Hey Don I know your hearing isn’t stellar so I wrote some questions for you if you have some free time.  I am not sure where the best place to ultimately post them would be but we can figure that out afterwards.  I already know some of the answers to these questions so I tried to structure the question flow in a way where we end up with something resembling a Q&A where readers might learn a couple things.  I think if we combine all of this together we might make a very strong case for Mexus.

Thanks in advance for the opportunity to pick your brain.

 

 

Who is Don Phillips?  Don Phillips is a successful junior mining investor that has been the largest private shareholder in several exceptionally successful junior mining ventures.

Could you briefly talk about your early life and your military service? What is the early Don Phillips story in a nutshell?

Obviously those experiences played a pivotal role in your development and the kind of person you became.  Was there anything about this period that you think helped you become a more successful investor? Perhaps the discipline from your service or some experience of your youth helped you understand the value of saving and investing.

Given your life’s path it seems like money was not the principal goal and motivation for most of your life.  Yet someone who never pursues wealth will probably never attain it so when did you seriously start to invest and accumulate wealth and what were the first sorts of investments you made?  Real estate and oil?

What did you learn from those first few investments?

And all of this roughly coincided with a bottom in the gold price in the late 1990s and early 2000s.  Did you recognize this as an opportunity?

Do you own some physical precious metals?  What is your opinion about bullion?  Insurance or shiny paperweight?

Let’s get into the topic of junior mining and talk about one of your triumphs, US Gold.  US Gold is now part of McEwen Mining but was a stand alone company for many years that ultimately made an interesting silver-gold discovery and had many big moves in the stock price.  Why were you attracted to US Gold?  What was it specifically that drew you to the property itself?  

Did you physically visit the property early on?

How important in your mind is “boots on the ground” due diligence?

 

 

What about Robert McEwen?  He joined US Gold after you were already positioned, right?  How did you manage to get in ahead of such a savvy investor?  

US Gold then went on quite a run.  It had a few good moves up and down during its history.  At one point it was a ten cent to ten dollar stock, correct?

What did that ride feel like?

Were you able to maintain your discipline and a sell at a good time or did the excitement and exuberance of the ascension cut into your profits?

A remember reading an article about you, “Becoming a Millionaire with US Gold.”  What gave you the guts and confidence to keep acquiring shares of something that for so long seemingly nobody else wanted?  At its core was it a value investor’s belief that it was simply undervalued and meant to be accumulated?

Let’s talk about another very unique company you were investing in practically from the beginning.  How does the GORO (Gold Resources)  story begin?

GORO went from around a dollar to over thirty dollars a share.  These are the kind of returns that get investors really excited.

When a stock goes up more than a thousand percent even small daily percentages can lead to large swings in portfolio value.  In the past I’ve foolishly ridden stocks that were up a thousand percent down until I had a loss.  It is no good buying low if you never sell high and reap a profit.  What are some of the signals in a junior miner that helps you know when you should be dishoarding?

How quickly in these massive runs do you tend to recoup your initial investment?  It seems like a constant battle of fear and greed, and one that often gets the better of most of us.

Let’s talk about your current favorite, Mexus Gold US.  (For the record both Don and I own a large amount of Mexus shares.)

When did you first meet Paul Thompson and what was your impression of him?

Mexus started off pursuing a cable salvage project that has recently been somewhat resurrected with the rights transferred and a royalty retained.  Yet at the time Mexus pursued this course it did not succeed.  What happened?

Mexus has one of the most impressive gold properties I know of.  How did they get it?  What is the story behind it and what role did you play in the company’s earlier days?

How big was the gold nugget you found near the road?

Mexus also had another promising mine, the San Felix, that they sold earlier in March of this year for five million dollars and some shares in the acquiring company.  This is almost the entire company’s current market cap in cash, which implies their properties and potential is worth almost zero.  I noticed that at recent bottoms there was often similar nonsensical resource valuations, situations were proven reserves of economic minerals are valued at zero,  Then a few years later those same reserves will trade at insane premiums that also make no sense.  Why do you think these companies trade to such extremes?

Going back to what we discussed before, on a relative basis, if all of the other neighboring mines surrounding Mexus are producing profitably at a fraction of a gram and Mexus has ore closer to the surface and much higher grades well above a gram.  It would not be a stretch to say profitable production is not only achievable but is in fact its likely with Mexus.  Any comments?

Relative to your previous successful picks, how does Mexus Gold compare to them in your opinion?

You’re not a geologist.  People must have said you were crazy buying mining stocks, especially the junior miners without specialized knowledge and during scary bear markets.  Do you think people without geological backgrounds can adequately evaluate mineral projects and their potential?  Geologists and newsletter writers often say it is impossible yet clearly you were capable of such a thing.  Is it something that can be learned?  Or is it merely a matter of mentally determining if something is obviously economic and then using common sense and a comparative basis to judge the projects?. If you had two nearly identical mines side by side and one was a one oz/t project and the other was a one g/t project it is obvious which should be more profitable and if you know that the guy at one gram makes money the guy at one ounce should make a lot.  Is this line of thinking correct in your view?

It seems undeniable that luck plays a crucial factor in exploration due to the low chance of making a discovery yet there are several people that have track records that seem to make a mockery of the one in three to ten thousand chance to make a discovery bandied about by analysts. Do you think luck is be a big factor in the success of the mining stocks that you have personally picked?  It seems very unlikely that you would be able to pick four or five lottery tickets in a row. Clearly there is something else going on here. What are some of the traits of a company or a property that investors can identify to make their portfolios less dependent on luck and more dependent on common sense?

Do you think that conditions today are similar to when you started accumulating positions in US Gold, Comstock Mining, and Gold Resources?

Mr Phillips, do you have anything you would like to add?

Thank you very much for your time!