Miners' Debt Problems an Opportunity in Crisis | Nolan Watson

Here's Nolan's full bio: Mr. Watson co-founded Sandstorm in 2008, prior to which he served as the Chief Financial Officer of Silver Wheaton Corp. In that role, Mr. Watson developed the silver streaming business model and helped raise over US$1 billion in debt and equity to fund Silver Wheaton's growth. Mr. Watson is a Chartered Professional Accountant (Valedictorian), holds the designation of Chartered Financial Analyst and received a Bachelor of Commerce degree, with honours, from the University of British Columbia. He has won numerous awards for his professional and charitable achievements including the Early Achievement Award by the Institute of Chartered Accountants of British Columbia, Canada's Top 40 Under 40 award, CEO of the Year by Business In Vancouver and the Queen's Diamond Jubilee Medal. Mr. Watson also serves as the Chairman of the Audit Committee of the board of Bear Creek Mining Corp. and as a director of TrueGold Mining Inc.

During this 25+ minute interview, Jason asks Nolan about the dangers of trying to use debt to do new deals. Nolan talks about counter party risk with miners and how many miners took on way too much debt to bring very high cost mines online when gold and silver prices were way higher.

Jason and Nolan discuss the gold mining industry at length and how well miners have cut costs, if they need to cut more costs to survive and if the miners can return to profitability anytime soon.

Jason asks Nolan many questions about the gold mining industry and the current and future plans for Sandstorm Gold.

This is a must listen if you own gold mining or silver mining shares, shares of gold and silver royalty and streaming companies or are thinking about doing so in the future!

How to Make Money In Mining - Nolan Watson of Sandstorm Gold Interview

Nolan Watson: Well at Sandstorm Gold we are what you would call a streaming and/or royalty company. So we have right now nine gold streams from mines around the world. The majority of those gold streams are in production. What a stream effectively is, is we'll give a mining company money on day one so they can go build their mine. What we get back in return is a contract that allows us to buy a certain percentage of their production at a fixed price per ounce and we go on and sell it at spot. So the contract might say something like: 'We get to buy fifteen percent of their production at 500 dollars an ounce and every time they give us an ounce we buy it at five hundred and sell it the same day for spot price'. And so we have this stream of cash flow coming back because we're buying and selling the gold from various mines around the world. And that's why we call ourselves a streaming company. But we also, we just actually closed the acquisition of a royalty company as well, so we now have 25, I believe, royalties around the world, and those royalties a number of them are paying cash flow as well. So it's a good place to be to have positive cash flow in this environment.