Steve Barton: Mining Stocks — How I Pick Winners, When to Buy and Sell

Key Concepts

• Due Diligence Strategy: A systematic process for evaluating investment opportunities, particularly in junior mining companies.
• AI in Due Diligence: Utilizing Artificial Intelligence to filter and identify promising companies from a larger pool.
• Key Investment Criteria: Focus on large deposit targets, experienced management teams, and potential for significant growth (10-baggers).
• Company Evaluation Questions: A structured set of inquiries to assess a company's market cap, cash, debt, valuation, value creation strategy, competitive advantage, management experience, ownership structure, partnerships, and scalability.
• Red Flags: Identifying warning signs during company interactions, including gut feelings, lack of authenticity, and poor work ethic (e.g., late arrivals, early departures from conferences).
• Conference Selection: Prioritizing intimate conferences like the New Orleans Investment Conference and Rick Rule's event for effective company engagement.
• Investment Strategy: Typically investing in tranches, buying more as the price decreases, but also making lump-sum investments when a key unanswered question is resolved.
• Holding Period: A long-term approach, with 90% of the portfolio held for a year or more, emphasizing patience and following the story.
• Selling Strategy: Based on a pre-defined thesis for each commodity and company, including identifying when to sell based on fundamental changes or technical indicators.
• Technical Analysis: Using chart patterns and indicators (e.g., RSI on a quarterly timeframe) to inform buying and selling decisions.
• Commodity Outlook: Copper is identified as a strong performer for 2026, with expectations of continued strength above $5 per pound.
• Technical Analysis Course: A beginner-friendly series focused on reading charts and identifying optimal buy/sell points.

Due Diligence Strategy at Investment Conferences

Steve Barton outlines his systematic approach to due diligence, particularly at events like the New Orleans Investment Conference.

Initial Company Screening

• AI Filtering: Barton utilizes Artificial Intelligence (AI) with specific prompts to "separate the wheat from the chaff" among the listed companies. While not detailing the exact prompts, he offers to share them upon request.
• Key Criteria for Approach:
  • Big Targets/Deposits: Focus on companies with substantial resource potential.
  • Experienced Management: Prioritizes individuals with a proven track record of successfully developing projects multiple times, especially those coming out of retirement to pursue new ventures. He emphasizes that this experience is the "number one thing" he looks for.
  • Growable Deposits: Seeks projects with the potential for significant expansion, aiming for "10-bagger" opportunities.

Questioning Companies at the Conference

Barton shares a structured list of questions, adapted from experienced investors like Jordan Roy and Rick Rule, to gain a comprehensive understanding of each company.

• Initial Assessment (Market Cap, Cash, Debt): This provides an immediate sense of the company's size and financial health, differentiating between smaller ($15 million) and larger ($400 million) entities.
• Valuation and Value Creation:
  • "Are you undervalued? Why are you undervalued?"
  • "How are you going to create value?"
  • "What separates you from all these other companies?"
  • These questions are designed to filter out companies providing superficial answers and identify those with genuine passion and understanding of their projects.
• Management and Team Experience:
  • "What is your experience? Have you done any projects that are similar to this?"
  • He stresses the importance of relevant experience (e.g., a copper miner moving to copper projects, not uranium to copper).
  • "What experience does his team have that relates to this project?"
• Ownership and Partnerships:
  • "Who owns the company? How much do they own?" Barton advises directly asking the CEO about their share ownership, as this is easily verifiable and indicates alignment.
  • "Do they have any vested partners?" The presence of major companies like Barrick, BHP, or Vale investing in a project is a significant positive, as their due diligence teams are extensive.
• Scalability and Geology:
  • "What is your company scalability? Basically, how big is it?" This question delves into whether the project can support a small mine or has the potential to become a "really big mine," which is where significant profits are made.
• Biggest Unanswered Question:
  • "What is the biggest unanswered question facing your company?" (Attributed to Rick Rule).
  • An example is provided: If a company needs to drill out a specific area (e.g., South Pasture) at a cost of $7 million but only has $2 million in cash, the question becomes how they will secure the remaining $5 million. This highlights the need for realistic funding plans to address key uncertainties.

Identifying Red Flags

Beyond the structured questions, Barton emphasizes the importance of intuition and observation.

• Gut Feeling: "If you get the feeling that something just doesn't feel right, go with it. Trust your gut." He stresses the difficulty in articulating this feeling but highlights its importance in assessing authenticity and potential hidden issues.
• Work Ethic Observation: Barton observes which companies have representatives present from early morning (8:00 AM) to late evening (6:00 PM) at conferences.
  • Negative Indicator: Companies consistently arriving late (10:00 AM) and leaving early (3:00 PM) suggest a lack of dedication and hunger.
  • Positive Indicator: Companies that are "hungry," "early," and "leave late," demonstrating passion and a desire for engagement, are preferred investment targets.

Conference Preferences and Investment Approach

Barton shares his preferred conferences and his methodology for making investments.

Favorite Conferences

• New Orleans Investment Conference and Rick Rule's Conference: These are his "two favorites" due to their intimate nature, which allows for more meaningful interactions with companies. He contrasts this with larger, "football stadium" sized events.

Investment Execution

• Tranche Investing: Generally, Barton buys in tranches. He identifies companies that are frequently mentioned by experts and then uses technical analysis to find optimal entry points, buying more as the price decreases.
• Lump-Sum Investment: He will invest all at once if he believes the opportunity is exceptionally strong.
  • Example: Banyan Gold: He invested a lump sum when the company resolved its "starter pit" question, which was crucial for securing financing. He emphasizes that in such cases, the stock chart becomes secondary to the fundamental resolution of a key uncertainty.

Holding Period and Patience

• Long-Term Focus: Approximately 90% of his portfolio is held for a year or more, with a minimum holding period of one year.
• Patience Required: He highlights the need for patience, citing an example of holding a position for over four years, which has now reached a zero cost basis and represents 2.5% of his portfolio.
• Navigating Volatility: He advises investors to remain patient through minor setbacks (e.g., city council meetings affecting stock trading) if they believe in the underlying story. These dips can be opportunities to buy more.
• Exit Strategy: The only reason to sell is if a fundamental question is answered in a way that contradicts the initial investment thesis.

The Importance of a Thesis and Selling Strategy

Barton stresses the critical role of a well-defined investment thesis for both commodities and individual companies.

Developing a Thesis

• Commodity Thesis: For each commodity owned (gold, silver, copper), he writes down the reasons for owning it and, crucially, the conditions under which he would sell it. This framework is inspired by investors like Adrien Day, Rick Rule, and John Pauly.
• Company Thesis: Similarly, a thesis is developed for each company, outlining the rationale for investment and the selling triggers.
• Actionable Plan: Having a written thesis provides a clear roadmap, allowing investors to act decisively as questions are answered or circumstances change, rather than making emotional decisions.

Selling Triggers and Methods

• Fundamental Narrative Change: If the core narrative of a company changes (e.g., a large tier-one deposit is proven to be insignificant), Barton will exit the entire position regardless of profit or loss.
• Tranching Out: In other cases, like Rio2 nearing production, he may sell in tranches as the company progresses. He notes that the most valuable time for such a company is often when it enters production.
• Technical Analysis for Selling: Barton also uses technical indicators to inform selling decisions.
  • RSI Indicator: An RSI (Relative Strength Index) above 70 on a quarterly timeframe serves as an "alarm bell" to trim positions.
• Combined Approach: He integrates both fundamental analysis (to identify what to buy and focus on) and technical analysis (to determine when to buy and sell).

Conference Insights and Future Outlook

Barton shares recent interviews and his commodity predictions.

Recent Interviews and Company Updates

• Banyan Gold: He interviewed Tara Christie, reporting that "all systems are go" with ongoing drilling and project expansion. He discloses his ownership in the company.
• Dakota Gold: He plans to interview CEO Robert Quartermain. He attended their presentation, finding it promising, and is studying the company, though he doesn't yet own it. This highlights his patient approach to investment.

2026 Top Performing Asset Prediction

• Copper: Barton predicts copper will be the top-performing asset in 2026.
  • Current Strength: He notes that copper is consistently trading above $5 per pound, a level that was a new all-time high a year ago.
  • Reduced Recession Fears: He is less concerned about a recession impacting copper demand than he was previously.
  • Advantage for Gold-Copper Projects: He believes projects with both gold and copper exposure will outperform primary gold projects.

Technical Analysis Course and Final Thoughts

Barton promotes his technical analysis course and offers concluding remarks.

Technical Analysis Course

• Beginner-Focused: The course is designed for beginners to learn how to read charts and identify optimal buy and sell times.
• Practical Application: The first 30 minutes cover chart setup, followed by 2.5 hours of instruction on chart reading.
• "Kindergarten Method": He describes the core principle as selling at the top of the chart and buying at the bottom, with indicators providing additional certainty.
• Positive Feedback: The course is receiving positive feedback and is helping many investors improve their bottom line.

Closing Remarks

Barton expresses gratitude for the interview and reiterates that links to his channel and technical analysis course will be provided in the video description.