A rock-solid strategy

Brian Hester

Age: 80 Occupation: Retired mining

geologist

Portfolio: Agnico-Eagle Mines Ltd., Colossus Minerals Inc., Columbus Silver Corp., Goldcorp Inc., Hochschild Mining PLC, Northgate Minerals Corp., Royal Gold Inc., Silver Wheaton Corp., Temex Resources Corp., Underworld Resources Inc., Ur-Energy Inc., Vista Gold Corp.

A mining man

A mining geologist, Brian Hester has lived in six countries, including South Africa, Australia and Tanzania, and worked in 40. Retired and living in Vineland, Ont., he sticks to mining when it comes to investing.

Why he sticks to what he knows

"It's fine to say 'read what's published about a stock,' but unless you stick to one or two industries, there is too much information," he says. "I spent my career in the mining industry, much of it on the international scene, so why should I dabble, for instance, in bank shares, about which I know nothing? Far better to stick with the industry I have a feel for."

Why he likes gold

Mr. Hester has been a big believer in the gold sector for some 10 years. "I could see the price of gold going up because government spending was getting greater and greater every year." That's only been added to recently by what economists are calling "quantitative easing," which he says are polite words for "printing money."

"You've got more and more dollars, and a fixed amount of gold, so the price goes up," he says. "I think gold will continue going up for the foreseeable while, and I certainly don't see it going down - that's the critical thing."

How he picks his stocks

"There are no firm rules to my strategy. I look for technical competence and properties with the right geology to make mines."

A typical investment

Mr. Hester bought shares in Osisko Mining at $5 because of its Malartic gold project in Quebec, and because "it was owned by a bunch of guys that were well qualified." In addition, he thought it was a takeover target. He recently sold his shares at $7.50.

Best Move

Mr. Hester regularly visits the annual Prospectors and Developers Association of Canada convention. He was impressed by Agnico-Eagle's display. "The guys there aren't in public relations, they're hands-on, and I was very impressed with what they were doing." He invested in the shares in 2003-2004 at about $9. Agnico closed yesterday above $72.

Worst Move

A decade ago, Mr. Hester was doing work with Conquest Resources Ltd. and received some options. He exercised them at 20 cents, but ended up selling at just 10 cents. "I was investing in myself," he says. "The company had some bad luck. They had properties in Zimbabwe which they just walked away from due to the political problems in the country."

Advice

"You can do what I say but not get the same results if you haven't got my sort of background. There's a judgment factor here that's hard to quantify."

Want to share your strategies?

E-mail tony.martin@sympatico.ca