• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Consolidated Rock Holding Company

Consolidated Rock Holding Company

Consolidated Rock - Investment Holding Company of Sultan Ameerali

  • Overview
  • About Sultan
  • Portfolio

Interview: Mining Stock Education

August 8, 2023

This post originally appeared in my newsletter.

Happy Civic Holiday!

As most of you are already aware, I talked to Bill Powers of Mining Stock Education last week about how I got started and my process for making investments. Please forgive all the filler words and fast talking. I’m out of practice and an hour freeballing isn’t a 45-second markets report.

I’ve been putting off a newsletter post, partly because of procrastination, partly because of the difficulties integrating Twitter embeds, but mostly because of some projects not related to investing (I’ll have some short stories published before year end). Hopefully there’s some value in hearing about my journey and what works for me. I thought I could get back into investment writing by drilling down on points I glossed over or assumed the listener understood that I probably should have explained.

Useful Books

I mentioned The Sleuth Investor by Avner Mandelman. He breaks down his due diligence process by people, plant, product and periphery. The book still holds up, but there is an updated version that I haven’t read. I recently read Capital Returns after hearing it discussed on the Value Hive podcast. It’s essential content for anyone speculating in cyclical industries.

Building a Model

My valuation models in Excel are crude but effective. They let me play around with different inputs so I can see how costs, production delays, royalties and spot prices impact cash flows and valuation. There’s no one right way to do it and Youtube is your friend if you’re looking to figure it out. The best time to learn was yesterday. The second-best time is today before you invest another dollar. If all you can do is regurgitate someone else’s thesis or macro talking points, you aren’t going to make it.

Building an Investment Case

I like this as a quick test.

Filtering new jr mining ideas:

1 check C-suite and board
2 check latest corp pres
3 check flagship project
4 check financials
5 build simple econ model

That's ~60mins. If it passes those 5 stages with no red flag it's at 1st base & real DD begins. Any red flag = instant discard

— Mark (@Mark_IKN) March 27, 2023

Below is how I build my mosaic. I’ve structured it as a checklist in an effort to keep this simple.

The basics

  • Do I care enough about this business to spend the time learning about it?
  • Explain to a child how the business operates and makes money
  • How has the business evolved?
  • What countries do they operate in and what are the jurisdictional risks?
  • Are the people in charge trustworthy?

Management basics

  • What type of manager is leading the company?
  • How would outside management effect the company?
  • How did the CEO end up in charge?
  • How are senior management compensated? How did they gain their ownership interest?
  • Are insiders buying or selling the stock?

Management Skills

  • Does the CEO manage the business for all stakeholders?
  • Does management learn from mistakes? For example by improving operations day-to-day or using a strategic plan
  • Does the company issue guidance?
  • Is the business managed in a centralized or decentralized way?
  • Does management value employees?
  • Can management recruit top talent and hire well?
  • Does management cut unnecessary costs?
  • Does management make disciplined capital allocation decisions?
  • How does the company return excess cash to shareholders?

Management Ethics

  • Does the CEO love the money or the business?
  • Can you identify a moment of integrity for management?
  • Is the company clear and consistent in their communications and actions?
  • Does management think independently?
  • Is the CEO self-promoting?

Customers

  • Who is the customer?
  • Is the customer base diversified?
  • What’s the sales cycle? Is it easy to convince customers to buy the product?
  • Customer retention rate
  • Evidence the business is customer oriented
  • What problem does the business solve for the customer?
  • Is the customer dependent on what the business provides?
  • Any viable replacements/substitutions?

Understanding the business and broader industry

  • Does the business have a sustainable competitive advantage and what is it?
  • Can the business raise prices without losing customers?
  • Does the industry have good economics?
  • How has the the industry evolved?
  • How intense is the competition?
  • What type of relationship does the business have with suppliers?

Operating metrics and Finances

  • What are the fundamentals of the business?
  • Operating metrics to follow
  • Key risks facing the business
  • Does inflation impact the business?
  • Is the balance sheet strong or weak?
  • Return on invested capital

Cash Flow

  • Are the accounting standards conservative or aggressive?
  • Are revenues recurring or one-off transactions?
  • Is the business cyclical, counter cyclical or recession-proof?
  • How does operating leverage impact earnings?
  • How does working capital impact cash flows?
  • What are the CapEx requirements?

Growth

  • Does the business grow through M&A, organically or both?
  • What is management’s motivation to grow the business?
  • Has previous growth been profitable and will it continue?
  • What are the future growth prospects?
  • Is management growing the business too quickly or slowly?
  • How does management make M&A decisions?
  • Have past acquisitions been successful?

You can reject or accept an investment for any reason you want. Just be honest with yourself.

Winners and losers seem self evident, but I can provide detailed post-mortems if there is interest. I plan to cover the other stocks I mentioned as part of a mid-year update.

Filed Under: Notes and Concepts Tagged With: commodities, metals, Sedar

Recent Posts

  • Mid-year review: Metals and Mining Positions
  • Carbon Streaming cash box
  • Interesting links: June 2025

Recent Tweets

Sultan Ameerali Follow

Investor. Don’t buy any stock because I mentioned it. Boxer, award-winning reporter, author in a different life. Ex-BNN, 680News, CTV News etc

SultanAmeerali
Retweet on Twitter Sultan Ameerali Retweeted
dpgeo Dustin Perry @dpgeo ·
13h

Drilling is underway at HWY 37.

Hole 1 pictured first started last week and is planned for 900m depth to test below Williams and provide critical info to help us target better (oriented core).

Hole 2 started yesterday and is drilling steeply back towards the large undrilled…

Reply on Twitter 1940401042992271499 Retweet on Twitter 1940401042992271499 10 Like on Twitter 1940401042992271499 50 Twitter 1940401042992271499
sultanameerali Sultan Ameerali @sultanameerali ·
14h

Never forget.

Sultan Ameerali @SultanAmeerali

I would add to this that it’s not your family’s job to know how to manage your portfolio of mining stocks, crypto and deep value trash.

Reply on Twitter 1940395800749834271 Retweet on Twitter 1940395800749834271 Like on Twitter 1940395800749834271 4 Twitter 1940395800749834271
Retweet on Twitter Sultan Ameerali Retweeted
amerresources American Resources Corporation (NASDAQ:AREC) @amerresources ·
2 Jul

We believe our holding in $rmco are still at a tenth of its fundamental value based on peers even with setting a new 52 week high today. $arec

Reply on Twitter 1940210836678877473 Retweet on Twitter 1940210836678877473 5 Like on Twitter 1940210836678877473 22 Twitter 1940210836678877473
sultanameerali Sultan Ameerali @sultanameerali ·
1 Jul

“Trade and geopolitical turbulence have lit a fire under the precious metals, but industrial metals are largely treading water at the mid-year mark as concern grows about the tariff-related drag on global manufacturing activity.”

Reuters Energy and Commodities @ReutersCommods

Copper's tariff high fails to lift other LME metals - column by @AndyHomeMetals https://www.reuters.com/markets/commodities/coppers-tariff-high-fails-lift-other-lme-metals-2025-07-01/

Reply on Twitter 1940026810437189931 Retweet on Twitter 1940026810437189931 Like on Twitter 1940026810437189931 3 Twitter 1940026810437189931
sultanameerali Sultan Ameerali @sultanameerali ·
30 Jun

There’s a window to give Marchand the Bobby Bonilla contract before that loophole closes in the next CBA.
He clearly doesn’t want to play for the Leafs. Get the cap hit down with deferred money and let him play out his career in tax-free sunshine*

James Mirtle @mirtle

Could $6.3 million in cap room be enough to keep Marchand in Florida? That's about what they can fit, barring more subtractions. (Via @PuckPedia)

Reply on Twitter 1939789514505072756 Retweet on Twitter 1939789514505072756 Like on Twitter 1939789514505072756 1 Twitter 1939789514505072756
Load More

Primary Sidebar

Connect

  • Email
  • LinkedIn
  • Substack
  • Twitter

Media

  • Substack Newsletter
  • Mining Stock Education Interview – April 2025
  • TD Direct Investing Webinar
  • Mining Stock Education Interview – Aug 2023
  • Andy Millette Interview
  • Globe B2B Marketing Panel
  • Seeking Alpha

Recent

  • Mid-year review: Metals and Mining Positions June 29, 2025
  • Carbon Streaming cash box June 29, 2025
  • Interesting links: June 2025 June 29, 2025

Recent

  • Mid-year review: Metals and Mining Positions
  • Carbon Streaming cash box
  • Interesting links: June 2025

Categories

  • Substack Newsletter
  • Mining Stock Education Interview – April 2025
  • TD Direct Investing Webinar
  • Mining Stock Education Interview – Aug 2023
  • Andy Millette Interview
  • Globe B2B Marketing Panel
  • Seeking Alpha

Consolidated Rock Holding Company

© 2024-2025 Consolidated Rock Holding Company

  • Disclaimer
  • Contact
  • Privacy Policy and Terms of Use