As the price of gold continues to rise not only will investment dollars begin to flow more readily into the junior gold stock sector but so also will dishonest scammers seeking to take advantage of unsuspecting investors. In this interview, seasoned resource fund manager Warren Irwin returns to the show to warn us not to fall for mining stock scams.
Warren has first-hand experience with the Bre-X Minerals fraud of the 1990’s. Warren turned $250,000 of his own money into $5,600,000 as Bre-X’s share price rose. Fortuitously, after being warned and realizing that Bre-X was a scam, he sold his stock near Bre-X’s stock price peak. Warren then immediately began shorting the stock and holds the rare distinction of being one of the only people to profit from both Bre-X’s share price rise and fall.
Warren Irwin’s G-10 Special Situations Fund (US) LP earned the top position in 2016 among the 4,099 hedge funds tracked by BarclayHedge with a 156.32% annual return. Other Rosseau funds also took the second and sixth spots with returns of 155.94% and 128.89% , respectively.
2:09 Mining scams get worse when the sector heats up
3:45 Pre-IPO shenanigans
7:19 When issuing cheap paper is okay
8:42 Mandatory escrow requirements on pre-IPO shares
11:51 Reverse Takeovers can be either good or bad
14:00 Financial statements, lifestyle companies and more shenanigans
20:45 Some executives deceitfully syphon money from junior miners
22:51 Antiquated SEDI.ca website and insider buying and selling
26:47 “I’ve been burned by pretty much every one of these scams.”
Warren’s fund: https://www.rosseau.com/
To learn about Warren’s first-hand experience with the Bre-X mining scam of the 90’s listen to our in-depth interview from PDAC 2018: