Pathway was the first team at the table for what has become Sandstorm Gold Royalties ($2.2B Mcap).

Collectively, Pathway Founders Marcel De Groot and Dave De Witt have helped build five companies that have touched a $1 Billion market cap.

De Groot and De Witt (historical meanings: The “tall one” and The “blonde one”), consummated their marriage in 2004 and have since supported companies raising over $2 Billion in equity financings, in addition to involvement in several billion dollars worth of M&A transactions.

They are not promotional. They are not the loud personalities jumping in front of cameras and stepping to podiums. Most people on the street don’t even know who they are. But they operate with quiet precision, and consistently assemble some of the hottest opportunities that hit the market.



Following Pathway Capital is what led me to this month’s company spotlight:

Eclipse Gold Mining Corp.


The story of Eclipse Gold Mining Corp. is the story of Marcel De Groot and Dave De Witt seeking out entrepreneurs with proven track records.

In 2018, Mike Allen was a CEO on their watchlist. They had watched Mike, while CEO of Northern Empire, acquire the Sterling Gold Project in Nevada for $10 million and sell it in little over a year for 9X what he paid, to Coeur Mining.

Receiving the affirmation they needed, they coordinated a meeting with Mike at the 2018 Beaver Creek Conference in Denver.

Like many great CEOs in the mining industry (Ross Beaty, Mark O’Dea) - Mike Allen was a geologist first. His core skill set is finding great projects, and asking the ultimately important question: Can this property legitimately become a mine?

The conversation at Beaver Creek went well. Mike moved into the office at Pathway Capital in Vancouver. In obsessive fashion, he began pouring over dozens of projects looking for something that could “Eclipse” his previous win.

He looked at 90-100 projects before he found it, The One: Hercules, located in his all too familiar stomping grounds of Nevada.



I’m often asked, “What is Eclipse’s value proposition? What’s your plan for success?"


"What excites you most about this opportunity?” Here’s what I say:


It’s all in the name, Eclipse. In 2017, our team acquired the Sterling Mine in Nevada for US$10M. A year later, we sold it for $90M. Our goal is to eclipse this achievement with even greater success through a major gold discovery in Nevada. Hercules met or exceeded these standards.

- Eclipse Gold Mining CEO, Mike Allen


I like a lot of what I saw in Eclipse - the jurisdiction, the asset and the timing. But the people is where they truly stand in a league of their own.

Eclipse Gold Mining is a confluence of entrepreneurs from the resource business that have collectively generated over eight $100M+ exits for their shareholders, including the $1Billion+ takeouts of Arequipa Resources and Newmarket Gold.

In addition, they were on the ground floor for some of today’s best known success stories - Equinox Gold, Sandstorm Gold Royalties, Kirkland lake Gold and Calibre Mining.

Following my logic - brilliance attracts brilliance. Pathway Capital found Mike Allen. Together, pulling on their track records of successful companies, they have built the best executive and advisor team in junior mining - They truly are:

The Junior Miner with The Major Team.


Eclipse Gold Mining 5 Critical Facts

1. Serially Successful Management: The management team has completed over $4.5 Billion in previous exits

2. Strong Balance Sheet: $11M in the bank and no debt

3. Skin in the Game: CEO Mike Allen is the largest shareholder, Insiders and Management owns 40% of the company

4. Location, Location, Location: Project is located in Nevada, one hour outside of Reno

5. High Quality Asset: District-scale land package, low sulphidation epithermal gold-silver system

We have assembled a must read report, detailing all of the key features and risks with Eclipse Mining. I built my position on the open market, within pennies of today’s share price.

Read my full report here

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