Hunting for Value in Mining Stocks Amid Soaring Metals Prices | Freddy Brick | Muddy Waters Capital

Precious metal and base metal prices have soared as have many mining stocks, but despite this, Freddy Brick, partner at Muddy Waters Capital says that the industry feels closer to left for dead than euphoric. He explains why that setup and the consistency of the mispricing in the sector brought them to launch a fund with the help of mining expert Darren McLean allowing them to take concentrated investments in the assets they think the market is overlooking while running lower net exposure. He also discusses how they think about hedging in the sector, why they take a bottom-up approach to portfolio construction, and how they approach short and long activism in the sector.

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Timestamps:

00:00 Intro

01:28 Approach to Portfolio Construction

07:56 Fraud Report Origin

09:35 Block Models Explained

15:27 Why Juniors Are Distressed

21:19 Finding Mispriced Projects

25:12 Venture Like Investing

28:25 Promoters and Capital Raising

33:43 Sentiment and Cycles

38:28 M&A Wave Ahead

43:27 Trading Vol and Hedging

46:57 Long Activism Approach

50:23 Scaling the Strategy

55:10 When Alpha Shows Up